Charlie – I really enjoyed learning more about how Brexit is impacting Tesco, and future implications for grocery and retail in general. I agree with Grant’s comment above that it is initially shocking that they don’t pass on costs to consumers; however, given the shifting landscape towards discount stores such as Aldi and Lidl, it becomes apparent that the broader pressures in the grocery market leave Tesco with no option but to commit to low costs. Further, as some comments touched on above, I was surprised to learn about the magnitude in which Brexit might exacerbate the growth gap between traditional grocers and discounters.  This is due to two factors in my opinion:
1) Discounters have taken proactive steps that might allow them to benefit off of Brexit. For instance, Aldi’s proactive push for local sourcing, and both Aldi and Lidl’s positioning of their headquarters in Germany.
2) Discounters have established customer promises that inherently align to pressures of Brexit: focus on local sourcing and relationship-building with British farmers, de-emphasis on brands, and lean operating models that value simplicity in offerings.
I am curious to see if, and how, Tesco might fight to maintain market share by altering not just its operating model, but its customer promise, in the face of a widening growth gap between discounters and traditional grocers.
Loved this post, Mel! What is most fascinating to me are the ripple effects the “Walk Out Shopping” experience stands to have across all components of the grocery value chain, and the potential pushback from each angle. This is particularly dangerous for Amazon because EVERYONE is a potential Amazon customer – including the employees of the retail stores being disrupted, the grocers losing their jobs, and the suppliers forced to disrupt longstanding distribution and sales models. With its commitment to being the most “customer-centric” company in the world across its many verticals, Amazon must think holistically about who their customer is beyond the end-user of a single service, and the importance of brand equity.
One seemingly minor, yet important example of how AmazonGo serves to shake-up grocery suppliers is its potential impact on impulse buying (i.e. buying the candy bar and trashy magazine you didn’t know you needed until you went to check-out). Companies who previously thought critically about how to position for impulse purchasing must re-think the customer in-store journey, and where they play a role.  Without retail or grocery expertise, Amazon is at risk of alienating key players in the value chain. Hence I think your point about Whole Foods’ serving as a test-hub for AmazonGo is spot-on – not just for new technology and data capture, but for new types of supply chain relationships and understanding as well.
Speaking as an avid Reformation consumer, I loved learning more about their efforts to lead the market in sustainable fashion. I think GF’s point above regarding the parallel to Everlane is super relevant here in regards to how Reformation might successfully communicate their internal efforts to their external audience – in a way that doesn’t dilute the simplicity and elegance of the brand. Everlane’s mantra of “radical transparency” aims to shift not just the way that consumers shop for Everlane, but the types of questions consumers ask when shopping for anything, anywhere (e.g. how much is this actually marked-up and why?). Everlane leverages their online platform as a mechanism for education by presenting its customer with videos, images, and behind-the-scenes visibility into sourcing and pricing decisions that a brick-and-mortar store just can’t accomplish. In that regard, I think Reformation has a huge opportunity in leaning on its online-first model to offer the customer more learning opportunities alongside an e-commerce experience. By bringing customers into the fold as to how Reformation is investing in higher quality, sustainable prices, the brand can drive customer loyalty and higher willingness-to-pay – and place increasing pressure on the industry as a whole.
One question I leave with is how customer attitudes might shift if the economy takes a hit. Right now, customers might be able to afford paying a premium for a sustainable product, but will they shop with the same commitment to values when financial pressures increase? Pushing for industry standards in anticipation of such ethical elasticity could be very smart!
Great post. One question that came to mind while reading this was the degree to which Chipotle is investing in sustainability practices in order to anticipate climate change vs. an investment in anticipation of customer interest in a “local” and “sustainable”-branded product. If it is indeed the latter, then I question how much consumers will actually care. Research shows that the overwhelmingly dominant purchase drivers for food are 1) taste (85% say has a great impact) and 2) price (71%), compared to the 40% that say that sustainability has a great impact on their food purchases.  And while the 40% figure is not insignificant, I think it is key to keep in mind that Chipotle is risking quite a bit if any of their investments in sustainable production come at the expense of taste and price.
In order to gain back consumer trust while hedging against looming supply chain strains due to climate change, I do agree that Chipotle should leverage win-win investments into sustainable practices that they can tout as a stamp of their quality food and brand. However, they must be mindful of the trade-offs of price and taste in the process!
Thanks, Francie! So fascinating you worked with the Red Cross for a year – I completely agree with your concerns around a lack of transparency. This particularly rings true when funds are proactive and therefore less directly or immediately tied to a specific disaster. That is a communication challenge that will be difficult but critical to solve!
Thanks for your response. I absolutely agree that marketing will be key here. As Francie mentioned, people are prone to spending on specific disasters, which makes it harder to build the in-the-moment fundraising impact for a broad, anticipatory program. The way the Red Cross communicates the need for FbF will be essential to its success. More broadly, the Red Cross faces skepticism in how it spends its dollars, so transparency will be vital in proving ROI and closing-the-loop with key donors.
Thanks for the response – this absolutely tied back to Watson, and I think we will hopefully see how such platforms are starting to align quite well with use-cases that have significant impact in the world.
I love the Bangladesh example. Continued data collection on the success of FbF will be critical in making the case for widespread adoption!
Great topic, Aaron! This made me think of something I read this past summer about how Amazon continues to modify its “customer promise” alongside its shifting operating model. Tech blogger, Ben Thompson, notes the evolution from: “Amazon.com’s objective is to be the leading online retailer of information-based products and services, with an initial focus on books.”… to: “Our vision is to be earth’s most customer centric company; to build a place where people can come to find and discover anything they might want to buy online.”… and ultimately to where Amazon stands today: “Our vision is to be earth’s most customer centric company.” 
Amazon’s latest vision, to me, represents a shift away from pure e-commerce towards investment in infrastructure and spaces that can reduce the burden of delivery (echoing Drew’s concerns about last-mile delivery). I see this having several implications in terms of Amazon’s ability to beat-out competitors in the US and China:
1) In China (and Asia more broadly), will Amazon be able to understand and build-out the infrastructure needed to scale its quick delivery model? In our Marketing class, we discussed how Zalora’s deep market knowledge for Southeast Asia pushed it to scale a cash-on-delivery and hyper-localized model. Will Amazon be able to manage the cultural and infrastructural needs in Asia to replicate such models at scale?
2) In the US, we see increasing concerns of Amazon’s “big brother” aspect, particularly as they occupy physical space, which might diminish the consumer trust at the core of the business model. Some speculate that launching Amazon HQ2 via a public forum was one way of quelling its invasive image. Nonetheless, Amazon must be thoughtful about how it toes the line of value-additive personalization and expansion that invades privacy and escalates consumer distrust.
 Ben Thompson, “Amazon’s New Customer,” Stratechery, https://stratechery.com/2017/amazons-new-customer/, Accessed November 29, 2017.