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Wednesday, July 23, 2014

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Kate's Take: Pooling Resources

by Kate McMahon

Stew Leonard’s flagship store in Norwalk, Connecticut, is a festive retail mecca replete with a petting zoo, animated singing fruits and vegetables, a costumed Wow the Cow high-fiving kids and record-breaking sales per square foot for a grocery store.

But customers entering the Disney-like atmosphere are also greeted by a serious, heartfelt message from family scion/company CEO Stew Leonard Jr. and his wife Kim:
“WE LOST OUR CHILD … Don’t lose yours,” reads the bold black-and-white type above their photo in the store.

It’s been almost 25 years since 21-month-old Stew Leonard III accidentally drowned in a swimming pool during a family birthday party, and Kim and Stew Jr. have been passionate advocates for water safety awareness ever since. It is emblematic of what a retailer can do in terms of serving a community, going beyond acts of commerce and really focusing on what ultimately is an act of kindness and compassion. Not only are they serving the community, but expanding it.

Their Stew Leonard III Children’s Charities has raised more than $2 million toward water safety awareness and education, with national and international outreach, and provided more than 200,000 swimming lessons to children.

And now, in the peak of family summer vacation season, the affable Stew Jr. isn’t pitching fresh produce and ice cream in his radio ads but rather their book and free app “Stewie the Duck Learns to Swim.”

“After you go through a tragedy as a family, you try to build yourselves back up again,” Stew Jr. told me, noting that drowning is the leading cause of accidental deaths in children ages 1-4. Stew and Kim created the charity’s mascot Stewie the Duck, a youngster whose older sister won’t allow him to swim with the “big ducks” until he learns the three basic safety rules.

The read-aloud book, aimed at children ages 2 to 6, is now in its eighth printing, available in English and Spanish, with more than 200,000 copies sold and thousands more given away and read to children across the country. The Leonards developed a free mobile app of the book for iPads, iPhones and iPhone Touch, which was accepted by Apple on April 24, 2012, the day that would have been Stewie’s 25th birthday. The app is now available on Android and Kindle, and nearly 10% of recent downloads have been from Australia. There is even a catchy jingle set to “Twinkle, Twinkle.”

The “Don’t Jump In ‘Til You Learn to Swim” rules are straight-forward enough for a child to grasp: Always wear a life vest, take swimming lessons and have a grown-up watch you in the pool.

Leonard implores adults to “keep your eyes glued every second” to a youngster near a pool, to prevent what he called “one of the worst losses you can have in your life.”

“It’s almost therapeutic in a way for my wife and I just to be able to put our head on the pillow at night and say, ‘yes, we did lose our child to a drowning, but look at all the people we’re helping,’” he said. “We’re so proud of our four daughters – including the three youngest who never met their brother – that they still embrace the cause and do book readings all summer.”

It is an important lesson, in two ways.

First, the Stew Leonard's example demonstrates how retailers can and should find issues that are personal and important, and use their expertise and marketing power to bring attention to them.

Second, I hope that you'll share the story of Stewie the Duck with anyone you know who would find the Leonards' story to be relevant. The Stewie the Duck site can be found here; sharing it could save a life.

Comments? As always, send them to me at kate@morningnewsbeat.com .

Wednesday Morning Eye-Opener: Take The Day Off. Really.

by Kevin Coupe

The Washington Post reports that Carlos Slim, the Mexican billionaire, is advocating for a change in the traditional 40-hour, five-day work week, suggesting that if everyone worked for 11 hours a day, three days a week, until they are 70 or 75 years old, they would be happier and more fulfilled - both in their professional and personal lives.

Also, presumably, it would be good for employment figures, since at least some companies - like retailers - would have to hire other people to work those other days.

The additional benefit, Slim says, is that companies would benefit with greater productivity coming from these happier workers.

Now, to be honest, I can't even remember the last time I worked a "traditional 40-hour, five-day work week." (I'm thinking 1984. But I could be off by a couple of years. Not that I'm complaining. I pretty much hated what I was doing in 1984.) And most of the people I know would find a 40-hour week to be something like a vacation.

