Drinking from the Firehose #134: 🐷 Ain't that a funny name? 🐷

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This week, a founder reminded me of a story I told him years ago that made an impression. If, like me, you're fascinated with the history of American retail, you may enjoy it.

Americans used to shop for groceries in marvelously inefficient ways. A century ago, different categories of products were sold in different stores. A family would go from one store to another to buy their weekly staples. Each store had a counter, and the clerk behind the counter would take your order, write it down, and head to the back of the store to weigh and sort everything. Your final package would come several minutes later all wrapped up by the grocer. You never touched goods yourself, and in the meantime you socialized with other patrons. Grocery shopping was a great time to catch up with your community.

That all changed in 1916, when an entrepreneur named Clarence Saunders opened the first Piggly Wiggly in Memphis, TN. The store featured several concepts that were groundbreaking at the time:

  • A serpentine aisle format with elaborate displays that forced each shopper to see every item on the shelf.

  • 4x the variety of goods of a typical grocery store.

  • Requirement to pick your own groceries using shopping baskets.

  • Price marks for every item in the store.

  • Check out stands staffed by cashiers.

Saunders was a frugal man, and he designed his store for the everyday shopper. Piggly Wiggly's self-operated format lent itself towards lower prices. The serpentine aisles forced shoppers to move quickly through the store, increasing throughput. It also allowed those shoppers to view more products, increasing basket size and consolidating multiple shopping trips for different categories into a single one. By picking their own goods, Piggly Wiggly saved money on expensive and inefficient grocery clerks. The store did not offer luxuries like delivery, and staff refused to take orders over the phone.

The first ad announcing the store said it all:

"Piggly Wiggly...Ain't that a funny name?
The fellow that got up that name must have a screw loose somewheres. All this may be so, but the Piggly Wiggly knows its own business best and its business will be this: To have no store clerks gab and smirk while folks are standing around ten deep to get waited on.

Every customer will be her own clerk, so if she wants to talk to a can of tomatoes and kill her time, all right and well--and it seems likely this will be a mighty lonesome chat."


Saunders himself remarked in the papers:

"It will be fashionable to save at Piggly Wiggly. Don't be behind time. Go to Piggly Wiggly and get yourself in style. People too snobbish to wait on themselves often take a summer vacation to escape bill collectors."

And like that, Saunders invented not only the modern grocery store format, but also the virtuous cycle behind most of 20th century retail:

  • Make stores more efficient

  • Drive more cash flow

  • Decrease prices and advertise cheapness

  • Attract more customers

  • Make stores more efficient, etc...

Unfortunately, Piggy Wiggly and Saunders did not earn the legacy of popularizing this business model for retail. That credit goes to Sam Walton at Wal-Mart in the 1960's. But Saunders can certainly claim credit for a knock-on effect of Piggy Wiggly's success: the consumer packaged goods (CPG) industry.

With shoppers picking their own products, all of the sudden the grocery store became a platform. The "apps" were CPG products, and CPG firms (General Mills, Kellogg's, Hormel's, etc) started investing heavily in marketing those products directly to consumers. The colorful ads and packaging that we're familiar with today were essentially created to serve customers at stores like Piggly Wiggly.

I often tell this story because it parallels the e-commerce revolution a century before the invention of the internet. Putting consumers in the driving seat not only created massive new companies like Wal-Mart, but was a boon for the CPG companies that built businesses on their shelves. Conversely, Amazon's disruption of retail in the last decade has created a need for consumer brands to reach customers through new channels of marketing and fulfillment. Those CPG leaders who embrace direct to consumer distribution over the internet will thrive, as did their predecessors during the advent of self-service retail a century ago.

If you want to read more about Piggy Wiggly and the entrepreneur behind it, check out the book linked below.

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Clarence Saunders and the Founding of Piggly Wiggly: The Rise & Fall of a Memphis Maverick (e-book)

In his observations, [Saunders] noticed that shoppers often entered a store with a prepared list in hand or had called the grocer to place an order. These people, he reasoned, had not needed the help of a salesman to pick out their groceries. Why not arrange the store for customers to do just that?

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#commerce

Cash App rules everything around me.

Peer-to-peer payments have taken off in such a major way that the leading platform, the Cash App by Square*, is getting name-checked by rappers left and right. Some hip hop stars like Travis Scott have even found a marketing use case for the Cash App, using it to give away $100K to fans on Twitter quoting his lyrics.

Bankrupt boomers.

In 1991, senior citizens were only 2% of bankruptcy filers in the U.S. By 2016, that number had risen to 12%. Because elders as a percentage of the population have only grown from 17% to 19% over that period of time, the relative size of the boomer population is only marginally responsible for its relatively high bankruptcy rate.

Of all age cohorts, seniors are growing their percentage of debt faster than all others. For many, the biggest problem is rising healthcare costs which have not been offset by rising income during the period of their lives when they could have accumulated savings. In addition, student debt is a surprisingly big problem for seniors. Fully 37% of seniors with student loan debt are in default. Unlike credit card debt, federal student loans can't be eliminated in bankruptcy.

#media

The Resistance.

AWA Studios* has revealed the creative direction of its first few comics. The company partnered with J. Michael Straczynski (known for Babylon 5, Sense8, and many others) to create a character universe defined for 21st century values and sensibilities.

“DC and Marvel are products of the times that produced them,” he explains. “DC, which came to prominence in the '40s and '50s, a very conservative time, was peopled largely by authority figures: Batman is a cop; Superman's a cop; Green Lantern is an interstellar cop; Hawkman is another interstellar cop; Flash is a cop-scientist; and so on. Marvel hit its stride during the anti-authoritarian '60s, and that's reflected by its heroes: the Hulk and Thor answer to no one, Spider-Man is a kid, the X-Men are on the run from the government... you get the idea. Those were the paradigms then.

“What Axel and I did in beginning this process was to ask, long before we dialed into individual stories, ‘What's the paradigm now? Where are we as a people, a country, a world, and what stories do we need to hear not just to entertain but to ennoble and uplift?’ We wanted to give readers, especially millennials, something that would impart a measure of hope without undue cotton candy while confronting dead-on the real challenges we face as a people.”

#tech

GDPArrrrrr...

At this year's Blackhat security conference, a presenter revealed a critical vulnerability in the EU's General Data Privacy Protection Regulation (GDPR). One of its core provisions is a "Right to Access" a user's own data from a service provider. Hackers can use that right as an attack vector.

He writes, "the highly standardized nature of GDPR requests makes it possible to automate this process at immense scale and provides one of the most reliable general phishing attack typologies to date."

The author attempted to hack his fiancee's info from service providers, with her permission of course. 72% of the companies he reached out to provided a response. Of those, only 39% required a "strong" ID, but were relatively inconsistent on the type.

#science

Flying on Mars (video).

Veritasium visited the Jet Propulsion Lab to see what will become the first powered flight vehicle on Mars. Scientists at JPL are building a drone designed to fly for 90 seconds in the light atmosphere and gravity of the red planet.

The engineering challenges are significant. The drone must operate in atmospheric conditions equivalent to those found at 100,000 ft on Earth, higher than any terrestrial helicopter has ever flown. Its blades must therefore spin 4x faster than those of a normal helicopter, and it must be much, much lighter.

#culture

Jamming in a gondola (video).

I enjoyed this picturesque video of Mike Dawes jamming out John Mayer's "Slow Dancing in a Burning Room" on a single acoustic guitar, while riding a gondola in New Zealand. Epic!