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THE OTHER SIDE OF THE RETAIL CONUNDRUM: Yesterday I featured an interview with Walmart’s CEO which focused on the retailer’s challenge of melding a traditional B&M core operation with consumers’ shift towards eCommerce. Now for the opposite perspective consider Amazon’s challenge of solving the most complicated pillar within retail . . . Grocery. No doubt the “steaks” (sorry) are high, with annual grocery sales in the US approaching 1 trillion dollars – that’s with a T, not a B! But the delivery model Amazon has mastered for other products doesn’t work well for grocery because of two reasons – produce and meat. Consumers want the ability to hand pick the freshest, best looking items. And even if they do order groceries online, the return rate is so high that it’s hard for eCommerce vendors to make any money. The attached IBJ article delves into Amazon’s plan to break into the grocery game. Their strategy is still evolving, but it feels like a hybrid of their current Amazon Fresh grocery delivery, and the new Amazon Go register-less stores their testing in Seattle. Get ready to watch this one play out.
THE FIRST STREAMING-ONLY RECORD LABEL: In a sign of the times Warner Music Group is launching the first streaming only specialty label within their portfolio. They’re positioning it as an emerging artist platform – sort of like the farm team to their regular label. I think Warner is doing this to appease current artists under their main label who might feel like they’re stuck on the old platform. My guess is within 5-10 years there won’t be a streaming-only designation for labels, because all labels will be completely concentrated on streaming and concerts, as physical album sales become a relic of the past.
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