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    Published on: May 22, 2007

    A prime example of how some people turn challenges into a business model can be seen in the New York Times this morning, which reports on the small boom in the luggage shipment business, which allows people to send their luggage ahead of them when taking trips and wanting to avoid airport security hassles.

    “A small but growing number of executives are using such services to ship bags ahead when they travel on business,” the Times writes. “These services — some originally created to ship vacationers’ sports equipment like skis or golf clubs — are proliferating. And variations are springing up, like companies that operate ‘virtual closets’ for travelers. These companies store and maintain customers’ clothing and other possessions and ship them to their destination, then return it all to storage once the trip is over.”

    And while some of these businesses are more than a decade old, they are finding new popularity as air travel gets more complicated and challenging – not to mention more expensive, as airlines raise their luggage fees.
    KC's View:
    Now, to be sure, these shipment and “virtual closet” companies aren’t cheap – they tend to be the province of the affluent and time-constrained business travelers with expense accounts. But as some of these shipping firms create alliances with various airlines, hotels and other frequent traveler programs – as seems to be happening in certain cases – we would guess that usage would become cheaper and more frequent.

    The point is that these business opportunities have grown out of circumstances created by airport security challenges. The negative spawned an opportunity.

    That’s a good lesson for every retailer – to look around, to find opportunity where only challenges seem to exist.

    Nothing is impossible. Or, as Jean-Luc Picard once said (or, will say, depending on your point of view), “Things are only impossible until they’re not.”

    Published on: May 22, 2007

    The Wall Street Journal reports that “laundry-detergent brands are about to face a messy marketing challenge: convincing consumers to pay the same old prices for about half the detergent.”

    Except, of course, that it isn’t half the detergent. It is more concentrated detergent that takes up less room, and therefore allows manufacturers like Procter & Gamble and Unilever to use smaller bottles…which they’ve been pressured to do by companies like Wal-Mart, which want to be able to put more product on their shelves. The use of smaller packaging also cuts product costs for the manufacturers, and has the environmental upside of reduced packaging going into landfills or needing to be recycled.

    All of which would seem to be a win-win. Except, potentially, for consumers.

    “Come next year, shoppers simply won't be able to find giant bottles of the major brands anymore,” the Journal writes. “Still, there is huge potential for consumers to be confused and even irritated, which could lead to headaches for the companies.”
    KC's View:
    What we don’t understand is why manufacturers, at least according to the Journal, aren’t making the environmental upside of the new packaging a central part of their marketing efforts, but rather focusing on the potency of the concentrated formulas.

    Potency is a good thing. But everything we’ve seen suggests that people want to make positive decisions when it comes to the environment, and the laundry detergent folks actually are making it simpler for people to make ethical choices (by, in fact, reducing their choices). Manufacturers ought to be using some version of the “a convenient truth” message as a key part of their communications, not shrinking from it.

    Published on: May 22, 2007

    The Wall Street Journal reports this morning that as food retailers and manufacturers achieve greater supply chain efficiency, there is a cultural downside – less food that can be delivered to the nation’s food banks, which report “receiving fewer donations in the form of imperfectly packaged canned and boxed edibles.”

    “To make up for the product loss, food banks are seeking ways to raise money to buy more food,” the Journal writes. “They are also looking for new types of food, including perishables. Some food banks are hiring trucks to pick up food directly from farms.

    “The food-bank shortages are nationwide. The Community Food Banks of South Dakota in Sioux Falls, S.D., received 35% fewer donations from grocery stores last year. The Greater Chicago Food Depository, the nation's fourth-largest food bank in terms of the amount of food distributed, has 12% fewer donations this year than last

    “Many food banks have made up for the loss of salvage products by buying food through donation drives, but others are giving out less food overall.”

    One solution to the problem actually has been found by retailers, who say that “they have found new -- and some say better -- ways to contribute to food banks. For example, many grocery stores will donate money so a food bank can purchase its own food.

