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Friday, November 21, 2014

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Friday Morning Eye-Opener: Fighting Disintermediation

by Kevin Coupe

A couple of weeks ago, we reported here about how some cable networks, such as HBO, seem to be looking for a way to disintermediate traditional cable companies (think Comcast, TimeWarner, Cablevision) by making their programs available online and a la carte.

At some level, this isn't surprising. After all, everybody hates the cable companies … and so if companies like HBO can find ways to disentangle themselves from these hated corporate entities, it probably makes sense. (Though, to be sure, this will be a long process….)

Now, however, the Washington Post has a story suggesting that at least one cable company is figuring out a response.

According to the story, Comcast is "launching a tool aimed at cutting down the time you waste waiting for their technicians. The firm is testing a new feature in its app that will notify customers when a technician is about 30 minutes away -- more precise than the broader two-hour service windows that Comcast offers now. And if the technician gets stuck in traffic or otherwise hung up, the app will provide real-time updates on his or her progress."

Of course, it isn't like Comcast is breaking all the rules … right now, the upgraded services is available to "a few hundred customers," with the possibility that it could be expanded. And this isn't the first time that it's tried to improve its service - in 2011, it reduced its waiting window from four hours to two. (Yikes.)

At the same time, the Wall Street Journal this morning has a story about how a number of new companies are being created with the specific mission of using "big data" to help traditional broadcast television networks find ways to "pinpoint viewers with much greater specificity than the traditional demographic categories of age and gender … As the rise of digital and mobile advertising threatens to yank ad dollars from the big cable companies and broadcasters, networks and marketers hope the new technologies will have the ability to leverage huge databases on what products consumers buy and which obscure shows they watch, making the television ad landscape more like the online one."

The story goes on to note that "the TV industry is far behind online services when it comes to ad-targeting. In the digital realm, marketers routinely place ads not just based on consumers’ age and sex, but also their geographical location, shopping habits and other bits of information logged as consumers traverse the Internet. That is one reason that spending on digital ads is expected to reach about $82 billion by 2018, eclipsing TV spending, according to eMarketer."

You can read more about these technology initiatives here.

But the broader and Eye-Opening message, I think, is that when companies are threatened with disintermediation - and a lot of companies are or will be facing this possibility - they have to examine their weaknesses ruthlessly and then do whatever they can as fast as they can to address those problems.

Massachusetts Town Rejects Tobacco Ban Proposal

The Boston Globe reports that the board of health in Westminster, Massachusetts, has decided to drop a proposal that would have banned the sale of all tobacco products within the town's borders.

The decision came about a week after a raucous public hearing at which town residents vociferously opposed the ban, and a move by some in town to try to recall the board members in a new election.

The Globe reports that "opponents had said the proposed ban … was a sign of excessive government interference in private life. Some also expressed concern that a ban would harm the local economy."

KC's View: I'm neither surprised nor upset by this development, and I'm about as anti-tobacco as one can be.

Tobacco is legal. It makes perfect sense for companies, like CVS, to decide not to sell tobacco because it is at odds with its image as a health care provider. But I'm not sure some sort of modern prohibition is the way to go, if for no other reason than we know how it went the last time.

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Now back to regularly scheduled editorial...

Amazon Finds Space In NYC, But Does Not Open Store There. Yet.

Amazon said yesterday that it has leased 470,000 square feet of space in midtown Manhattan, across the street from the Empire State Building at the corner of 34th Street and Fifth Avenue.

However, Bloomberg reports, there is no word about whether Amazon plans to open a much-speculated-about physical retail store at the location.

“We have leased this building primarily as corporate office space and we intend to sublease to other tenants the ground-floor retail space,” Kelly Cheeseman, a spokeswoman for Amazon, tells Bloomberg.

KC's View: Stay tuned. Amazon is like a magician. It wants you to watch one hand, while all the magic is being performed by the hand you can't see.

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Worth Watching: Pig Out

Jon Stewart had a great piece on "The Daily Show" about the practice of using gestation crates on pig farms - which is currently the matter of a political and legal dispute in New Jersey. It is both very funny and very informative - especially some of the visuals, which make the crates seem like a particularly cruel form of torture. (Almost as torturous as the politics informing the debate.)

It's really worth watching…

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From Park City Group...

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The MNB Walmart Watch

• The New York Post reports that the Americans for Tax Fairness advocacy group is charging that "Walmart avoids $1 billion in federal taxes each year by exploiting loopholes, and could raise that figure by more than 70 percent if the corporate tax rate is cut … The world’s No. 1 retailer has cut its effective corporate tax rate to 29.1 percent from 35 percent, partly through the 'accelerated depreciation' of stores and other assets."

The report also suggests that Walmart has engaged in a tax-dodging scheme overseas, as evidenced by it decision to allow "cash profits overseas to pile up without reinvesting them in the business, more than doubling its overseas profits during the past five years."

Walmart has it "completely" disagrees with the report.

