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Friday, April 29, 2016

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Friday Morning Eye-Opener: Safe Harbor

by Kevin Coupe

The Washington Post has a lovely story this morning about a Safeway there that is being shut down, leaving some wonderful memories behind.

The Tenleytown Safeway, across the street from the Georgetown Day School, is described as a place full of "psychic data," reflective of the community it served and serving the community it reflected.

"Tied up in the material the store sells are snippets of the lives supermarkets sustain, including mine," says the writer, Julia Fisher. "Thousands of neighbors, many of whom I knew and more of whom I didn’t, have walked these aisles and wondered why they could never find the sauerkraut or the beer (my Safeway did not sell beer; the sauerkraut was just hard to find). They went at the end of a long day and then had to wait 25 minutes in the checkout line. Maybe someone consoled himself by buying a tub of ice cream. Transactions and acquisitions are the profile of our days: Safeway had them.

"I’ve been to that Safeway more than any other store. It’s across the street from where I went to school and, later, taught; for many years, I lived a few blocks away. For those who work or live nearby, it was a staple of life, good for a quick lunch, a last-minute purchase for an event or a venture out when you just needed to go somewhere else. Safeway had everything—rows and rows of consumable products. All that choice provided a refuge from the limitations of life outside the fluorescent lighting. You could buy an energy drink you’d never drink or a lousy novel you’d never read, and you’d feel good. And yet somehow the Safeway often managed not to have what you needed."

Throughout the story, Fisher continually uses possessive terms to refer to the store - whatever its quirks and disappointments, it was a store that held a special place in people's lives.

"Clearly our supermarkets - and in Washington, it is often our Safeways - play a significant role in ordinary life," Fisher writes. "They’re fixtures; otherwise, we wouldn’t give them nicknames. There’s the Social Safeway, the Soviet Safeway, the Sandinista Safeway: These places are communal markers, because just about everyone has to go some time or other. This one was sometimes called the Secret Safeway (or the Super-Secret Safeway, to distinguish it from another defunct 'secret' store in Dupont), because it isn’t visible from Wisconsin Avenue."

You can read the entire story here, and it offers an important lesson for every sort of retailer. Stores can be stores, or they can be something more ... intrinsic to the life of a community, purveyor of goods that sustain and delight us, employer of our children, and even, in best moments, a provider of inspiration.

Read the story. It is an Eye-Opener.

Walmart Looks To Fund, Mentor Startups

Forbes reports that "Walmart has joined a growing list of retailers issuing looking for a few good startups to help solve some sticky technology problems and create more compelling shopping experiences."

The story says that the retailer will host, in partnership with the Northwest Arkansas Technology Summit, some 250 applicants who will then be winnowed down to 25 to 30, who will then get a chance to pitch their ideas to top Walmart executives.

"Ultimately," the story says, "a handful will be selected and invited to take up residence inside Walmart for mentorship and help developing and bringing their technology to market."

Forbes writes that "It’s a trend in retail today. First companies like Walmart and Target opened offices in Silicon Valley and then they began integrating those teams into the home offices. Target has an advisory board and now an entrepreneur in residence program. A recent call for startups yielded 50 responses and ideas ranged from from connected toys to virtual fitting rooms."

KC's View: I think this is a critically important trend for retail businesses, as they look to see around the corner in ways that may challenge traditional ways of doing business. They need to have people in influential positions who can challenge traditional methodologies, who can create game-changing concepts that big companies have the resources to nurture and grow.

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Amazon Q1 Figures Show Sales, Profit Increases

Despite persistent criticisms that it is a company without a profitable business model, Amazon yesterday "posted its fourth straight profit, boosted by a 28 percent sales increase," CNBC reports.

According to the story, "Amazon reported first-quarter net income of $513 million, or $1.07 per share, on $29.13 billion in revenue. Those figures compare with a loss of 12 cents per share and $22.72 billion in sales for the previous year."

The story also notes that "the company's fourth straight quarter of earnings assures some company watchers who have questioned whether it can maintain profitability. Operating income also spiked to $1.1 billion in the quarter, up from $255 million in the prior-year period."

In a message to shareholders, CEO/founder Jeff Bezos said, "Amazon devices are the top selling products on Amazon, and customers purchased more than twice as many Fire tablets than first quarter last year. Earlier this week, the $39 Fire TV Stick became the first product ever — from any manufacturer — to pass 100,000 customer reviews, including over 62,000 5 star reviews, also more than any other product ever sold on Amazon. Echo too is off to an incredible start, and we can’t yet manage to keep it in stock despite all efforts. We’re building premium products at non-premium prices, and we’re thrilled so many customers are responding to our approach."

The CNBC story points out that one of the company's bright lights, Amazon Web Services, saw its sales go up 64 percent to $2.57 billion from $1.57 billion in the prior-year period.

KC's View: To me, it is Bezos' comments about proprietary technological devices that are the most interesting. There are two reasons. First, it means that Amazon understands that much of its future will be determined by how successful it is selling products that are unique to its store. And second, so many of these technologies are designed to make it easier for people to buy other stuff on Amazon.

The ecosystem grows. And these days, at least, it is showing a profit.

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GNC Grapples With Stagnant Performance By Selling Off Stores

The Pittsburgh Business Times reports that nutrition-and-supplement retailer GNC has announced its intention to sell 84 of its locations to one of its franchisees, and it plans to sell off as many as 1,000 additional stores as a way of dealing with sales issues.

According to the story, "GNC is also working with existing franchisees to get them to more quickly adapt the company's new initiatives, including an expanded assortment of products that has been showing success at the company-owned stores. The expanded assortment isn't as widely adopted among franchisees, a trend that has concerned GNC executives who are already smarting from lower same-store sales. Franchisees have been leery of additional expenditures."

Bloomberg writes that "part of the problem was that unsold vitamins sat on GNC shelves so long the company had to discount them heavily to get people to buy them before they expired. It's almost a metaphor for the company and the industry. GNC's sales have been falling as customers pull back on vitamin purchases. Fewer of GNC's franchisees are adopting its new product lines or participating in national promotions, causing sales to fall further. Meanwhile, the FDA and Justice Department are scrutinizing the dietary supplement industry for allegedly selling products made with illegal ingredients, which isn't helping matters."

GNC is looking to persuade franchisees that by investing in additional merchandise they can move the needle on sales, and that standing pat with current approaches won't generate improved results.

KC's View: I could be completely wrong about this, because I'm certainly not GNC's target customer, but its stores always seem like anachronisms to me. From the outside, at least, it would appear that to be brought into the 21st century, they need a lot of investment, not a little.

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The MNB Walmart Watch

• The same week as Walmart announced that it is dropping the Wild Oats brand of natural and organic food, Money reports that "Walmart is simultaneously getting rid of another, markedly different food brand with the phasing out of Price First, an ultra-basic, low-cost in-house label featuring the plainest of plain blue packaging."

The story suggests that "the Price First and Wild Oats brands failed to resonate with shoppers enough for Walmart to keep them around. The death of Price First won’t come as a surprise to early skeptics, who criticized the bare-bones aesthetics in the packaging."

So while Walmart remains committed to expanded natural and organic foods and to a low-price image in its stores, it will seek more cost-effective and resonant ways to do so.

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From MyWebGrocer...

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• The Associated Press reports that McDonald's is testing a new version of the Chicken McNugget that is made without artificial preservatives. The company says that the recipe is "simpler," and designed to "make parents feel good" about serving it to their children; it also is an effort "to try to catch up with changing tastes and turn around its business, which has lost customers in recent years."

• The National Retail Federation (NRF) is projecting that "Americans are expected to spend $172.22 on mom this Mother's Day, down slightly from $172.63 last year," with the bulk of the money being spent on jewelry, dinner out, and flowers.

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See the full lineup here.

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Executive Suite

• The Tampa Bay Times reports that Publix divisional vice president Tom McLaughlin will retire from the company next week after 48 years with the company. He started as a bag boy and ended up supervising all day-to-day operations at 300 Central Florida stores.

• The Boston Globe reports that Dunkin' Donuts president Paul Twohig has announced his intended retirement, effective at the beginning of 2017. He will remain in the job while the company seeks a successor from a pool of internal and external candidates.

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...will return.

OffBeat: 33

I want to recommend - with some caveats - the second season of "Catastrophe," now streaming on Amazon.

"Catastrophe" is a British TV series that debuted here last year with six episodes about an American advertising executive who has a brief affair with an Irish schoolteacher living in London. When she gets pregnant, he decides to move to London to live with her and raise the child together; the first season takes them up to the birth of the child, while the second season picks up a couple of years later as the now-married couple is navigating a somewhat more mature relationship.

The series is very much a two-hander. Rob Delaney and Sharon Horgan created it, write every episode, and star as the protagonists, and "Catastrophe" has such verisimilitude that it almost feels improvised ... the intimacy of their relationship - both in their conversations and its physicality - comes across, sometimes to the point where it feels almost too intimate to be watching from the outside. Mostly, it is very, very funny ... occasionally sweet, and sometimes sad. Sort of like life.

My caveats have to do with the explicitness of the series. The language can be very profane, and the sexuality (while there is little actual nudity) somewhat raw. "Catastrophe" won't be everyone, and I have to admit that I hit the pause button on the remote whenever my adult daughter walked near the room where I was watching. (I wasn't embarrassed, exactly, but there are certain things we don't need to share.)

One of the nicest things about "Catastrophe" is that it is short - each season consists of six 30-minute episodes. It doesn't require a major commitment, and if you buy into its approach and portrayal of this relationship, you find yourself wanting more. I hope they make a third season, because I want to see these two people continue to grow up.

Speaking of relationships ... as of Sunday, I've been married to Mrs. Content Guy for 33 years. Of course, because I travel a lot, I've really only been around for about 22 of them ... which Mrs. Content Guy probably would argue is the secret to a happy marriage, or at least the secret of being happily married to me. (I'm not sure anyone could actually be around me for 33 years straight...)

So Happy Anniversary, Mrs. Content Guy. Tom Stoppard once wrote, "It’s no trick loving somebody at their best. Love is loving them at their worst." I completely believe that, but I've no personal experience with it, because her worst is pretty great.

That's it for this week. Have a great weekend, and I'll see you Monday.


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Topical, relevant, engaging, thought-provoking...Who could ask for anything more?

When Kevin Coupe gets on stage in front of your company meeting, association conference, or any other event, the pace is fast ... the thoughts are provocative ... the focus is innovation ...the style is entertaining and interactive ... and the reviews are glowing...

"Our sales organization is a very skeptical bunch, and your presentation was both topical and relevant. The content was right on to address the meeting theme, and was presented in way that kept the audience enthralled. I had quite a few positive comments at the break, something that does not happen frequently. We appreciate the time and effort to help make this sales meeting one of the best we have had in several years."
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- Cathy Kloos, Director of Human Resources, Albertsons Safeway

“Kevin was an engaging speaker whose stories really brought the concepts to life. Although his lessons were focused on retail rules to achieve business success I found the lessons could be directly linked to enhancing my leadership style. “
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Kevin Coupe uses his unique perspective as MorningNewsBeat "Content Guy" and more than 30 years writing about business, marketing and innovation to identify 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.

Want to make your next event unique, engaging, illuminating and entertaining?

Start here: Or call Kevin at 203-662-0100.

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