The Lempert Report LIVE

Ice Cream Robot, Star Wars Frosted Flakes, New H-E-B

May 09, 2022 Phil Lempert Episode 32
The Lempert Report LIVE
Ice Cream Robot, Star Wars Frosted Flakes, New H-E-B
Show Notes Transcript

A new climate fight – this time between Leo and a President. Why data is the key to success at retail. Ice cream delivery in 2 minutes – where’s the Good Humor man when we need him? Big brands are trying to take back share from private label. HEB’s new store opening is a WOW and in the metaverse today we look towards the creators. Sally has a new opportunity to share and on The Lempert Report its all about dollar stores and this week’s Bullseye marketing report is focused on Star Wars.

Phil:

Welcome to the Lempert Report LIVE. There's a new climate fight this time between Leo and the president. Why data is the key to success at retail ice cream delivery in two minutes. Where's the good humor guy. Anyway, when we need 'em big brands are trying to take back, share from private label. He B's new store opening is a wow. And in the metaverse we look towards the creators. Sally has a new opportunity to share with us and on the leper report, it's all about dollar stores. This week's bullseye marketing report is focused on star wars. Let's get started. So Sally, what's the fight over the Amazon?

Sally:

Well, apparently we've reached a critical moment with the Amazon , in Brazil's Amazon deforestation has surged to record levels for the month of April and, and this is very troublesome and it's particularly troublesome to Leonardo DiCaprio who has been an outspoken activist on this issue. And he's been urging Brazilians to register, to vote in the upcoming election to save the Amazon. So apparently president Bolsonaro took office in 2019 and uh , weakened environmental protections. And so it has, it has caused for an increase in deforestation and Bolsonaro wasn't too pleased with Leonardo de Caprio's comments.

Phil:

Yeah. So what Leo tweeted is Brazil's home to the Amazon and other ecosystems that are critical to climate change. What happens there matters to us all. And youth voting is key in driving change for a healthy planet and bull Eros response. He better keep his mouth shut about the Amazon seriously. You know what what's with this guy? You know, we had a problem. He had a problem with, with COVID not really looking at data truthfully and really prohibiting a lot of resilience from getting the vaccine. Now this, and when we take a look at what's going on with the ecosystem in the Amazon, it's, you know, frankly harmful, as Leo said, I agree with them to the rest of the planet. So inside big data asked I'm gonna get this name, wrong. Begrat Safarian, who's the co-founder and CEO of Local Express to talk about the four areas where grocery stores can use data analytics to enhance operation. So there's a couple stats in here before I get to, to the four points. Number one, there was a survey that was done and 59% of grocers agree that their third party delivery partnerships are unprofitable. So, you know, almost 60% of grocers are saying, you know, this whole ecosystem this eCommerce ecosystem is broken and the profitability that the grocers face when using third party vendors is due to the loss of their data, which impacts their inventory management, marketing, and customer service. So he goes on for these four points , point number one is inventory management, why it's so important. In 2021, he writes two thirds of in-store shoppers and 51% of online customers experienced out of stock pro products, which resulted in more than 3 billion loss for supermarkets in the US. Number two, online shopping, 86% of grocers indicate they're dissatisfied with their online profitability. Grocers need to collect sufficient data on the number and volume of digital orders. And what I don't like is what he says here, that if you're doing a good job with data, you can test whether you can increase product prices while promoting lower fees and better service through your own eCommerce platform, without risking lower order volumes or loss sales. IBM, some years ago had come up with a shelf strip that instead of having those paper price, tags, or plastic price tags, you know, they could change the prices like this. So if it wasn't busy in the store, they might lower prices if they were getting outta stock. And frankly, I just don't subscribe to that policy. 99% of marketers say that personalization helps advance customer relationship. That's number three with marketing and number four is rentability that grocery stores can test different pricing strategies again and, and analyze the effect on sales data, allowing them to identify products where price raise won't necessarily affect buyer's decisions. Seriously, with the prices going through the roof with shortages, we want to try to, you know, cheat people and raise prices. I don't think so. So Sally, you like ice cream, right?

Sally:

I do. <laugh> and I really enjoyed the ice cream truck coming to my house when I was a kid in the summertime hearing that bell ring.

Phil:

Yeah, me too . Good humor. We had good humor man, in the Northeast. What did you have in the south?

Sally:

You know, I don't remember an actual name. In fact, in my small town in Georgia, it may have just been, you know, just some individual driving a truck around, but they always had the beautiful pictures on the side of the truck with all of the different, different items you could choose from. And it was, it was very, very exciting , which it , this is really cool. Now, Unilever is offering a robotic direct to consumer ice cream sales . So it's a different modern version on the ice cream truck.

Phil:

Yeah. There's, there's this company , RoboMart , who's based in Santa Monica, like we are. And , they started a couple years ago in West Hollywood having these trucks that are like mini convenience stores. So you have an app, you can, you know, identify where you are. The truck comes to you. It is driven. It's not a robotic truck. There is a driver in it, but what happens? It looks like a minivan. And what happens is you take their app, you swipe their app when it gets to you that actually opens the door of the side. And then you see all the products there and you can just take it , almost like what Amazon is doing with the take and go technology. So, you know, i t it's on your app. That's how you pay for it. No credit cards, you never even talked to the driver. And , now what they did is they made this deal with Unilever. Who's the world's largest producer of ice cream, Ben, and Jerry's Magnum and , and so on. So they're testing this in Los Angeles. That's a good news for us. And they're gonna do that. And it's the same thing. Now what their press release says is it takes, it could take as little as two minutes, what the company on their website says is 10 minutes, either way, it's still kind of cool , that you can have this truck come to you, how they're gonna make money. I don't know. That's the big issue for me because if I just order it and I just get like one ice cream , how can they make money? They're gonna be operating 12 hours, 12 hours a day, seven days a week. And you can get your ice cream like that, but still the , the thing for me is how do you make money on this?

Sally:

Yes. And I wonder if it's gonna be a lot like the Uber concept where you hire people to drive these and , um, the app just notifies whichever ones are in the area and closest to you and they pick up, they pick up the delivery. So it'll be interesting on how they, how they manage the logistics of that.

Phil:

Yeah. I mean, I like the other idea where it's like this mini convenience store, so what I would've done and Unilever's obviously doing it just to promote their ice cream. I just would've expanded the truck. Still have the convenience store stuff and ice cream, Unilever's brands of ice cream, because you've got a better shot, you know, at making money. And talking about making money looks like the major brands are up in arms. They wanna fight , the private label increase that we've seen certainly during the pandemic and even before the pandemic. So now , the CEO of Clorox announced that they're gonna increase promotions. Now promotions have really gone away during the pandemic because retailers and manufacturers didn't know what products they would actually have on the shelves. And you know, that's what they're gonna do. They're , they're gonna try to really compete with store brands. However , this article that was in Yahoo finance also pointed out that if you bought tide free and genuine, no free and gentle detergent, it's $12 and 97 cents on Walmart.com and Walmart's great value free and clear brand is $8 and 67 cents. So there's a difference of $4, $4 and 30 cents. And I've gotta tell you that. I think with that kind of difference we're gonna have some severe wars going on , P & G has also announced , that's the maker of tide that it's shifting its marketing to make more overt claims about the value in its costlier products. I don't understand what are overt claims about the value in your costlier products? I could see them, you know, promoting the tide , you know, is a better product than a store brand or whatever, but I, I am anxious to see what overt claims about value is all about from P & G.

Sally:

Yes. And I really think it's interesting with these household products like this, because I think back to my mom and how there was such loyalty to, you know, one of them mentioned in here cascade cascade was the only detergent that, you know, would work, but now with the price differences it's, you know, it's a lot easier to let that loyalty to that brand go. Especially if you take a look at the ingredients and you see that, you know, they're comparable. I think what would be really interesting to see, especially with these household products, is them , promoting more sustainable packaging for these, or, you know things that consumers are interested in paying more for these days.

Phil:

Yeah. Or just not switching away from and, you know, but , but we are gonna see these price increases continue. We are gonna see more shortages. We're gonna see inflation continue. I mean, the , the issue and I was talking to a farmer this morning the issue is really the price of, of, you know, diesel and, and gasoline and how that's affecting everything. And, you know, that is going to affect the price of meats and, and produce and just about everything else. So, but some good news H- E-B has opened up a new retail store in Texas. It's their first two story , true Texas barbecue restaurant, by the way, their true Texas barbecue by Texas monthly magazine has been named the best Texas barbecue in Texas. They have also opened up home by H- E-B, a department it's 120, 2000 square foot expanded organic and local produce a department with chef inspired meal, a drive through pharmacy, a larger curbside pickup , and what they also have. And our friend Stacy Bates was heavily involved with this with H- E-B. They built an office for a licensed nutritionist to be there, to help their shoppers. So, you know I wanna have an H- E-B come to Santa Monica.

Sally:

Yeah. We love H-E-B. My husband is from Texas and we love going in there. We love it for the fresh tortillas that they have there.

Phil:

Yep.

Sally:

I also thought it was really cool that they're really embracing , um, local goods in this store by offering Texas based artisans and businesses, an opportunity to sell things like, you know, things that are very Texas like broken antler art they've got.

Phil:

Which I want.

Sally:

But if you go , you know , you like that kind of stuff , stop

Phil:

Yeah. And also , in another story, there was in supermarket news about HEB they've rolled out smart tablets. The company is the Luma project in the beer and wine department of 120 of their stores. And basically instead of just running an ad, the way Walmart and so many other retailers do it they're focused on the people behind the brands on the shelf. So it really is storytelling. And when you look also HarrisTeeter's been using them, Lowes food has been using them. And there's some numbers here, which are fascinating to me. Brand C growth rise twofold during a loop video campaign followed by 25% growth in the following month, 12% growth over the ensuing six months and retailers sell 51% more items for brands that are highlighted in loop tablets on an end aisle and 60% of shoppers buying a loop featured product are trying it for the first time. So it really just talks about the power of video when it's done, right? Not when you just take a commercial that's on TV and put it in the store, but going that little extra effort and doing that whole storytelling, I think is really important. And talking about storytelling metaverse tell me about what's going on with the creator economy and the metaverse.

Sally:

Well, there's a couple of things here to talk about. And the first thing being that, you know, that it's been in the news that meta plans to take a nearly 50% cut of virtual asset sales in horizon worlds. Now horizon world we've talked about is their platform for the metaverse. It's not the only one, but it is theirs. And , um, and, and what we're hearing is that this is, this is bringing up , uh , an interesting point for creators. Particularly people who make music, people who make art who have been very severely affected by the digital world and their ability to make income for a very long time. So, you know, it's , it's gonna be interesting. It's going to be an interesting opportunity for these creators in the metaverse I believe, but I also wonder if this is also a great opportunity for brands that are trying to get involved in the metaverse to find creators, to partner with and giving them a fair opportunity , um, to promote and, and make income from their work, as well as help with you know, partnering with them on getting their brands recognition.

Phil:

And also we, we're constantly hearing these stories about, you know, a million dollar NFT piece of artwork and stuff like that. That's the exception. And it makes good headlines this story also sadly to report and this story was , um, where was it? I don't know, but Ariel Shapira wrote it. And , um, what he also did is he included some stats. It's 75% of all US artists that could be a graphic artist. It could be a fine art artist. It could be a musician make under $10,000 a year, which really just underscores, you know, why we can't allow whether it's meta Facebook or any of these other people just to, you know, be stealing money blind and, you know, in the music world, as, as you know, far better than I, you know, you have a lot of people who really stood up to these streaming services and either pulled their music off it, or they, they were making, you know, like 10 bucks you know, a year off of an album that's sold millions.

Sally:

It's so true. And , yeah, it has been a difficult world for, for these creators, but, you know, if we look at things like Fortnite, as an example, you know, Fortnite , which came out several years ago, I'm not exactly sure how many, but not that long ago. They really did something very interesting with creating these one of a kind events. I think their first one was the art was with the artist , Travis Scott and millions of kids showed up to be a part of this event because of the, it was a , it was a virtual concert. And so I think that's really proof that there is opportunity for the creatives and the brands to work together so that everybody can get some fair income from these projects.

Phil:

Yeah. And what Ariel wrote that I in particular really took heed for is that give accessibility and freedom to independent creators. They will make the most of the work for you. It's as simple as that, you can hire a hundred developers to build the backbone of your metaverse, but they will never be as passionate as 1000 independent fans who decide to make it their home. So very well said, and we're gonna keep on talking about the metaverse, we're gonna keep on doing it and, you know, just help every supermarket retailer, every food company really understand the opportunity in the metaverse. In fact, we're gonna be having a webcast within context in just a few weeks from now. So check it out on supermarketguru.com. It is May 24th. I hope you'll join us because we've got some great people from Microsoft. We've got people, a new survey that in context just did . We've got Kroger there. We've got a lot of people who are gonna point us to the future of the metaverse as it relates to groceries . So I hope you'll join us. And now it’s time for The Lempert Report. Twenty-Five municipalities have put in place a moratorium on new dollar store openings. The reason? Lawmakers including Georgia’s Lorraine Cochran-Johnson, who is a county commissioner, are pointing to data that correlates the growth of dollar stores, the lack of healthy food choices and food deserts. Her 2019 resolution for the moratorium was easily passed by the commission and includes a comprehensive evaluation on small box retailers – dollar stores, c-stores and independent grocers whose stores are less than 16,000 square feet – and their effects on the health, safety, obesity levels, food availability, food quality, land value and welfare of residents. DeKalb county is not alone. Kansas City, Tulsa, Mesquite Texas, Cleveland, Fort Worth, Oklahoma City and New Orleans have all put in place similar efforts and moratoriums on growth. Across these communities one common denominator is that these stores are predominately in low income mostly Black neighborhoods. According to a report just released this past January by the Institute for Local Self Reliance, these and other cities across the nation are approving new policies that tie local regulations to broader public goals that not only limit the expansion of dollar stores but also put limits on chain retailers with the intention of creating better alternatives for their populations especially in the categories of fresh meats, fruits and vegetables. In all fairness what we have seen over the past couple of years is Dollar General adding produce departments – right now the number is a little more than 2,000 produce departments but the company has published its goal to bring that to 10,000 over the next few years. Impressive – but that’s only about half of their stores – what about the rest? Last week, the national j obs report was a good one with unemployment a t 3.6% and over 400,000 new jobs. Sally, what's the job opportunity report for this week?

Sally:

Well, Phil, first of all, Stanford University will be launching this fall, their first new school in 70 years. And it's very exciting. It's the Stanford Doerr school of sustainability. And this school is gonna be focused on cultivating knowledge and high impact solutions for planetary issues. These departments will advance subject, understanding interdisciplinary institutes and innovate across fields. It's very exciting and it's great timing. We all know that Stanford is one of the best schools for technology and science and society majors. In fact, they've been ranked as number two in those categories in the country, but experts are now predicting a big boom in sustain in the sustainability job market. So imagine what kind of great candidates are gonna come out of this new Stanford school for this new field that's out there. Business leaders are restructuring and expanding their budgets to build sustainability teams. But the catch is , is that there's still a very, like a lack of clear definition on these roles and responsibilities. There's really no benchmarking for pay. So this is, these are, these are jobs that are gonna have to really, really develop and we'll see what they become. But Green Biz's most recent benchmarking study, which is called the state of the profession. 2022 suggests that the average total compensa compensation for sustainability managers is $146,900. Now for directors and vice presidents, that salary goes up to $227,158 . And if you'd like to be a vice president, that number goes up to $404,972 . So not bad for what you can get paid for these jobs.

Phil:

I, I want to change my title to Vice President of Sustainability. I'm there

Sally:

For SupermarketGuru?

Phil:

On today’s Bullseye let’s talk about Star Wars – not the latest series – but the merchandising. There is no doubt that the Star Wars franchise is big business. According to Nielsen The Force Awakens earned $2 billion in ticket sales. But the merchandising, the toys, apparel, video games and even toasters that can burn the image of Darth Vaders face on your bread was $5-6 billion. On the whole, Star Wars, now owned by Disney generates $2-3 billion every year – but George Lucas still owns the merchandising rights. So now Disney+ streaming service is launching Obi-Wan Kenobi on May 27th and with that Kellogg’s has a new cereal – Kellogg’s Frosted Flakes Obi-Wan Kenobi. It’s actually a lot more than just putting the Star Wars logo, light sabre and dressing Tony the Tiger in the appropriate helmets on the package front – they have challenged us to decide if we want to be on the “light side” or “dark side”. Each box contains a mixture of regular Frosted Flakes and Frosted Flakes Chocolate. Look for the new cereal blend in stores in July. July? Except for Walmart. They get to sell the cereal first starting in June. That move doesn’t make sense. If the series starts May 27th – why not tie the introduction together. Who knows if by July the series is still relevant? Of course there is yet another twist – no its not about who’s father is who – but if you go to Walmart.com you can get a special edition – instead of the box showing Tony’s face half light and half dark; one side of the box is all light and the other all dark. And these boxes are a mystery – you don’t know whats inside – all regular light Frosted Flakes or all chocolate – or dark side Frosted Flakes. Who cares? Who thinks up this stuff? Just remember how well Heinz mystery ketchup did. You cannot make this stuff up. Just remember how well Hines mystery ketchup did. You cannot make this stuff up. And don't forget to visit us on supermarketguru.com. Sign up for our newsletters. Also archives of all the Lempert Report LIVE reports are right there. And we'll see you back here next Monday, 1130 Pacific time, two 30 Eastern time for more of the Lempert Report LIVE.