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From Barnie's CoffeeKitchen...

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E-conomy Beat

• The Wall Street Journal reports that the US Department of Commerce says that "e-commerce sales increased by 16.2% in the third quarter, year over year, to a seasonally adjusted $78 billion. That amounted to 6.6% of overall sales, more than triple the 2.1% share of a decade ago.

"The share of sales being made online is all the more impressive after considering all the retailers where the e-commerce threat is slim to nonexistent. Take away receipts at car and car-part dealers, restaurants and gasoline stations, and e-commerce’s share of sales rises to 10%.

"Even that doesn’t account for sales of all the things that can’t easily be stuffed in a box and shipped. Take, for example, the $15 billion Americans spend annually on boats, or things that most shoppers insist on buying in person, like the $40 billion that goes on major household appliances.

"That means e-commerce’s portion of sales where online purchases make the most sense, like clothing, books and music, is much higher. By 2012, for example, e-commerce accounted for about one-quarter of computer hardware sales, Commerce Department figures show, and that share has doubtless grown since then."

KC's View: Of course, because every silver lining has to have a cloud, the Journal wonders at what point e-commerce will reach the saturation point - online sales will have appealed to as many people as they're going to in the categories where they are practical, and the spike will come to an end … or at least will level out.

Which is, of course, possible.

The other possibility is that somebody comes up with an e-commerce innovation that we don't see coming, and everything changes. Again.

Which is what I think will happen.

Not because I'm pro-online and anti-offline shopping. But because these days, this inevitably is what happens.

The problem with projections is that they only take into account the known universe. And you'd think that people would begin to realize that the known universe is a lot smaller than the unknown universe.

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From Samuel J. Associates...

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Worth Reading: Designing Organisms

There is a fascinating piece on that looks at the next great frontier in synthesizing food - or what comes after genetically modified organisms (GMOs).

According to the story, "The latest step in genetic engineering — at least as it pertains to our food system — is called synthetic biology, which applies the principles of engineering to the fundamental components of biology. Instead of mixing one engineered gene into an existing organism (which is what happens with most of today’s GMOs), these scientists are creating large clusters of genes synthetically."

These scientists, essentially, can "design organisms."

You can read the entire story here. It is fascinating.

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• The Wall Street Journal this morning reports that Whole Foods, which has 10 stores in Canada, plans to add another 30 stores there as part of its broader expansion strategy. Co-CEO Walter Robb made the commitment as part of the ceremonies marking the opening of Whole Foods' 10th Canada store, in Ottawa, this week.

• The Wall Street Journal reports that quarterly US same-store sales at Target were up 1.2 percent, more than projected, "helped by a good showing at its core businesses of well-designed housewares and affordable fashion, areas that have been underperforming for a while."

According to the story, "Target cited strong demand during the back-to-school and Halloween seasons. Higher priced goods like Apple Inc.’s new iPhones and more expensive beauty lines like Vichy and La Roche-Posay meant shoppers spent more per trip. Online sales rose 30%, contributing to about half the sales gain."

The story goes on to say that "managers under the leadership of new CEO Brian Cornell have been energized to break from the past and test new strategies. Target has rolled out new apparel displays that use mannequins to 650 U.S. stores to better tempt shoppers with its clothing."

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Your Views

…will return next week.

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From Kevin Coupe & Michael Sansolo, co-authors of "The Big Picture: Essential Business Lessons From the Movies"…

In "Business Rules!", Michael Sansolo brings his unique perspective on business to this guidebook for people running business big and small. Some of the 52 rules are surprising, as in “Fail fast and fail cheap” (Rule 14), which shows the power of failure. Others offer new insights: “Focus on your best customers” (Rule 4) shows how Lady Gaga is a model of loyalty marketing.

"Retail Rules!", by Kevin Coupe, offers 52 rules to steer a retailer to success. With a liberal dose of examples from today's business environment, Coupe gives advice on management, marketing, customers, and operations, reflecting The rules Kevin's unique - and often irreverent - view of the world of retail.

Now, here's the deal. The books are available for ordering today on Amazon, both as paperbacks and for Kindle … but if you'd like signed copies in time for the holidays, all you have to do is order from our publisher by November 20 … and you can have one or both books signed and shipped to you in time to give away as a gift (or, to keep for yourself).

Also … there's a special deal if you order both books. Yippee!

Both "Retail Rules!" and "Business Rules!" are designed to be fast, evocative reads … and they're both made even more fun by the drawings of Steve Hickner, the well-known animator and director of Bee Movie, who illustrates every chapter with the kind of exuberance that Kevin and Michael bring to their writing.


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From The MNB Sports Desk

In Thursday Night Football action, the Oakland Raiders (finally) won their first game of the season, defeating the Kansas City Chiefs 24-20.

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Make Your Next Event Unique, Mesmerizing & Provocative

Here is everything you need to know about what Kevin Coupe - MNB's "Content Guy" - can bring your meeting or conference:

"The response from our staff to your presentation has been overwhelming. There has been an excitement and enthusiasm that I have not witnessed since taking over this position. The thanks in the hallways, the emails, the comments … have all been extraordinary. Thank you for capping off the perfect company event yesterday."
Steven L.  Goddard, President/CEO, WinCo Foods

"He brought a unique perspective, and  helped us think about our industry and the changing consumer in new ways ... He left us with a lot of rich conversation and actionable information ... He was terrific."
- Lynn Marmer, Group VP Corporate Affairs, The Kroger Co.

"Kevin Coupe was an injection of high energy. Both his presentation and the session he facilitated were huge hits with our team.  Unanimously, people told me how right on, topical and extremely well presented his speech was!"
- Peter T. Wolf, Chief P Global Sales Operation, ParTech Inc.

"Kevin Coupe is authentic, witty, informed and speaks from the heart.   His pace and style of walking the room kept our members engaged and attentive and his remarks were punctuated by a mix of thought provoking and entertaining pictures and videos.  Kevin is direct and challenged our members to think and take risks by tapping into both sides of the brain.   The positive energy that Kevin generated lasted throughout the day; expect to be surprised.” - Shelley F. Doak, Executive Director, Maine Grocers Association

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.

"My team was mesmerized by Kevin’s presentation. Thanks to Kevin, they left the meeting newly energized with a strong sense of purpose.”
- Donna Giordano, President, Ralphs

"Our group felt your presentation was filled with fresh, practical information and is excited about trying some new marketing approaches.”
- Norman Mayne, CEO, Dorothy Lane Market

Want to bring this kind of excitement and energy to your next meeting or conference? Check out

Contact Kevin Coupe at 203-662-0100, or email him at: .

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OffBeat: Flights of Fancy

Two movies to recommend this week….

Birdman (Or The Unexpected Virtue Of Ignorance) is an exceptional piece of moviemaking, a black comedy of considerable merit that features some extraordinary performances from the likes of Michael Keaton, Emma Stone, and Edward Norton. It has a story that would seem to have some real-life parallels - Keaton plays a Hollywood actor who got typecast as a superhero, Birdman, and now is looking to reignite his career with a Broadway play based on a Raymond Carver short story that he is starring in, as well as writing and directing. (Keaton, of course, says he has no such feelings about his career since he played Batman.)

While the movie takes place over a series of days, it also appears to be one, long, single shot … which gives it the appearance of almost being hallucinatory. It also creates a framework within which Keaton gives an exceptional performance, going deep to create a fascinating character of shallow passions and deep conflicts. Stone plays his daughter, and brings luminosity to a role that could have been rote and thankless, while Norton plays a narcissistic Broadway actor who is so totally caught up in his "art" that he has lost touch with his humanity.

Directed by Alejandro González Iñárritu, Birdman is a fascinating piece of work. I hope it ends up with Keaton, an actor of considerable talents, getting a boost for his career - he deserves bigger roles in better films than he's been getting.

Big Hero 6 is the new Disney animated film, based on a Marvel comic book of the same name, that is enormously charming. It tells the story of Hiro Hamada, a young technology wiz living in the futuristic city of San Fransokyo. For reasons that I won't explain here, he finds himself in the middle of a complicated plot that concerns the use of microbots, and he is aided in part by a "personal healthcare robot" called Baymax.

(The whole notion of San Fransokyo is appealingly subversive. And if Baymax had been part of Obamacare, the whole process would have been a lot smoother. I'm just sayin…)

I'm not going to tell you much more about the movie because I didn't really know anything about it before I went; my daughter wanted to see it, my wife was doing report cards, and so I went … and I'm glad I did. Find a kid, and take him or her to this movie … you'll be glad you did.

I was very happy this week to read that Netflix has decided to rescue "Longmire," the modern western TV series that garnered huge ratings for A&E but was cancelled after three seasons because its audience was too old.

Netflix, following the strategy that resulted in "House of Cards," "Orange Is The New Black," and a revival of "Arrested Development," says it will make a fourth season of "Longmire" available in 2015, with 10 new episodes.

The series stars Robert Taylor and Lou Diamond Phillips and is based on a series of novels by Craig Johnson. If you've never seen it, you should go catch up on the first three seasons, which are available on - natch - Netflix, which had a clear picture of just how popular the series is.

As it happens, A&E said that the "too old" average age of 'Longmire" viewers was 60.

Thank goodness Netflix realizes that some of us of this advanced age are still kicking.

Yesterday was Mrs. Content Guy's birthday, and at her request I made lamb and artichoke stew … and we washed it down with a terrific wine, the 2007 Carlton Cellars Roads End Pinot Noir, which is rich and delicious and utterly first class. Roads End is Carlton Cellars's flagship wine, and I urge you to find a bottle and enjoy it. It is wonderful.

That's it for this week … Have a great weekend.

See you Monday.


PWS 29