retail news in context, analysis with attitude

We had a story yesterday about Loblaw in Canada deciding not to accept personal checks anymore, since they are a higher credit risk and only represent two percent of transactions. We were skeptical of the wisdom of alienating even that small percentage of customers.

One MNB user wrote in to chide us:

“Actually, Kevin, in Canada it is spelt "cheques". I applaud Loblaw's move this way. I foresee the day when cheques go the way of the do-do. It is a shame however that their Western Canadian operations are only taking MasterCard and Debit for GM purchases. While I understand their desire to promote their own card and their Presidents Choice banking they have alienated those customers who are Visa and AMEX users. I for one do not need yet another card in my pocket so my GM purchases and increasingly my food purchases go elsewhere. A simple customer service issue.”

MNB user John Schmitt disagreed:

“I absolutely agree with you - who is really prepared to alienate 2% of their customer base, or to absorb the effects of the bad aura that can settle over the rest of your customers, when a service is seen to be taken away essentially from all customers?

“But, maybe Canadians have a mindset that allows them to "settle" as consumers.”


We suspect we may hear from the Canadian MNB community about that one…

Another MNB user wrote:

“Don't recall if this bit of information has made it your way but here in Roswell, GA, my local Wal-Mart Supercenter now coverts your personal check into a direct draft on your bank account, thereby passing all the Federal Reserve handling, time in transit, etc., and taking away your "float" from being able to live off your deposited pay check before having your check for the groceries clear your bank.

“Just another way to get your money a few days quicker? Makes sense.”


Maybe for Wal-Mart…

MNB user James Curley wrote:

“Loblaw's would be better served by announcing to their customers that since checks are a small part of payment sources in the store, they find it necessary to charge a small processing fee (say 50 cents on every $100 or less ) to customers who want to use checks. That way, the consumer has the option to pay the small fee or choose another form of payment.

“Banks issue teller withdrawals for free but charge for the convenience of ATMs and consumers still have the choice to pay the fee or not. Most still use ATMS.

“This is a poor choice on Loblaw's part; I only hope US Grocers don't find this acceptable......it's always best to give consumers the choice.”





We reported yesterday on a study indicating that a majority of the population would accept biometrics as a method of proving one’s identity, and then recommended that “Minority Report” is a good movie to watch for an illustration of where this logically will take us.

One MNB user wrote:

“While you're at it, ‘Blade Runner’ might caution us to watch out for Cloneaid and their boast of successful human cloning! I note this only as that cautionary tale was also the product of a Phillip K. Dick novel ("Do Androids Dream of Electric Sheep?"). Could this be coincidence? Hmmm.”

Dick, of course, wrote the novel on which “Minority Report” was based.

And no, we don’t think this is a coincidence.


On the subject of e-grocery, which we continue to endorse, one member of the MNB community wrote:

“I've watched this area carefully and our company gave this method a trial. The concept is terrific, but neither retailers nor customers have realistic expectations.

“Many times retailers don't fully understand the direct costs associated with making this offer (both the fixed and variable components). When they do, they don't often pass all of those costs along to their customers - for the simple reason that customers don't expect the costs to be so high (& hence won't pay). And with price sensitive commodities the service has to be very worthwhile to justify increased costs for the market basket.

“The other factor that demands attention is "involvement" (the good ol' fashioned buyer-behavior-class kind); folks are not willing to put a lot of effort into acquiring "no brainer" goods. Hence, retailers can't even give the service away because the method is so burdensome to the customer.”


We recognize and agree that there are plenty of problems associated with e-grocery that might not be issues when it comes to selling books or CDs or DVDs or even computers over the Internet.

We do think, however, that consumer trends that are growing the e-category slowly but surely cannot help but carry over the how they buy food. And it is important that the industry at large figure out how to make it work…because somebody will. (And that somebody may well have an Arkansas zip code.)




In response to our story earlier this week about rumors that Ahold might make a bid for Safeway’s Dominick’s division in Chicago, one MNB user wrote:

“It would be the best thing that has happened to the Dominick's employees, and their customers in four years.

“From what I have read about Ahold USA, they would let the company be run the way it should be, with customers having input on what is carried. The major name brands that have disappeared since Safeway has taken over and replaced with the SELECT BRAND, would be returned, and then, so would the customers.

“It would be a win win situation for all.”


The only thing we’d add to that would be that Ahold would let Dominick’s alone as long as things were working. But if they weren’t, you could expect Ahold to swoop in and make the changes required to assure that they would.




On the broad subject of loyalty marketing and privacy issues, always a hot topic here at MorningNewsBeat, we got the following email from a member of the MNB community:

“As a checker at Haggen's, I have to deal with a lot of hostility from customers who do not have a card. They think our company just wants their info. so we can sell their names to make a profit. I don't know about other stores, but we have never sold anyone's name to anybody. The program is used for a various number of reasons, all being positive.

We use the info. to help us know what things are bought most frequently so we know what to put on our ads in the coming weeks. We give out numerous trips, prizes, and save the customers the time of having to sit and cut out coupons. All this, just for taking approximately one minute to fill out a form at no charge. It appears to me people are just looking for reasons to bitch.”


Maybe.

But we’d make two points about this email

One is that it illustrates the importance of communicating effectively and consistently with customers. If you make the point in bold letters and with a loud voice that you don’t sell names and lists, people will believe you. (When we started MNB, we were told to put a complicated legal disclaimer on the site about the privacy issue. Instead, we opted for the simple “we don’t give out your name to anyone” approach. It is simple, direct, and nobody questions it.)

Second, this person noted that her job was as a checker at Haggen’s. We’ve always been proud of the diversity of the MNB community, ranging from checkers and store managers right up through CEOs, CFOs, CIOs, CMOs, etc…

We even have a Wal-Mart greeter.

That means the breadth of opinion expressed here has some meaning. It also suggests that there are a lot of people in a lot of different jobs who have an awful lot of passion for what they do. Which to us seems like a good thing. A very good thing.




In response to the stories and emails we’ve been running about consumers too tired to cook, we got the following email from MNB user Steve Panza:

“My parents divorced when I was 9, and mom had to work. So in turn, many household chores fell upon me to accomplish, including preparing dinner a couple of nights a week. To this day, I am the cook around the house (which my wife loves). With families doing more and having less free time to do it in, I think more young people are learning their way around the kitchen than when I was growing up. I hear of kids cooking (or participating in) all the time, which is a good thing - they will have a better idea of what goes in their bodies.”

We’ve always told our kids that we believe in the following equation:

RESPONSIBILITY + DISCIPLINE = AUTONOMY

We also think that one of the ways to be autonomous is to know how to cook. Nothing fancy. But the ability to put supper on the table in invaluable.



Another MNB user, James Donnelly, wrote:

“After reading your column this morning I was scanning the business section of the my Tuesday edition of the Columbus Dispatch, page C2 of the Business section, where a story clearly illustrated how someone is easily taking full advantage of "the tired consumer" you discussed.

“Here is the short article as written and included in their "Toque Of The Town" column:

    Mama Mimi's Take n Bake Pizza stores keep count of their business traffic by the number of cinnamon rolls they move out on Christmas Eve, the only day that they are offered. Because the cinnamon rolls are not baked to order, owners Jodi and Jeff Aufencamp have boxes stacked and ready for their 10:00 AM opening.

    “In 30 minutes the entire 400 dozen were gone!

    “Mama Mimi's also sold 216 pans (eight servings per pan) of ready to bake Lasagna and 478 Pizza's during the same day.”


“How many Supermarkets can boast anything close to this?

“What are we missing? Supermarkets have the facilities and the traffic, not to mention the thousands of other impulse items that could have easily added to that same register ring if they were successful in convincing this same consumer to come into their stores.

“It's not rocket science, provide a ‘superior product, custom made to the desires of the consumer’ and support it with ‘exceptional customer service’ and we can all add profitable sales to our businesses.

“As I see it, we first need to rethink our reason for being -- it's to serve the needs of our customers better than the guy down the street. Whenever we place anything in front of that reasoning and change our direction, we lose the game and allow yet another competitor to pick up our fumble with an excellent opportunity to score and even possibly win the game.”


One thing that we think more retailers ought to do is have promotions like ‘we only make cinnamon buns on Sundays…so get ‘em while they’re fresh and hot.” Most supermarkets feel the need to have everything all the time, and that approach doesn’t create any kind of magic. It doesn’t really “sell,” it just offers “stock.”

Incidentally, we noted yesterday that the previous evening, our 13-year-old had to make dinner for us to satisfy a home economics class requirement…and he chopped onions, made salad, and prepared a shrimp risotto like a pro. He even chose the wine for us (though he didn’t get a sip because he had homework to do).

One curious MNB user asked:

“What wine did he choose to pair with the Shrimp Risotto?”

We gave him a choice between a Coppola Rosso and a Snoqualmie Syrah…and he chose the Rosso because he knows we love it, because it seemed more appropriate with an Italian risotto, and because he had a great time when we visited the Niebaum-Coppola vineyard in Napa a few years ago.

It was a no-lose proposition for us; we love both. But the Rosso, as always, was a terrific choice.

Another MNB user had a different perspective:

“Last night, I made myself a grilled cheese sandwich and had a can of soup for dinner. It was fine. Easy. What's the big deal?”

We think that this correspondents employers need to give her more time to prepare a slightly more complicated meal. Either that, or we’ll rent her our 13-year-old.
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