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    Published on: October 22, 2008

    Dow Jones has a story about the gradual shift toward electronic, paperless coupons, which, though not yet widespread, seem to be on the cusp of broader acceptance. “This year,” Dow Jones writes, “more programs are being been tested and introduced, causing some in the industry to suspect that 2009 will be a big year for the technologies.”

    According to the story, “Dwindling ranks of newspaper subscribers are already seeking out deals online. But instead of printing them out, coupons that are registered on a shopper's grocery loyalty card waste less paper and help companies cut down on coupon fraud. The convenience quotient is upped when shoppers can find a coupon on their cell phone while shopping in the aisles. Often, the only paper you'll use is a print out of the coupons you've selected … Both new delivery methods may be more effective with younger shoppers, those in the industry say. The younger the consumer, the more likely they want a paperless option, according to a survey conducted earlier this year by ICOM Information & Communications.”

    KC's View:
    The generational point is a good one, and could be a marker for the acceptance level for paperless/electronic coupons. And I tend to think that programs in which people will print out electronic coupons at home are almost obsolete already … especially when viewed from the point of view of a younger generation that has no use for paper.

    And it certainly is true that the economic doldrums of the moment are working in favor of coupon usage … though whether we’re going to start seeing enormous jumps in coupon usage is questionable at best. I tend to think that companies that stress low prices without coupons – think Aldi, Save-A-Lot, Costco, Walmart – will do better than those that require people to bring coupons with them.

    The key to making the shift to paperless coupons work, I maintain, is a greater level of targeting than currently is being used. Without significant targeting, most coupons will simply be seen as clutter.

    In the end, without targeting, it won’t matter whether a coupon is paper or electronic. A lot of us simply throw out those useless FSIs that show up in the papers each Sunday, and we’ll also file useless electronic coupons in the trash bins on our computers.

    Junk is junk.

    Published on: October 22, 2008

    The Financial Times reports this morning that Walmart plans to use a global sustainability summit in Beijing to inform its suppliers that it will use its market power to raise standards throughout its supply chain – especially in China, where Walmart does a significant amount of sourcing, but where concerns about product safety have emerged against a series of scandals.

    Walmart reportedly has more than 60,000 suppliers worldwide and sources roughly $9 billion worth of goods directly from China each year.

    According to the story, Walmart CEO Lee Scott will “set out a range of objectives for the company’s supply chain and for its Chinese retail operations, which will include targets for the reduction of water and energy usage, reductions in packaging, and commitments to develop more sustainable products … The retailer will also be promoting a new ‘Green Supply Chain Initiative’ being led by the Environmental Defense Fund (EDF), a non-profit group that has worked with Wal-Mart on sustainability issues in the US. The project is aimed at working with individual suppliers on energy saving and other issues, and is expected to extend to other US and European retailers, covering another 20,000 factories.”

    Among the industry leaders attending the summit, according to FT, are “AG Lafley, chief executive of Procter & Gamble, Fred Smith, head of FedEx, and Yuanqing Yang, chairman of Lenovo, who are keen to adopt a similar approach. Executives from Kimberly-Clark, Coca-Cola and Newell Rubbermaid will also be on hand for the most ambitious private sector drive yet to reduce waste and pollution in China’s export-focused manufacturing industries.”

    The New York Times writes this morning that “the changes signal a move on the part of Wal-Mart, the world’s largest retailer, away from intermittent transactions with many suppliers toward longer-term arrangements with a smaller group of manufacturers. Wal-Mart is betting that using its buying power this way can help keep prices low even as it keeps a closer eye on its suppliers.

    “Wal-Mart, long criticized for its treatment of workers in the United States and its ostensible willingness to overlook violations abroad, has in recent years offered a series of environmental and labor initiatives … By next year, Wal-Mart will start keeping close track of the factories from which its products originate, even if they pass through many hands. By 2012, Wal-Mart will require suppliers to source 95 percent of their production from factories that receive the highest ratings in audits of environmental and social practices. The agreement includes a ban on child and forced labor and pay below the local minimum wage.”