But it is an interesting concept. According to the Post, "Slim is not the first person to advocate a change to the typical 40-hour, five-day work week.  The Swedish city of Gothemburg has proposed experimenting with a six-hour work day by having one group of government workers work six hours a day, while another group works a normal eight-hour day. If the first group is found to be mentally and physically better off and more efficient in their work, then the city could consider extending the six-hour workday to other parts of civil service."

In fact, a similar test was run in the US: "In 2008, Utah became the first state to mandate a four-day workweek for all state employees as a way to lower energy consumption," the Post writes. "A year later, state planners found that in addition to the reduced energy use, there were unexpected boosts to productivity and worker satisfaction as well. But the state switched back to the traditional work week in 2011 when residents complained some state services weren’t available on Fridays."

(That seems so American. They figure out a way to be make workers happier and more productive, and then dump the program rather than figure out how to address the consumer issues.)

It would be very interesting if more companies and yes, even governmental institutions tried to figure out to apply some of these ideas to their organizations. Because the ones that figure it out, it seems to me, may have themselves a differential advantage in the hunt for great employees.

It'd be an Eye-Opener.

Editorial continues after a word from our sponsor...

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Now back to regularly scheduled editorial...

Study: US Consumer Confidence On The Upswing. Go Figure.

Nielsen is out with its second quarter Global Confidence report, which concludes that "U.S. consumer confidence increased four index points in the second quarter to a score of 104, continuing an upward trend that started in first-quarter 2013 and has registered an 11-point increase since then … Almost half of Americans (49%) believed it was a good/excellenttime to spend, which is the highest level reported since 2006 and up 6 percentage points from the first quarter of 2014 (43%)."

According to the report, "Optimistic perceptions of job prospects and personal finances also rose in the second quarter. While the outlook for jobs (46%) was still below pre-recession levels (63%), the sentiment represents a significant improvement from 2009, when it was at 20 percent. Almost two-thirds of U.S. respondents (64%) said their personal finances were in good order, a rise of 5 percentage points from the first quarter."

“In the U.S., positive news for job, housing and equity markets appears to have buoyed the spirits of Americans,” James Russo, Nielsen's senior vice president, Global Consumer Insights, said in a prepared statement. “The retail environment for non-durable goods, however, is still catching up. Retail dollar sales of fast-moving consumer goods are up 1.3 percent in latest six months ending June. Consumers are moving ahead slowly, and marketers need to adjust to a new consumer mindset of restraint, which will take time to reverse.”

KC's View: It is at moments like these that I am really, really glad that I watch cable news. Because Nielsen seems to be suggesting that the economy is on the upswing, and people are feeling better about the things When, as those of us "in the know" really understand, because we watch cable news, the world is actually going to hell in a hand basket.

(Well, of course, much of the world does legitimately seem to be rushing toward armageddon. But, even as that happens, it is good to know that American consumers seem to be feeling pretty good about the whole experience…)

Editorial continues after a word from our sponsor...

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Now back to regularly scheduled editorial...

Ahold-Owned Stop & Shop Acquires Single Store Upscale Grocer

The Providence Journal reports that Ahold-owned Stop & Shop is buying Eastside Marketplace there, a store described as "a special kind of store, one with a post office … It also offered shoppers a bakery, prepared food department with 300 plus recipes, a café, and an extensive produce department, long before such things were common in super stores."

Terms of the deal were not disclosed. Stop & Shop reportedly plans to operate the store under its own name, and will not convert it to the Stop & Shop banner.

Scott Laurans, Eastside's owner since 1981, says he will stay on as ad advisor. “I think it can be a good symbiotic deal," he says. "We can learn from each other.”

And Ahold USA COO James McCann said, “We are very happy to welcome Eastside Marketplace to the Ahold family of stores. We have a great deal of respect for Scott, Brian and their team … Eastside Marketplace is a terrific community asset and, with this transaction, Ahold USA is looking forward to working with the Eastside Marketplace team to do great things together."

KC's View: A curious and, I must say, out of character move for Ahold … but when you realize that they've just named their first EVP in charge of format development, it makes a kind of sense. If they're smart about it, they'll learn from Eastside and won't demand from it the same kind of metrics as they get from their superstores. They'll nurture the culture, not try to re-engineer it. And maybe then they'll have an interesting little laboratory in which they can test concepts that could be rolled out to bigger stores, and maybe even have a new format that will be appropriate to other locations. There will be some culture clashing, no doubt, but this can be an interesting opportunity for Ahold.

Editorial continues after a word from our sponsor...

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Now back to regularly scheduled editorial...

Current Market Basket Co-CEOs Say There Was No Alternative To Staff Firings

The Boston Globe reports that Felicia Thornton and James Gooch, the current co-CEOs at troubled Market Basket (and "troubled" may be the understatement of the year), have released a statement addressing the management firings that took place at the company last weekend.

Those firings, which followed the dismissal of CEO Arthur T. Demoulas, came after an employee protest slowed down warehouse deliveries to the stores to the point that many shelves were empty. Arthur T. Demoulas’s similarly-named cousin, Arthur S. Demoulas, ousted the CEO due to a conflict over the company’s finances. The fight is characterized differently by the two sides. The Arthur S. Demoulas faction argues that Arthur T. Demoulas spends money irresponsibly and refuses to take direction from the board. The Arthur T. Demoulas side maintains that his cousin is fueled by greed, only interested in raising prices, cutting employee compensation, and threatening the formula that has built the company to a New England success story.

Arthur T. Demoulas had released his own statement, saying that the fired employees should be immediately reinstated. In their statement, Thornton and Gooch said:

“We share many of the sentiments that Arthur T. Demoulas articulated in his statement. The success of Market Basket and the loyalty of both its associates and customers is indeed the result of the dedication and hard work of thousands, from all ranks of the company. Our cashiers and store associates are as important as senior executives. The individuals who were terminated took significant actions that harmed the company and therefore compromised Market Basket’s ability to be there for our customers.

"We took the difficult step of termination only after we saw no alternative. We are committed to continuing the tradition of excellence and dedication that has been built over several decades. We strongly encourage all associates to return their focus to Market Basket’s customers, their needs and expectations. We understand the strain and emotion facing Market Basket associates. We know and understand that trust and acceptance are earned and cannot be demanded or imposed. We are committed to earning the trust and acceptance of our associates and Market Basket’s customers and hope that our associates will judge us not on our promises, but on our actions as we move forward.”

KC's View: Right now, the real winners in this mess are Market Basket's competitors, all of which have fully stocked stores and none of the tsouris that is affecting the Demoulas chain. If adults were in charge at Market Basket, they'd figure out a way to end hostilities right now … if Don Corleone can do business with Don Barzini, then Arthur S. and Arthur T. ought to be able to figure out a way to come to some understanding.

Editorial continues after a word from our sponsor...

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Now back to regularly scheduled editorial...

Worth Reading: Millennials Face Age-Old Questions

Good piece from MNB editorial partner The Hartman Group that looks at the behavior of the Millennial generation, suggesting that they "are gradually beginning to sound a bit more like their parents, and even their grandparents, which makes it worth considering whether our habit of thinking about generations in silos is too rigid. If we can fight the urge to believe that each generation is so wildly unique, we could learn more about what they want and what’s coming next."

The column poses the following question: "What if what we think we know about Millennials may be explained simply by the effects of aging, as opposed to the unique psychological and cultural forces that generational marketers are fond of touting?"

You can read the entire piece here.

Editorial continues after a word from our sponsor...

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Now back to regularly scheduled editorial...

Target Introduces New Smartphone App To Sell Items From Magazine Ads

The Associated Press reports that Target has developed a new smartphone application "that lets users purchase items after scanning magazine ads … It's the latest offering from retailers looking to boost sales with the use of improving image-recognition technology."

According to the story, the app "will recognize images for Target's Room Essentials products in 10 home decor magazines including Architecture and Real Simple. A user can simply scan an image and when it is recognized by the app, the item gets added to a shopping cart for potential purchase." The Target app, the story says, "is limited to recognizing products in ads. It is free to download but still in test mode, and it offers users the ability to send feedback to the Minneapolis retailer."

The AP notes that "apps that scan codes, such as QSR codes and UPC symbols, are fairly common, but an app that consistently recognizes images or objects has proven more difficult. Retailers are anticipating competition from Firefly, a service Amazon is launching this week with the debut of its Fire smartphone. The company claims Firefly can recognize 100 million items. Amazon's current app for iPhones and iPads has a similar service called Flow that scans barcodes, grocery labels, books and DVDs."

