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Tuesday, March 03, 2015

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Sansolo Speaks: In Google We Trust

by Michael Sansolo

There’s a simple phrase that may be the simplest way to understand why so many are so wrong about so much these days. And why they do all that with absolute certainty.

The phrase is Filter Bubble.
Consider this. On a recent shopping trip, my wife asked me to grab two cans of “fat free condensed milk.” In truth, I know nothing about condensed or evaporated milk other than it means she planning to bake something special.

At the same time I heard another woman in the aisle give her husband the same request. With total certainty he shot back, “it’s not really fat free you know.” Despite a clear label and his wife’s assurance, he was convinced. The label, he said, was simply a marketing gimmick and most certainly a lie.

That’s where the filter bubble comes in. We’ve long talked here about how too many of us these days limit our information flow to only sources that support our positions. Instead of being challenged, our views are reinforced with little regard for whether they are right or not. If someone wants to believe that fat-free condensed milk is a misleading label, he can. Heck, I bet I can quickly find answers on Google that will support that position.

Google can mislead. A recent article in Southwest Airlines magazine explained the filter bubble as a form of Google intelligence. Google tries to give us the answers we are most likely to use and websites we likely will open. My knowledge isn’t challenged; it is reinforced.

A recent article in the Daily Beast examined why doctors are no longer trusted advisers for so many patients. As the author, writing as “Doc Bastard,” explained, doctors now constantly face patient skepticism supported by all the articles produced in Google searches.

When doctors prescribe medication, patients assume a big pharma company paid for that moment. (John Oliver recently did an in-depth report about this on his wonderful HBO show.) Instead of physicians being trusted resources, many of us search for our own answers, ignoring the reality that our education and training may severely limit what we do and don’t understand.

Actress Jenny McCarthy, a leader of the anti-vaccine movement now leading to a measles outbreak in the west, once said she got her education from “the University of Google.”

Food products suffer the same fate. Even though the vast majority of consumers have no training in chemistry, they associate specific types of words with danger signs. As the Daily Beast pointed out, 3-methyl butyraldehyde looks as if it should be avoided because it’s hard to pronounce. Yet it is one of the most naturally occurring elements in all of nature.

The article continued: “Processed food sounds bad because it’s processed. You want to get back to how the cavemen ate - they ate only natural stuff and they were healthy, or so you think. It doesn’t matter that their average life expectancy was only 35 and yours is closer to 80.”

The question is: what do we do about this? We can’t chase down every theory or confront every misguided shopper in every aisle. Yet we still need to be part of this conversation with information in stores, on packaging and, of course, on line. We need to earn and maintain trust so that shoppers honestly believe fat-free means exactly that.

Here’s the thing: I love Google and I like skepticism. The former has become an indispensable life tool and the latter is essential for all of us. But everything needs moderation. And let’s be honest, everything I’m writing in this article is based on materials I found that support my premise. So I too am in the filter bubble.

Some of you will disagree with me and will write e-mails back to MNB. That’s great. It’s exactly the kind of open dialog we need.

But as an industry, it’s a dialog we need with shoppers who honestly believe the fat-free label is a lie or that all chemicals must somehow be bad.


Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com . His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available on Amazon by clicking here. And, his book "Business Rules!" is available from Amazon by clicking here.

Tuesday Morning Eye-Opener: Getting Our Goat

by Kevin Coupe

Reuters reports that goat is gaining traction as a beef alternative, in part because it is less expensive than beef, and in part because demographic shifts mean that it is more acceptable from an ethnic perspective, which means that it is moving onto the menus at high-end restaurants.

The story notes that "goat's appeal is equal parts cultural tradition and rural economics. The number of U.S. residents born in the Middle East jumped to 1.6 million in 2012, up 47 percent from a decade earlier, according to Pew Research Center. Population increases were also seen from other communities with traditional goat cuisine: South America (up 42.3 percent), Central America (56.3 percent) and the Caribbean (31.4 percent)." Goat sales in 2013 went from$24 million in 2013 to more than $30 million last year, and are expected to continue to grow in 2015.

At one point in the story, it describes a dinner of "bowls of braised goat shoulder tortellini in a smoked broth and plates of rosemary-goat cheese ice cream." Which sounds absolutely delicious. And that's enough for me, and certainly my definition of an Eye-Opener ... not to mention an appetite stimulator.

Editorial continues after a word from our sponsor...

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Now back to regularly scheduled editorial...

Costco To Replace Amex With Citigroup Visa As Co-Branded Credit Card

Reuters reports that Costco has chosen Citigroup and Visa "to run its co-branded credit card starting next year, replacing American Express, which lost the coveted deal last month. Citigroup will exclusively issue the Costco branded cards and Visa will provide the payment network in the United States and Puerto Rico from April 1, 2016, Costco said. The deal means that Costco customers will be able to use only Visa credit cards at its stores, as is currently true with American Express cards."

According to the Wall Street Journal, "The current AmEx Costco card that is in the hands of many Costco shoppers will be replaced by a Costco Visa card that is issued by Citigroup. AmEx will try to get the existing holders of the AmEx Costco cards to switch to another type of AmEx card, but it won’t be accepted at Costco.

"It isn’t clear yet what it all means in terms of rewards, which is a key reason why Costco shoppers like having a Costco-branded card in the first place. Costco didn’t provide many details of the new Citi card, saying only that it “would provide generous rewards to Costco members.”

KC's View: I could be wrong about this, but my sense is that this decision has a lot more implications for Citigroup and American Express (and, maybe even their stock prices!) than it does for Costco, or even for its shoppers. I'm a regular Costco shopper, and I pay no attention to what its co-branded card happens to be.

Editorial continues after a word from our sponsor...

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From ReposiTrak...


Now back to regularly scheduled editorial...

Tesco Adopts New Code Of Conduct

KamCity reports that Tesco "has launched a new Code of Business Conduct for its staff.

"The code sets down minimum expectations and legal obligations for its staff across the group, providing guidance on key risk areas that may arise in all aspects of its business and dealings with suppliers. There are 21 of these covering areas such as prices & marketing, product standards, competition laws, GSCOP, ethical trading, fraud, bribery, and market abuse ... The code also actively encourages staff to report any misdemeanours or concerns via a new Protector Line with telephone hotlines and email contacts in each of the countries it operates."

The new code comes as Tesco continues to deal with investigations related to financial misstatements that overestimated revenue and underestimated costs as a way of making the books look better than they were.

In a memo to staff, CEO Dave Lewis says that the code "means more than just following the law and our policies. It’s about using our Values and Leadership Skills to guide our conduct and decision-making so that we are always doing the right thing at work and working in a fair, open and honest way."

KC's View: The thing is, I'm guessing that Tesco probably had an old code of conduct that prohibited many of the actions in which some of its people engaged. I've had people familiar with the Tesco situation tell me that the culture there had grown toxic ... and it takes more than 21 "new" rules to fix that kind of problem.

There has to be a real cultural change, it has to start with the folks at the very top, and it has to reflect some level of servant leadership that puts the customers and front line employees first.

A new code of conduct is a good start. But only a start.

Editorial continues after a word from our sponsor...

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2014 Year-in-Review from MyWebGrocer

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Now back to regularly scheduled editorial...

The Need For Speed: Google To Get Into Mobile Network Business

The Financial Times reports that Google has decided to launch its own mobile network in the US, saying that the network "would be small but significant enough for traditional mobile operators to be able to learn from any good ideas ... The company hopes that by showing customers that better services are possible they will demand more from established operators."

According to the story, "The mobile launch comes with the internet juggernaut increasingly frustrated at the slow pace of innovation at incumbent telecoms companies, which it feels is preventing it from providing new services in established markets while leaving unconnected users around the world out of reach.

"The US ranks below many European countries for broadband speed and affordability, a situation some analysts say could constrain Google’s business model, which relies on getting as many people as possible online in the hope that they will then use its services."

KC's View: The subtext of the announcement is that Google has the resources to become a major competitor in the mobile network business, which could position it as an alternative to players such as Verizon and AT&T.

The story notes that this is standard operating procedure for Google, that the company "is also rolling out its super fast Google Fiber broadband product in more than 30 cities, prompting companies such as AT&T to follow suit." So what we can assume, based on history, is that Google will continue to push the innovation envelope.

Editorial continues after a word from our sponsor...

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Now back to regularly scheduled editorial...

Joe Kelley Out As Stop & Shop President

The Boston Globe reports that Joe Kelley, president of Ahold USA's Stop & Shop division, resigned yesterday "to pursue other career opportunities."

No further information was provided about the resignation.

Kelley is being succeeded on an interim basis by Don Sussman, president of the company's New York metro division.

Editorial continues after a word from our sponsor...

Now back to regularly scheduled editorial...

E-conomy Beat

Reuters reports that there is speculation in the industry that Amazon already is working on plans to allow shipping from the US to Cuba, even though such shipments are not legal at the present time because of export controls and sanctions.

However, the Obama administration has restored diplomatic relations with Cuba, and the possibility of open trade between the island nation and the US seems more likely today than at any time since the sixties.

In addition, the story notes, Amazon founder/CEO Jeff Bezos has family connections to Cuba: "His adoptive father Miguel Bezos was born there and came to the United States at the age of 15."

Editorial continues after a word from our sponsor...

Industry Drumbeat

From USC...

Now back to regularly scheduled editorial...

FastNewsBeat

• The Wall Street Journal reports that as Target looks to be more appealing to urban and millennial consumers, it "plans to lean on Greek yogurt, bagged coffee, and craft beers in an effort to make its grocery aisles feel less like" Walmart.

The story notes that "Target has zeroed in on seven grocery categories—from granola and yogurt to candy and snacks—where it thinks it has the best chance of standing out to urban dwellers, younger families and Hispanics, two people familiar with the matter said. Along with a proclaimed goal of adding more organic, natural and gluten-free foods, Target is showing signs that its food direction will become less reliant on packaged and processed foods that are out of favor with many millennial consumers.

"Fixing grocery - which accounts for about a fifth of Target’s $73 billion in annual sales - is a priority for Target’s new chief executive, Brian Cornell."


• Published reports say that 93-unit Natural Grocers has announced that it is investigating a possible data breach that may have put "limited customer payment data" at risk.

The company says that there have been no reports from customers or financial institutions of fraudulent use of credit or debit cards. But there has been some evidence that hackers may have gained access to Natural Grocers' POS systems, and the retailer is investigating.

Retailers including Home Depot, Supervalu, Neiman Marcus and Target have all been hit with data breaches in recent years.


• The Wall Street Journal reports that GameStop is acquiring some 163 locations previously occupied by RadioShack, which is divesting as many as 2,400 units.

Cost of the deal: about $2.4 million. The Journal writes that "most stores are set to reopen as Spring AT&T cellphone retail outlets, about 11 will be new GameStop stores, and one will be a Simply Mac outlet, specializing in Apple sales and repairs."

Editorial continues after a word from our sponsor...

Industry Drumbeat

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Now back to regularly scheduled editorial...

Executive Suite

• Petland announced yesterday that it has hired Tony Samples, formerly vice president of Retail Operations at Walmart, to be its new vice president of Corporate Stores, leading its retail store division and overseeing the company's merchandising and marketing efforts.

Your Views: Taking Stock

We had a story yesterday about the artisanal marijuana movement, and I continued to express some level of discomfort with legalized recreational marijuana.

One MNB user responded:

It seems strange to me that there is very little comment or issues raised about the second hand smoke produced in the smoking of marijuana.  I feel we have finally made inroads stamping out the wide spread use of cigarettes, only to now open the doors to public acceptance of marijuana.  My objection is I don’t want to be surrounded by people in cloud of smoke, something you don’t get with drinking alcohol.  I’m not sure how many other people feel the same.

From another reader:

Regarding legalizing pot for personal use. Why the personal struggle on your side?

Generally speaking you seem to be pretty pro transparency and pro personal decision making.

Why not let individuals determine whether they use or don’t use marijuana…for whatever reason they choose to use it or not use it.

There are plenty of laws on the books today that already make it illegal to harm others, steal from others or put others at risk with your behavior. The very same laws apply to consuming marijuana. If you get baked and decide to drive you deserve the same penalties as a drunk driver or over medicated driver.

I’m not here to argue pots good for you (probably not) or better or safer than drinking but I am here to say you appear to been very inclined to personal freedoms and an advocate for meeting the associated responsibilities of the same…so why the internal struggle on this one?

Legalized pot is all the above plus the reversal of a huge budget negative turned into budget positive …why not choose freedom?





Responding to yesterday's story about Kroger considering a move into the Hawaii market, one MNB user responded:

I suddenly have a burning interest in changing my field of interest to Retail Grocery Store Management….

I suspect they may be getting a bunch of applications...