    “Safeway says its donations of cash and food to food banks amounted to $110 million last year, up from $109 million the year before. And supermarket chain Supervalu Inc. of Eden Prairie, Minn., says that contributions to food banks ‘have remained steady or continued to increase in many areas of the country’.”
    KC's View:
    This seems like a good place to point out a charity campaign that was unveiled last week – the Great American Bake Off, which has been designed by Share Our Strength to address the problem of childhood hunger in America. To quote from the press release:

    “The Great American Bake Sale is a national campaign that mobilizes people of all ages to help end childhood hunger in America by holding bake sales in their communities. Since 2003, the campaign has raised over $3 million and engaged more than 1 million people in baking, selling or buying goods.

    "’The Great American Bake Sale campaign provides a simple, exciting way for people of all ages to join the fight to end childhood hunger in America,’ said Billy Shore, Share Our Strength's founder and executive director. ‘The campaign builds on the long American tradition of holding bake sales as community fundraisers. By engaging everyone to hold a bake sale, the Great American Bake Sale will help ensure that the 12.4 million American children at risk of hunger have the healthy, nutritious foods they need to develop their full potential."

    “Funds raised through Share Our Strength's Great American Bake Sale are granted to local organizations that work to increase participation by low- income children in summer and after-school feeding programs and to support nutrition education programs for low-income families. Funds will be used to support such efforts as purchasing equipment and utensils to serve children meals, covering the cost of opening additional meal sites, hiring additional staff to serve children meals, or paying for outreach that informs parents about the availability of summer meals and after school snacks.”

    The campaign will be getting a lot more publicity than in past years because of a partnership with the Food Network, which has enlisted the help of stars like Rachael Ray in the cause.

    It seems to us that this is the kind of program that retailer sought to be getting involved with, and not just because it is a great way to cement relationships within local communities. It also seems like a really good thing to do.

    Published on: May 22, 2007

    Reports in the Irish trade press say that Superquinn here plans to revamp its wine departments, stressing both better quality wines and exclusive varieties from a number of wine-growing regions of the world.

    David Orr, the company’s new wine manager, says, “We see this as a way of encouraging the customer to experiment and try out new wines...Wine should have personality, an angle that follows through from the vineyard.”
    KC's View:
    That’s the key to differentiation – finding products that nobody else has, and then communicating with the consumer about them with a kind of unbridled passion that takes them beyond any sort of implied commoditization.

    Published on: May 22, 2007

    The San Francisco Chronicle reports that there is a major shift taking place in how people use and view telephones.

    ‘‘Today, the cellphone is regarded as a necessity by a growing number of Americans — especially the young and the poor — while the residential phone is becoming optional,” the Chronicle writes. Almost a third of people between the ages of 25 and 29, and a quarter of people between the ages of 18 and 24, have abandoned land lines and use cell phones exclusively…with just older Americans clinging onto what now is seen in some quarters as old-world technology.

    The Chronicle notes that there are studies suggesting that the US could be 30-50 percent wireless-only in just a few years…which would mirror patterns already taking place in Europe.
    KC's View:
    Which, we would think, would open up all sorts of new opportunities for texting-based promotional programs, wireless payment systems, etc…

    Published on: May 22, 2007

    The New York Times this morning reports that “Chinese authorities are investigating whether two companies…exported tainted toothpaste as more contaminated product, including some made for children, has turned up in Latin America.”

    According to the story, “no tainted toothpaste has been found in the United States,” but the US Food and Drug Administration (FDA) reportedly is looking into the matter.
    KC's View:
    That’s the thing about all these contamination stories coming out of China.

    One makes headlines, and two hours later the media is hungry for more.

    There always seems to be a new headline, a new concern…and the real erosion, in the long-term, will be in overall consumer confidence.

    Published on: May 22, 2007

    • The Portland Business Journal reports that Supervalu-owned Save-A-Lot plans to expand its Pacific Northwest presence by 50 percent later this year, opening three new stores to add to the existing six save-A-Lot fleet.

    Two of the stores will be in Oregon, in Portland and Albany; the third new unit will be in Port Orchard, Washington.

    • The Bergen Record reports that New York’s esteemed Fairway Market, which currently operates four upscale stores (two in Manhattan, one on Long Island and one in Brooklyn), is moving across the Hudson River to New Jersey, and plans to open a store in Paramus sometime next year.

