retail news in context, analysis with attitude

Yesterday, in a report about encouraging economic news, we wrote that "at the risk of seeming cynical and pessimistic, we need to point out that this consumer confidence is built like a house of cards. A stiff wind of cold reality, like a terrorist attack on these shores or some sort of massive loss of soldiers in Iraq, could bring it tumbling down."

Few seemed to agree with our assessment. One MNB user wrote:

What a depressing response to good news. You can pick up your 'Vote Dean' card on your next trip to New Hampshire.

MNB user Al Kober wrote:

Boy, is your glass only 1/2 full. Don't you like good news? What a pessimist.

I always thought you as more an upbeat person, but this issue you are really a downer.

Must be the holidays…

Then again, we've always been a little worried about the economy. As one MNB user pointed out to us, it was almost a year ago that we wrote:

"No matter what the spin, the economy ain't pretty."

Our assessment hasn't changed. And if you disagree with that, think about the underpinnings of the Southern California labor situation, and what it says about a variety of economic issues that could bring this country to its knees if they are not addressed. (And this isn't a political statement - we're not sure any party is facing the real issues facing the nation.)

Interesting email from an MNB user about customer service issues:

I have been thinking about the whole concept of customer service as a true differentiator lately. In the past three weeks I have experienced the full spectrum of customer service.

I stayed at two Marriott properties in the past 2 weeks, one the Marriott World Center in Orlando and another Marriott property in Dublin, Ohio. Customer service, going the extra mile was evident from the server in the restaurant to the bell captain, desk clerk, to the maintenance man who was lickety split to correct issues in our room to the cleaning lady who went the extra mile to show us a peek at a guest suite.

Another true leader in customer service in Orlando is the Disney company. Courteous, professional, with clean and efficient parks. Disney "cast members" all 50,000 employed in the Orlando area are trained to put on their smile as the first order of preparing for work. Did you know the Colorado Rockies hired the Disney company to train their employees in Denver when the new (baseball) park opened several years ago. An expensive training cost but the Rockies management saw the benefits of customer service and happy customers, more concession sales, more ticket sales...

Now the other end of the spectrum, today at a Wal-Mart Neighborhood Market store I had to wait for the checker to finish reading her magazine to check me out. When I approached the checkout I said hello to her with no response. Many people shop at Wal-Mart for economic reasons, not for the customer service.

Also today, I waited in line for 30+ minutes at the US post office to mail a Christmas package. There were about 15 people in line with 1 employee working. Exactly at 9:00 am another US postal worker magically appeared, not one second before 9:00 even though there was clearly a backup in the lobby and the stamp machine was broken so many in line just needed to buy stamps. Does the US postal service not know this is the Christmas season and should staff appropriately? A good friend of mine uses a third party mailing services to mail packages just for the convenience and customer service even though she pays more. Seems like these mailing places are in every strip center now, just how much business has our US government lost?

More companies and government agencies need to take a look at their employee training programs and customer service functions. Unfortunately measuring customer service is one of those soft benefits that many companies cannot put a dollar value on, so it is not a focus. Well, maybe when their company goes out of business or loses substantial market share because of lack of customer service they will get the message and focus on this very important success driver. It is easier (cheaper) to keep a customer than to gain a new customer.

We had a story yesterday about a proposal to put RFID chips under people's skin, allowing them to pay for purchases or get cash from an ATM without any card or key fob. We expressed some alarm at the privacy implications, and even made a veiled reference to the old Patrick McGoohan television series "The Prisoner." (A series, by the way, which is a little bit dated but amazingly prescient about the depersonalization of modern society. It is that rare thing - a television series with a specific and unrelenting vision.)

MNB user Dan Raftery wrote:

The Applied Digital folks have been around for a while. Their chip implant got them some notoriety about a year ago, when they "did" a Florida family on one of the morning TV shows. Their GPS partner is Digital Angel and the technology has been most widely accepted as it applies to animals. The chips can also send some biometric data, which can indicate the health as well as the position of the "tagee."

