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    Published on: August 7, 2008

    Now available on iTunes…

    To hear Kevin Coupe’s weekly radio commentary, click on the “MNB Radio” icon on the left hand side of the home page, or just go to:

    Hi, I’m Kevin Coupe, and this is MorningNewsBeat Radio, brought to you by Webstop, your first stop for retail website design services.

    Michael Sansolo’s column earlier this week about the role that technology can play in heightened communication between retailers and shoppers made me think about an exchange I had earlier this summer.

    I was giving a speech in which one of the things I was talking about was generational marketing and how the industry needs to use technology smarter to be both accessible and relevant to the next generation of shoppers; this is an opinion that I share with Michael, and we talk about it a lot in speeches that we do both separately and together.

    After the speech, a number of people were nice enough to come up to me to say things like they hadn’t thought about some of the issues I’d raised, and they appreciated it. That’s music to the ears of any speaker, and don’t let anyone tell you that we don't lap it up.

    But then a young guy came up to me. He wasn't any older than 25 if I had to guess, and he was looking at me like I was some sort of dinosaur. “That stuff you were talking about – text messaging and blogging and podcasting – is almost obsolete,” he said, with disdain dripping from his voice. “You should see some of the stuff that people are working on now…” And then, he rattled off a bunch of technological-sounding names that were so foreign to me that he might as well have been speaking Klingon. And it wasn't just the words that I was unfamiliar with…it was the concepts, which went by me so fast that I couldn’t explain any of them to you.

    This kid may have been a geek, but he was a really, really smart geek. And me, I was something from the Jurassic era…something without teeth and a very limited life expectancy.

    Moments later he was gone, as were the other folks who’d come up to talk to me. And I was left alone, just a little bit humiliated.

    I’ve thought about this a lot since then, and two things occur to me.

    One, and this is the obvious lesson, is that he’s absolutely right. The technological stuff we think is so advanced right now is doomed to be obsolete, and almost certainly that will happen faster than anyone expects. So we have to keep up, keep moving forward, and never allow ourselves to be complacent or satisfied. Because that’s the path to irrelevance.

    But the other thing that that kid made me think about was how wrong he was – because by treating me like a moron, even if I am one, he lost the opportunity for a meaningful exchange and conversation that would have at least helped to advance his ideas and attitudes at little bit. I’m wiling to learn, and a lot of people like me feel the same way. Treat me like an idiot, and the learning opportunity is lost.

    However, I do want to suggest that as an industry, we have two responsibilities here. One is to hire more people like this young computer geek, because they are the ones who will drag us – sometimes kicking and screaming – into the future. Without them, we may spend more time looking backward than forward, and that’s no way to run a business.

    The other responsibility, I think, is to dedicate time, energy and money to helping kids like this learn how to communicate in a civilized and clear manner. Some of it is just social skills, which he didn’t seem to have in abundance. Some of it has to do with basic leadership training…which people like this are going to need if they are to help our companies thrive in such a dramatically changing environment.

    Now, I know that a lot of people didn’t get into the food business thinking that teaching kids how to talk and relate to their elders would be in their job description. That’s too bad. But like it or not, that’s what we’re going to have to do.

    Because the alternative ain’t pretty.

    For MorningNewsBeat Radio, I’m Kevin Coupe.

    KC's View:

    Published on: August 7, 2008

    The annual Harris Interactive poll that measures public attitudes toward various industries shows that “supermarkets continue to get better scores than any other industry; fully 90 percent of all adults think they do a good job and only six percent think they do a poor job, giving them a net positive score of 84.

    Tobacco companies (-43) and oil companies (-32) come at the bottom of the list, far below the other 19 industries, according to the poll.

    Next in the list of industries with the best reputations are online search engines (65), computer hardware companies (64), computer software companies (59), hospitals (53), and Internet service providers (52).

    The two other industries with negative scores are managed care companies (-14) and health insurance (-9), which are now more or less synonymous. Three other industries have low score below 20: cable companies (14), pharmaceuticals (15) and airlines (18). Indeed, three industries have seen what the poll refers to as “truly massive declines in their reputations since Harris first asked these questions eleven years ago in 1997.” They are oil companies, which have fallen 56 points from 24 point positive to 32 negative; airlines, which have fallen 48 points from 66 positive to 18 positive since 1998 (they were not included in the 1997 survey); and pharmaceutical companies, which have fallen 45 points from 60 positive to 15 positive this year.