    • The Cincinnati Business Courier reports that Supervalu-owned Bigg’s is considering whether to leave its Forest Park, Ohio, location when its lease runs out in July. One-year’s notice is required before vacating, according to Bigg’s president Steve Kaczynski, who says, "We are looking to see what we can do to stay there.”
    KC's View:

    Published on: May 22, 2007

    Internet Retailing reports that UK-based Sainsbury saw its online sales grow by about 49 percent last year, and that the company now projects that it will be able to double those sales numbers within three years time, in part by expanding from 114 to 200 the number of Sainsbury stores that offers the delivery service.

    The retailer doesn’t provide precise numbers, but will say that it has some 64,000 shoppers ordering via the Internet each week, and that Christmas was a peak season for the e-commerce business.
    KC's View:

    Published on: May 22, 2007

    • Wakefern Food Corp., the retailer-owned cooperative, said that its most recent fiscal year generated $9.5 billion in retail sales, a “record sales level” for the company. The company also said that it generated $7.5 billion in wholesale sales last year.

    • Campbell Soup yesterday reported that its third quarter profit rose 31 percent to $217 million, from $166 million during the same period a year ago. Q3 revenue grew eight percent, to $1.87 billion.
    KC's View:
    Campbell Soup attributed the profit growth in part to higher beverage sales. We think it is directly traceable to the copious amounts of V-8 we’ve been drinking.

    By the way, it isn’t that we’re dragging our feet on the re-naming of this section…it’s just that there are so many entries, it is taking more time than we expected to make a choice!

    Published on: May 22, 2007

    • Home Depot announced this week that Jim Stoddart, its vice president of growth initiatives and the man largely seen as responsible for opening convenience stores in some of the company’s parking lots, has left the company.

    Stoddart, according to the Atlanta Journal-Constitution was hired by then-CEO Bob Nardelli in 2002; it is seen as possible, given that Nardelli has been forced out of the company and succeeded by a new regime, that Stoddart’s portfolio was receiving considerably less support from the chain’s new leadership. The new CEO, Frank Blake, is said to be far more focused on core rather than ancillary businesses.
    KC's View:

    Published on: May 22, 2007

    More on the proposal by one New York State county to ban people from smoking in their cars if they are traveling with children…

    One MNB user wrote:

    While I've never smoked, except trying them in my early teens, I now know very few people with young children. In my days with my three I can't recall any parents who smoked, with or without children in the car, without the windows being cracked open enough to move most fumes out of the car.

    Maybe all of us cared enough about our kids…

    Another MNB user wrote:

    First it will be the government controlling where people can smoke, then it will be the government controlling what we feed our children, when we put them to bed, what we let them watch on TV, what video games we allow them to play…

    Smoking or not, there are parents that make irresponsible choices every single day (not just the smoking parents). I don't agree with parents who allow their children to eat fried and junk food, I don't agree with parents that use television as a babysitter, I don't believe that a 6 year old should play video games rated "M", but that is a parent's choice their prerogative. Of course we all understand the dangers of second hand smoke, but if the government starts here…where will it stop?

    Still another MNB user wrote:

    Your comments got me thinking. I recall as a child my parents smoked and so did most of their friends. Mom's afternoon bridge card parties seemed so innocent but when I came home from school our house looked like a smoke filled bar. They always smoked in the car and we kids really didn't think about it too much. Today I realize what they did was wrong and so do they, but its not something we openly discuss. I'm not out to give my parents a guilt trip, I'm sure they feel bad enough about it already.

    I'm also not going to remotely suggest special spots in hell for anybody. I'm going to count my blessings. As for the ill effect of years of exposure to second hand smoke, well its not killed me yet.

    Another MNB user wrote:

    I hate smoking. Grew up with both parents smoking, yet never became a smoker. Can't stand the smell of smoke. That being said, it's time for the PC group to quit pushing us down that proverbial "Slippery Slope".

    As opposed to smoking as I am, I'm sure that you can't legislate common sense and 100% protection, even for our kids. Those with a point of view too often use an obscure example (kids stuck in car with smoker to/from school with windows rolled up in the winter) that is emotionally appealing, but exceptional (I would suspect that most parents who smoke don't do this). Abhorrent? YES! Worth giving up our freedoms for? I think not.