I wholeheartedly agree with you on the Big Brother implications here, but that only holds if free choice is not part of the future scenario. Which it isn't for pets, by the way.

Several parts of the population (human) might want an implant. Think about all those folks with the newly discovered heart attack gene (only the ones who care to know, of course). Folks in elder care environments currently wear similar devices, but most of them don't work outside the range of their land-based station. Lots of examples could be made.

The point is, this is very potent technology. Hopefully, privacy concerns won't short circuit the potential good it can bring, while keeping the harm at bay. This won't be easy, but should be fun.

Another MNB user wrote:

As an industry I agree that we are going to need to get in front of the privacy issue sooner rather than later. This is not a time for us to act in our usual reactive mode but to try and set standards that I think everyone in the industry is already pretty much adhering to. FMI put forth a membership privacy policy a few years ago. It may be time to either review that to make sure it keeps up with changes in technology; or, if it is considered to be sufficient, to start to tell the story that we as an industry are responsible with our customer's information. The stakes are too great to stand silently by and let the consumer draw their own conclusion.

And yet another MNB user wrote:

My only question:

Revelation 13:16

"He causes all, both small and great, rich and poor, free and slave, to receive a mark on their right hand or on their foreheads, that no man may buy or sell except one who has the mark or the name of the beast, or the number of his name."

(This passage from revelation concerns the mark of the Anti-Christ) - Tell
me - wouldn't your RFID tags embedded in skin leave a mark? And, I
suppose you couldn't buy or sell unless you had this tag?

Have we seen "The Omen" a few too many times? (Great movie, though…)

In an email yesterday, one MNB user wrote, "Are we a society that is so rich in information that must be consumed fast and on the go that we're starving in knowledge? Do we base all of our assessments on what can fit into three lines of text or five seconds of airtime? Whoever sold us "Fast Is Better!" has probably got a bridge he'd like to talk to us about."

MNB user Spencer Johnson responded:

It's amazing how the world has been so excited about doing things more efficiently via the computer world, cell phones, PDAs, etc, yet they are working longer hours, sporting more carpal tunnel injuries every year, and losing more and more time at home eroding the family life. What has happened to society? Sad thing is a lot of my life has elapsed in the computer era and I would not be able to live without it, but I still think it's disgusting how horribly separated many people become from their family b/c of work, not to mention the degradation of those social skills that make people better team players at work. There is a quote that an ex-coworker of mine used to say, and she worked long hours every day: "I work to live, not live to work." I hope I don't get caught in the trap of working long hours, like in the case of many companies, while my kids are asking "where's daddy?" at the dinner table or, even worse, having to wait until late at night to eat as a family with Chinese takeout. It's one thing to have it happen once in a while, entirely another when it's expected of employees every day.


The problem for many of us is that there is no employer to blame for 20-hour workdays. When you prize autonomy as much as we do, the price of self-reliance and the absence of superiors is too much work and too little life. (Of course, it helps when you love what you do…)

Regarding Wal-Mart, MNB user Mark Rodrigues wrote:

In your article on Wal-Mart, it is true that they have created an environment in which shoppers can buy more and cheaper goods, but at what price?

We are going to have to factor in the human cost (of employing child labour because they are the cheapest) and the global environment (goods are cheapest in countries where there are NO environmental regulations).

Another MNB user wrote:

Regarding Wal-Mart as "the quintessentially American success story," I see a difference between winning with grace and winning with applied humiliation. If you have two kids' baseball teams and one team is significantly ahead, do you encourage the winning team to steal home and win by the most points it possibly can?

Yes, winning is the reason to play the game, but to what degree and at what price? After all, if Wal-Mart continues to put all of their competitors out of business, who will be left to shop at Wal-Mart?

Regarding possible changes at Ahold's Tops Markets in upstate New York, MNB user Bob McMath wrote:

While statements made to me by friends in the local and management positions of Tops Markets in Upstate New York may not be true -- although I think they were at the time -- Tops Markets was either THE or one of the "top" (no pun intended) groups for Ahold when it purchased the chain.

Among other things, the Tops name was what was chosen for the name of Asian expansion over there, using the model that Tops had in the US. Some of Tops leading store managers went over to help set up the new stores or modify older ones over there.

Now Ahold may be thinking of changing the name of the upstate New York group to Giant Market. I for one certainly hope not. Is it possibly the Ahold people have forgotten -- or have not understood -- the problems with Safeway when it picked up the chain in the Chicago area and tried to model it after Safeway stores and practices?

Why is it that bigger companies that pick up well run groups don't try to build on what they purchased instead of molding them into an entirely new entity, foreign from the way it was run, before? Many need help to grow -- but many others that are doing well don't need to be changed so drastically -- and doing so ends up wrecking the operations, such as happened in the case of Safeway in Chicago.

Sometimes it seems like even Safeway doesn't remember what happened at Safeway in Chicago…

Yesterday, we ran a pre-Thanksgiving letter from MNB user Glenn Cantor that was a meditation on the on-going conflict between the drive for lower prices and costs, and the ethical responsibility of business to provide for the welfare of the people in markets in which they chose to do business.

MNB user Patricia Pagels responded:

Mr. Cantor's comments were very reassuring--even though they seem to be a minority opinion. I keep wondering how companies expect their own businesses--let alone the county--to survive if the continual pursuit of low prices overshadows corporate citizenship, leaving the average worker with nothing but low-paying jobs. Same for those who will only buy on price, with no consideration for where and/or how the goods were produced. But, this is not a new mentality, and it's going to take a lot of time and energy to turn this ship around.

Fifteen years ago, I was a new mother in Southern California. Many co-workers (professional, highly compensated) encouraged me to hire an "illegal" for daycare. "They cost so little and they will watch your child, do the laundry, cook and even take care of yard work!" they all told me. The fact that it would be a legal issue and a terrible abuse of a person caused them no concern. Even the thought that, should my child be abused, taken or otherwise mistreated, I'd have a compromised legal position and possibly no chance of tracking the person down, didn't stop my "friends" from questioning my judgment in finding a certified (expensive!) provider. So, if people don't care enough to "hire the very best" for their children, what's the chance they will concern themselves with the labor practices of the foreign companies producing the lowest-priced sneakers?

We can only hope that more and more people will make the connection between fair and equitable compensation, reasonable prices and a healthy economy. Thank you, Mr. Cantor, for keeping the momentum going.

And finally, in a commentary about a story detailing how many discounters are using Santa Claus visits to get people into the stores, we wrote that "Santa had better be careful about who he hangs out with. Wal-Mart looks like a friend now, but pretty soon it'll start putting pressure on the old guy to start cutting wages and benefits for the elves, which could lead to a labor action.

Let's face it, Wal-Mart has managed to do a lot of damage to Toys R Us and other toy retailers…but it really hasn't achieved world toy domination until Wal-Mart can knock Mr. Claus into retirement".

One MNB user responded:

Now, why in the world would Wal-Mart want to knock Santa into retirement.

Who would take his place?

Children identify with Santa and Wal-Mart wants them to identify Wal-Mart with him too, so why would they want him retired? To live forever in everyone's mind would be the best action and if the past weekend is any evidence of his presence in everyone's thoughts and mind, he won't be going anywhere any time soon.

As far as damaging toy retailers, you have to be able to run with the big boys if you want to gather any attention from the fans.

And I doubt that Wal-Mart doesn't worry about what Santa pays the elves. They're on a profit-sharing plan for sure.

Yeah, but as far as we know Santa isn’t outsourcing his toy building business to cheap foreign labor.

MNB user Rick Parmelee seemed to reflect our prevailing mood:

Let's hope Santa's green card is in order if he is working at Wal-Mart. I would hate to see the Feds haul him away just before Christmas.
KC's View: