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    Published on: April 25, 2006

    Another in a series of previews of the Food Marketing Institute (FMI) Show…

    Retailers often find themselves trying to figure out what the next major trend will be, and then trying to gauge the timing for when and how they should try to ride it. But according to Robyn Waters, author of The Trendmaster's Guide: Get a Jump on What Your Customer
    Wants Next
    , that's an almost myopic approach because it ignores the real opportunity – to connect consumer values to relevant offerings in a transcendent way.

    In an FMI Show Super Session, Waters will look not just to point out coming trends to attendees, but to teach them how to recognize these trends on their own and create or adapt business strategies that capitalize on these insights. To get a preview of some of what she will offer her audience, MNB engaged Waters in this exclusive e-interview.

    Waters is scheduled to share her insights at an FMI Show Super Session on Sunday, May 7, from 3:45-5:00 pm.

    MNB: Many good retailers seem to be dyed in the wool reactors, believing that if they are on the leading edge they likely also will be on the bleeding edge. How can retailers with such a high sensitivity to cost become "Trendmasters"?

    Robyn Waters: First of all, let me explain the difference between a Trendmaster and a Trendspotter or Coolhunter.

    Trendspotters and Coolhunters are always on the lookout for what's next. They tend to furiously scavenge for "the next big thing." A Trendmaster, on the other hand, is aware of all of the trendy new options in the marketplace. BUT, and this is a big BUT, they know how important it is to translate the trends into something that resonates strongly with their customers values. They know that trend for the sake of trend isn't always a good strategy.

    Instead, a Trendmaster is more concerned with what's IMPORTANT, not just what's next. They care as much about what's going on inside the customers' minds and lives as they do about what's happening out in the marketplace. To answer your question specifically, I believe that you have to reframe the 'cost sensitivity' argument. I think that retailers today can't afford NOT to become Trendmasters.

    The most successful and innovative retailers today follow many of the philosophies I outline in The Trendmaster's Guide. For instance, they know how to listen to their Instincts and Intuition. (Howard Schultz). They know how to push customers' Magic Buttons. (Trader Joes.) They know how to find and feature products with Soul (Whole Foods) and do it with great integrity. They know how to connect to the Hearts as well as the Head and Handbags of their customers. (Target.) They see the Big Picture. (Costco). They Keep it Simple. (Krispy Kreme). They Lighten Up and don't take themselves too seriously (Cold Stone Creamery.) They know how to make a trend, not just jump on a trend bandwagon. They realize that by leveraging Grace and Guts they can introduce a new concept and watch it take off quickly (Pom Wonderful) as long as it Resonates with their customers' values.

    I believe there's no one formula or process for successful trend merchandising. Trends are merely signposts and indicators pointing to what's going on in the hearts and minds of your customers. It's up to the Trendmaster to translate the trends into meaningful products and strategies that connect to their customers' hearts, lives, and desires.

    MNB: How "at risk" in terms of image, money, sales, etc.- does being a "trendmaster" make a retailer?

    Robyn Waters: As long as you're looking to master the trends (i.e. Translate them into products and experiences that are meaningful to your guests lives and resonate with their values), and not just follow them, I think there's no more risk involved involved in being a Trendmaster than if you just played the price game. In fact, I think you're more at risk if you're NOT thinking like a Trendmaster.

    These days you have to "differentiate or die." It's so easy in today's marketplace to become a commodity. A strategy that was revolutionary one moment can become mundane the next. There are No Secrets. Anyone can pretty much figure out what's next. Therefore, there is no one "next big thing." There are so many Possibilities today in the marketplace. The retailers that can Edit those possibilities to a meaningful assortment and present them with Passion will have a big edge over those that don't.

    MNB: How do you separate a trend from a fad - recognizing the difference so you can invest in one and merely capitalize on the other? (Assuming you think I'm right about how I characterize this....)

    Robyn Waters: I think you are absolutely correct in your point of view. Trends are things that make sense for a reason. Fads tend not to have a lot of reason behind them--they are fun or odd or simply a novelty. Oftentimes they are controversial. Fads tend to polarize, people either love or hate them. You can still make money off of fads, you just have to really keep your Antennae out and make very sure you don't get stuck with something after the fad passes.

    Trends, on the other hand, often Connect the Dots with what's going on in the marketplace to what's going on in the hearts and minds of your consumers. If handled properly, a meaningful trend can grow and extend in many different directions. The really big trends tend to Fuse with other trends and become incredibly meaningful to your customers lives. As a result, they tend to have a longer shelf life. Starbucks, for instance, fuses the trend for small indulgences, with our desire for convenience, with our need to customize, all the while offering us a third place to unwind and relax. That's a lot of power in a good cup of coffee.

    MNB: What is the big trend happening now that you think many or most food retailers are missing? And why do you think they're missing it?

    Robyn Waters: We usually can't see the forest for the trees because we are so close to the issue or the question. I think that's the case these days with tracking and translating trends. This may sound like heresy, but I think what people are hungry for isn't more 'stuff.' They are looking for balance, and for a little peace of mind. As Melinda Davis says in The New Culture of Desire, "Peace of Mind is the new gold standard." Many of us, faced with the 'claustrophobia of abundance' in the marketplace, are searching for meaning.

    It may feel like a big stretch, but I believe that marketers need to give up looking for "the answer," and instead, reframe how they present their stories (or products, services/experiences) to the customers. Now that said, I don't think that we're going to stop shopping, or needing and wanting things. We just need to reframe how we approach the question "what is the next big trend?" and "what should we do about it?" There's a great story about the London Metro (Underground). Awhile back, the city was trying to encourage more people to take mass transportation. The train cars had become dirty, the timetables weren't always adhered to, and people just preferred to drive their own cars. As parking became more impossible, the cost of fuel rose, and the streets became more crowded, the city realized it had been handed a unique opportunity to 'start a new commuting trend' so to speak. So, they revised the schedules, cleaned up the cars, polished up the stations, and even installed wireless access in the cars. Then, they announced it to the public with a great campaign, stating "we get you to work faster." And nothing happened. Then they decided to talk to commuters and would be/should be commuters to figure out what they really wanted. Sure, wireless was a big advantage, as was improved efficiency. After talking with the customer they came out with a new campaign: "We get you home faster." And guess what happened? Rider-ship went up drastically. Same cars. Same tracks. Same places. What was different, is that they figured out what was IMPORTANT to their customers....and that was getting home. I believe the idea translates to something more meaningful. The new slogan is symbolic of a desire to achieve balance in our lives, and our wish to honor those things that are most meaningful to us.

    MNB: What will be the next big trend that people in the food industry need to start preparing for now?

    Robyn Waters: You've probably figured out by now that I'm not going to give you an example like "Wellness," or "Glycemic Index" or "Convenience" or even "Spirituality." So, let me give you a big idea instead. If you are looking for the Next Big Thing, beware. Because for every Next Big Thing out there, I can point to a countertrend at the opposite of the trend spectrum, happening at the very same time, that's just as important.

    For instance, are cars getting bigger and more in your face (the Hummer) or smaller and cuter (the Mini)? Both, right? Is food getting more indulgent, or healthier? Why not both? Healthy Indulgences. Vodka made from soy. Health by Chocolate candy bars. Jelly Belly Sport Beans (jelly beans that are really portable power), organic dorm food that students consider a luxurious perk. My next book (due out October from Portfolio, a division of Penguin USA) is about the power of paradox, or trend/countertrend. It has to do with the idea that oftentimes, the answers are not to be found at one end of the spectrum (i.e. black or white), but that instead, unique answers and opportunities can be found in the middle ground, the grey area. Why paradox? Psychologists tell us that at the heart of every consumer there is a paradox. According to them, the two most basic of human desires are:

    1) the desire to be a part of something....a group, a community, a religion, a club.

    And 2) the desire to be perceived as an individual....just me, one of a kind.

    How do we resolve the paradoxes inherent in each of us, and in the marketplace? We don't. Instead, we live with them, and celebrate them. We need to reframe the way we navigate the trend landscape. Some of the examples of macro level trends I explore in The Hummer and The Mini are: Mass Customization, Luxurious Commodities, Healthy Indulgences, Everything Old is New Again, Extreme Relaxation, Counterfeit Authenticity, and Social Capitalism, ending with the paradox of success.

    Charles Handy said: "The more turbulent the times, the more complex the world, the more paradoxes there are." We are definitely living in turbulent times, and the world has certainly gotten incredibly complex. There are a lot of paradoxes out there. I think that represents an incredible opportunity for retailers and marketers that can figure out how to deal with the paradoxes most creatively.
    KC's View:
    This sounds like a fascinating presentation that will look to move retailers away from the put-out-the-fires approach that dominates so many of their lives, and look at the bigger picture. We love the notion that there is an enormous difference between a campaign that says "we get you to work faster" and one that says "we get you home faster," and we wonder how many of us would see that difference.

    One other note. We think, and we suspect Waters would agree, that that there are multiple answers to the question, "What's the next big trend?" And it is critical that retailers and manufacturers be able to sort through these various answers and figure out which ones are appropriate to their businesses. Probably the only thing worse than missing a trend would be trying to focus on one that isn’t relevant to a store's consumer base.

    By the way, a reminder about the upcoming FMI Show. On Sunday, May 7, we will be hanging out at the bar at one of our favorite Chicago bistros, Bin 36, from 6-7:30 p.m. And if any members of the MNB community would like to stop by, say hello, and chat for a bit…well, the first couple of bottles of wine will be on us.

    It’ll be a great opportunity for all of us to put faces and voices with the names and words that appear on MNB plus an excuse to drink good wine. (Not that we need an excuse…)

    (Bin 36 is located at 339 N Dearborn on the west side of Marina City, between the river and Kinzie.)

    We’ll see you in Chicago.

    Published on: April 25, 2006

    The Indiana Business Journal reports that Ron Marshall, the former CEO of Nash Finch, may be in line to get a top job at Marsh once the sale of the company to a private equity firm is completed.

    A tentative deal for Marsh to be acquired by Sun Capital Partners for about $88 million was announced late last week. Marsh operates 70 Marsh grocery stores, 38 LoBill Foods stores, eight O'Malia Food Markets and 160 Village Pantry convenience stories across Indiana and western Ohio, and the speculation is that the company will be quickly broken up and sold.

    Marsh has had competitive problems in recent years, as well as garnering significant bad publicity because of what some analysts felt were extravagant payments to family members who worked for the company. Just two months ago, the company’s board of directors decided to close nine stores and fire four family members - David Marsh, the company’s president, as well as Arthur Marsh, Don Marsh Jr., and Joseph Heerens – as it tried to refocus the company.

    Ironically, ethical questions were raised about Marshall two months ago when Nash Finch announced that it had communicated the results of an internal probe of stock trading by officers and directors of the company to the US Securities and Exchange Commission (SEC) on the same day that Marshall left the company along with Kathleen E. McDermott, the company's senior vice president, secretary and general counsel. Marshall had announced his retirement last September pending the naming of a permanent replacement, but when he quit in February he was replaced on a temporary basis by former Oshawa CEO Allister P. Graham. (Graham said at the time that Marshall's departure and the stock probe were not connected.)

    It was only last week that Nash Finch named Alec C. Covington, the president/CEO of Tree of Life, to be its new president/CEO.
    KC's View:
    If Marsh is to survive as an entity – and there is no certainty that this is what the folks at Sun Capital want – then it will require a leader capable of innovative, ambitious thinking and the ability to inspire confidence in the employees as well as the company's traditional consumer base.

    The question is whether it makes sense to hire someone who has been around the track more than a few times, or to hire someone who can see the situation and potential solutions with a new set of eyes unjaundiced by the actions of the past.

    Published on: April 25, 2006

    Internet Retailer reports that one of the byproducts of high gasoline prices could be even more people shopping on the Internet.

    One survey, by Shopzilla, suggests that half of all consumers surveyed said that they would shop on the Internet more. Almost 30 percent said that they would shop "somewhat more," and 20 percent said they would shop online "a lot more."

    While gasoline prices have gone above $3 per gallon in many places, some experts believe that the height of the summer driving season will see $4 per gallon prices, with it costing $60 or more to fill up those big SUVs that are all over the road.
    KC's View:
    We think this is an excellent point. The other night, the gang at home had come up with a list of books that they needed for various reasons. (We think any reason they want books is a good one, by the way.) Now, we happen to have a Borders gift card in our wallet, as well as a Barnes & Noble discount card. But we didn’t even consider going to either place – we just went on Amazon, ordered the books and a few other things, and stayed out of the car. (Delivery is free, by the way, because we belong to Amazon Prime…though we know that "free" in this case is relative because we had to pay to belong. But believe us, we get our money's worth out of this one.)

    Smart retailers will find a way to exploit – in the best sense of the word – the high price of fuel. (As opposed to the worst sense of the word, which is the kind of exploitation that the oil companies are engaged in.)

    Published on: April 25, 2006

    Advertising Age reports on how fast food companies such as McDonald's, Wendy's, and Burger King are working the late night hours for higher sales, with the time between dinner and breakfast accounting for almost eight percent of total fast food sales.

    This day-part has become a major battleground for these companies, with double-digit sales increases being seen in some cases.
    KC's View:
    Great insight, and one to which supermarkets ought to pay attention.

    Store are open late, but most of them are shutting down their foodservice operations at the usual time. Wonder if there is something to be said for an unconventional approach to fresh food sales in supermarkets, creating a late night menu that would attract a new set of customers looking for something to eat but also wanting something beyond the fast food experience?

    Published on: April 25, 2006

    The Flint Journal reports that some retailers looking to compete with Wal-Mart are trying something unique. They're getting smaller.

    Take, for example, Colony Quality Meats in Grand Blanc, Michigan. Owner Scott Smith planned to expand his grocery store, but the opening of a Wal-Mart Supercenter prompted him to scrap those plans and instead open a new specialty store that sells varieties of smoked meats, seasoned prime rib and crown pork roasts – things that Wal-Mart doesn’t sell.
    KC's View:
    This tack won’t work for everyone, nor should it minimize the threat of a supercenter. But it makes a lot more sense to go in a different direction that doesn’t place you in direct competition with the big guys.

    Published on: April 25, 2006

    The Seattle Times reports that Costco has won its suit against the Washington State Liquor Control Board, essentially dismantling the state's distribution system that requires the use of a distributor tier that the retailer maintained artificially raised costs and prices.

    In its defense, the state tried to prove that the system promoted temperance and an orderly marketplace, but the judge wasn't having any of it, saying that the state laws were anti-competitive.

    The judge in the case stayed her ruling for 30 days to allow for a potential appeal, and state officials are said to be considering their options.

    Costco CEO Jim Sinegal told reporters that he believed that most of the cost savings could be passed back to consumers.
    KC's View:
    Based on everything we've heard, eliminating the mandatory use of distributors in such cases not only can reduce prices for consumers, but also can enlarge selection and choice. Distributors often seem to spend more time closing gates than opening them…and that's never good for consumers.

    We hope the state will just drop it.

    Published on: April 25, 2006

    Business Week asks whether Starbucks can be successful with its incursion into the French marketplace. The coffee retailer has 23 stores in Paris at present, but the magazine suggests whether there could be cultural issues that prevent the kind of rollout that has been successful elsewhere.

    "France isn't just another country, and how far the coffee chain can go in one of the world's most traditional café cultures is anybody's guess," Business Week writes. "A rich, dark espresso sipped under a haze of cigarette smoke at a zinc bar or at a tiny cramped sidewalk table is about as quintessentially French as it gets. Starbucks' bright, upbeat image, with its large white paper cups of takeout brew, big sticky snacks, and no-smoking policy, feels a million miles away." And despite the nation's reputation for loving the chic and trendy, the magazine writes, its citizens "are a very conservative people with deeply held traditions."
    KC's View:
    Next time we're in Paris, we're going to go out of our way to see what a venti skim latte tastes like in the City of Light.

    Betcha it tastes pretty good…and for our money, anyplace that doesn’t have a haze of cigarette smoke sounds like a place we want to be.

    Published on: April 25, 2006

    • Wal-Mart has settled a lawsuit brought against it by the Michigan Attorney General that charged the retailer with violating the state's item pricing law.

    The company will pay $1.5 million in fines, penalties and legal reimbursements, and also will donate $100,000 to Michigan food banks.

    The company insisted that its willingness to settle the suit was not an admission of guilt.

    Business Week reports that Wal-Mart is creating a task force made up on non-company employees that will advise its executives on issues of diversity. The first two members to be named are former Detroit mayor Dennis Archer, the first black president of the American Bar Association, and Latina civil rights activist Vilma Martinez. One or two additional members are expected to be named shortly.

    The task force is being formed as the company deals with a class action suit alleging that it discriminates against women, as well as faces a constant barrage of criticism about its institutional indifference to women and minorities. And it comes after Wal-Mart hired former civil rights activist and Atlanta mayor Andrew Young as a spokesman for the company.
    KC's View:

    Published on: April 25, 2006

    • Tesco announced this morning that its just-completed fiscal year generated a 17 percent increase in pre-tax profit to the equivalent of $3.8 billion (US), with annual sales up 13.2 percent to $72.9 billion (US).

    Tesco's UK sales were up 10.7 percent for the year, with non-UK sales up 23 percent.
    KC's View:

    Published on: April 25, 2006

    • Wm. Wrigley Jr. Co. has named Martin Schlatter, currently the company's general manager for its US business, to be the its first chief marketing officer.

    Schlatter's charge is to develop a global marketing strategy that pulls together the efforts being made around the globe.
    KC's View:

    Published on: April 25, 2006

    …will return.
    KC's View: