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Thursday, August 21, 2014

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FaceTime with the Content Guy: How To Compete With Amazon & Win

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, I'm Kevin Coupe and this is FaceTime with the Content Guy, coming to you this morning from the beautiful Napa Valley. (Life is good.)

I've been spending a lot of time driving the last few weeks, which always gives me time to think. What I've been thinking about lately is the whole "how to compete with Amazon and win" thing. I think I've come up with a metaphor that may work…and I found it, go figure, right on my dashboard.

Think of your GPS system. Most of us find that the GPS is an invaluable part of our car - it uses data and algorithms to determine the fastest way to get from point A to point B, navigate around traffic, find a nearby gas station, Starbucks or whatever. They work, and they are efficient. Now, think of Amazon as the GPS of retailing.

To compete with Amazon, I think, you have to be the opposite of that. You have to be the guy with the map, who puts his arm around the shoulder of the traveler and says, 'Here's how to get from there from here. But if you go this way, about an hour out there's a really good place to stop for coffee and doughnuts. Then, here's a really good place for lunch - make sure you try the apple pit for dessert. Here are all the places you need to stop on the way, because the views are spectacular. And when you get there, I have a terrific place for you to have dinner, and they have a wonderful beer and wine list. Now, it may take you a little longer to get there, but I can guarantee you the trip will be more rewarding and more fun." (I recognize that my "points of interest" reflect my personal preoccupations, but you get the idea…)

Now, sometimes people will want to get from point A to point B in the fastest possible time. They'll opt for efficiency, and there's nothing you can do about that. But if you make yourself the guy with the map, offering advice and suggestions and ideas - being a resource of information, not just a source of product - you create for yourself a differential advantage that can and, I believe, will work.

That's what is on my mind this Thursday morning. As always, I want to hear what is on your mind.

Thursday Morning Eye-Opener: Smacked

by Kevin Coupe

MNB's Eye-Openers often tend toward the whimsical.

But this is no joke.

The state of New Hampshire has declared a state of emergency because of a series of overdoses from people who have ingested a synthetic drug called "Smacked," that is described by CBS News as "a packaged mixture of spices sprayed with a synthetic drug similar to the active ingredient in marijuana. It’s usually smoked to get a high," though it is sold as potpourri.

The New Hampshire Grocers Association says that "this designer drug began showing up in Manchester in 2011. It became illegal in New Hampshire on Aug. 18, 2012, but continues to be sold because the chemical content is constantly changed by the manufacturers so that it falls within legal limits."

But a bad batch has apparently found it way into the marketplace, and "police and EMT’s have been responding to medical emergencies at several parks this week. In Manchester at least 41 people have experienced serious medical reactions since August 11, at least 20 taken by ambulance to local hospitals."

CBS News reports that "the state of emergency from Governor Hassan will help police confiscate the drug from the stores and raise awareness. Manchester police have already shutdown three stores they say have not cooperated."

New Hampshire’s Attorney General Joseph Foster said, "We are strongly recommending that merchants who have similar products remove them from their shelves and destroy their current inventory. Retailers that continue to knowingly sell these dangerous or illegal products are placed on notice that they could be held responsible for harm caused to a user of the product.”

A criminal investigation has been launched.

I'd want to know this as a retailer. I'd want to know this as a parent.

BREAKING NEWS: Family Dollar Rejects Dollar General Acquisition Bid

The Associated Press is reporting that Family Dollar has rejected the $8.9 billion bid by market leader Dollar General to buy the company, and will instead move forward with announced plan to be bought for $8.5 billion by Dollar Tree.

Management cited antitrust concerns as the reason for the rejection, saying that it seemed unlikely that regulators would let the deal be consummated on the proposed terms.

As reported below, Dollar General CEO Rick Dreiling is saying that entreaties from his company to acquire Family Dollar, which took place before Dollar Tree put in a bid for Family Dollar, were rebuffed because Family Dollar CEO Howard Levine did not want to lose his job.

KC's View: Let's see if Family Dollar's shareholders feel the same way. I suspect this one isn't over yet.

Editorial continues after a word from our sponsor...

