Supply Chain Reaction

My neighbor to the north – the one with a mansion lording over the rest of the hood from the highest point around – hosts equestrian events on weekends. Whether reining or cutting competitions, or “quaint” social gatherings, his barn and surrounds burst with dozens of horses and riders just about every Saturday. His property is large enough we’re pretty far removed from the hubbub, except the convoy of horse trailers and trucks barreling down the street beforehand. The wheels rumbling over the washboardy dirt road and balloons of dust floating high overhead are hard to ignore.

Maybe you don’t have a parade of horse trailers in your neighborhood (or a washboardy road), but guess what?  You do have a procession of vehicles making their way to your driveway, and the list of participants is growing.  Home delivery is the latest block party where everybody seems to have an invite.

In the 1970’s the only vehicles coming up our driveway were the red, white, and blue jeeps of the United States Post Office (USPS) or the brown, boxy trucks of the United Parcel Service (UPS).  Then Federal Express vans (FedEx) joined in with a little purple and green, while DHL (the initials of the three founders’ last names) added a healthy dollop of yellow.  Taste the rainbow!

 That’s a pretty good line-up right there, but in the last decade or so home delivery (or “last mile delivery”, to use the trendier term) picked up several more players.  Amazon (black vans with a blue “swoosh” on the side) and WalMart (several colors) extended their supply chain by adding home delivery trucks.  Your pizza guy has been joined by restaurant delivery of all kinds, like DoorDash, Grubhub, and UberEats.  AmazonFresh is competing with your local grocery store to make sure you consider home delivery of products from Whole Foods.

Here are a few of the more “colorful” entries coming soon to a driveway near you:

  • Postmates – Pizza, prescriptions, shoes, and tech products, just to name a few Postmates delivery favorites.  What makes Postmates unique?  They’re not affiliated with any business or product line.  If you need it, they’ll find it.
  • LuggageForward – Boasts “doorstep pickup”, so all you worry about is transporting you from your home to your travel destination.  LuggageForward guarantees your bags arrive before you do, and their “shipping experts” track your items every step of the way.
  • Piggybee – Just like LuggageForward, except you’re entrusting your luggage or other item to a random person who happens to be traveling to your destination anyway.  Sounds a little dicey, but isn’t the name great?
  • Entrusters – The opposite of Piggybee, but the same concept.  You find something you want to buy in a distant locale, and the random person who happens to be traveling to your city brings it to you.
  • goPuff – A “convenience store caterer”, tempting you with products like that pint of Ben & Jerry’s you don’t really need.  Perfect for college students?  Yes, and the company was started by college students.  “goPuff”?  No clue.
  • Drizly – Not only wine, beer, and liquor to your door inside of an hour, but also all the mixers, garnishes, and supplies you need to make your party tipsy.  Hopefully you’re not the only one at the party.  Hopefully your Drizly driver doesn’t partake in whatever he or she delivers.
  • Stitch Fix – A competitor to Nordstrom’s Trunk Club, Stitch Fix offers a stylist and all the designer clothes you could ever want.  Try them on and keep ’em or return ’em within three days.  Might as well close the doors on your local shopping mall.
  • Washio – Just what you would guess: home-delivery wash, dry, and dry-cleaning of your wardrobe.  Your hamper just moved to the front door!  Washio’s “ninjas” pick up and drop off inside of 24 hours, and even leave a cookie on top of the clean-clothes bag.  Sadly, Washio lasted less than three years; it’s founders claiming, “sometimes you make it, sometimes you don’t”.

As we speak, many of these deliverers are hopping the fence into each other’s domains.  Postmates is test-marketing convenience store items in New York City, sourcing from 150+ Walgreens and Duane Reades.  Doordash is trying out same-day grocery delivery in 22 states.  AmazonFresh distinguishes itself as food delivery with its lime-green (not black) vans.

With so many entrants in the home delivery circus, it’s fair to say the concept is still in its infancy.  We’ll need several years to see who and what will ultimately come out in the wash (clearly, not Washio).  But mark my words, you can always count on someone to rain on the parade.  Amazon is already experimenting with “Prime Air”, a drone-service.  In other words, home delivery may be a little less grounded in the future.

