Can Luckin Replace Starbucks’ Third Places?

29 Wednesday Jul 2026

Posted by in Chapter 06: Retail Market Strategy

≈ Leave a comment

istockphoto / Robert Way

Since the initial introduction of Starbucks and its novel-at-the-time approach to selling coffee to consumers, more than three decades ago, the United States has developed a specific coffee culture. By design, Starbucks stores represent third places, separate from work or home, where people feel comfortable enough to visit regularly and spend time. To encourage such uses, Starbucks carefully curated its stores to maximize the relaxing, communal atmosphere. Every location boasted plenty of seating, low light, and soft music, along with friendly baristas who sought real relationships with customers. In return, it charged prices that once would have been unheard of for coffee. Following its success, most competitors in this market have adopted similar strategies.

But in recent years, Starbucks has seen sales stagnate and decline. Observers offer various reasons for the shift, ranging from growing time pressures on consumers, who feel unable to sit and linger over coffee anymore, to price pressures that force consumers to cut back on little luxuries. In response, the company has been experimenting with several strategic changes, including expanding its mobile ordering options, building more comfortable seating into stores, and reducing the ratio of baristas to customers to save costs.

Even as Starbucks looks to regain its appeal among existing customers though, it faces a new competitive threat, in the form of Luckin Coffee, a Chinese chain that has announced its plans to expand massively in North America. Four Luckin stores already have opened in New York City, spanning different districts in Manhattan.

The Chinese coffee chain’s retail strategy prioritizes customer satisfaction, which it believes it can achieve by offering greater convenience and efficiency. As such, employees receive focused training in how to distribute drinks faster, especially those ordered for pickup, without reducing the quality of the beverage.

In addition to quick customer service, all stores boast menus that feature a wide variety of offerings, including fruit-flavored alternatives to classic coffee and tea drinks. Its related food offerings highlight the freshness of the baked goods. Finally, and in accordance with its focus on efficiency, the product prices are substantially less expensive: Most of Luckin’s offerings cost almost one-third less than equivalent items at Starbucks.

On the basis of this appealing promise, Luckin has built a larger presence in China than Starbucks has, in less than 10 years. In Luckin’s first year of operation alone, Starbucks share prices in China decreased by more than 25 percent.

Although it’s too soon to predict the brand’s ultimate appeal and longevity among U.S. consumers, experts seem optimistic about Luckin’s potential. In support of these predictions, they point to the many other Chinese food conglomerates that have expanded into North America in recent years, often with great success.

Discussion Questions

  1. Is speed and efficiency more important, or is a pleasant environment the key to appealing to the average coffee shop consumer today?
  2. What other changes might Starbucks adopt now, before Luckin begins its wider expansion in North America?

Sources: Tim Balk, “As Starbucks Slumps, a Chinese Coffee Giant Sees an Opening in New York,” The New York Times, September 4, 2025; “China’s Luckin Coffee Opens First U.S. Stores in New York City, Taking On Starbucks,” NBC Palm Springs, June 30, 2025; “Starbucks’ China Rival Luckin Coffee to Open First US Store in New York City,” TechNode, May 16, 2025

Kroger Is Paying the Price for its Bet Big on Automation

15 Wednesday Jul 2026

Posted by in Chapter 03: Digital Retailing, Retail Tidbits

≈ Leave a comment

Ripples spread across financial sectors when the supermarket chain giant Kroger announced plans to close three of its recently opened automated locations. Each store had started up only a few years before, heralded as the first stage of the company’s drive into the future. In a partnership with the Ocado e-commerce grocery platform, Kroger borrowed Ocado’s existing systems to design its software and robotics, then integrated the resulting Smart Platform into eight fulfillment centers. The goal was to complete vast numbers of digital orders efficiently and thereby offer shorter turnaround times and more diverse delivery options. But online grocery orders have not matched optimistic predictions, such that Kroger has not been able to establish economies of scale that might justify the costs associated with operating independent fulfillment centers dedicated solely to e-commerce. In a revised strategy, Kroger plans to expand its partnerships with third-party food delivery partners, like UberEats and Door Dash. It also anticipates that it will recover from the failed experiment, citing an overall annual profit goal that was nearly half a billion dollars more than the results it achieved last year. Ocado also made out well, receiving a settlement worth more than one-quarter of a billion dollars. But for workers, the closure of the fulfillment centers means layoffs; reports from a single facility in Groveland, Florida, suggest that 1,400 employees were left out of work following its shuttering.

Sources: Anuja Bharat Mistry, “Kroger to Close Some Automated Facilities, to Incur $2.6 Billion Charge,” Reuters, November 18, 2025; “Kroger to Close Automated Fulfillment Center in Groveland,” WKMG-TV, November 18, 2025; Scott Harrell, “Lake County Releases Statement on Kroger Distribution Center Closing,” 352today, November 18, 2025.

Talking Shop at the Top: Retail Leaders Reshuffle

08 Wednesday Jul 2026

Posted by in Chapter 01: Introduction to the World of Retailing

≈ Leave a comment

istockphoto / monkeybusinessimages

Becoming the chief executive of a global retail firm might seem like a dream. It implies reaching the top of a competitive field, earning millions in compensation, and having the opportunity to reorient and determine the future of hundreds of stores, thousands of employees, and millions of consumers. So why do all these new retail CEOs seem so worried?

Current trends make retail leadership even more challenging and uncertain than ever before. Inconsistent tariff policies mean it’s nearly impossible to establish clear, confident cost predictions. Consumers are exhibiting an ongoing crisis of confidence, unsure about how far their disposable income can go and unwilling to spend more than they must. As these macro-level trends add pressure to the business, employees worry about the threat of layoffs and store closures. Meanwhile, shareholders continue to clamor for sufficient returns on their investments, demanding the retail leaders find novel sources of substantial revenue.

Together, these trends have prompted new approaches to leadership in many firms. It appears that more companies are willing to take a risk and appoint a brand new CEO, someone without prior experience in that role, in the hope that their perspective will be radically different and powerfully effective. Another notable trend involves “listening tours,” such that new leaders make it a priority to solicit direct feedback from employees across the hierarchy, to determine what problems they see and what solutions they might prefer.

These tours had better be short though. To keep boards and investors happy, new retail CEOs need to devise and start implementing their strategy within the first three to six months after their appointment. Once they’ve done so, experts note that they only have about a year to prove it works. If they don’t, they face another notable trend in modern retail: massive turnover among leadership ranks.

Compared with many other industries, retailing sends leaders packing far more quickly and more often. When calculating all turnover among executives, retail firms account for approximately one-quarter of firings. Whereas CEOs in technology sectors can count on an average 10-year tenure, and finance executives average nearly 9 years, chief executives in retail last less than 6 years on average.

Discussion Questions

  1. Having read about these challenges, would you still want to lead a retail chain at some point in your careers?
  2. Should new retail leaders be evaluated with the same standards, despite the unprecedented conditions they face?

Sources: Jordyn Holman, “A Bad Time to Take the Helm? New Retail Leaders Face Extra Headaches,” The New York Times, September 27, 2025.

Do Dogs Need Dry Shampoo Too? Lil Luv Dog Believes They Do—Or at Least that Pet Parents Think They Do

24 Wednesday Jun 2026

Posted by in Chapter 02: Types of Retailers

≈ Leave a comment

istockphoto / Tatyana Kalmatsuy

For consumers for whom pets are family, or perhaps even more important than their human family members (you know who you are), finding and purchasing the very best pet supplies and products seems not just logical but necessary. In response to this market need, a new seller of high-end pet care products called Lil Luv Dog positions itself as akin to a premium beauty brand or wellness regime. It cites Gwyneth Paltrow’s much-discussed Goop line of products and the luxury diaper brand Coterie as inspirations. As the founders of Lil Luv Dog see it, pets have become extensions of their “parents,” especially those who count as Millennials or Gen Zers. So shouldn’t those extended selves have access to luxury self-care products too?

With that positioning in mind, the first grooming product that the company launched was a pet-safe version of dry shampoo, marketed to do everything that dry shampoo formulated for human users can do: It can eliminate smell, extend the longevity of hair, and give owners precious time and money that they otherwise would have to spend at salons, on frequent grooming appointments. It’s also a great way to alleviate stress for both owners and canines, especially if those pooches are particularly anxious or averse to being groomed.

Listed at $36 per bottle, the dry shampoo doesn’t come cheap. But Lil Luv Dog has had no difficulty turning a steady profit, in large part due to how lucrative the pet care market is. Some estimates value the entire industry at nearly $250 billion, with predictions that it will continue to achieve 7 percent annual growth over the next five years.

To ensure that it could establish and maintain its foothold within this massive and growing market, Lil Luv Dog partnered with a venture capitalist to secure $1 million in initial funding. In soliciting such support, the founders could point to their early retail success as a direct-to-consumer brand. Operating according to that retail structure, it earned most of its sales through ecommerce channels, pop-up placements, and installations on the shelves of premium retailers that share a similar high-end sensibility. Furthermore, it has pursued collaborations with leading names in related and parallel industries, including the founder of cult-favorite haircare line Ouai, as well as the innovator behind the highly exclusive bath and home brand Flaming Estate. Seemingly inspired by these examples, Lil Luv Dog has taken care to design each product to reflect a clean, minimalist aesthetic.

Having securing a healthy source of investment capital, as well as a notably sizeable online following already, the company seems poised to shift its operational strategy to embrace more traditional retail approaches and expand access through additional retail channels and spaces. As it does so though, it will need to address increasing competition as well. Some established, premium, human beauty brands, including Kiehl’s and Ouai, have begun to expand their pet-related offerings. Thus, even as Lil Luv Dog has carved out a respectable niche, it still must remain alert. After all, it’s pretty hard for an independent retail brand to succeed in this dog-eat-dog world.

Discussion Questions

  1. What other pet care products would you recommend that Lil Luv Dog should release, given its specific positioning?
  2. As Lil Luv Dog expands, should it pursue wide retail distribution, or should it remain selective in terms of the retail channels where consumers can find its products? Explain your answer.

Sources: Cheryl Wischhover, “Like Goop, but for Dogs,” The New York Times, November 15, 2025; “Lil Luv Dog Launches with $1M Backing to Redefine Petcare,” Brand Insider, September 9, 2025; Maivy Tran, “2025 Best Modern Gifts for Pets + Pet Lovers,” Design Milk, November 7, 2025

A Dupe Dilemma: Lululemon Sues Costco Over Alleged Infringement

10 Wednesday Jun 2026

Posted by in Chapter 13: Buying Merchandise

≈ Leave a comment

istockphoto / FinkAvenue

Lululemon’s success stems from a combination of factors: awareness of consumer trends embracing look-good, feel-good wellness pursuits; a reputation for providing relatively fashion-forward workout appeal; and pricing that finds a good balance between those aspects. Because Lululemon gear provides both symbolic and functional value, the brand can justify the relatively expensive prices it charges for its leggings, jackets, and socks.

But popularity and notoriety can come with their own prices. Noting the popularity of Lululemon apparel, competitors in the crowded athletic and athleisure clothing markets have sought to mimic its success, and its style, by introducing “dupes” or duplicate versions. There’s a vast market in dupes, especially for Lululemon gear, such that #LululemonDupes remains a popular hashtag on social media. According to Lululemon though, some of those dupes cross the line into trademark infringement, as alleged in its suit against Costco.

The suit claims that certain workout pieces sold in Costco—known for its low cost offerings—resemble Lululemon’s proprietary designs too closely. Beyond broad similarities in color, material, shape, or function, as might be accepted in copycat products, it asserts that the items in contention exactly replicate the silhouettes, seams, and accents that the brand has sought to establish as markers of its own, distinctive identity and appeal.

In support of its claims, Lululemon provided evidence involving three product lines: Define jackets, Scuba jackets, and ABC pants. In side-by-side comparisons submitted to the courts, it showed how its Define jacket collection—which it promotes as overwear that can help people transition easily from a strenuous run into everyday chores—features a unique, tailored silhouette, achieved by stitching the back panels together in a novel way. Then it showed how the Jockey Ladies Yoga Jacket carried by Costco featured the same seaming along the back, producing the flattering silhouette that helped make the Define so popular. It also indicated the price difference: $168 for Lululemon’s Define design, $17 for the Costco dupe.