    Reuters notes that CEO Scott conceded that these changes could mean smaller margins for Walmart, but that he was willing to accept that possibility.

    KC's View:
    I read stories like these in the Financial Times and the New York Times and I cannot help but get the feeling that while governments dither, react to the crisis of the day and put out fires, companies like Walmart and Procter & Gamble are simply moving ahead to deal with real priorities in tangible ways.

    Published on: October 22, 2008

    The Ventura County Star reports that “solar power has come to the Pavilions grocery store off Tapo Canyon Road in Simi Valley, marking the first of parent company Safeway's solar-powered stores in Southern California.”

    According to the story, “the system would cover about 35 percent of the store's energy needs during peak hours, and balance out to about 15 percent to 18 percent of power annually … Over the 20- to 25-year life of the solar panels, the company hopes to save about 10 percent or at worst break-even.” Safeway says that the extent to which it will save money depends on energy legislation and the future cost of energy.

    KC's View:
    Such installations aren’t just about saving money. They’re also about perception, and about establishing an image in the minds of shoppers.

    Fuel prices are coming down right now, but the worst thing we could do as a culture is start to put less of a priority on fuel economy and conservation. We have to keep moving forward on this issue, being relentless about developing new technologies … which seems to be what Safeway is doing here.

    Published on: October 22, 2008

    There seem to be a number of coffee related stories in the news this morning…

    • The National Coffee Association of the USA has come out with its 2008 National Coffee Drinking Trends Summary, revealing that 17% of the adult population consumed a gourmet coffee beverage on a daily basis in 2008, compared with 14% in 2007. In addition, the study says that 61 percent of coffee drinks say that it improves their mental focus, with 49 percent of coffee drinkers saying they consume it because they perceive it as being a healthy beverage.

    Consumption of cups per day by consumers age 18-24 continued to trend higher in 2008. Young adults who drank coffee consumed an average of 3.2 cups per day as compared with 3.1 in 2007, a significant increase over 2005’s level of 2.5 cups per day. Adults 25-59 led the upswing with 19% of daily gourmet coffee drinkers, an increase of six percentage points from 2007.

    • Starbucks announced that it has created a new Thanksgiving blend designed to go with the traditional holiday meal. The new coffee, which represents the first time that Starbucks has created a Thanksgiving blend, is a combination of beans from Sumatra and Guatemala and was created in collaboration with Seattle chef Tom Douglas.

    • Dunkin’ Donuts has begun a new advertising campaign that is hyping a blind taste test study that it says concludes that there is a real preference among consumers for its coffee when compared to Starbucks. The study says that 54.2% preferred Dunkin' Donuts coffee, compared to 39.3% who chose Starbucks.
    KC's View:
    Just FYI…we’re expecting some big coffee news to be broken here on MNB any day now. Stay tuned.

    Published on: October 22, 2008

    USA Today reports this morning that Walmart is seeing some shifts in consumer behavior because of the economic crisis, noting that a percentage of shoppers is “waiting until they get their paychecks to buy even the most basic necessities.”

    According to the story, “Personal financial security, a recent poll revealed, was the No 1 concern for 80 percent of Wal-Mart shoppers, up from 65 percent a few months ago, said Eduardo Castro-Wright, president and chief executive of the Wal-Mart's U.S. operations.”

    The story also notes that “U.S. consumers have been cutting spending for months due to falling home values, job losses, higher prices for basics like food and fuel, and a global credit crisis.” In addition, “credit used as a form of payment at Wal-Mart is falling and that the decline is expected to reach into the double digits this year.”

    The paper reports that “Wal-Mart has seen a rise in purchases of staples instead of discretionary items. Shoppers have more then doubled purchases of private-label items, eschewing name brands. Castro-Wright said, however, that Wal-Mart has no immediate plans to change the stores' merchandise mix to take advantage of the trend … Some shoppers aren't coming to the stores as often so they don't have to drive as much. Others, who may be unemployed, are coming more frequently to buy a few items when they have money in their pockets, he said.

    “And more sales are showing up around paydays. Wal-Mart has seen a 2.5% increase in sales at the start and the middle of the month, when workers are paid, compared with four months ago.”

    KC's View:

    Published on: October 22, 2008

    Chain drugstore chain Walgreen Co. said yesterday that it has reached an agreement to acquire McKesson Corp.’s specialty pharmacy division, which provides consultations and prescriptions for patients with chronic and expensive-to-treat maladies, and which the Associated Press notes is the highest-growth area in the prescription sales business.

    Terms of the deal were not disclosed.

    KC's View:

    Published on: October 22, 2008

    The Chicago Tribune reports that while pomegranate has become a superstar in food stores, identified in the media and by consumers as a source of numerous health benefits, some medical professionals think the advantages are overstated.

    According to the story, “The fruit's potent mix of antioxidants has been shown to interfere with a range of drugs, including cholesterol medications such as Crestor and Lipitor. It also may interfere with some high-blood-pressure medications, causing an unsafe drop in blood pressure. ”

    However, Pom Wonderful, a major U.S. pomegranate producer, says such concerns are overblown, the Tribune writes.

    KC's View:

    Published on: October 22, 2008

    • MillerCoors announced that it is discontinuing the production and marketing of malt liquor beverage Zima, saying that there is diminished consumer interest in the category.

    • The Chicago Tribune reports that Sears Holdings plans to close shutter eight Kmart and four Sears stores, saying that units are underperforming with no hope of revival.

    KC's View:

    Published on: October 22, 2008

    This is the kind of customer service story that I find so interesting, contributed by MNB user Tracy Krogstie:

    Long-time reader, first-time writer … I’ve long awaited the moment where I’d have a tale to share, that correlated somehow to one of many core passions of yours … whether it was a good wine, a sturdy canvas bag, an unforgettable movie, your fascinating family experiences, the list goes on.

    When my beau called me this weekend, and asked me to stop by his sister’s house to bring enough coffee and ‘pan dulce’ for half a dozen people, I knew I had plenty of options, at least when it came to the coffee part. I had but a short amount of time to accomplish my ‘task’ so I had to think, and act fast.

    I ran in and out of our favorite Mexican bakery with the same ease as always, and was happy to see freshly baked bread and cupcakes awaiting me. I speak enough Spanish to read or write a short novel, so communication is never an issue; however, freshness, friendliness, and fastness are always of the essence.

    Now for the coffee. When I think coffee, which is a rarity, I think Dunkin’ Donuts. Solely because of you, Kevin, Starbuck’s is a close second. So - - in an attempt to impress my beau and his sister, who will hopefully be my sister-in-law someday, I had to listen to my second instinct. I remembered that near their house, there was a nice Starbucks. I would head inside, tell him what I wanted, and if I wasn’t feeling the vibe, there was a Dunkin’ Donuts right next door.

    My interaction with the young American Starbucks barista went something like this:

    TK: I’m looking for some type of box of coffee that would be enough for about 6 people
    SB: Well, how much time do you have (I guess I even looked like I was in a hurry)
    TK: Not much
    SB: Can you specify?
    TK: A few minutes, why, how much time will it take?
    SB: Probably about 5 to 7 minutes, I’d have to make a new batch…(incomprehensible coffee terminology)…do you think a gallon would be enough?
    TK: I have no idea. I guess so. It's for 6 people. How much will it be, I guess that’s another factor
    SB: (incomprehensible – I don’t know if it was the way he said it, or if I just didn’t care at this point because of all the questions I had already been asked)
    TK: What does that include?
    SB: Cups, stirrers, lids, half-and-half, sugar (basically everything I would need and more)
    TK: Thanks…I might be back (which was a lie)