    According to a summation of the poll results, these results are all linked: “Real world events, bad service and bad experiences can lead to bad media coverage. But there are also cases where personal experiences are relatively positive and media coverage tends to be negative (such as health insurance). Clearly industries need to focus on good customer service and running their business successfully with a strong focus on the public interest. When the price of an industry’s goods and services rises sharply, the quality of their services decline or they get a lot of unfavorable press coverage, they should expect to become more unpopular.”

    KC's View:
    Memo to supermarket industry…

    Don't screw it up.

    The industry ought to go to school on the issues that have brought down so many other industries – lousy customer service, lack of transparency, irrelevance, arrogance…

    The worst mistake the industry could make is to think that its position at the top of these rankings is somehow unassailable. Nothing could be further from the truth. Every position is assailable and every advantage is temporary.

    I once gave a speech to a retailing organization that would be considered to be legendary, and the company’s owner said he wanted the overarching message to be a simple one – that while the companies managers and leaders were to be congratulated for their achievements, those were all in the past. “Being legendary,” he said, is a reputation that the company had to earn every day. No exceptions.

    Here endeth the lesson, as Jimmy Malone once famously said.

    Published on: August 7, 2008

    The Augusta Chronicle reports this morning that Monsanto plans to sell off its controversial dairy hormone product, Posilac, which increases milk production in dairy cows.

    The company said it would sell the brand in order to focus on its core business.

    Posilac has become controversial as some supermarket chains such as Kroger have stopped selling milk from cows that were given the artificial hormone, even though the US Food and Drug Administration (FDA) has ruled that milk from cows given the hormone and cows not given it is not significantly different.

    Monsanto maintains that the controversy has nothing to do with the decision to sell the company, according to the Chronicle story.

    KC's View:
    Sure. Nothing to do with it at all.

    Published on: August 7, 2008

    The New York Times this morning discusses a new advertising campaign launched in the UK for Coca-Cola, in which the company actually – for the first time – reveals a little bit about the secret formula for its flagship cola product that has remained both a mystery and unchanged for 122 years.

    The company is emphasizing that Coke has “no added preservatives or artificial flavors,” and that it includes “the best spices from around the world.”

    What’s made the campaign worth dissecting, according to the Times, is the fact that the “no added preservatives” claim would seem to be at odds with the product’s position as a lifestyle brand. In other words, since nobody is buying Coke as a healthy product anyway, why emphasize its ingredients in the advertising?

    One answer to this question is the reality that Coke – just like every other soft drink manufacturer – is under public pressure because of obesity and nutrition concerns, especially about children who consume such products. And so, by talking about natural ingredients, the sense is that Coke can relieve at least a little bit of the pressure that is being applied to it by outside forces.
    KC's View:

    Published on: August 7, 2008

    The Los Angeles Times this morning reports that Los Angeles County Supervisor Zev Yaroslavsky has unveiled a legislative proposal that would require chain restaurants in the county with 15 or more units in the state to post calorie counts for all of their products. The proposal, if approved, could be in effect by the end of the year, and is seen as one way to combat the obesity epidemic.

    The bill is similar to one that has been implemented in New York City.

    The move comes in the wake of a decision by the Los Angeles City Council to put a one-year moratorium on the opening of fast food chains in the South Los Angeles section of the city, concerned that the proliferation of such outlets – and the lack of healthier alternatives – was increasing the obesity rate in those areas and causing local residents to have more than their share of obesity-related maladies.

    KC's View:
    Some will say that this is the nanny state at work yet again. Others will say that this is simple transparency.

    I tend to side with the latter, though I do wish that chains would be open about such things on their own, making legislation unnecessary.

    Published on: August 7, 2008

    • The Financial Times reports that it appears wants to get into the loyalty marketing business with a program that will allow customers to pay for products and digital downloads with points compiled during previous shopping experiences.

    According to the story, Amazon is advertising for a new position that will be part of its “new rewards redemption platform business.”

    FT notes that “loyalty programmes operated by airlines, credit card companies, retailers and others are an increasingly important marketing battleground in the US,” and that one estimate is that the average US family is enrolled in 12 different loyalty programs, and actively participates in four to five.

    Amazon currently is supporting a points-redemption program being run by PepsiCo.

    KC's View:
    This is interesting, since I’ve always thought that the way Amazon is structured and the way it uses its information about its customers makes it the world’s biggest and best loyalty marketing program.

    Published on: August 7, 2008 has an interesting piece about how bottled water companies, faced with convincing accusations that their very existence and business plans – which depend on water being packaged in plastic and transported via vehicles that use gasoline – have a negative impact on the environment. “Ironically, bottled spring water, long marketed as having highest purity, is now the most tainted, because transportation from distant sources leaves a greater carbon footprint.,” Forbes writes.

    “As a badge of health becomes a stigma of reckless consumerism, what's the bottled water industry to do?

    “Many competing brands have opted for the same strategy: They are attempting to mitigate, even neutralize, the impact of their existence. For example, Naya advertises that 1% of its revenues go to protect the environment. Fiji has launched a dedicated Web site that touts a rather convoluted commitment to carbon negativity. Go to the Poland Spring site, and the first thing you see is a message not about the benefits of the product but about its new ‘Eco-Shape’ plastic bottle. Volvic has enlisted the United Nations as a guarantor for its reputation: For every liter sold, the brand pledges a donation to UNICEF to help provide 10 liters of drinking water to children in Africa.”

    The irony, Forbes writes is that Coke’s Dasani water and Pepsi’s Aquafina could be best positioned to take advantage of the new environmental consciousness – they are both purified tap waters, not spring waters, and travel considerably shorter distances on the way to the store.

    KC's View:

    Published on: August 7, 2008

    • The St Petersburg Times reports that Publix Super Markets, which is acquiring 49 Albertsons stores in Florida, “smells blood. It sees the weakness of its rivals as time to expand its dominance among Tampa Bay area supermarkets by building a slew of new stores in addition to the Albertsons' locations that it's snapping up … (Publix is) expected to reopen every Albertsons purchased and keep open virtually all of its current Publix stores nearby. Speculation is rampant that a few will reopen under the Sabor or Greenwise flags, Publix's experimental supermarkets designed for Hispanic and natural/gourmet food fans, respectively. Some may be retooled into a Publix even if another Publix is two blocks away … The chain's goal: add most of Albertsons' 8 percent share of the Tampa Bay food market to Publix's current 38 percent.”

    Advertising Age reports that while Procter & Gamble has pledged to reduce costs as the nation’s economy continues to tighten – taking such steps as closing a Massachusetts manufacturing facility and eliminating more than 200 jobs at Gillette’s South Boston headquarters - its advertising budget will remain intact at approximately 10.4 percent of annual sales. What P&G will do, according to the story, is mix up the media a bit, spending less on television commercials and more on alternatives.

    • The Dallas Business Journal reports that Minyard Food Stores has informed the Texas Workforce Commission that a layoff “will impact 37 stores and approximately 2,387 employees after the grocery retailer sells its Carnival Super Market Brand and other Minyard-owned stores to Houston-based Grocers Supply Co. Inc. The announcement does not take into account the number of employees who will most likely be rehired by new store owners after the sale is complete,” according to a spokesman for Grocers Supply.

    KC's View:

    Published on: August 7, 2008

    • Food Lion announced yesterday that Robert Canipe, the company’s director of strategic and business analysis, has been promoted to the rile of senior vice president – corporate development.

    KC's View:

    Published on: August 7, 2008

    • Costco Wholesale said that its total July sales rose 14 percent to $5.7 billion, on same-store sales that were up 10 percent in the US and 11 percent in its international operations.

    • Arden Group-owned Gelson’s Markets said that its second quarter sales were $116.6 million, down 2.7 percent from the same period a year ago. Q2 net income was $6.6 million, up 1.7 percent.

    • Walmart de Mexico said that its July sales grew 11 percent compared to the same period a year ago, to the equivalent of $1.92 billion (US). Same-store sales were up 4.6 percent.

    KC's View:

    Published on: August 7, 2008

    • The Green Bay Packers traded Brett Favre, the legendary quarterback who retired after last season only to change his mind as training camp got closer, to the New York Jets.

    According to the New York Times, “the Jets surrendered a fourth-round draft pick that can increase in value, potentially all the way to a first-round choice, based on the performance of Favre and his new team this season.”

    KC's View:
    The best you can say about the Favre-Packers situation is that it was a mess, no matter how you feel it should have turned out.

    But as a Jets fan, I have only one thing to say:


    Published on: August 7, 2008

    Michael Sansolo’s column on Tuesday, which talked about the importance of technology as a communications tool, touched on the recent revelation that Sen. John McCain (R-Arizona), who is running to be the next president of the United States, is only just learning how to get on the Internet. The column got a lot of response, and it was all over the map. Some examples…

    MNB user Pat Nicolino wrote:

    Each week I thoroughly enjoy Tuesday with Michael. Today I find myself actually at my own desk instead of racing through an airport or changing conference rooms the way others change their minds about what to have for lunch. The luxury of time to work quietly coupled with time to think deeply about...

    • the impact of technology on nation-building
    • the opportunities to build rapport and affiliation with shoppers
    • the impact of one person's passionate determination to speak of the human condition at its most spare and noble source

    ...ahhh, what a glorious morning you have given me with your column today.

    MNB user Gary Stephenson wrote:

    Interesting view on FDR, Reagan & McCain. In my mind we're talking about using a medium to present ideas -- let me clarify. FDR, I expect was working off a prepared script for his radio sessions & I've no doubt Reagan did the exact same thing in his 'prepared' TV speeches. I'm also assuming that McCain (or in fact all 3) will use the web as the vehicle for the content.

    Frankly, having a President sit down & do interactive 'blogging is a scary thought!

    Another MNB user wrote:

    Isn't it refreshing to know that there is someone out there that does not have his head replaced with a computer? They have their place, but are far over done.

    I’m not sure that knowing how to get on the Internet and use a computer is the same thing as having one’s head replaced by one. I could be wrong about this, but I think I’m smarter and better-informed because of my computer…and I have a lot more access to a broader range of opinions and views.

    And I thought that’s what we wanted in our leaders.

    One MNB user wrote:

    Adaptability in a rapidly changing world will need to be an essential trait of the next president. The obvious immediacy of the internet as a world resource has to be a tool that is well understood and employed. It is difficult to imagine someone leading the most powerful nation in the world, let alone directing the global economy/marketplace, doing otherwise.

    Another MNB user wrote:

    To me this says more about his style of learning and evolving. Either a person, company, country or world is learning and growing or they are devolving. Could this mean he is out of touch?

    I don't think McCain is any more out of touch with the real world than Barack Obama. I just think they view the world differently.

    I will say that I view this issue a little differently than Michael does. I won’t make my choice in November based on whether or not someone knows how to use a computer, but I do think that being conversant with this technology is important…and says something about mindset.

    BTW…I was interested to read in the new Vanity Fair an article by Gail Sheehy about the failed Hillary Clinton campaign that Bill Clinton does not use email and does not know how to use a Blackberry.

    Which only tells us that technological ignorance exists on both sides of the aisle.

    Got a number of emails this week responding to the stories about Whole Foods’ quarterly earnings, which were 30 percent lower than during the same period a year ago. Many of them were along the lines of a short note written by MNB user Bob Reynolds:

    It is gratifying to see arrogance so richly rewarded.

    In a piece about identity theft at the nation’s gas pumps, I made a comment about how now people have to worry about two kinds of thieves when pumping gas – identity thieves and oil company executives.

    MNB user Bill Auld wrote:

    Your comment about Oil Companies "reaping huge profits on the backs of our citizens" is not justified. The Oil Companies, like all other US Businesses, including Grocery Store Chains are in business to make a profit. The oil companies you cite are making about a 10% margin. Google makes about a 25% margin. I don't hear you claiming that Google is making too much money??!!

    Also, the biggest benefactor of Oil profits? Look no further than the US Government.

    • Exxon/Mobile - Last Quarter Profits: $11 Billion
    • US Taxes Paid by Exxon/Mobile: $32 Billion

    MNB user Kevin Tryon wrote:

    Give it a rest. Blame the oil company execs if you will, OR buy some shares and enjoy reaping record profits on the backs of US citizens yourself. It’s called a market economy.

    I don't know. I think if I have to choose sides these days, I’m very comfortable being antagonistic toward the major oil companies.

    Responding to yesterday’s piece about the indictments of 11 people for stealing more than 41 million credit and debit card numbers – with the accused coming from places such as Estonia, the Ukraine, China and Belarus, as well as the US – one MNB user wrote:

    This is the price we pay for globalizing and opening up the worldwide web….I expect more of this in the future, especially if the Democrats gain the White House….My grandma was right to keep all her money in her mattress….

    I should point out here that the MNB user who wrote this email was not, in fact, named John McCain.


    KC's View: