Eye-on-Retail 1/10/13: Walmart & Same-Day Delivery; Walgreens Growth Strategy

“Walmart Teams With UPS to Fight Amazon” at The Slant. “…So rather than beat Amazon, Walmart is trying to join it with a big digital push and this UPS partnership. Dubbed Walmart To Go, the move will feature same-day delivery for $10 in northern Virginia, Philadelphia and Minneapolis, with the San Francisco area coming online within a year. Deliveries will be made by UPS using its extensive distribution network rather than building out a warehousing and shipping network that could rival Amazon.” Read more: https://slant.investorplace.com/2013/01/walmart-teams-with-ups-to-fight-amazon/

“Target Taps Former Wieden Exec as New Head of Creative” by Natalie Zmuda at Ad Age. “Target has tapped Todd Waterbury, a longtime creative director at Wieden & Kennedy, as its senior VP-creative. Mr. Waterbury, who will begin work Jan. 14, fills a role vacated by Liz Elert, VP-creative, last summer. He will be charged with leading the creative direction of the Target brand, working with the retailer’s agency partners and internal creative team. He will report directly to Jeff Jones, Target’s chief marketer. Mr. Waterbury plans to relocate to Minneapolis from New York.” Read more: https://adage.com/article/news/target-taps-head-creative/239092/

“Amazon’s Jeff Bezos Doesn’t Care About Profit Margins” by Brad Stone and Jim Aley in Bloomberg BusinessWeek. “Amazon scares everyone. There are multiple reasons, but a big one was summarized by Amazon Chief Executive Officer Jeff Bezos in a Harvard Business Review interview posted lasted week, which ranked Bezos as one of the top executives in the world. “Percentage margins are not one of the things we are seeking to optimize,” Bezos said, employing some Wall Street jargon to make the counter-intuitive point that he does not particularly care about making money. “It’s the absolute dollar free cash flow per share that you want to maximize. If you can do that by lowering margins, we would do that. Free cash flow, that’s something investors can spend.”… Bezos is more concerned with driving cash flow than making money because he believes the opportunity offered by the Internet, and by e-commerce, is massive and still largely untapped. To him, it’s still a land grab. So he’s prepared to cut prices to the bone and add all those freebies to cultivate customer loyalty and drive sales growth. Then he reinvests it all in more low prices and further expansion, driving additional customer loyalty.” Read more: https://www.businessweek.com/articles/2013-01-08/amazons-jeff-bezos-doesnt-care-about-profit-margins

“Walmart Defies Consumer Electronics Recession” by Laura Heller at Forbes. “Consumer Electronics are experiencing an uncharacteristic moment in the dog house as shoppers eschew hardware and entertainment devices, opting instead for mobile practicality. This trend is hitting retailers hard as the most popular products are easily obtained direct from manufacturers, service providers or less expensive online outlets. There is of course an exception — Walmart, it seems, is defying the CE recession.” Read more: https://www.forbes.com/sites/lauraheller/2013/01/09/walmart-defies-ce-recession/

“Christmas 2012 shopping: paper catalogs whipped Facebook, Twitter, and Pinterest, and Amazon is the new Google” by John Koetsier at Venture Beat. “I guess we’re just not as advanced as we think we are. Or, the more things change, the more they stay the same. In last month’s Christmas shopping season, paper catalogs influenced more holiday shopping than Facebook, Twitter, Pinterest, and mobile advertising platforms. And that’s not just for bricks-and-mortar stores — that’s for online shopping too. Flyers and catalogs influenced 22 percent of online purchases and just slightly less, 21 percent, of offline purchases, according to the 1000-participant study by Baynote, a customer experience solutions company. Facebook, meanwhile, influenced 15 percent of online purchases and 12 percent of offline, and Twitter and Pinterest were at the 10 percent levels for both, according to Baynote. Read more: https://venturebeat.com/2013/01/08/christmas-2012-shopping-paper-catalogs-whipped-facebook-twitter-and-pinterest-and-amazon-is-the-new-google/#ZgHxyzMGyRIdP6pV.99

“Kroger Offers Specialized Cart in Michigan” by Michael Garry in Supermarket News. “Kroger will offer Caroline’s Cart, a shopping cart designed to carry disabled children and adults, at a store here, its first to carry the cart, according to the Caroline’s Cart Facebook page. “We have been working with Kroger for several months and they have been very supportive of Caroline’s Cart,” said the Facebook post. Caroline’s Cart was developed by Drew Ann Long, Alabaster, Ala., whose 12-year-old daughter, Caroline, has Rett syndrome, a neurodevelopment disorder.” Read more: https://supermarketnews.com/consumer-trends/kroger-offers-specialized-cart-michigan

“Whole Foods hires new tech head” by Jan Buchholz at Austin Business Journal. “Jason Buechel has been named global vice president and chief information officer for Whole Foods Market Inc. Formerly an executive and partner with Accenture Plc, Buechel will be responsible for all aspects of information technology at Whole Foods. He’ll conduct his duties at the Austin headquarters.” Read more: https://www.bizjournals.com/austin/blog/retail/2013/01/whole-foods-market-hires-new-head-of.html

“Holiday Season Ends on Positive Note for Retailers, According to ShopperTrak”. “ShopperTrak estimates that during the holiday shopping season of November and December 2012, national retail sales increased 2.5% and foot traffic also increased 2.5% when compared to the same two months last year. ShopperTrak’s initial data indicates that shoppers spent $248.8 billion during this period. The U.S. Department of Commerce will release its December GAFO sales numbers in February. The 2012 holiday season marked the third consecutive year with positive total retail sales. It also was the second holiday season of the past three with positive foot traffic changes. “Our data indicates that more people visited more stores this holiday season than the previous year,” said ShopperTrak Founder Bill Martin. “Retailers who understood their foot traffic were able to staff, stock and market to best serve their customers, ultimately converting more of the browsers into buyers.” Read more: https://media.prnewswire.com/en/jsp/latest.jsp?resourceid=6103436&access=EH

“Walgreens to pay over $1 million penalty for overcharging customers” at KTVU-San Jose. “The settlement, to affect 625 Walgreens stores in California, took place three years after a store customer in Santa Clara County told county officials that products at a Walgreens outlet cost more after they were scanned at cash registers, Donohoe said. “There was definitely a consumer complaint that got the ball rolling,” Donohoe said.” Read more: https://www.ktvu.com/news/news/crime-law/walgreens-pay-over-1-million-penalty-overcharging-/nTrjN/

“Walgreens Presents Growth Strategy at 2013 Annual Shareholders Meeting”. “Reviewing a challenging but strategically important year for Walgreens, Chairman James A. Skinner, President and Chief Executive Officer Gregory D. Wasson and Executive Vice President, Chief Financial Officer and President, International Wade D. Miquelon today outlined how the company is positioned for growth in fiscal year 2013 at Walgreens Annual Shareholders Meeting…

To that end, Walgreens has continued to expand its product offerings, including:

Expanded grocery items and fresh food in stores for on-the-go consumers with quick, convenient pickup, and a growing selection of healthy food choices that are important to underserved food desert communities.
Substantial investment continues in private brands, including Walgreens, Delish, Nice! and many more that have led to a 2 percentage points increase in private brand penetration year-over-year to 22 percent.
Enhanced beauty departments that now include an array of niche and prestige brands not found in traditional drugstores, including the introduction of Boots No7.
And mobile device capabilities that have expanded in the past year to include prescription refills and transfers by scanning the pill bottle; QuickPrints, an application that enables users to print photos directly from their devices to any Walgreens store; and in-store maps that allow customers to use a digital shopping list to map and locate items in a store.
Read more: https://news.walgreens.com/article_display.cfm?article_id=5697

Thanks for reading…