Corporate Drumbeat


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Staples To Close 140 Stores This Year

Bloomberg reports that as Staples announced disappointing sales and profits for the second quarter, it said that it would close about 140 stores this year as part of its broader plan to reorganize the business and place greater emphasis on e-commerce.

Eighty of those stores were closed down during the second quarter. As many as 225 stores in total may be closed through next year, as the company looks to reduce costs by a half-billion dollars.

The move to e-commerce reflects competition from the likes of Amazon, as well as the consolidation taking place in the office supply business; Office Depot and OfficeMax, Staples' two major competitors merged earlier this year.

"We're accelerating growth in our delivery businesses as customers turn to Staples for more products beyond office supplies," says chairman/CEO Ron Sargent. "At the same time, we have more work to do to stabilize our retail business, and we're taking action to improve customer traffic, reduce expenses and close underperforming stores."

The Wall Street Journal writes that "Staples is also looking to downsize locations as several products, such as tablet computers, take up less space than the usual sort of office supplies, such as filing cabinets and desktop computers."

KC's View: Seems to me that Staples is doing what it has to do to remain relevant and viable … essentially trying to stay out of the retailing graveyard that is occupied by the likes of Borders, Blockbuster, Circuit City, and the like. The folks there would appear to not be indulging in epistemic closure … they understand that the world is not the way they'd like it to be, and they have to deal with the world the way it is.

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Nestlé Adopts Aggressive Animal Welfare Standards

The New York Times this morning reports that Nestlé "is adopting animal welfare standards that will affect 7,300 of its suppliers around the globe, and their suppliers.

"The move is one of the broadest-reaching commitments to improving the quality of life for animals in the food system, and it is likely to have an impact on other companies that either share the same suppliers or compete with Nestlé.

“In the digital world, everyone has a smartphone and they want to know where things come from and share that information,” Kevin Petrie, chief procurement officer for Nestlé in North America, tells the Times. “Is it good for me? Is the quality good? Has it been responsibly sourced?”

The new policy, Petrie says, is "another step in Nestlé’s efforts to address risks in its supply chains like child labor and palm oil, the production of which is damaging to forests. Consumers today know far more about how components in their food are made — and they are far more willing to share that knowledge to stir up a fuss on social media, he said."

KC's View: This ties back into an app that Michael Sansolo wrote about earlier this week - BuyPartisan, which allows consumers access to an enormous amount of information about the political and social stances taken by companies and their top executives, enabling shoppers to make buying decisions based on those positions.

While some would deem this as being "too much information," I don't agree. I like the idea of being able to choose one product over another based on this kind of information. At the end of the day, it doesn't matter whether some think of it as being "TMI" … many consumers do act that way, and what Nestlé is doing is simply acknowledging reality.

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Corporate Drumbeat

From Samuel J. Associates...

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McDonald's To Start Selling McCafe Coffee In Supermarkets

Advertising Age reports that McDonald's is working with Kraft Foods to "roll out McCafé bagged coffee at grocery, mass merchandise, club and drug stores nationwide after testing the product last year … The brand is expected to be positioned as a premium product, in keeping with McDonald's long-held positioning of McCafé in its restaurants and the test in select markets last year."

The story continues: "The chain originally rolled out McCafé in 2009 with a massive marketing push for coffee and espresso drinks. It has since rolled out seasonal drinks from time to time, along with smoothies and frappes.

"The move comes at a time when McDonald's is struggling to reverse a sales slump. Last year, the chain said among its main areas of concentration for 2014 would be coffee and improving operations and the customer experience."

KC's View: McDonald's says, without reservation, that it wants McCafe coffee in supermarkets to build awareness.

To which I respond, then why in the hell would any self-respecting supermarket want to put it on the shelves?

This is hardball. McDonald's wants share of stomach. I know I've said this before, and not everyone agrees with me (perhaps the understatement of the year), but I'd tell McDonald's that if it wants to build brand awareness, it can do so somewhere else. (And yes, the same would go for other, similar brands, such as Starbucks and Dunkin' Donuts coffee.)

Why would anyone want to help the company that wants to diminish your sales?

Editorial continues after a word from our sponsor...

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Worth Reading: Delivery Room

There is a piece in the New York Times Magazine on Sunday about the resurgence in delivery start-ups.

An excerpt:

"In the tech crash of the early 2000s, on-demand delivery services like Kozmo and Webvan weren’t just among the most colossal failures. They also became a sort of grim joke, symbolizing the excess that portended the bust. Afterward, conventional wisdom hardened: Web-enabled delivery was not a good business because it simply cost too much to build warehouses, manage an inventory and pay drivers. There was too little opportunity to recoup expenditures in delivery fees; people will pay only so much for toilet paper to be delivered before they decide to fetch it themselves.

"But something is in the air of late, making hindsight blurry …

It is worth reading, here.

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Corporate Drumbeat

From Park City Group...

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E-conomy Beat

• The South Florida Business Journal reports that with the closing of its $280 million acquisition of Vitacost, Kroger has taken "another step into online grocery retail, where it has the potential to grow in South Florida." (Vitacost has a website that sells more than 45,000 health-related products.)

The story goes on: "When it comes to brick-and-mortar space, Kroger won't be able to snap up the spaces that stores like Publix, Winn-Dixie, Target and Wal-Mart have claimed. But the company may fair better virtually as Kroger has room to move into an online ordering and express lane pickup services role. The company is currently employing those services in Denver.

"Kroger also acquired 212 stores of Charlotte-based company Harris Teeter in a $2.5 billion deal in addition to its online grocery ordering service in July 2013, which added to speculation that Kroger aimed to compete with online grocers."

• The Financial Times reports that "Amazon, the US ecommerce group, plans to ramp up its business in China by setting up operations in Shanghai’s new free-trade zone, allowing it to sell more imports more cheaply to better compete with domestic rivals Alibaba and"

KC's View: Amazon better get aggressive in China against the likes of Alibaba, because it appears that Alibaba has every intention of getting tough with Amazon in the US.


• The Salisbury Post reports that Delhaize-owned Food Lion has unveiled its newest store format in North Carolina, with 31 stores that it says have been remodeled to focus on its "easy, fresh and affordable" positioning strategy.

The Post writes that "Food Lion is working to overcome recent struggles and battling for market share. The company in 2012 closed 126 underperforming stores and shut down its Bloom brand. Last year, parent company Delhaize sold 155 stores under the Harveys, Sweetbay and Reid’s brands to rival Bi-Lo.

"But good momentum at Food Lion helped Delhaize post positive results in the United States at the end of the second quarter, which marked the seventh consecutive quarter of improved sales at Food Lion."

• The Wall Street Journal reports that Southeastern Grocers, parent company to both Winn-Dixie and Bi-Lo, has decided not to go ahead with a planned IPO.

The story says that the company "filed for an IPO of up to $500 million back in September and said that it was looking to repay debts and build working capital."

• The Associated Press reports this morning that The UPS Store is saying that customers at 51 of its units in 24 states may have had their credit and debit card information breached by hackers. According to the story, "a spokeswoman for UPS says the information includes names, card numbers and postal and email addresses from about 100,000 transactions between Jan. 20 and Aug. 11."

MarketWatch reports that Dollar General CEO Rick Dreiling is saying that entreaties from his company to acquire Family Dollar, which took place before Dollar Tree put in a bid for Family Dollar, were rebuffed because Family Dollar CEO Howard Levine did not want to lose his job.

Earlier this week, Dollar General made an $8.9 billion bid to acquire Family Dollar, a bid that is significantly higher than the $8.5 billion offered for Family Dollar by Dollar Tree.

In fact, Dollar General says, "Levine failed to reveal that he was entertaining another offer from Dollar Tree when Dreiling met with him in mid-June to talk about a potential merger."

Executive Suite

Advertising Age reports that McDonald's has hired Julia Vander Ploeg, most recently general manager and senior VP at Ticketmaster's Resale division, to be its first VP of digital.

Editorial continues after a word from our sponsor...

Industry Drumbeat

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Your Views

…will return.

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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

"He’s refreshingly real and authentic…it’s more of a conversation than a presentation ... He uses everyday customer experiences to think about food retailing and the possibilities ... Many times he was reaffirming where we were headed, occasionally he pointed out something we hadn’t thought about and in at least one moment, we knew we had a lot of work to do ... " - Beth Newlands Campbell, President, Food Lion

"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: .

Now back to regularly scheduled editorial...

A Scheduling Note from the Content Guy

As is my custom at this time of year, I'm going to be taking off the last days of summer … MNB will be on hiatus (except for the archives, of course, which always are open) through what we here in the US celebrate as Labor Day.

I'll be back on Tuesday, September 2 with all new stories and commentaries …


OffBeat: Summertime, & The Living Is Easy

Since summer is for all practical purposes almost over, and this is the last MNB until after Labor Day, I thought I'd take a moment to tell you about some of the things that stick in memory from my time in the Pacific Northwest. There are some pictures at left, and in order …

…I loved the idea that my very first day, as I was taking the light rail in from the airport, there were two guys collecting signatures on petitions. The fellow working from the back of the train was working to legalize marijuana, while the guy working from the front was looking to mandate the labeling of GMOs. They did their jobs, met in the middle, discussed what they were up to, and then continued on. Democracy at work, Portland style.

…When I got off the train, one of the first things I saw was the new Apple Store, which is glass on three sides and takes up most of a city block. It is a thing of beauty, just six blocks or so from our apartment, and as I mentioned here a few weeks ago, always busy.

…One other thing about Portland International Airport. Y'know how we all spend so much time looking for electric outlets to plug in our laptops, cellphones and tablets? Well, they've got it figured out in the Alaska Air terminal, with a set of plugs in between every seat.

…Two of the things I could always count on at the PSU Farmers Market, held every Saturday, was that there would be a big line at the breakfast burrito stand, and that it would be worth the wait. Just wonderful. Mrs. Content Guy got addicted not just to the fresh produce, but to the flowers.

…Willamette Valley Vineyards has opened a new tasting room and event center, offering not just their wines but a terrific new menu and a spectacular view of the vineyards. It remains a go-to destination whenever we're in the area (and when you go, make sure you ask for Wende … tell her Kevin sent you).

…Another terrific little winery that we love to visit is Carlton Cellars, in Carlton, Oregon….the pinot noirs are terrific, and you should make sure you stop next door at the Horse Radish for the best BLT you'll ever eat. Trust me.

…The Safeway Portland Waterfront Blues Festival has become a must-see event for us each summer, exposing us to music and artists with which we are completely unfamiliar, but who often manage to reach deep into our souls with their music and lyrics. It is a fabulous use of the city's riverfront, and people are about as nice and civilized as you can imagine.

…I've written about it before, but it deserves a repeat mention - the Foot Bar, in the Pearl District, where they use massage to make your feet about as fantastic as they've ever felt. Trust me. I took Mrs. Content Guy and our daughter there once, and now it has become a regular event.

…The olive oil ice cream at the Salt & Straw. Incomparable.

…Each year we try to hike someplace new, and this summer we did Silver Falls State Park, which takes you past ten different waterfalls. It is one of the most popular hiking spots in the state, apparently, but it was completely peaceful and a lovely way to spend the day.

…Most mornings started with a four-mile jog along the Willamette River…

…And then moved to Stumptown Coffee, where I'd go through email, read students' papers, or just kick back and read a book. I am a person of routine, and this is a great way to start the day.

…One of my favorite new restaurant discoveries was Grassa, where they served a spectacular black squid ink pasta with Oregon albacore tuna, golden tomatoes and Calabrian chili.

…Always great fun is the Oregon Brewers Festival. This year my favorite beer may have been the one with the name that I'd be happy to have on my tombstone: "Witty Moron." (I've been called worse.)

…It was new to me, but the Portland Outdoor Store has, in fact, been around since 1914. The outside of the building may look decrepit, but inside it is bustling, featuring western wear (hats,. boots, etc…) and carrying brands that include Filson, Woolrich, Stetson, Barbour and Levi. A friend of mine who knows that industry tells me that it is one of the best in the category, passed down through generations and absolutely relevant to its customer base.

…And finally, there is Nel Centro, the restaurant and bar just across the street from our apartment. It is the place where Mrs. Content Guy and I would go to enjoy each other's company and some excellent wine, and on a cool night they'll light the fire pits and the evening will turn to magic.

PWS 28