Another jacket, the Scuba from Lululemon, retails at $128 and features a distinctive zipper location on the front, as well as creative pocket placements. The Danskin Half-Zip Hoodie at Costco, selling for $8, displays the exact same zipper and pocket locations. The other example listed in the suit sought to set up a consistent argument, showing how the Kirkland 5-Pocket pants ($20) copy Lululemon’s ABC pant ($128), with almost imperceptible variations in coloring, pant leg style, and sizing.

According to Lululemon, because Costco is so well-known for selling private-label versions of national brands, the dupes create an unacceptable risk of increasing consumers’ confusion. That is, shoppers at Costco likely are aware that, for example, the Kirkland brand diapers on the shelves are made in the same manufacturing plant that Huggies diapers are. Thus, they might be forgiven if they believe that Kirkland-branded jackets or pants that look just like Lululemon versions actually are being produced by Lululemon.

There’s where the problem lies. To maintain its brand strength and price positioning, Lululemon needs to ensure that all its products offer high quality. If consumers get confused and believe that a dupe is made by Lululemon, and then that dupe offers poor quality, it arguably harms the brand’s hard-won position

Notably, only the dupe of the pants carries Costco’s in-house Kirkland brand. The others appear sourced from external manufacturers (i.e., Jockey and Danskin). Still, the company claims that the significant research and development it conducts to ensure that its products function at the standard that customers have come to expect deserves protection as intellectual property that others should not be allowed to copy.

Discussion Questions

  1. What is the standard or threshold that applies, when it comes to defining a similar, copycat product as a fair dupe versus an illegal infringement? Has Costco crossed that line, in your opinion?
  2. Analyze Lululemon’s pricing strategy, in light of its claims here. Why is it so determined to protect its designs from being mimicked by other firms, especially those that sell at lower prices?

Sources: Blake Brittain, “Lululemon Sues Costco for Allegedly Ripping Off Clothing Designs,” Reuters, June 27, 2025; Eric Goldman, “Analyzing the Lululemon v. Costco Dupe Suit,” Technology & Marketing Law Blog, July 9, 2025; Kelly Tyko, “Lululemon Sues Costco Wholesale for Selling Alleged Dupes,” Axios, July 1, 2025; Micah Barkley, “Lululemon Gets Aggressive About Lookalikes with Costco Lawsuit,” Bloomberg, July 2, 2025

Seas the Day: Red Lobster Reinvents Itself

13 Wednesday May 2026

Posted by in Chapter 07: Financial Strategy

≈ Leave a comment

istockphoto / Chuck Bennet

The recent history of Red Lobster has been a real rollercoaster (see, for example, “What If the Pricing Promotion Is Too Popular? Ask Red Lobster” from our January 2024 newsletter). Once known for its promise to supply diners with literally endless amounts of shrimp, the restaurant chain sought to leverage the popularity of a limited-time promotion by extending it throughout the year. As we discussed in previous abstracts, the strategic shift proved unwise. It was financially untenable to keep giving people all the shrimp they could eat, and extending the promotion made it seem less special.

Faced with a serious crisis and impending threat to its very survival, the company undertook a radical shift by bringing in new leadership. Previously the CEO of P.F. Chang, Red Lobster’s new head Damola Adamolekun has committed to turning the ship around. Immediately and unsurprisingly, he retired the endless shrimp promotion. But at the same time, he imposed substantial cuts to the chain’s menu, seeking to reduce the cluttered, confusing list of options by approximately one-fifth its size. Having eliminated a lot of poor sellers, Adamolekun introduced a few replacement menu items, which have been designed explicitly to appeal to diverse customers’ taste preferences. Thus, the new menus feature some globally inspired additions, like lobster Pappardelle, as well as safe favorites such as bacon-wrapped scallops.

Perhaps reflecting Adamolekun’s youthful perspective—the new leader is just 37 years of age—this pivot also involves an aggressive social media approach, which highlights the restaurant’s determination to be responsive to customer preferences. For example, having received requests for specific sausage pairings on the menu, Red Lobster readily introduced Cajun-inspired and Old Bay–seasoned bratwursts to the menu.

