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Thursday, March 05, 2015

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FaceTime with the Content Guy: Screen Time

This commentary is available as both text and video; enjoy both or either. To see past FaceTime commentaries, go to the MNB Channel on YouTube.

Hi, Kevin Coupe here, and this is FaceTime with the Content Guy.

Last week, the situation comedy "Modern Family" offered an unusual episode, with every frame shot on Apple devices - laptops, iPhones, and iPads. Even more importantly, the entire episode played out on the character Claire Dunphy's laptop screen, as she communicated with various members of her family while waiting for a flight at O'Hare Airport.

Been there, done that.

(It was an incredible commercial for Apple... except that Apple apparently did not pay one penny for product placement. It's just that the producers and writers all use Apple products, and so that's what they used in the show. Smart folks, I think. And if you missed the episodes, I'm sure you can watch it on iTunes, Hulu, On-Demand, or some other service. It's definitely worth it.)

The communications got more and more frantic as the episode went on, as the family became convinced that one character had gone off and eloped; they came to that conclusion because they were able to use all the tools of the internet to conduct instantaneous research. Like it or not, our lives are largely transparent these days ... though, as the episode also points out, we have to be careful about jumping to conclusions. It is like that story last week about the dress that some see as white and gold and others see as blue and black ... it is the same dress, but our perceptions go through different prisms, sometimes actual and sometimes psychological.

But what really impressed me about the episode was how quickly Claire Dunphy was able to move from video conferencing to email to text messaging, then going onto Facebook and Google and using all sorts of other applications ... all while waiting for a plane. In fact, the only thing the episode got wrong was a comment she makes about feeling disconnected while flying ... because more and more, I'm finding that airlines are offering Wi-Fi while in-flight.

In fact, it wasn't that long ago that I was emailing back and forth with a CEO friend of mine, who informed me that he was conducting his end of the conversation from 30,000 feet ... and noted, somewhat ruefully, that it wasn't that long ago that such a capability was beyond reasonable expectations, and now he gets frustrated when he gets on planes without Wi-Fi.

We're all connected. All the time.

I was thinking about this ability the other day when I got one of the creepiest phone calls I've ever received - from a woman who lives in the same New York City building as a 95 year old woman who I can best describe as the widow of my wife's father. (It's complicated ... but we feel very close to this woman, and are doing our best to help her out at a challenging time in her life.) When the call came - and I guess she got my cell phone number from the doorman, who is under instructions to call whenever he thinks we need to know something - my first reaction was that she'd either died or had been taken to the hospital.

But no ... this neighbor just wanted me to know that when her apartment became available, as it probably would sooner rather than later, she was interested in buying it.

Now, I've read many times that the best way to get an apartment in New York is to watch the obituaries, and that always seemed creepy enough. But it is a lot creepier when a) you get the phone call yourself, and b) the apartment is owned by someone who, in the words of Monty Python, is not yet dead.

But what was interesting to me was how fast I was able to go online and research this woman .., I found out pretty quickly that she indeed is a neighbor in the same building, when her husband had passed away, the names of her kids. and even that one daughter live sin Brooklyn and is a graphic designer. I was even able to ask her if she was a realtor in Wilton, Connecticut ... which she said she wasn't even though they have the same name. I actually stopped researching her because I was beginning to feel kind of creepy about it.

The big point is this. We'd all like to think, even in this day and age, that we control the information that people have about us. But we don't. When businesses engage in strategies and tactics that are anti-transparency, they only put off the inevitable - which is that people eventually will know even what they do not want them to know, and that they'll look like they were hiding something.

And because, like on "Modern Family," sometimes people draw the wrong conclusions, that makes transparency and honesty more important, not less so.

That's what is on my mind this Thursday morning. As always, I want to hear what's on your mind ... unless, of course, you're interested in an apartment in New York City, which I hope won't be available for while...

Mike Vail To Replace Brad Wise As Hannaford President

Delhaize-owned Hannaford Supermarkets announced that Brad Wise will retire from his role as company president on June 30, and will be succeeded by Mike Vail, a 29-year company veteran who most recently has been chief merchant and supply chain officer for Delhaize America.

Vail has roots in Hannaford, having worked for the company as retail management trainee, store manager, district manager, category manager and director of Deli Merchandising; he also was president/COO of Sweetbay Supermarkets in Florida when Delhaize owned the chain.

KC's View: Delhaize has been going through its share of changes recently, with executive moves also taking place at Food Lion. But the latest numbers show that sales and profits are improving, and that its US divisions are doing better.

One other note about changes at Delhaize - former CEO Pierre-Olivier Beckers, who has been on the board since he stepped down from the top job, announced that he also will be leaving the board in May 2015.

As for Mike Vail ... I'm not sure that this is when I would have made a move to the northeastern US. Then again, maybe he can delay his actual move until New England thaws out after this miserable winter. Which ought to be sometime in July.

Editorial continues after a word from our sponsor...

Corporate Drumbeat

2014 Year-in-Review from MyWebGrocer

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Now back to regularly scheduled editorial...

Study: US Online Shoppers Like Tablets, Free Shipping

A new study suggests that the use of tablets and free shipping are major drivers for online shoppers in the US.

According to the study - conducted for UPS by comScore - "American online shoppers are open to new trends on social media and in-store technologies, making more purchases on tablets than any other market.
In addition, "Free shipping continues to drive purchasing decisions as 58% of online shoppers reported adding items to their shopping cart in order to qualify for the incentive. Further, 83% are willing to wait an additional 2 days for delivery if shipping is free, and 68% said free returns shipping is needed to complete a sale."

However, "only 44% of online shoppers said they were satisfied with the flexibility of changing delivery days or rerouting packages."

KC's View: At some level, we all know that "free shipping" is an illusion. Right? It has to cost something ... it just sounds like most people want it built into the cost of goods, instead of being an add-on, or want to know that they can either earn it or buy it through greater loyalty or higher transaction levels.

Which means, essentially, that many of us are willing to fool ourselves when doing so rationalizes a decision.

Go figure.

Editorial continues after a word from our sponsor...

Corporate Drumbeat

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Now back to regularly scheduled editorial...

McDonald's Plots Move To Antibiotic-Free Chickens

The New York Times reports that McDonald's plans to begin "using chicken from birds that are not raised with antibiotics used to treat humans," a move that will be phased in over the next two years and that mimics similar moves made far earlier by both Chick-fil-A and Panera.

The Times writes that "the Centers for Disease Control and Prevention have been increasingly vocal about its concerns about the use of antibiotics in animal husbandry as more and more bacteria and pathogens are showing resistance to such drugs. It estimated in 2013 that at least two million Americans fall sick each year because of antibiotic-resistant infections and at least 23,000 die from them. The government’s concern has caught the attention of consumers, and food companies and restaurants are increasingly using 'antibiotic free' labels as a marketing tool that sometimes allows them to command a higher price."

KC's View: I'm still trying to process the whole idea that McDonald's uses real chickens in its chicken sandwiches. next thing you know, they'll be telling us that they use real beef in the hamburgers, actual dairy in the milkshakes, and certified French people in the French fries.

Editorial continues after a word from our sponsor...

Corporate Drumbeat

From ReposiTrak...


Now back to regularly scheduled editorial...

Worth Reading: Job Market Driving Economic Recovery

MarketWatch has a story about how an improving job market is driving an economic rebound in the US. An except:

"The easiest way to explain why the U.S. economy appears poised for its best growth in years can be found in a pair of words that have become more and more common: Help wanted.

"Over the past year the U.S. has cranked out an average 259,000 new jobs a month, including almost 1 million positions in the last three months alone. That’s the strongest increase in employment in a decade and a half. Nor is there any sign hiring is about to crumple. The U.S. added 252,000 jobs in January and economists polled by MarketWatch predict a milder but still-healthy 235,000 gain in February."

The story notes that "the spike in hiring has set the stage for faster economic growth even though there’s little evidence yet that workers are receiving sharply higher wages. More Americans working means more people eating out, more car sales, more home buying and so forth — even if people who already had a job don’t increase their spending at all."

You can read the entire piece here, but the conclusion of the piece is thus: while wages may remain relatively stagnant, the job market is tightening, and the result will be lower unemployment, higher wages, and a healthier economy.

Editorial continues after a word from our sponsor...

Now back to regularly scheduled editorial...

The MNB Walmart Watch

MarketWatch reports that Walmart continues to believe that mobile payments increasingly will replace cash and debit cards. While Walmart is committed to the CurrentC system that currently is in pilot, and that was created by the Merchant Customer Exchange (which also boasts Target and Best Buy as members, along with Walmart), the story suggests that the retailer has to be encouraged at some level by the early successes seen by Apple Pay.

According to the story, "Two out of three dollars spent via contactless payments at Visa, MasterCard or American Express happened on Apple Pay as of the end of January.," suggesting that the system is catching on to some extent.

The piece says that it remains to be seen whether Walmart eventually will accept mobile payment options other than CurrentC.

Editorial continues after a word from our sponsor...

Corporate Drumbeat

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It's time to get to work.

Now back to regularly scheduled editorial...

E-conomy Beat

• Weis Markets announced it will begin offering online shopping with in-store pick-up at its Camp Hill Store, making this the 24th location where it is offering a click-and-collect model.

“Weis Online Shopping offers our customers the best of both worlds: the in-store shopping experience with online, time-saving convenience. Our in-store personal shoppers are trained to focus on quality and customize orders,” said Kurt Schertle, Weis COO, in a prepared statement. “Customers can place their orders at any time and schedule a convenient pick-up time that suits their schedule. These orders can also be ready in four hours.”

Editorial continues after a word from our sponsor...

Industry Drumbeat

From USC...

Now back to regularly scheduled editorial...

FastNewsBeat

• The Tampa Bay Business Journal reports that Publix Super Markets, having just reported $30.6 billion in sales in 2014 on same store sales that were up five percent that profits that were up almost as much, "plans to invest $1.3 billion in new store construction, remodeling and technology in 2015. It also plans to continue investing in real estate, buying up the shopping centers its stores anchor."


• The New York Times has a story about Enlightened Ice Cream, a product described as "good for you" ice cream that has one-third the calories, 75 percent less sugar and twice the protein of regular ice cream, and that has grown sales after just a few years to $4 million in 2014. Expectations are high - the owners believe they can drive it to $100 million by the end of 2017 - but the challenges are significant.

For one thing, ice cream is a category dominated by big players; six companies control 62 percent of the business in the US. And, it is a category where current consumer trends favor high-fat, premium varieties, though there is some growth in low-fat ice cream products.

Editorial continues after a word from our sponsor...

Industry Drumbeat

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Now back to regularly scheduled editorial...

Executive Suite

• The Wisconsin State Journal reports that Mark Magnesen has been named president of Kraft's Oscar Mayer business. He succeeds Sam Rovit, who resigned from the post last month.

Magnesen most recently was general manager of the Planters nuts business for parent company Kraft.

Your Views: On A Plethora Of Subjects

I got a number of emails about our story regarding Bill Nye the Science Guy, who has changed his mind and now is in favor of GMOs in food; he apparently was persuaded after spending time with scientists at Monsanto.

MNB reader Timothy A. Bastic wrote:

On this subject I do not put a lot of credence in anything Monsanto or Con Agra say as some of the staff at the governing bodies (I believe it is the FDA) that regulate this industry are former executives of Monsanto and ConAgra.  Seems to me as if this is a “conflict of interest”.  This is  what I have come to know through researching and reading on this topic of GMO’s….. For what it’s worth.  In my opinion anything that is not naturally grown cannot be good for the consumer.

Go figure. A conflict of interest in government. Next thing you'll tell me is that there is a trend toward hiring foxes to guard henhouses.

From another reader:

Obviously, you couldn’t print this, but my first thought was that Monsanto made the Science Guy an offer he couldn’t refuse.

And why can't I print it?

I think a lot of people pondered at least that possibility, though most of us probably dismissed it. After all, if you can't trust Bill Nye the Science Guy...

That said, there is a long history of scientists who are willing to adjust their view or adopt a kind of myopia when one big organization or another is willing to write a check. Just look at all the so-called scientists who were willing to say that smoking didn't cause cancer.

