Retail Radar 30-Jan-2024

Top of Mind

?? ? Aldi’s acquisition of Southeastern Grocers Moves ahead

German discount grocery giant Aldi has inked a deal to acquire about 400 Winn-Dixie and Harvey Supermarket locations in Alabama, Florida, Georgia, Louisiana, and Mississippi. This acquisition is part of an agreement with Southeastern Grocers to acquire all of its Winn-Dixie supermarkets. The deal is expected to close in the first half of 2024.

Southeastern Grocers completed its divestiture of its Fresco y?Mas stores this week as part of the deal. It’s another validation that the market is ok with consolidation under the right circumstances.

The continuing consolidation of grocers has all eyes on Kroger-Albertson’s mega-merger.

What is top of mind for consumers, businesses, and advocacy is

• Increased Market Dominance and Competitive Pressure: The consolidation leads to a dominant position for the consolidating entity in the market. This can intensify competitive pressure on smaller, independent grocers and potentially reduce the number of players in the industry, affecting consumer choices.
• Economies of Scale and Cost Efficiency: By consolidating, grocery chains like Aldi can achieve economies of scale, leading to cost savings in purchasing, logistics, and operations. These efficiencies can be passed on to consumers through lower prices. This is where there is an opportunity to get concessions during the merger process. Set-asides that benefit all parties over divesting parts of the portfolio.
• Impact on Suppliers and Product Diversity: Such mergers can also impact suppliers, as larger chains may have more negotiating power, potentially affecting the terms and prices for suppliers. Additionally, there's a possibility of a more homogenized product selection as larger chains often streamline their product offerings for efficiency, which might reduce the variety of products available to consumers.

Tech Spotlight

Kiosks are multi-faceted hardware, the canvas on which hardware and software artists paint. Roll them up to your location and find tens of billions in revenue across the world. Coffee is a $20B market across Europe, South America, and North America.

They are my favorite of all consumer devices; today, kiosks are used for many services, such as EV chargers, wayfinding, ticket sales, information services, or as a point-of-sale (POS). They’re designed for public use, offering users a convenient and efficient way to access services or information. They offer flexibility and a wide range of usage in convenient spaces.

Yet for all the features, bright lights, and cool looks outside, they are straightforward on the inside. Kiosks are low-end fan-less computers with a touchscreen. ?Optionally, they have card readers, printers, a payment terminal, and perhaps a dispenser.

BTW, the result of a kiosk that isn’t in a high-traffic area is that its next home is the trash. Over the years, with tens of thousands of kiosks deployed, I’ve watched offices and other locations dispose of underutilized hardware.?

Their format and use continue to evolve. The business, process, and technology are something I’ve termed humnlss.

humnlss is the art and science of building e-commerce products and services that autonomously improve the consumer experience at scale while providing insights from data and assets uncovered at the network scale of transactions.

Experience humnlss

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The Disruptors

Wander – Profitable Returns

When Jordan Allen decided to create Wander, he knew a better Return Management model existed.

I sat down with Wander’s CEO and got the scoop on how he is taking a #ShopLocal approach to the retail industry’s trillion-dollar return opportunity.

Wander’s vision is to be a purpose-built company. They create financial liquidity for retailers and provide environmentally friendly sales in local communities, promising a speedy turnaround for both sides of the market.

How? Wander launched its first location in Spokane, WA, last week. Wander uses a Click and Collect model where consumers browse the website, bid on products, and the winning bid is notified. Buyers drive to the location and collect the product(s). My review of the site was during their pre-launch.

During the bid process, it is the usual. Each product listing comes with a card describing the state of the product so you know what you’re buying. The model is not unusual for the returns industry (e.g., Woot), but Wander’s Return Management product is.

From a Product standpoint, Wander’s two-sided marketplace earns credibility for:

1.???? Well-defined Seller Market. Most retailers need to be equipped to resell returned goods. For retailers, it is cash back without additional repacking and restocking costs. The supply chain is well stocked.

a.???? Wander’s vision is to create a local presence with multiple warehouses across the US, reducing environmental impact and making products available for immediate pickup.

b.??? Wander’s cashback now is a strong incentive for retailers. Getting the numbers and metrics of cashback will be a leading indicator.

2.??? Circular Economy. The buyer target is aimed at local resellers who benefit from select amounts, not pallets of product. Additional customers include suburban Millennials and Gen X’ers who wish to contribute to the Circular Economy and landscape and are satisfying an immediate purchase need.

a.???? Why will consumers buy? The Circular Economy works on an emotional level, both by seeing it as doing good and removing excesses from the retail supply chain. The scarcity model motivates you to purchase if the product scratches an itch. Post-purchase, the logical brain will justify everything.

b.??? Their list of beta customers topped 500 while we were on the phone, all without heavy promotion.

3.???? [Less] Effort E-Commerce Onboarding.

a.???? Products entering the warehouse are immediately screened and documented, and images are scraped or created for the website.

b.??? An AI/LLM creates memorable product descriptions and posts on Wander’s site.

c.???? If you’ve ever built and maintained an e-commerce site, you know product onboarding loading is the most complex and tedious part. Wander processes new products in under three minutes.

What is Wander’s future?

The stated goal is 20 warehouses across the US in large population centers. Wander’s flexible model setup is relatively straightforward. New centers can be stamped out and added to the network. I can foresee compelling feature enhancements, including a membership model, working with brands, partnerships, a seasonal market, and social selling.

I think they have legs, building loyalty on both sides of the market. The market is ripe for businesses that touch on emotional responses.

What do you think?

Onward.

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