    Recent news - a town in CA is trying to pass a law that would prohibit smoking ANYWHERE outside within the city limits. That means that a smoker could be arrested for smoking on the patio in their own backyard. A bit too far for me. Sorry, but if someone comes into the backyard of my home demanding that one of my guests stop smoking on my property, they would also have to contend with my right to bear arms!

    And another member of the MNB community chimed in:

    Sounds like you got hammered by some readers on your position on parents smoking in cars. Just a quick note to say I'm 100% with you. What's next, government agencies making sure parents don't buy their kids too many Happy Meals or ensure the little ones get enough sleep at night.

    But MNB user Linda Wish disagreed:

    As the daughter of two super smokers- I remember the circle of hell that was our family car. Summer trips were the worst. I recognize the slippery slope for exactly what it is- but when do children's health rights become less important than our bartender, wait staff and employees in public places.

    We've already traversed this slope with seatbelt and childseat laws. I see only upside for the trapped little people in the back seat. I suspect that many smart smoker/parents already follow this rule. As usual we need to legislate for the thoughtless.

    And another MNB user challenged us:

    How do you feel about state laws that require seatbelt usage? The issue is really the same – how do you protect the occupants of a vehicle? This is different from laws such as those prohibiting use of cellphones without a hands free device, which clearly are designed to protect not only the occupants of the car, but also others that are in danger due the driver of the vehicle being distracted.

    Onto another subject…

    We commented the other day that we believe that a lot of organic/natural shoppers would prefer to see such products integrated into mainstream products sections, that people make choices in different categories – for instance, there is nothing wrong with buying organic milk and Oreos.

    Which led MNB user Mark Kastel to write:

    The truth is often stranger than fiction. Kraft/Nabisco recently announced that they were introducing organic Oreos and Chips Away.

    The organic Twinkie is next.

    We suggested yesterday that consumer confidence could wane as people get tired of paying high gas prices, which prompted MNB user Rob Rice to write:

    I recently saw and referenced some interesting research about this topic in a presentation made at a recent Convenience sector conference. It came from a survey executed by Penn Schoen and Berland Associates. They learned:

    • 69% of consumers will spend more money and buy same amount of gas when prices increase.

    • 66% of consumers say price remains most important purchase decision criteria (22% say location)

    • 42% of consumers pay in-store (some buying other items)

    • 25% of consumers say they would change purchasing behavior to save 1¢ / gallon (50% would to save 3¢ / gal.).

    This says that most consumers are willing and prepared to pay more for fuel and DO NOT intend to curb their consumption of it. The most surprising finding was that despite that they will pay more/consume same, they remains most concerned about price, and 25% of consumers will change their purchase behavior (fill up across the street; fill up in another town; join a fuel loyalty scheme) to save $0.01 cent per gallon (that’s $0.13 cents on an average tank fill up). Further, 50% of consumers would change purchase behavior to save $0.03 cents per gallon ($0.39 on a 13 gallon fill up). I have honestly never realized how cheap we can be as consumers and can only imagine how willing customers are to change their purchase behavior to save 10 to 70 per gallon, as is the case with many grocery store supported continuity programs (spend in store save at the pump). Are the C-store guys worried?

    And, regarding our ongoing discussion about Jackie Robinson, MNB user Geoff Harper responded to an email we ran here yesterday:

    Good comments from Bruce, but you are hardly the only other person who considers Jackie Robinson a vital historic figure. Thousands and thousands of us agree. I am ordering the book today also.

    True. We actually meant to point that out, but frankly forgot. It must have been the jet lag.

    And MNB user Bob Gremley suggested two other books about Jackie Robinson:

    Baseball's Great Experiment: Jackie Robinson and His Legacy - extremely well-researched book on both JR and the history of the Negro Leagues. Puts the whole 1947 year into context.

    Jackie Robinson - I Never Had it Made - His autobiography only 1/3 of which is devoted to baseball. Other chapters on his involvement in civil rights and politics are told best here - a time often given scant coverage by books or columns penned by sportswriters.

    We’re also a fan of “Double Play,” which is Robert B. Parker’s imaginative novel about a bodyguard hired to protect Jackie Robinson during his first year in the majors.

    All good stuff.
    KC's View: