Morning Brew - ☕ We do deliver

But why doesn't Trader Joe's?
February 17, 2023

Retail Brew

Bluecore

Happy Friday. Consider this: Our upcoming Financial Forecasting course is made for the professional looking to level up their knowledge of numbers. From P&L to building that dreaded budget, this one-week course will teach you everything you need to know to build a strong financial foundation. Reserve your spot.

In today’s edition:

—Andrew Adam Newman, Jeena Sharma, Hayden Field

DELIVERY

FSQ (Frequently Searched Questions): Why doesn’t Trader Joe’s deliver?

A Google search query result page for "why doesn't trader joe's." The top autocompleted result is "why doesn't trader joe's deliver." Google

When Google autocompletes search queries about retail brands, it offers a glimpse of what most confounds customers. This series looks for answers.

Trader Joe’s did deliver groceries, at least in New York City, for about a decade, but left the party not long before it really got started. When it announced it would end delivery on March 1, 2019, some cauliflower-gnocchi-loving New Yorkers despaired—and politicians stepped in.

“There are too few affordable grocery stores in Greenwich Village, which I represent, and other parts of New York,” State Senator Brad Hoylman-Sigal wrote in a letter to Trader Joe’s CEO Dan Bane, which was quoted in daily newspaper amNY at the time. “Trader Joe’s delivery service was a vital part of mitigating that problem for countless families.”

But Trader Joe’s stuck to its scan guns.

“Instead of passing along unsustainable cost increases to our customers, removing delivery will allow us to continue offering outstanding values—quality products for great everyday prices, and to make better use of valuable space in our stores,” Trader Joe’s then-spokesperson Kenya Friend-Daniel told Business Insider.

Just a year later, of course, in the pandemic’s early days, grocery delivery saw unprecedented growth:

  • Online grocery sales surged from $2 billion in August 2019 to $6.5 billion in March 2020, according to the Brick Meets Click/Mercatus Grocery Shopping Survey.
  • They peaked at $9.3 billion in January and March 2021, but have remained steady, with online grocery sales totaling $9.1 billion in December 2022.

With its nautical theme, you’d think that Trader Joe’s would worry about missing the boat when it comes to deliveries. But don’t bet on it changing course.

Keep reading here.—AAN

        

TOGETHER WITH BLUECORE

Sourcing sole-mates

Bluecore

Whether you’ve slipped on a pair or not, you know Steve Madden. They’ve been creating fashion-forward shoes and styles since the ’90s, and this iconic brand wanted to take their strategy a step (or two) further.

Looking for ways to keep their iconic styles in their shoppers’ closets, the Steve Madden team went beyond designing shoes that shoppers love: They embraced Bluecore’s predictive intelligence.

Bluecore took a deep dive into Steve Madden’s story and how predictive intelligence changed their business, helping them offer shoppers fresh new fits based on their retail data. By leveraging predictive intelligence, the Steve Madden team was able to:

  • boost conversion by 37% with category affinity campaigns
  • reduce campaign production time by 87.5% using predictive campaigns
  • elevate their repeat buyer rate by 22%

Check out the full story here.

RETAIL

Love is in the…consumer spending index

Gif from the movie The Room Giphy

Consumers may still be reeling from the pressures of inflation, but you can’t really put a price tag on love, at least when it’s Valentine’s Day.

According to NRF, consumer spending on Valentine’s Day this year was predicted to hit ~$26 billion, up from $23.9 billion in 2022, marking one of the highest spending years on record.

The average amount consumers were projected to spend on gifts amounted to $192.80 (up from $175.41 in 2020), per NRF.

Of course, a lot of the spending was for traditional gifts like chocolate, flowers, going to dinner, or just a good ol’ bottle of liquor, Katie Thomas, who leads the Kearney Consumer Institute, told Retail Brew.

Per NRF, the top categories of gifts included candy (57%), greeting cards (40%), flowers (37%), an evening out (32%), jewelry (21%), gift cards (20%), and clothing (19%).

“When you think about the sort of experience-over-things mentality, when it’s the more straightforward holiday, people just want to give the material thing,” she said. “They’re not necessarily buying cooking classes or something like that; they’re going to give a wine basket, or they’re going to do a sort of chocolate arrangement.”

Many consumers, however, were expected to take an “it’s the thought that counts” approach, choosing homemade presents like a custom Spotify playlist or making a nice dinner at home, or simply getting a nicely packaged takeout order, which Thomas calls “trade up at home.”

“We found that a lot of people actually think cooking at home and splurging on a nice bottle of wine, or a nice cut of meat—they actually see it as an upgrade to going out to eat,” she explained. “You’ll see a lot of that this year.”

Keep reading here.—JS

        

TECH

Of service

Walmart computer loading Francis Scialabba

“The pre-flight phone call kicked off months of turning a ‘mental handshake’ deal with Salesforce into a formal one: a contract that rolled Walmart’s tech tools for retailers into Salesforce’s suite of products…Walmart’s purported goal: become a services provider for other retailers,” writes Tech Brew’s Hayden Field in a recent profile of Walmart’s Anshu Bhardwaj:

As Walmart’s senior VP of tech commercialization and strategy, Bhardwaj is in charge of not only marketing the company’s tech, but also designing its tech strategy with Walmart CTO Suresh Kumar.
“Think about it: Me coming into this role where my boss leads tech for all of Walmart Inc.,” Bhardwaj said. “And think of it as 17 different tech companies combined into one.”

Read the whole story here on Tech Brew.

        

TOGETHER WITH BOLT

Bolt

Hold your checkouts account(able). Making customers fill out long, tedious forms when they purchase your goods online? You’re turning away potential repeat buyers. Bolt can help you streamline your account creation and checkout processes so you can keep shoppers comin’ back for more. Learn more in our latest vid, sponsored by Bolt.

SWAPPING SKUS

Today’s top retail reads.

Top dogs: The legacy of department store retail leadership development programs, and why it’s harder than ever for retailers to fill the role of CEO. (the New York Times)

Starting price: A look at the latest producer-price index report (PPI) which reflects the amounts suppliers are charging businesses, and which economists say isn’t good news for consumers. “Today’s producer price increases will translate into tomorrow’s consumer facing price hikes,” said PNC senior economist Kurt Rankin. (the Wall Street Journal)

(Un)happy returns: While more and more companies are offering retail merchants returns services, the merchants themselves are getting creative to avoid their customers wanting to make returns in the first place. (The Information)

WHAT ELSE IS BREWING

  • DoorDash reported better-than-expected Q4 sales, causing its stock price to jump 6%.
  • Starbucks CEO Howard Schultz may end up testifying about alleged anti-union activity in front of the Senate, if Bernie Sanders has anything to say about it.
  • Gucci sales are struggling in the US and China, dragging down overall sales numbers at luxury group Kering.
  • Egg companies are facing inquiries from Capitol Hill about skyrocketing prices, which are up 150% YoY.
  • Twitter will now allow cannabis brands to advertise on the platform (in states where it’s legal).

FRIEND OR FAUX?

Three of the stories below are real...and one is most definitely not. Can you spot the fake?

  1. A supermarket chain hosted an appliance-themed runway show during fashion week sending models down draped in steam irons and blenders.
  2. Mars Wrigley was slapped with a $14,500 fine after two of its workers fell into a vat of chocolate.
  3. A thief broke into an industrial park in the UK to steal 200,000 chocolate Easter eggs worth $38,000.
  4. Chipotle is launching a new line of frozen burritos that come stuffed with four other kinds of burritos.

Keep reading for the answer.

FRIEND OR FAUX? ANSWER

We know that there’s no such thing as too many burritos, but we think stuffing burritos into other burritos is a solution to a problem that doesn’t exist.

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Written by Andrew Adam Newman, Jeena Sharma, and Hayden Field

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