Target debuts clean label for personal care products

This is the latest step in Target‘s plan, first announced in 2017, to offer products without unwanted chemicals and with greater transparency regarding product formulations.

By 2020, the overall plan is to formulate products without the chemicals on its priority list, and to label products clearly to indicate those free of ingredients like phthalates, parabens and formaldehyde. “Target Clean” is now one of more than a dozen Target labels indicating whether products are, for instance, organic, non GMO, gluten-free, bio-based or cruelty free, among other things. For the long-term, Target has also committed to investing up to $5 million in green chemistry innovation by 2022.

With this new label, Target is making a bet that it has enough trust built with customers that the icon will become shorthand for better-for-you and better-for-your-wallet products. Hennington noted that Target shoppers are increasingly interested in those types of products.

Other companies are capitalizing on the trend too. In 2017, upstart Brandless shook the industry with a business model that offered all of its products — mostly consumer goods and cleaning supplies — free of toxic chemicals and most for $3 each. The company recently began offering some products for $9 as it moves into baby and pet categories, but its core mission is about making it easier for consumers to quickly find affordable and clean household essentials.

Sitting at a higher price point, digitally native brand Grove Collaborative also makes a similar promise to shoppers by making it easier to buy natural products. For Grove, the priority is building a strong relationship with customers through phone consultations with service associates and personalized shipments. As a mass merchandiser, though, Target is making more of a convenience and value proposition to its customers. That ties in to the company’s overall mission to become “America’s easiest place to shop.”


Meijer adds Shop & Scan service to 23 locations

Meijer’s expansion of its Shop & Scan feature is in line with an industry-wide trend of using technological innovations to make grocery shopping a more efficient and seamless process, with 49% of retailers naming in-store mobile experience as a top priority.

Streamlined, self-service in-store shopping is still relatively new, but more retailers are giving it a try. Since Amazon pioneered cashier-free technology at its Amazon Go stores, other retailers have accelerated their rollout of scan-and-go technology in an effort speed up the front-end experience. Kroger launched its Scan, Bag, Go service to 400 stores last year, and Sam’s Club has also piloted scan-and-go technology, most recently unveiling a new computer vision feature to make it even faster.

Meijer has been keeping up with the retail tech movement, offering curbside pickup and using the online shopping and delivery fulfillment service Shipt to provide e-commerce for customers through Meijer Home Delivery, which has been popular with shoppers. Online grocery sales accounted for only 2% of Meijer’s total transactions in 2018, according to an estimate from Meijer’s director of digital user experience — a number that’s in line with consumer adoption across the industry.

“This technology joins our curbside pickup and home delivery programs to provide yet another option for Meijer customers to personalize their shopping experience,” company CIO Terry Ledbetter said about the service when it was first launched. Shoppers like to have options these days, particularly millennials, so adding an in-store innovation is an important way to keep curious customers engaged.

Doubling down on in-store shopping experiences with features like Shop & Scan shows the retailer is still focused on a brick-and-mortar approach as it struggles to build online sales.

Meijer is making other innovative investments in physical stores. Last year, the company opened a new 30,000-square-foot urban concept store in Michigan focusing on fresh products and a neighborhood feel. That market, along with several others the company has planned, offer a fresh new look for Meijer and a way for it to penetrate dense urban markets.

When it comes to customer service, Meijer is resonating with shoppers, landing the second spot on Newsweek’s America’s Best Customer Service 2019 list for the superstore and warehouse club category. With efforts like Shop & Scan, Meijer gives hurried shoppers another option to get their grocery shopping done quickly, and this should help boost the company’s reputation while staying competitive with other tech-focused retailers.

Source: grocerydive

Kroger expands Pinterest tie-up with first-party data ad targeting

Kroger and Kroger Precision Marketing (KPM) announced an expanded partnership with Pinterest that enable advertisers to leverage the supermarket chain’s first-party data for targeting ads on the social platform and closed-loop measurement to track from digital inspiration to purchase, according to a news release.

Pinterest is a destination for many consumers looking for inspiration related to fashion, food and home-related topics. The KPM partnership with Pinterest will give brands the chance to better target these audiences at various stages in their product discovery and purchasing process by leveraging Kroger’s consumer data.

Faced with competition from Amazon and its growing ad business, retailers, like Kroger, Walmart and Target, are leveraging their vast amounts of consumer data, including their shopping habits and purchasing history, to attract advertisers with the promise of targeting their most relevant audiences. Kroger hopes to generate $400 million in additional profits by 2020 and sees its marketing unit KPM as playing a key role in that goal, since it places digital ads for companies like Unilever and General Mills, according to Bloomberg.

Pinterest has been rolling out new features to bring more advertisers to the platform and connect with its more than 250 million monthly users — mostly women, but fathers are a growing user group — with 78% saying brands’ content on the platform is useful to them, according to data from the company. Pinterest made its content marketing API available to third-party influencer marketing platforms, giving marketers and influencers the ability to collaborate more effectively.


Trader Joe’s plans to cut plastic packaging in stores

Trader Joe’s is taking the fight against plastic to its 500 or so stores. The grocery chain announced that it is cutting back on plastic waste in the hopes of eliminating one million pounds of plastic from its stores as soon as possible.

The move comes following an online Greenpeace petition that was started late last year and signed by 91,000 people. Trader Joe’s read the room and jumped into action. It started putting some of its plastic-removing plans into effect late last year, announcing it would no longer offer single-use plastic bags to customers, replace the plastic produce bags and Styrofoam packages with compostable alternatives, and avoid using compounds like BPA in packaging.

That was just the beginning. To eliminate even more plastic that would otherwise just wind up in a landfill, the grocer is reducing how much produce it sells in plastic packaging. They will also replace Styrofoam trays with recyclable ones, use compostable, renewable sleeves on greeting cards, swap plastic sleeves and plastic flower bags with renewable ones, and eliminate non-recyclable plastic and foil from tea packaging.

According to EcoWatch, the grocery store described the changes as “better managing our environmental impact”—and the environment needs all the managing it can get. Each year, enough plastic is thrown away to circle the earth a whopping four times. Trader Joe’s new plastic-reducing efforts come as other corporate giants take very public steps to eliminate plastic and a slew of startups jump in the race to try and do away with this global problem.


Source: Fast Company 

Amazon’s New Supermarket Chain

The first preview emerged a few weeks ago when Amazon acknowledged that the Whole Foods “365” format would no longer exist. Later, it was further acknowledged that all 12 of those stores would be converted to the Whole Foods banner.

The 365 format was originally designed to offer shoppers an alternative to the more costly shopping trip to a Whole Foods store by offering product under the 365 private label that is priced below similar national brands. Clearly, it was an attempt to compete directly with Trader Joe’s and Aldi, both of which depend almost entirely on their own brands sold at low prices.

The explanation for the folding the 365 stores was that the price spread between Whole Foods stores and 365 had diminished to the point that 365 was no longer needed.

I think there’s a lot more involved than that. As I predicted in The Robin Report a little more than two years ago when 365 began, the concept was flawed and perhaps doomed to failure. That’s because food retail customers return to the store much more often than, say, department-store shoppers. Food customers know the prices of items they buy frequently.

Known Price Points

Therefore, while department stores and apparel-brand owners might prosper with outlet stores, often located away from their conventional stores, Whole Foods located its off-price offer near its main stores appealing consumers well acquainted with food prices.

To the minor extent that 365 stores offered better price points, they also implicitly shouted out that Whole Foods stores were overpriced. Not good marketing.

In any event, Amazon is now consolidating its Whole Foods stores into a unified whole, but that leaves a big hole when it comes to any sort of a low-price offer. That would seem to counter Amazon’s current strategy to appeal to lower-income shoppers. It already offers a lower-price Prime membership level to recipients of Medicaid and other public-assistance programs.

This is where the new supermarket chain comes in. The Wall Street Journal, the primary source about the new chain, stipulates that the first store will open in Los Angeles at year’s end with others to follow in San Francisco, Seattle, Chicago, Washington, D.C. and Philadelphia. It is worth mentioning that the WSJ’s news article has no identified sources, but it’s virtually certain that Amazon was involved in spilling the beans.

The new chain will begin in populated areas, as reported, and likely mimic Trader Joe’s and Aldi by mostly offering private labels – including Amazon’s own – at conspicuously favorable price points. Moreover, informed speculation has it that Amazon could acquire small grocery chains of a few stores each to facilitate expansion of the new chain. Publicity on that point will identify buying opportunities for Amazon.

Small Town, Big Opportunity

If it’s the case that expansion by acquisition of small chains is in the offing, it’s interesting to note that small grocery chains tend to exist in lightly populated areas. Both the chains are small and the stores comprising such chains are also small. That suggests that after Amazon’s new concept gets its footing in larger markets, it can be rolled out in less-populated places, for example in the plains states of the upper Midwest where no current Amazon store format would otherwise seem to fit. In sum, Amazon’s new supermarkets will give it a store fleet to appeal to cost-conscious customers and that will fit well into new territories, such as rural areas and small towns.

Incidentally, reports have it that the new supermarket chain is yet unnamed. If I were on Amazon’s board I would propose “Prime,” a name that Amazon already uses and that has a food-related meaning.

Finally, I’ll offer caution that much reporting about Amazon’s intentions is ill-informed, premature or nothing more than a trial balloon floated by Amazon to see how the competition reacts. So, the immediate eroding of equity values of heritage food retailers such as Walmart and Kroger that accompanied the news about Amazon’s purported intensions is doubtless premature, if warranted at all. As for other retail categories, far as we know, Amazon has no store-based ambitions beyond food and its own Amazon Books and 4-stars.

Source: The Robin Report

Amazon planning to launch new grocery chain

Nearly two years after Amazon acquired Whole Foods for $13.7 billion, a new supermarket chain could help the e-commerce giant sell more groceries to more people, gather valuable data and continue feeding its Prime loyalty flywheel.

Since its marquee grocery acquisition, Amazon has pushed down prices at Whole Foods stores in an effort to net more customers. But refashioning a store commonly known as “Whole Paycheck,” at which analysts noted prices were typically 15% higher than the competition, has proven difficult. Although Prime members get some special savings and more conventional brands have appeared in the aisles, reports have noted little to no change in the retailer’s average basket prices. Last month, The Wall Street Journal reported that Whole Foods prices are actually starting to creep up as suppliers battle inflation and other headwinds.

Although its exact positioning is unclear at this point, Amazon’s new chain will presumably be more in line with a traditional supermarket. It may lean toward a value offering popularized by discounters like Aldi and Lidl, which would allow Whole Foods to maintain its positioning toward the high end of the market while the new brand would reach a more mainstream audience.

“If I’m Amazon, I’m thinking of opening a store more conventionally driven, more price-oriented than Whole Foods,” said Neil Stern, senior partner with McMillanDoolittle, in an interview with Grocery Dive following Friday’s news.

Amazon acquired Whole Foods after struggling to grow its online food and beverage business, including its AmazonFresh brand. News of the new chain further proves that the e-commerce powerhouse needs physical stores in order to succeed in grocery, sources said.

“Grocery is still a store-based business. Amazon didn’t upend the grocery industry with Whole Foods, so now it’s taking matters into its own hands,” Matt Lindner, senior e-commerce analyst with Mintel, told Grocery Dive.

Amazon would use its new stores as distribution points for its growing grocery e-commerce business, WSJ reports. Same-day delivery through Whole Foods has reached more than 60 markets while store pickup touches more than 20. Both services offer an option for Prime members that waives the fulfillment fee — a move that addresses the price sensitivity many shoppers have toward online grocery shopping.

In addition to delivery from the unnamed new chain and from Whole Foods stores, Amazon’s physical footprint would allow it to build out AmazonFresh — which exited several markets back in in 2017 — and generally get food and beverage orders to shoppers faster and cheaper than before. Earlier this week, Amazon’s Happy Belly private label launched its first milk and dairy products, available only through AmazonFresh.

Perhaps most importantly, a conventional supermarket chain would offer yet another avenue for Amazon to collect consumer data and learn how to sell more cereal, produce, meat and other groceries to consumers. The company’s ability to adapt and learn — not to mention its $850 billion market cap — puts it in a class all by itself in the supermarket industry.

“Amazon grocery stores will certainly use their expansive shopper data to merge the in-store and online grocery experience,” Sylvain Perrier, CEO and president of grocery e-commerce provider Mercatus, wrote in comments emailed to Grocery Dive.

One big question mark in all of this is how Amazon would integrate its bleeding-edge technology into new stores. Whole Foods locations won’t see its cashier-free Amazon Go technology, company officials have said, but a new chain’s stores, at just 35,000 square feet, could be ideally suited.

For conventional grocers like Kroger and Albertsons, which haven’t yet seen their bottom lines impacted by the Whole Foods buy, this news signals a new competitive challenge. These chains have accelerated their rollout of store technology and online shopping, straining their profitability as they struggle to insulate their businesses.

A new grocery chain from the world’s largest e-commerce company could signal an even faster rollout of online and in-store innovation. If Amazon brings the same low-price strategy it employs online to the new stores, it could also mean even more heated price wars in crowded markets across the U.S.

“Amazon has that brand recognition and association in the mind of the consumer that if you shop online, you’re going to get the lowest price anywhere,” Lindner said. “If Amazon can bring that low price model to grocery chains, especially where the profit margin is so low, then it could be a game changer.”

Source: Grocery Drive