We had a story yesterday about Warren Buffett apologizing to Berkshire Hathaway shareholders for keeping the company's investment in Tesco for too long, saying that "an attentive investor ... would have sold Tesco shares earlier. I made a big mistake with this investment by dawdling ... During 2014, Tesco’s problems worsened by the month. The company’s market share fell, its margins contracted and accounting problems surfaced. In the world of business, bad news often surfaces serially: You see a cockroach in your kitchen; as the days go by, you meet his relatives.”

Leading one MNB user to write:

One has to wonder when Warren is going to see the cockroaches at Coca-Cola too.  Since it’s being managed as a Bond rather than a stock (for growth), he can’t be too happy about that ROI either.




Finally, I want to thank the dozens of folks who wrote in yesterday to chime in on the discussion I was having with MNB reader Bob Warzecha, who felt that my writing about Leonard Nimoy's death was incongruent with what he views as my mission - to help supermarket companies increase their stock prices.

To be honest, I only got one email agreeing with Bob's position. (More on that below.) Everybody else seemed to "get" what I was saying ... that MNB is designed to be a lot more than about supermarkets, and that stock prices are way down on my list of editorial priorities.

I'm not going to run them all. (I'd love to. But I do have some small amount of modesty.) But there are two that I thought captured the spirit of the discussion...

MNB reader Chris Connelly wrote:

Because it appears that your critic works in the same industry as I do, I feel compelled to respond...

The supposed controversy of your decision to publish an alert regarding the passing of Leonard Nimoy made me laugh out loud.   I learned long ago that your writing is about far more than the business of selling food or increasing stock prices of food companies.  

Over the last seven years I have read and participated in your website for numerous reasons other than learning about the grocery business.  During that time, I have forwarded information from your blog to dozens of other people regarding subjects which you have discussed here.   These folks might not have any in-depth knowledge of the grocery industry, but they are bright, articulate, and always intrigued by a spirited discussion; as a result, several of them have become subscribers to your website.  By sharing your writing and the articles that you feature in your blog, I feel that I have been able to broaden their horizons as well as my own.   My wife and children even know you on a first name basis (and they now allow me to talk about you at home without rolling their eyes).

The fact that I spent 24 years working in the retail grocery industry in my first career makes your daily content just that much more interesting to me.  By following your contributions and those of my fellow readers, I have also gained immense knowledge about numerous topics that are significantly more important to improving the quality of our lives, the lives of others, and our interaction with people in this world.

Thanks for all that you have done for your readers in that regard-----I believe that if you were no longer writing on a daily basis, it would leave an enormous void in my day.


And MNB John Rand wrote:

Wine. Burgers. Meals in places I may not get to visit. Travelogues of a sort. The perils of Catholic elementary school discipline. Epistemic closure. Movies. Classes on the West coast. Mrs. Content Guy. JC Penney. Apple.  Baseball. Kirk vs Picard.

Good heavens – anyone who thinks that all you wrote about was how to make money in supermarkets clearly hasn’t been paying attention…

I rather like it the way it is. A conversation – which you have been kind enough to let me listen in on, and occasionally get a word in edgewise. I took a liberal arts degree, the best part of half a century ago.  I never regretted it. I do not believe one learns well, or adapts well, or copes well, by being narrow, either in thought or in attention, not in attitude and not in topic.

Don’t change.


Thanks. I have no intention of changing. or stopping.

Now, about that one email I got supporting Bob's position.

It was, in fact, from Bob, who wrote:

Here are the thoughts of my followers of my post.  You say that you feel that  the stock price of a company is way down on your list.  But as one that wrote me today that since your mother and sister died of lung cancer you seem to be on a crusade to beat down companies that sell tobacco products.  What legal product is next (as he wrote)?

I'll tell you what I told Bob in an email ...

I really don't want to turn this into a personal argument.

I'm not always consistent, but I'm pretty confident that on this one, I have been.  I always talk about Main Street being more important than Wall Street.  I rarely talk about share price (though I have occasionally railed against executives who seem most interested in driving up a company's share price for their own personal gain).  As for tobacco company executives ... I think I've generally suggested that they deserve to spend eternity in a special circle of hell designed for people who do what they do, but I'm not sure I've ever written about their company stock prices.

I appreciate your point of view ... even if I disagree with it.  And I did think it was important to air your views on MNB ... it was entirely possible that I would get dozens of emails from people who agreed with you and disagreed with my view of what MNB is and should be.  And I'm certainly willing to put myself out there for that kind of criticism.

Finally, a word from our sponsor...

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