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The Future of Retail Checkout: No Checkout at All?

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“People have said when checkout is working really well, it will feel like stealing. You grab a pair of shoes and you just walk out.” That’s how Michael Chui, a partner at the McKinsey Global Institute, describes the retail-checkout experience in your not-too-distant future.

This coming transformation in the way you pay for items in bricks-and-mortar stores will occur through a network of sensors placed strategically around stores, which will enable retailers to recognize you (through your smartphone or other devices) when you walk through the door. Inexpensive sensors also will be attached to (or embedded in) items available for purchase. And the stores will already have your preferred payment information on file, so when you exit the store with your chosen merchandise, you’ll simply be billed automatically, totally skipping any traditional checkout experience.

Many restaurants are already in the vanguard of transforming the checkout experience. As Alexis Madrigal explained two years ago here, a growing number of restaurants are using iPads or other tablets to have diners place their own orders and then check themselves out at the end of the meal. If such a change becomes widespread, as Madrigal pointed out, the implications for waitstaff employment will be profound.

Retail stores are heading in that direction too. According to M.V. Greene, writing inStores, a trade magazine for retailers:

The “Internet of Things,” where objects in the physical world are connected to electronic virtual networks, is poised to turn retail on its head. Not since the introduction of online shopping – and before that credit and debit cards for purchasing – has something in retail had the potential to be so transformative.

Usually, when we think of “transformative” changes, we’re talking about things most people didn’t even anticipate coming at the time: examples include the radio, the atomic bomb, the Internet. But this coming change in our retail experience is, I would guess, something that many people wouldn’t find all that surprising. After all, the history of retail shopping is one of task-shifting.

In the last century, the big change in retail checkout came by having the customer do more of the work. In the original model of, say, the grocery store, a person went into a general store, where the owner or clerk stood behind a counter and retrieved items the customer wanted from behind-counter shelves, then packaged those items and billed the customer or accepted payment. But that retail model was gradually replaced by the “supermarket” model, which put products out on customer-accessible shelves. Now, the customer did the work of selecting items he or she wanted and taking them to a cashier for payment. Efficiencies galore.

More recently, efficiencies have built on that model of having the customer do more of the work, now augmented by technology. For example, a growing number of grocery chains have “intelligent” carts that can total up items as a customer moves through the store, tracking movement and making recommendations. And in many stores, especially grocery and drug-store chains, customers can use self-checkout kiosks. In Apple stores, for a couple of years already, you’ve been able to buy off-the-shelf items using an app on your smartphone and walk out of the store with your merchandise, having never interacted with a salesperson.

But just because the coming changes in retail checkout aren’t beyond our imagining doesn’t mean that they’re unimportant. For one thing, they’re likely to have profound effects on retail employment. In fact, according to data from The Economist, retail workers are among those whose jobs are most likely to be displaced by digital or computer-related technologies in the next 20 years. (I should note that the U.S. Bureau of Labor Statistics holds a different view, projecting that growth in the number of retail-sales jobs is likely to hold steady—at about 10 percent—over the next decade. Your guess as to who is right may be better than mine, but I’m putting my money with the folks at The Economist.)

Apart from employment concerns, the vision of a digitally-automated retail future provokes unease about privacy issues. As M.V. Greene notes, “a major hurdle for brands and retailers is to gain the trust of consumers when their personal data is flying back and forth in real-time across networks.” Greene quotes David Dorf, a Senior Director of Technology Strategy at Oracle Retail, who says retailers have to be worried about a “creepiness factor” related to the privacy of consumer data.

Dorf advises merchants to avoid a “stalker” configuration as they deploy these new technologies and adopt a “butler” configuration instead. “The stalker wants something from you and typically is trying to get as much information as possible and wanting to directly impact you.” By contrast, “The butler is kind of always in the background, always helping you, pointing things out that might be of interest, trying to make your life easier.”

“If retailers can focus on this butler mentality,” Dorf predicts, “the Internet of Things has a lot of potential to make the customer experience more rich and engaging, and loyalty will ensue.”

It’s oddly reminiscent of another Internet-enabled butler, the early search engineAsk Jeeves. It could take a few years, but we may soon see how a Jeeves-like digital figure fares in the brick-and-mortar world.

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This post originally appeared on TheAtlantic.com

 



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What’s Going on in Beer World?

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What’s going on in Beer World? Beer lovers of America might be forgiven if their grasp of the current brew-scape feels iffy. Alice herself would be at home in this Wonderland. It’s a world in which up is down, little is big, and there’s no Blue Moon on the horizon.

It’s a world in which old standbys are faltering (case sales of Miller High Life were down almost 10 percent in 2013 from the prior year). Mexican labels are dominant (Corona, Modelo, and Dos Equis, account for three of the top four imported beers). And a craft-beer company founded only 20 years ago is coming on strong (“Bartender, pour me a Lagunitas”).

The March 2014 issue of Beverage Industry offers us a through-the-looking-glass portrait of Beer World in the United States today. The magazine unleashed its writers on data gathered by Information Resources Inc. (IRI) of Chicago from supermarkets, drug stores, mass merchandisers, gas and convenience stores, military commissaries, and select club and dollar retail chains for the 52 weeks ending December 29, 2014. I made graphs and charts from their tabular data.

Before we delve into the particulars, let’s remember the big picture: over the past twenty years, per-capita consumption of beer in the U.S. has been declining. Derek Thompson wrote about that here last August, citing this report. But twenty years is a long lens. Let’s take a look at the state of Beer World in the last year.

Domestic Beer

If you were to hazard a guess as to which domestic beers are the top sellers by volume, you’d probably manage to guess at least half of the top ten. These are the familiar, less-expensive brands, regular as well as light, that you see everywhere—Budweiser, Coors, Miller, etc. The table below tells the story about the top ten domestic beers in 2013.

 

This pie chart makes it easier to visualize the relative size of these various domestic brews, as measured by annual case sales. Bud Light accounts for nearly as much market share as all the other non-top-10 domestic beers combined. Lumped together, the beers ranked six through 10 also account for a smaller market share than Bud Light.

Stephanie Cernivec’s report in Beverage Industry reveals a far more interesting picture emerging when we look at what kind of year each of these top 10 domestic beers had in 2013. The following chart shows the percent change in case sales that each of the top ten brands experienced from 2012 to 2013.

Michelob Ultra Light was the big winner among the top ten, with its case sales rising 6.5 percent. But seven of the top ten domestic beers suffered sales declines for the year. In the case of  Natural Light and Miller High Life, the declines were steep—7.5 percent and 9.8 percent, respectively.

Imported Beer

While the domestic-beer category is hurting, the imported-beer category is thriving, according to Jennifer Haderspeck’s report in Beverage Industry. Imported beers grew in volume by 4.5 percent in 2013. The following table contains the particulars on the top ten imported beers:

 

The pie chart to the left shows each of the top ten imports’ relative share of this market segment, a category in which much of the growth is being propelled by Mexican beers. The Mexican brews grew in 2013 twice as fast as total imports (11.1 percent vs 5.3 percent). By comparison, Canadian imports as a group were down 6.5 percent last year, and European imports declined 2.1 percent. Experts attribute growth in the Mexican-beer segment to the growing Hispanic population in the United States, and aggressive marketing by these brands (think of the “Most Interesting Man in the World” commercials from Dos Equis, or the “Find Your Beach” campaign by Corona). The relative fortunes experienced in 2013 by the top ten imports are evident here:

Craft Beer

Although craft beers are popular, and this segment of the market is the one in which the most exciting things are happening, craft beers generally remain way behind the main domestic brews and imports in both case sales and revenue. Part of the explanation for this has to do with distribution. Reporting for Beverage Industry, Jessica Jacobsen cited one industry expert who noted that while craft beers have good distribution in grocery stores and liquor stores, they’re less available in convenience stores and gas stations, which lack the space to accommodate a large variety. But that’s changing as distribution through those latter outlets grows. And, overall, the growth rates for craft beers is much greater than for major domestics or imports. In a future post, I’ll have more to say about the craft-brew industry. For now, here’s the basic rundown on the top 10 brands in the craft-beer segment:

 

 

 

This pie chart offers a better visualization of the relative share held by each of the top ten craft beers. And the bar graph below shows how each brand fared over 2013. Can you say “Lagunitas”?

 

What about Blue Moon? Whether or not you consider the MillerCoors brand a craft beer (other producers in that segment certainly don’t), you may wonder why it doesn’t show up on any list. If so, your curiosity may stem from a map that was ubiquitous on the Web back in October. The map came from Blowfish (the makers of “the hangover cure”), which conducted a survey of 5,000 drinking-age adults around the United States. The map purported to show each state’s top beer choice and also made the claim that Blue Moon is America’s favorite beer, with Sam Adams coming in second.

Writing at the time about this map and its claims, The Atlantic‘s Jordan Weissmann offered his opinion about Blue Moon (“that bland excuse for a Belgian white ale brewed by MillerCoors”), and questioned the validity of the claims (“Something about these results smells a bit off.”). On the basis of all the data examined above, I’d say there’s plenty of reason to share Weissmann’s skepticism.

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This piece originally appeared at TheAtlantic.com


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Choosing a College

I have mixed feelings about this. On the one hand, choosing a college is a really big deal. The choice has so many consequences. On the other hand, it doesn’t matter at all: Most people will be happy at whatever college they choose and, if they try, they’ll get a perfectly fine education wherever they go.

06BRUNI-articleLargeBut here is a great primer on the subject by Frank Bruni of the New York Times. Prospective college students should take his advice to heart, especially his closing: “College can shrink your universe, or college can expand it. I recommend the latter.” He’s right: choose a college that will expand your universe. Whatever else it’s all about, that’s the most important thing.


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Bill Kristol Should Be Ashamed of Himself

Oh, yes. You already knew that, you say. The evidence for that is abundant, you say. Quite true. But are you aware of his latest foray into McCarthy-land? His latest round of smearing people with a label of anti-Semitism?  See here. The man should be ashamed of himself. He has no honor, no decency.


George: The Better Romney

Here's a great piece from The Atlantic's website about George Romney, Mitt's father, who was a bold, thoughtful leader — someone who didn't cower from the truth, didn't pander to his audiences.

In the 1950s and 1960s, at the very height of American automobile dominance, and at a moment when his American Motors Corporation teetered on the edge of insolvency, Romney was calling out the Big Three automakers for a lack of engineering innovation — "most present-day automobiles are the lineal descendents of the ox-cart," he said — and for pandering to consumers' egos.

"Cars 19 feet long, weighing two tons, are used to run a 118-pound housewife three blocks to the drug store for a two-ounce package of bobby pins and lipstick," Romney told the Motor City Traffic Club of Detroit in a 1955 speech titled, "The Dinosaur In the Driveway."

Too bad Mitt isn't half the man his father was. 

 


Remind Me of This If I Ever Start to Spout “Poor Me” Nonsense

I came across this wonderful piece on Gawker, ripping into an insensitive Toronto douche who whined about how his annual income, which places him in Canada's top 1 percent, isn't really all that much when one considers his expenses.  Sheesh.

 

6231160730_50a6bc21c2I think of this "poor me" myopia every morning on my way to work.  I drive by a house at the intersection of Stuart, Waverly, and Ward streets in Newton, MA.  On their front lawn, the owners have a sign that boldly states, "We are the 99 Percent!"  What a laughable concept.  The city assessor's database lists the value of this house at $891,000.  I looked up its owners. Both are comfortable professors at Boston College.  She is a self-promoter whose personal website makes it clear that she is not, in any sense perhaps other than spirit, remotely close to falling out of the top 1 percent.  Surely this sort of hypocrisy (lack of self-knowledge?) is one of the things people outside the top 1 percent dislike so profoundly about those firmly inside it — especially those who portray themselves as in solidarity with the proletariat and opposed to conspicuous consumption.  


Is Iran the Problem? No.

Sure, Iran is a menace.   But Israel is a bigger problem.  The US should step away from its support of Israel; in fact, it should have done so long ago.  US support of Israel explains about 90 percent of our problems in world affairs. F@%k Israel. If Israel attacks Iran, let them fight it out on their own.  The US shouldn't give Israel so much as another BandAid. 

(This is the latest in what will be an ongoing series of short, unreasoned rants about current affairs.  I'm tired of reasoning.  Let's get straight to the gut-level emotions.)