    I hopped in my car and about 30 seconds later, I pulled up and walked into the Dunkin’ Donuts, not even sure if either of the gentlemen behind the counter would understand me in English, or Spanish, for that matter:

    TK: I’m looking for some type of box of coffee that would be enough for about 6 people
    DD: (pointing to a box that literally said Box O’ Joe 10 cups) Right here
    TK: Perfect – how long will it take
    DD: Just a minute or two
    TK: How much is it?
    DD: (he gave me an exact figure – then the exact figure with tax)
    TK: Great. Can I get…(they had already started preparing the cups, lids, sugar, etc)

    I know, I know - I’m a cavewoman when it comes to coffee. But I do like to consider myself a connoisseur in customer service and marketing, which includes reading people. It shouldn’t matter whether you’re gauging their time allotment, their subject matter knowledge, or their status in life…we should really just get back to the basics. Making your customer feel smart, savvy, and satisfied.


    Thanks for sharing. I’m with you a thousand percent when it comes to priorities.

    The folks at Starbucks should be concerned about stories like these. After all, they want Starbucks to be the “third place.” It works against the business if people start to think about Starbucks as the last place…




    Responding to yesterday’s piece about how a bunch of college students have created a new beer with the same health benefits as red wine, MNB user Rob Johnson wrote:

    Kevin, I agree with you completely, MillerCoors should sign these kids up. Oh the joys of watching a decade of commercials that feature taste great, less filling and now guilt free.

    And another MNB user chimed in:

    As a parent with two kids in college, I laughed out loud when I read the line about the kids being under age so unable to actually test the products. As I tell my kids – I was born at night, but not last night.




    MNB reported yesterday that Walmart is rolling out a new series of videos to be shown on its various websites that will give the two major presidential candidates – Democratic candidate Sen. Barack Obama and Republican candidate Sen. John McCain – a chance to air their views on key issues. The company said that the videos will be available to the 136 million shoppers and 1.4 million employees who regularly peruse Walmart’s e-commerce and corporate websites.

    My comment: Anything that can get out the vote is a good thing. Kudos to Walmart for contributing to the democratic process.

    MNB user Steve Panza wrote:

    I wonder if Obama will be talking about his support of the Employee Free Choice Act at Wal-Mart?

    One MNB user thought I had it all wrong:

    Sometimes you really crack me up Kevin. When you can make a statement about Walmart doing the democratic thing by showing the views of each candidate it scares me. The last thing Walmart cares about is being democratic. They are doing this bit because they don't want Obama to win as he is totally pro union and in favor of secret ballots. Please don't be so naive. Walmart will probably never be organized but they will have more heartaches with Obama than McCain. If you recall Obama sent a letter to the head of Tesco urging them to negotiate with the unions. The last thing Walmart wants is this guy in the White House. Please don't embarrass yourself anymore.

    And another MNB user thought that Walmart was making a tactical error:

    Getting voters out to vote themselves freebies is NOT necessarily a good thing. Spread the wealth sounds like a Socialist plan to me!!

    First of all, I’ve embarrassed myself plenty of times in the past and probably will do so plenty of times in the future. Goes with the territory.

    But I don't think this was one of those times.

    I’m not naïve. When I wrote that commentary, I was completely aware of the fact that an argument can be made that Walmart, under the guise of fairness and civic-mindedness, actually is trying to level the playing field between McCain and Obama at a time when Obama has an enormous financial advantage and apparently greater momentum.

    But that’s okay.

    I’ve raised my kids to believe that one of the most important things they can do as citizens is to vote – that it is both responsibility and privilege.

    I have not raised them to believe that voting is a sacred duty only when they agree with me. (Though it is a relief that, at the moment, we seem to be on the same page.)

    But I believe that democracy only works when everybody votes. We want 100 percent voter participation, no matter who the voters are or what their motivations happen to be.

    I am not embarrassed by thinking that voting is important, and that Walmart is to be lauded for creating awareness of political issues – regardless of whether one agrees with Walmart politically or not.


    KC's View: