Wal-Mart Stores is slowing its store-opening roll and doubling down on building a better e-commerce operation. McDonald's is searching for a better burger.
So, it’s the opening weekend of baseball’s postseason, something that means something to some people and nothing to others. Either way, take a break from the action to read the BloomReach Relevance Report or busy yourself reading it while others around you sit transfixed.Wal-Mart Stores is pulling a 180 that is more dramatic than the doughnuts hot-rodders spin in the retailer’s ample parking lots at night, USA Today and many others are reporting.
The Bentonville behemoth is going all-in on e-commerce, slowing its new store openings down to next to nothing and pushing to make a big move into Amazon’s territory.
The online emphasis has been a thing now for years for Walmart. But the move away from brick-and-mortar expansion marks a dramatic change. The Wall Street Journal reports that Wal-Mart next year will open only half the number of superstores as it did this year. It’s cutting back on its pint-sized Neighborhood Markets, too.
The BRRR has done the math (with a 50 percent assurance of accuracy): Wal-Mart plans to open 55 stores next year down from 230 this year. One important point: The vast majority of the 230 (161) were Neighborhood Markets, not the gigantic supercenters.
Profits will take a hit, though execs said there still will be profits. The forecast is for a profit flat line next year and bump about about 5 percent the year after that.
The move reflects two big retail trends: The unrelenting online assault by Amazon and the move to marry in-store and online experiences to boost consumer convenience and retailers’ profits.
On point No. 1: Amazon continues to gallop ahead as the place consumers start their online shopping excursions. A recent BloomReach survey, conducted by Survata, found that 55 percent of consumers begin their product searches on Amazon. That’s up 11 percentage points from just a year ago. And this time next year? Well…
And so Wal-Mart is jumping in with both feet, hoping to drive online and in-store sales with a more robust e-commerce offering — including a third-party marketplace.
On point No. 2: Wal-Mart is pairing its ramped up online efforts with a push to improve customer experience both in-store and online. The store is offering a beefed-up employee training program and providing better pay for those who work in its stores.
Turns out, customer experience is a thing and the nation’s biggest retailer is on it.
Opening fewer stores is the answer; unless it’s not
So, Wal-Mart Stores’ move pretty much seals it. Fewer brick-and-mortar stores and a bigger emphasis on online sales is the way forward for stressed out retailers, right?
Well, no. Turns out, online-only plays are now turning to brick-and-mortar expansion. Bonobos and Warby Parker, both of which started as e-commerce operations, are saying they will expand the number of physical stores they operate, The Wall Street Journal reports.
(The Journal story requires a subscription, but this Retail Dive summary does not — and it comes with commentary.)
In fact, a Warby Parker founder told the Journal that he could see a world where the eye-glass seller had 1,000 real stores. And no, he doesn’t need his eyes examined.
It seems that customers actually like to talk to people, at least sometimes. The Retail Dive summary above says that Warby Parker’s co-founder Neil Blumenthal found that out when for a period he was inviting customers to his apartment to try on Warby Ps, if they liked.
Sure, it sounds weird, having strangers plucking specs off your dining table so they can try them on. But Blumenthal found that not only did customers like talking to people, but that Warby Parker could build a better relationship with customers when they dealt with them in person.
That relationship is key, because getting someone to buy a pair of glasses from you once is nice, but getting someone to buy glasses from you over and over again is the goal.
Another sign that smartphones are taking over the world
Yet another study that serves as a reminder to retailers that they need to bring their best game across all channels. Search Marketing Daily reports that nearly half of consumers browsing the web, browse on more than one device.
As important, on any given day, 40 percent of consumers search only on their smartphones, according to the Search Marketing story, which quotes research by Google. The numbers underline the importance in providing a great mobile experience, sure, but they also make the case for retailers being consistent across their various channels.
We are a nation of multitaskers and Marketing Daily says 57 percent of those surveyed said they use multiple devices every day. In fact, 21 percent of those use more than one device at the same time.
One other cool thing: Google looked at the time of day people use different devices. No big surprise: Searches on mobile devices dominate for 15 of a day’s 24 hours. Desktops (which could be laptops, too) hit their peak at 8 p.m. — after the dishes are done and the kids are in bed or getting ready for bed.
The computer use then drops off as the night goes on.
All of which is another sign that there is no reason to believe that the mobile revolution will let up. The trick now is for retailers to figure out how to translate all that mobile browsing into mobile sales.
McDonald’s bad burgers: Do you think fresh beef would help?
Now, you knew the BRRR couldn’t pass this story up, if only for the chance to once again post this video. It’s an all-time favorite — of ours.
Anyway, the Golden Arches are making another move to serve up hamburgers that don’t suck. Turns out consumers are turning to Five Guys, Shake Shack and a place called The Habit, which we’d never heard of, but which apparently has the best burgers going. (Then again, we’re sheltered.)
You can get a deeper dive on McDonald’s hamburger-improvement program in The Wall Street Journal, though it’s available through tiered subscription.
It pretty much lays out the problem in a memo obtained from McDonald’s. Millennials just aren’t that into the Big Mac, which is a big deal for McDonald’s. The memo said the burger is less relevant, which has us almost feeling sorry for the iconic burger.
In fact, next time you see the Hamburgler give him a hug. Anyway, only one in five millennials has even tried the BM. And if you know anything, you know that without millennials there would be no reason to exist.
How bad are McDonald’s burgers? The worst, according to a 2014 Consumer Reports survey that ranked 20 fast-food burgers ahead of McDonald’s.
And so, McDonald’s has convened a panel of experts to come up with a good-tasting burger. They plan to start with fresh beef, which sounds better already. There are likely to be some premium ingredients involved, which couldn’t hurt.
The big worry is that all this goodness will slow things down. It turns out McDonald’s likes to get you your hamburger in 90 seconds and apparently a lot of McDonald’s customers believe they need to get their hamburger in 90 seconds — especially those who use the drive-through and devour the burger while behind the wheel.
The Journal runs down a series of failed McDonald’s attempts to give the public a better burger. There was the Arch Deluxe, there was the Angus beef experiment, there was the premium sirloin burger. Nope. Nope. And nope.
So, we’ll see. In the meantime, you can’t miss with the fries.
Holiday shopping starts when?
So some experts are saying that this year’s presidential election could slow holiday shopping — at least temporarily.
I’m not sure which is more interesting: that politics might interfere with holiday commerce, or that it’s now a given that holiday shopping will be in full swing by Nov. 8.
No, the BRRR hasn’t had its head buried in the sand. We know holiday shopping has been kicking off earlier and earlier.
It just sounds odd to read a sentence like this one in the MarketWatch report:
“The Nov. 8 presidential election and its outcome will distract consumers, but the retail industry believes that shoppers — well-positioned heading into this holiday season — will quickly get back to purchasing gifts after ballots are cast.”
We mean, it’s not like we’re talking about a few eager beavers getting their shopping going within about a week of Halloween. This story has the holiday shopping season in full swing by the first week of November. In full swing enough that it could actually experience a lull.
And it’s not hyperbole or baseless speculation. The story points out that PwC has released its 2016 holiday forecast, which says that 64 percent of consumers will have started their holiday shopping before Black Friday and that 29 percent will be all but finished shopping by then.
The potential upside? Maybe, given their penchant for getting a start on things, those shoppers will have voted early, by mail. That way their shopping won’t have to be interrupted at all.
Quote of the week
“We’re excited to give this day back to our employees so they can celebrate with their families.” — Mall of America senior VP of marketing Jill Renslow to the Minneapolis Star Tribune, regarding the mall’s decision to close on Thanksgiving.
Smartphone photo by Jason Howie published under Creative Commons license. Other photos by Mike Cassidy.
Mike Cassidy is BloomReach’s storyteller. Contact him at email@example.com; follow him on Twitter at @mikecassidy.