Although these novel efforts add some much-needed youth and vitality to the restaurant, Adamolekun also emphasizes his clear recognition of the restaurant chain’s roots. Red Lobster has long benefitted from its strong, enduring ties with the Black community. When the first store opened in 1968, the restaurant immediately established and distinguished itself as a place where all customers were welcome, and it made inclusive hiring a foundation in designing its workforce. As the chain grew, so did its place in popular Black culture, earning recognition and call-outs from stars like Beyoncé and Tyler Perry.

To acknowledge this history and build on it for the future, some special promotions feature nostalgic menu items that harken back to Red Lobster’s heyday. Seafood boil bags are the most visible, and most popular, addition so far. Within the first week they had been introduced, they accounted for an estimated 80 percent of sales. Citing such evidence, Adamolekun has expressed confidence in the chain’s ability to continue trending in the right direction over time. With its long, storied history, Red Lobster has an enviable foundation from which to start.

Discussion Questions

  1. Does ending the well-known endless shrimp promotion hurt Red Lobster’s ability to retain cost-conscious customers?
  2. How might the chain still position itself as an affordable choice, while still making the necessary menu changes?

Sources: Korsha Wilson, “Red Lobster Is Betting on Black Diners with Its Brand Comeback,” The New York Times, August 22, 2025; Pete Gannon, “Red Lobster’s Next CEO,” Axios, August 26, 2024; Rachel Ventresca and Nick Lichtenberg, “Red Lobster’s 36-Year-Old CEO Isn’t Repeating the Chain’s $11 Million Endless Shrimp Disaster. But He Is Reading All of Your Social Media Comments,” Yahoo! Finance, July 25, 2025

Lights Out: China Leads Dark Factory Production

15 Wednesday Apr 2026

Posted by in Chapter 10: Information Systems and Supply Chain Management

≈ Leave a comment

istockphoto / SweetBunFactory

It sounds like something out of a science fiction movie: a factory run completely by robots. From the mining of raw materials to final packaging, the system is completely autonomous. But China has already made it a reality, in the form of dark factories or lights-out factories. Because these operations require human intervention only on rare occasions (e.g., monitoring, repairs, software updates), they can remain completely dark, or perhaps just minimally lit, which reduces electricity costs while still allowing the system to work the same.

The luxury Chinese carmaker Zeekr, founded in the early 2020s, has achieved nearly completely autonomous factory operations. With the help of around 800 robots, its factories produce about 300,000 vehicles every year. Other countries have not achieved similar success as of yet. In the United States, Tesla promised, when announcing the launch of its Model 3, that it would manufacture the car using completely autonomous production. But after mass delays pushed the business to the brink of bankruptcy, Tesla chose to revert to its traditional assembly process instead.

The emergence and success of dark factories in China seemingly stems from its status as the global leader in production capacity and factory installations. China is responsible for almost 30 percent of the production of manufactured goods, more so than the next five countries combined. In support of such vast capabilities, it has deployed an estimated 300,000 new factory robots in 2024, almost ten times as many as are in operation in the United States.

Such dominance is reinforced and encouraged by federal incentives. In setting expanded uses of robotics and artificial intelligence as a national priority, the government has offered subsidies for adopters, as well as established beneficial regulatory policies. Qualifying businesses receive access to more affordable loan rates too, which they can use to expand their technological prowess but also to pursue more aggressive growth prospects.

Accordingly, multiple Chinese firms have signaled their ambitions. The domestic firm UBTech Robotics, in a partnership with the European aircraft conglomerate Airbus, plans to investigate and experiment with ways to integrate its robotics into aerospace construction. Similarly, UBTech reached a deal with U.S.-based Texas Instruments to integrate similar technologies into a variety of semiconductor manufacturing processes.

Discussion Questions

  1. How might the global economy be affected by China’s early dominance in autonomous manufacturing?
  2. What safety regulations should countries implement for autonomous testing?

Sources: Meaghan Tobin, Keith Bradsher, “There Are More Robots Working in China Than the Rest of the World Combined,” The New York Times, September 25, 2025; Ben Jiang, “China’s UBTech Partners with Airbus to Bring Humanoid Robots to Aviation Manufacturing,” South China Morning Post, January 19, 2026; Zachary Shahan, “‘Dark Factories’—Chinese Automakers Living Tesla’s Dream,” CleanTechnica, July 24, 2025.