Some content sourced from the 10/2/19 Wall Street Journal article, “Postmates, DoorDash Want to Deliver Your Groceries, Too”.

Tingling the Spines

When Amazon began opening bookstores a couple years back, I wondered why an uber-successful online enterprise would turn to brick-and-mortar, especially after sales of more than fifty million Kindle e-readers through its website. Turns out Amazon’s walk-in shopping experience is worth the walls. It’s retail at its most relaxing – and it has a place in the equation.  As CEO Miriam Sontz (Powell’s Books in Portland, OR) puts it, “something special occurs in a physical bookstore that is not replicable online”.

I’ve been to an Amazon Books just once (fewer than twenty locations in the U.S.), but vividly remember what made my shopping experience so compelling.  First, the manager greeted me with, “Welcome to Amazon, and what was the last book you read?”  When I told him (Kristin Hannah’s “The Nightingale”), he replied, “Oh, that’s a wonderful book.  Wasn’t it so interesting to read an account of the war in France instead of in Germany?  Have a look on Aisle 3 – you’ll find some other great WWII fiction.”

As I indeed had a look on Aisle 3, the manager moved on to other customers, prompting similar conversations.  Suddenly I realized the whole interaction was intentional.  Personalize/focus my shopping experience by discovering what I’m reading.  Pique my curiosity by allowing me to overhear what other people are reading.  A + B = Increase the odds I’ll make a purchase.

What really sets Amazon Books apart from the others is the displays.  The books are laid flat and on angled shelves, so you’re looking right at the cover as you’re standing in the aisle.  Below each book, an easy-to-read card delivers a crisp synopsis of the book, as well as a smattering of the ratings and reviews you’d find online.  Think about that tactic.  You peruse the entire colorful cover.  You take in the book title and author without cocking your head ninety degrees to the left or right.  And you know a little about the book (and whether it’s a recommended read) without turning a single page.  It’s almost like those moments in front of paintings in an art gallery.  “Displayed flat” sounds counter-intuitive in the per-square-foot world of retail, but damned if it isn’t a great way to shop.

Photo by Natasha Meininger

Amazon isn’t the only spine-tingler these days.  In a truly baffling trend, interior decorators and collectors are shelving books with the spines… facing the walls.  That’s right: take a book off the shelf, turn it all the way around, and place it back on the shelf.  Why?  Because “eggshell” – the typical color of the pages themselves – is aesthetically pleasing, instead of that rainbow of bright, colorful book jackets.  The linen texture is uniform, blending more confidently with whatever else is going on in the room.  Really?  Is this Feng shui on steroids?

Alas, as the Wall Street Journal reports, backward-bookshelving is no fad, .  You can purchase books on the cheap specifically for this approach.  Check out the goods at booksbythefoot.com.  BBTF sells you reclaimed books, covers removed, of various shapes and sizes, and yes; purchased “by the foot”.  You can even purchase your tomes in a color scheme (i.e. “burgundy wine” or “earth tones”).  Arrange them any way you want: facing in or out, flat or standing up, in piles or as standalones.  Any way you stack ’em they’ll look fully nondescript, suggesting you’d never go so far as to – gasp! – read them.  As Chuck Roberts (BBTF President) puts it, “Some people don’t want to have the literature as a distraction… they want books as objects on a shelf.”  You mean, like lobotomizing the intellectual meaning from the aesthetic?  Weird, just weird.

Or maybe not.  Now that I think about it, I own the complete works of Charles Dickens, painstakingly acquired years ago, one book at a time through the Franklin Press or some other mail-order rag.  My Dickens collection (above photo) sits neatly on the shelf gathering dust, just waiting for me to crack the first spine or read the first page.  But no matter; don’t they look pretty?

Some content sourced from Wikipedia, “the free encyclopedia”.

 

 

 

Refining Buy-Products

Let’s chat about your last visit to the gas station (assuming you don’t own a “plug-n-play” vehicle).  Chances are you hit the pumps in the last week or so.  If you’re like me you drove in and drove out, mindlessly fueling to be on your way again as fast as possible.  But lately I’ve learned there’s more than meets the eye as you fill-er-up.  We’re all unknowingly playing the great retail chess game known as dynamic pricing.

Here’s the drill.  My local Shell station asks me a lot of questions before I get my first drop of unleaded (which makes me crazy but what choice do I have?)  Cash or credit?  Rewards Program number?  Zip Code?  Car Wash?  Paper Receipt?  All that info is “pumped” out of me (ha) up front.  Even then I must choose the octane before I finally get what I came for.

Now here’s the rub.  Every one of those data points feeds a Watson-like computer somewhere far removed from the gas station.  Watson brews a big customer-transaction stew, mixing in time-of-day, day-of-week, gallons purchased, and even weather conditions.  The result?  The “optimal” price point, delicately balanced between a) what you the consumer are willing to pay and b) what the supplier wants to net.  It’s a price-per-gallon computation that changes as many as ten times a day.

Coca-Cola may get the credit for the advent of dynamic pricing – with soft-drink vending (almost 20 years ago now).  Coke added a heat sensor and a computer chip to their machines, and as the outside temperature increased so did the cost of a soda.  Bad taste, and bad decision.  Consumers figured out the game and raised a big stink.  The running joke at the time – maybe not so funny today – was Coke would next install a camera to determine how much change was in your pocket.  Pepsi seized the opportunity to lure the unhappy customers and Coke quickly dropped the techno-gimmick.  But dynamic pricing took hold and never looked back.

Dynamic pricing is easier to digest when it targets times or situations where customers don’t notice or don’t even care.  The better example is school supplies.  Towards the end of summer your local Wal*Mart or Target will deep-discount pencils and paper and the like, often as much as 50%.  Kids will flock to the sale and load up on everything they need.  Parents will give their receipts an approving smile.  But guess what?  The store still wins.  That’s because “impulse purchases” bagged up with the school supplies are priced slightly higher than usual, more than offsetting any loss from the sale.

Dynamic pricing is hardest at work in hotels (what rate makes sense to fill that empty room?), utilities (do you really need the air conditioning right now?), and outdoor sporting events (are you willing to watch your baseball team during that unexpected rainstorm?).  And of course, any time you shop Amazon or Uber, dynamic pricing is asking the question, “how much do you really want that product or ride?”

Let’s pull up to the pumps again.  If you use “GasBuddy” or some other app designed to locate the lowest price-per-gallon, you’re winning the battle – but not the war.  I wish I had GasBuddy the first time I filled up as a teenager.  I crunched the numbers: forty years of driving; a tank of gas per week; eighteen gallons or so per tank.  If I purchased at $0.03/gallon less each time I filled up, I’d have an extra $1,000 in my pocket by now.

Thanks to Watson and his endless algorithms however, GasBuddy isn’t much more than instant gratification.  The suppliers are always one step ahead.  Unless you keep an eye on prices (and a few gallons in your tank), you’ll inevitably purchase when your demand takes priority.  Did you know gas is less expensive in the early hours of the day?  That’s because commuters are more likely to fill up at the end of the day, when they unknowingly drive up demand.  The computer is only too happy to adjust the price.

Maybe now you’ll leave the house a little earlier in the morning.  Fill up on your way to work instead of on your way home later in the day.  You will save a couple of cents per gallon if you do that.  And good for you – you’re beating the dynamic-pricing game.

Just don’t buy a cup of coffee while you’re at it.

 

 

 

Impersonal Delivery

Why does Amazon ask for “packaging feedback”?  Do they really want my opinion on a plain brown box?  Yesterday I came home to an Amazon delivery on my front door step.  But that’s already not true.  The box was dropped into a plastic bag and suspended from my mailbox (“front door step” just sounded better).  My packaging feedback to Amazon: lackluster.

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Let’s chat about delivery as it used to be.  My fondest childhood memories include the noisy, colorful, “old-fashioned” delivery trucks that made their way into the neighborhood regularly.  No kid from that era will ever forget the bakery, dairy, and ice cream trucks, and the allure of fresh-made bread and other goodies – temptations limited only by Mom’s permission or the amount of change in your pants pocket.

Growing up in Los Angeles, the Helms Bakery had a fleet of hundreds of bright yellow delivery trucks.  The drivers dressed in smart uniforms and used a distinctive “toot-toot” horn to announce their arrival.  The neighborhood gathering at the truck was as much social as it was for baked goods.  At the end of grade-school field trips through the Helms factory, each kid received a coupon for something free from the delivery truck.  It was like a golden ticket to a candy store, where you walk in and the owner spreads his arms and says “pick one”.

The dairy truck came from Edgemar Farms, not that we ever knew (or cared) where the farm was.  Edgemar delivered milk in glass bottles with foil caps.  The “milkman” would walk into the kitchen like he was family.  He’d take the order from Mom and return with his wire basket full of milk, eggs, and butter.  Then he’d unload everything right into the refrigerator, tip his cap with a cheery “good morning” and be on his way.  Now that’s anything but lackluster delivery.

Ice cream (Good Humor or some other brand) appeared in our neighborhood on summer nights – the very best truck of them all.  I can still hear the beckoning jingle from the roof-mounted loudspeakers.  The neighborhood kids would flock – I mean flock – to the truck’s side window, where the all-in-white ice-cream man would lean out and wait too patiently while we made up our minds.  Bomb pops.  Push-ups.  Ice cream sandwiches.  Heaven on earth delivered right into your hands.

Okay – end of time-gone-by chat – back to today’s delivery by Amazon.  Boring brown box.  Got it?  So how did my box get to me?  What did the truck look like (was it even a truck)?  Did the delivery person wear a uniform? Did he or she come to the front door?

Lack of delivery details equals lackluster delivery.  And it’s only going to get worse.  Amazon Prime Air is described as “a future delivery system designed to safely get packages to customers in 30 minutes or less using small unmanned aerial vehicles”.  So now my brown boxes are going to arrive by parachute.  In my packaging feedback, I’m going to request a beckoning jingle from the drones to announce their arrival – er, landing?

 

Go On, Take the Money and Run

If you buy e-books through Amazon, you’re familiar with the option “send a free sample”.  Rather than buying the book up front, Amazon sends the first 5% to your e-reader as a teaser.  The sample cuts off abruptly (sometimes mid-sentence), but you get enough of a taste to decide whether you want to commit to the purchase or simply walk away.

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Free samples are a genius sales tactics (think Costco), but I say free samples are saving graces for an often mediocre world.

Mediocre.  It means you experienced something run-of-the-mill or commonplace.  Think about the last food item you purchased.  Would you say it was deliciousLike nothing you’ve ever tasted before?  Would you rush back and buy another one?  Probably not.  Yet you ate the whole thing even though the first bite screamed “meh”.  Why did you do that?

Here’s a better example.  How often are you at the movies and twenty minutes into the film you start to wonder if it’s going to get any better.  You become more interested in your surroundings than what’s up on the screen.  For me, the first red flag is when I suddenly double-check my pockets for my wallet and car keys.

Sometimes you see people get up and leave in the middle of a movie – the bold ones.  Do you leave?  Chances are you don’t.  You finish out the show, turn to the person you came with and say, “ah, it was just okay”.  Again, why did you do that?  You could’ve been gone almost two hours ago and salvaged the evening by doing something better!

I think we should apply Amazon’s “first 5%” to more of life’s experiences.  At the movies, why don’t they flash a little question mark in the corner of the screen fifteen minutes in.  If you’re not into the film you get up and leave at that moment, and the theater refunds you 20% of the ticket price.  Sure they might have to charge a little more to offset the loss, but guess what?  Movie producers would track the “leave” statistics and make better films.

The other night I saw the Harlem Globetrotters, an act I hadn’t seen since childhood.  They’re not as entertaining as they used to be.  The basketball is still impressive, but the slapstick comedy is dated, and the focus seems to be as much about their charity and the products they’re selling as it is about the show itself.  Again, the “first 5%” rule says you decide within the first fifteen minutes whether to stay or go, and you get a 20% refund on your ticket.  And, that ticket could be handed off to another line of patrons, who would then watch your remaining 80% for free (and probably buy enough concessions and products to offset the refund).

We’re in an election year.  You may consider your choices for President mediocre.  No problem.  The “first 5%” rule says the winner has 75 days to make good on those “when I get in office” promises.  If he/she comes up short, the Vice-President (or even more interesting, the runner-up) takes over and also gets a 75-days shot.  Sure, I’m making the early months in office more demanding and the election process more complicated.  But at least the VP would no longer be a figurehead.  And you the voter would no longer feel like your “purchase” of the next four years demands a refund.