MNB reader Randal O'Toole wrote:

I’m disappointed in your view that there should be mandatory labeling for so-called GMOs. (I say so-called because almost all foods have been genetically modified over the last several thousand years, but the foods targeted here are only a small fraction of the total.)

I can see the point in putting a label on cigarettes or some other hazardous material. Yet there is absolutely no evidence that so-called GMOs are hazardous to anyone. At the same time, due to confusion spun by a few special-interest groups, mandatory labeling of those foods would be the kiss of death in the marketplace.

So-called GMOs have the potential of dramatically increasing food supplies, which is a good thing for everyone. The only labeling should be voluntary. If someone wants to label their foods, “GMO-free,” they should be allowed to do so as long as they don’t falsely imply there are any health benefits. But a mandatory label will confuse consumers even more into thinking that so-called GMOs could have the same effects on human health as cigarettes.


Sorry I disappointed you.




I wrote yesterday about the importance of targeted marketing efforts, which led one MNB user to write:

“Targeted” marketing requires a “loyalty program” which (up to this point at least) requires some type of a loyalty or customer card.

What about those retailers that have resisted card programs? The ones that have even promoted their EDLP or “No Card Required Here” strategies as the antithesis of “gimmick” marketing?

How do they fare in this effective marketing debate?


I think it ramps up the pressure to be really good at what they do.

I'm not saying they cannot do it. WinCo is a great example of a highly disciplined, highly effective company that does not, to my knowledge, use any sort of loyalty marketing scheme.

But I continue to believe that the more you know about individual customers and their specific shopping habits, the easier it is to connect with them in fundamental ways.

It is as simple as this.

I love dogs. I don't like cats. So you should never, ever send me a cat food coupon. Because if you do, you waste my time, your money, and demonstrate that you are irrelevant to my needs and demands.




Regarding the great dress debate, MNB reader Monte Stowell wrote:

I am in total agreement with you as to how trivial this frenzy has been over the color of a dress. The media got ahold of this one and it boggles my mind how simple minded people are today on the inter-net and how the national media has dumb downed in the content of what they report. There are a helluva a lot more important things going on in this world than what color a dress is or is not. Great marketing yes, but don’t people have more important things to do in their lives than to tweet, etc.?

You misunderstand my position.

I don't think the story is trivial at all.

Is it important? Not in the grand scheme of things. But I do think it was interesting, revelatory, and when it was all over, many of us learned a little more about science than we knew before, and how can that be a bad thing.

Plus ... and this is the most important thing to me ... it offered a great metaphor for business about perception and reality, playing in many ways into what Michael Sansolo wrote about when he pondered the notion of a "filter bubble," and what I often write about when I talk about epistemic closure.




By the way, we got a lot of "attaboy" emails regarding Michael's "filter bubble" column this week.

One example:

Great article Michael!

This is a topic that needs to be talked about more and in a larger forum! Consumers are putting so much faith in what they read on line and yet not truly knowing how factual the information is. How often you hear, “ I know this because I read it on line”!

It’s another tear in the structure of humankind, where technology is replacing physical trust and social interaction.  There may be a future where the human race will no longer know how to interact with each other on an in-person environment as opposed to on line.

How often you see children texting and insta-graming and yet when they’re in a room full of other kids they can’t carry a verbal conversation. Maybe it’s a reach, but where is society headed?





Regarding Target's decision to eliminate a couple of thousand jobs, one MNB user wrote:

It continues to undermine the trust employees have in Senior Management when their decisions can affect thousands of employees who many most likely did not have anything to do with the Canada departure. What does it say to an organization that does not care for those who are treated like a cost not an asset.  It’s not just Target. We have seen it time and again; Walmart, Best Buy, Radio Shack, Tesco, McDonalds, on and on and on. Those on the top of the ladder will just move on to another high level job and those at the bottom that relied on their job to provide food on the table now will not eat.  As Yoda might say, “Conscience, none they have”.




I wrote the other day about how Costco is switching from American Express to Citigroup's Visa as its card of choice, prompting one MNB user to write:

Interesting story and I disagree with your take on the affect it will have on Costco.  As a former small business owner, my experience with refusing to take Amex due to their business practices did not affect my volume at all.  In hundreds of transactions, I never had a customer tell me if I didn’t take Amex, they couldn’t pay and 90%+ did not act surprised.  However, if I had not taken Visa, I may have well as closed my doors.

And from another:

This is going to be a boon for Costco in terms of average transaction size as more customers than ever will use a credit card, no longer limited to their bank balance.  I think they may see a similar increase as when grocery retailers started to take cards.

And another:

The problem with Costco changing from Amex to Citigroup is that they made a decision on behalf of thousands of members without member input (unless I missed the vote).  Pretty sure that less people have Amex than other cards due to the higher annual fee.  Costco made it an easier decision to get Amex since you were eventually credited the fees back through your purchases.

If you have the Costco Amex card only because you shop at Costco, then you now have a card you probably don’t need that also will likely require an annual fee.  Then keep in mind that canceling a credit card impacts your FICO score.  Also, what if you had setup automatic payments to that card for such things and household utilities, your Netflix account, internet provider, mobile phone etc.  Now you are stuck with that card or will need to move all those auto-payments to another card.  In this case Costco definitively did not have their members in mind.





Finally, yesterday's Eye-Opener used Hillary Clinton's email flap as a business metaphor.

To recap ... The New York Times reported that when she was Secretary of State during the first four years of the Obama administration, Hillary Clinton did not use an official State Department email account, but rather used a personal email account. What this means is that there is no official record of her email communications as seems to be required by law, and that Clinton - and not the State Department - controls the emails, though she certainly can be compelled to provide them if subpoenas are issued.

I wrote yesterday, in part:

Let's forget the politics of the situation for a moment. Here's what I cannot understand, and where the business lesson is.

There should have been someone in the room at the State Department, or someone in the Clinton orbit, who could have and/or should have said, "This is a bad idea. Not just on the legal face of it, but because it plays into every negative stereotype about the Clintons. Especially if you want a political future beyond being Secretary of State, you need to be not just as transparent as everybody else, but more transparent. The only way you can control the narrative is by subverting conventional wisdom, not by confirming it."

Now, I suppose that it is possible that somebody did say this, and was ignored.

Which is the second part of my point. Somebody has to be willing and able to make the contrarian and unpopular argument, and then somebody has to listen.

I have made this argument in other contexts over the years. Many newspapers now have public editors or ombudsmen who serve as critics of policies, procedures and decision-making processes ... and they do it public, on the pages of those newspapers, because they know that at a time when the media has declining credibility, it is necessary. I've always thought that companies like Walmart (I'm not picking on Walmart here, just using it as an example) or General Motors ought to have a person in senior management whose job is not to drink the Kool-aid. (Some companies seem to be largely run by people who get their haircuts from the same barber, buy their suits from the same shops, drive cars from the same dealership, and worship at the same churches. That's not healthy, in my view.)


But of course, lots of people cannot put the politics aside.

One MNB user wrote:

To be clear, this was a crime also.

And another wrote:

In the interest of accuracy, I am reliably informed there is not and was not a legal requirement for a Secretary of State to use an official versus personal email account, and there is actually precedent for it.

What is NOT customary is for those emails not to be turned over to State (or some Federal agency, not sure about which) and archived by the department. Which is where Hilary apparently differed from the expectation.


And from another:

Colin Powell did it, too.

I guess we know how these folks are likely to vote in 2016.

The thing is, I think what's important to think about here is the lesson that this story teaches us about how to conduct ourselves. Just because we can do something doesn't mean we should do something. (That's the lesson.)

MNB reader Elaine Howard got my point:

Your comments were on target. Reminds me of one of my favorite TED talks—Margaret Heffernan’s Dare to Disagree. Someone has to not be afraid to drink the Kool Aid!

And every once in a while, it's nice to confound people a bit, as in this MNB reader:

Not bad, KC, for someone I have always been lead to believe leans left.... Having business connections in DC and knowing people who know these kinds of shenanigans...there is no way on Gods green earth that Mrs. Clinton did not know exactly what she was doing !!

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With a uniquely fast-paced, provocative and entertaining approach, Kevin Coupe identifies the ways in which consumers are changing, the reasons behind these changes (technology, the economy, culture, demographics), how new and unorthodox competitors are altering the marketing landscape, and what companies need to do to find and exploit differential advantages.

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