Netflix Hits Major Benchmark, Passes 50 Million Members

The New York Times reports that Netflix has passed the 50 million member mark, and plans to continue growing by expanding into an increasing number of global markets.

According to the story, "Today, nearly three-quarters of its members are in the United States. In the future, it hopes that a growing portion of its membership will come from around the world … The company said it expected to increase its total membership roll by 3.69 million, to 53.74 million, with the global business adding 2.36 million subscribers. In the second quarter, Netflix added 1.69 million new subscribers, with about two-thirds of those new members coming from outside the United States … Available in 40 countries, Netflix has announced plans to introduce its service to a number of European markets in September, including Austria, Belgium, France, Germany, Luxembourg and Switzerland."

The Times makes the point that Netflix's growth comes as "a series of huge deals are set to reshape the television business. Awaiting regulatory approval are Comcast’s $45 billion deal for Time Warner Cable, and AT&T’s $48.5 billion proposed takeover of DirecTV. Netflix has been an outspoken critic of the Comcast-Time Warner Cable tie-up. Also making waves is 21st Century Fox’s pursuit of Time Warner which, if consummated, would create a behemoth in the television and entertainment industry. Analysts have raised concerns that a merger could affect Netflix’s leverage in acquiring original programming."

KC's View: The thing about Netflix is that, having helped to redefine the content game with projects like "House of Cards" and "Orange is the New Black," it has to keep innovating, both on the content and technological sides. The competition is only going to get tougher, and the challenges only are going to get greater.

FastNewsBeat

• The Wall Street Journal reports that the federal Drug Enforcement Administration (DEA) is looking into Safeway's record keeping "related to the theft of controlled substances," and has issued a subpoena to the chain, which is cooperating with the probe.

The story says that Safeway, which has agreed to be acquired by a Cerberus Capital Management-led investment group, which also owns Albertsons, has said that it does not expect the probe to have any "material adverse effect" on its results.


• The Chicago Sun Times reports that "some Walgreens pharmacists and online pharmacy agents will get training in wellness coaching to help customers with smoking cessation and adopting other healthy behaviors." The move is part of the company's expansion of its Balance Rewards program, which it says has 81 million active members.


• In San Diego, CBS News reports that a strike has been authorized by employees of Kroger-owned Food 4 Less, who reportedly are pushing to be paid the same as workers at Kroger-owned Ralphs in Southern California.

In a statement, Food 4 Less has responded that it "is committed to reaching an agreement with the union that is good for associates and allows the company to continue to operate in a very competitive market.... We remain hopeful that the union will have the same commitment to keep our associates working as we go through this process."

No word on when a strike might take place. The two sides are scheduled to meet again today.


• The Cincinnati Enquirer reports that the United Food and Commercial Workers union has reached a tentative agreement with Kroger on a new contract that will cover some 16,000 employees in the Greater Cincinnati and Dayton regions. Terms of the agreement were not disclosed, but the rank and file is scheduled to vote on the pact next week.


Shanghaiist reports that concerns about expired meat from a Chinese supplier that reportedly has been sold at fast food chains in China that include McDonald's, KFC and Pizza Hut have now spread to Starbucks. The coffee chain reportedly "pulled sandwiches from its shelves after discovering that several China branches also carried products from Shanghai Husi Food Co, a Shanghai supplier shuttered for selling expired meat and re-using meat that had fallen on the factory floor."

Editorial continues after a word from our sponsor...

Industry Drumbeat

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Now back to regularly scheduled editorial...

Want To Grab A Beer Or A Glass of Wine?

I'm going to be in Portland enjoying what I like to think of as my "adjunctivity" (team-teaching a marketing class at Portland State University with the great Prof. Tom Gillpatrick) until August 1 … and it occurs to me that this would be a great time to try and grab a beer or glass of wine with local members of the MNB community.

I'm thinking Nel Centro, located at 1408 SW 6th Ave, Portland, … on Monday, July 28 … say, from 5:30-7 pm? No need to RSVP…I'll just be there, hanging around outside by the fire pits, looking forward to meeting with anyone who would like to hang with me.

Your Views

…will return.

PWS 28