retail news in context, analysis with attitude

Published on: June 17, 2009

by Kate McMahon

Content Guy’s Note: Kate’s BlogBeat is a new ingredient in the MorningNewsBeat stew – a regular look at what people are talking about on the Internet, and how it impacts the conduct of business by retailers and manufacturers.


Call it “the Della debacle” – the latest example of blogosphere outrage forcing a company to quickly remedy an online marketing blunder.

It is still mind-boggling that Dell Computer created the Della in question, a short-lived area on Dell’s website entitled “What Do Women Want In A Laptop?” Well, gee, gals. How about pretty pastel cases and nifty “tech tips” on using your new laptop to count carbs and calories, search recipes, watch fitness videos and shop for vintage clothing?

I am not making this up. (I probably couldn’t make this up.) The pitch for Dell’s Inspiron Mini 10 netbooks was straight out of the Ozzie and Harriet 1950’s…and the online response – mostly from women, but also from men – was fast and furious. It condemned the Della campaign as “demeaning,” “sexist,” and “insulting.” In Twitter talk, it was described as “the new website 4 women who r 2 stupid 2 go 2 sell.com.”

For anyone who thinks that the criticism was confined to a small network of angry bloggers, or that the comments vanished into cyberspace, think again. That is why this case drives home three key lessons about the power of online networking…lessons that apply to retailers, manufacturers and service providers everywhere.

Lesson # 1: Speed. Dell had no sooner launched Della than the backlash hit. Give Dell some credit for damage control; the computer maker quickly deleted any references to Della on its site, removed the photo of the three women wearing sweaters in colors that matched their laptops (no joke), and toned down the offensive “tech tips.” Dell added, “There was obviously no intent to stereotype or otherwise offend anyone.” And, “There’s less pink. We are listening.”

Lesson # 2: Control. If you open your site to feedback and blog posts, you cannot control the substance nor hit “delete” after 24 hours. Some of the comments will sting, and all of them will stick. Even today, dell’s own site Direct2Dell, is still home to Della feedback such as “epic fail” and “truly offensive.” And then there are the rest of the blogs, including one post proposing “Dello” for men with “tech tips” on how to stream porn and read sports scores on the small screen.

Lesson # 3: Connection. Online social networking has changed the relationship between companies and consumers, and this holds true whether you are selling laptops, laundry detergent, blue jeans or coffee beans. The days of launching a product with traditional media and awaiting the results are over. Consumers are no longer content to just vote with their wallets. They want a dialogue, a connection, a relationship.

What do I think women want in a laptop? Well, I would suggest to Dell that we want one that is fast, reliable and well-priced. Just like a man.

And they can keep the pink.

Kate McMahon can be reached via email at kate@morningnewsbeat.com .

Published on: June 17, 2009

The New York Times reports on new research from The NPD Group suggesting that the eating habits of US children may be improving, with less consumption of burgers, fries, chicken nuggets and soft drinks and greater consumption of soup, yogurt, fruit, grilled chicken and milk. Even pizza seems to be affected, with growth in consumption flattening as pasta consumption grows.

According to the story, the research is seen as the next chapter in a story that seems to be getting better – it was just a year ago that studies suggested that childhood obesity levels were leveling off in the US.

In part, the economy is seen as having as role in the shift, with kids having less money to spend on junk food. There also have been ad campaigns like Subway’s “$5 foot long” promotion that give kids a way to spend less money on more nutritious foods.

The conclusion reached by most analysts, according to the Times, is that kids simply are willing to eat more nutritious foods when they are made available to them. Moves by chains such as McDonald’s and Wendy’s to offer healthier foods have been rewarded as patrons have embraced the healthier options.

Published on: June 17, 2009

The Arkansas Democrat-Gazette reports that Walmart has posted its 2009 Global Sustainability Report on its website. Among the conclusions:

• “A goal of improving fuel efficiency in its truck fleet by 25 percent by October 2008 led to a 38 percent improvement, and a goal of selling 100 million energy-efficient compact fluorescent light bulbs by the end of 2007 resulted in 137 million sold.”

• “A goal of, in effect, banning use of 20 chemicals in products led, instead, to a screening tool that the company says provides a more comprehensive way to identify potential risks to consumers.”

• “From February 2008 to January 2009, 57 percent of the waste from its stores was ‘redirected’ so that it did not end up in landfills. The original goal of a 25 percent solid waste reduction by October 2008 was set aside, the report says, while Wal-Mart worked with its waste haulers to develop a method of measuring its waste stream.

According to the story, “Wal-Mart acknowledged in its report that it has not met its goal of reducing its so-called ‘carbon footprint,’ the amount of greenhouse gases emitted into the atmosphere as a result of its operations. While the company has improved the energy efficiency of its operations, it also has continued to grow in the United States and globally, resulting in greater energy consumption.”

Despite the improvements, Walmart remains under fire for personnel policies that critics say are anti-union and exploit workers; the company also faces accusations that it does not adequately police the policies of its offshore suppliers.

Published on: June 17, 2009

The Denver Business Journal reports that unionized King Soopers employees there have overwhelmingly rejected a management contract proposal, objecting to cuts in pension benefits and a proposed increase in the retirement age.

The defeat only comes from Denver-area workers. Ballots by employees in Colorado Springs, Longmont, Boulder and Pueblo have not yet been counted.

The two sides now are scheduled to return to the bargaining table and continue negotiating.

As the Business Journal reports, “About 17,000 union workers from the area’s three largest grocery chains — Albertsons, King Soopers and Safeway — have been in negotiations with the grocers since April 9 on new five-year contracts.

“Safeway workers have voted to extend their contract until June 26, which Albertsons and King Soopers employees currently are working without contracts.”

Published on: June 17, 2009

• Tesco’s US division, Fresh & Easy Neighborhood Markets, announced yesterday that it plans to open four stores in July, including the first of the company’s units to be located in Pasadena, Oxnard and Santa Barbara counties.

Fresh & Easy currently operates 120 stores in California, Arizona and Nevada.

• Fresh & Easy also announced yesterday that it “will be introducing over 1,000 new products to existing stores over the summer. Customers should expect to see more Fresh & Easy brand products, larger pack sizes, more national brands, as well as exclusive new lines of national brand quality products at unbelievably low prices.”

Published on: June 17, 2009

Trade secrets and proprietary data that was provided under protest to Whole Foods by a number of its competitors – including Kroger, Delhaize, New Seasons Markets, HEB, Ahold and Harris Teeter – back during the days when the organic/natural food chain was fighting with the Federal Trade Commission (FTC) over its acquisition of Wild Oats now could be made public as a result of another, unconnected lawsuit.

Whole Foods wanted the data, and its demand was supported by the courts, because it said the company said it needed the information to prove that the acquisition was not hurting consumers and was not anti-competitive; while the judge supported the Whole Foods demand, he also said that the information would be safeguarded so as not to hurt the competitors that provided it. The FTC and Whole Foods subsequently resolved their differences.

Now, however, a class action lawsuit has been filed against Whole Foods, charging the company with engaging in anti-competitive pricing after it acquired Wild Oats…and the suit asks that the trade secrets and competitive data be provided in order to prove its case.

The chains involved are fighting the request, saying there has been no demonstrated need for the information.

Published on: June 17, 2009

• Dow Jones reports that Walmart’s planned relaunch of its Great Value private label brand is taking longer than expected…with most of the products expected to be on store shelves by the end of July. A May-June time frame had been projected.

Published on: June 17, 2009

CNN.com carries a Cooking Light piece that addresses the growth of the organic food movement and how cash strapped consumers ought to be making relevant buying decisions in the category.

The piece notes that on the one hand, organic sales continue to generate double-digit growth – the category generated close to $28 billion in sales last year, up from $1 billion in 1990. And while there is a growing supply for organics, there also is a growing demand and increased regulation that has fueled adjunct categories: “Some farmers are shifting to what is called ‘beyond organic’ to practice sustainable farming, build a local clientele for foods raised in season, and provide a living wage to workers. Also, some farmers may follow organic principles yet forgo USDA certification. That's one reason why you sometimes find uncertified organic goods at your local grocery or farmers' market.”

And, the story notes, there remains considerable debate about whether organic products are necessarily more healthy than traditionally created equivalent items.

The piece makes three basic recommendations for how shoppers should make organic shopping decisions:

• “Prioritize your purchases. Some types of produce contain more pesticides than others. Invest your organic dollars in traditionally pesticide-heavy produce instead of low-pesticide foods.”

• “Think local and seasonal. Locally grown, seasonal produce may have a lower environmental cost than organic items that use fossil fuels and energy to travel long distances in shipping. If possible, consider local and organic produce.”

• “Keep good nutrition in mind. When buying meats, dairy, or processed foods, factor the item's whole nutritional package first, then consider the method by which it was produced. Minimizing sodium and saturated fat has proven health benefits, such as helping to reduce risk of cardiovascular disease.”

Published on: June 17, 2009

The Wall Street Journal reports on how economic problems have affected the retail landscape in Detroit.

According to the story, “Borders Inc. was founded 40 miles away, but the only one of the chain's bookstores here closed this month. And Starbucks Corp., famous for saturating U.S. cities with its storefronts, has only four left in this city of 900,000 after closures last summer.

“There was a time early in the decade when downtown Detroit was sprouting new cafes and shops, and residents began to nurture hopes of a rebound. But lately, they are finding it increasingly tough to buy groceries or get a cup of fresh-roast coffee as the 11th largest U.S. city struggles with the recession and the auto-industry crisis.

“No national grocery chain operates a store here. A lack of outlets that sell fresh produce and meat has led the United Food and Commercial Workers union and a community group to think about building a grocery store of its own … The last two mainstream chain groceries closed in 2007, when The Great Atlantic & Pacific Tea Co. sold most of the southeast Michigan stores in its Farmer Jack chain to Kroger Corp., which declined to purchase the chain's two Detroit locations, causing them to close.

“A 2007 study found that more than half of Detroit residents had to travel twice as far to reach a grocery store than a fast-food outlet or convenience store.”

However, there are some bright spots: “Family Dollar Stores Inc. has opened 25 outlets since 2003. A handful of independent coffee shops and a newly opened Tim Horton's franchise cater to workers downtown. Discount grocer Aldi Inc. opened stores in the city in 2001 and 2005. A spokeswoman said the chain is ‘very bullish’ on Detroit.”

Still, the challenges are daunting. The Journal writes, “The city's 22.8% unemployment rate is among the highest in the U.S.; 30% of residents are on food stamps.”

Published on: June 17, 2009

• The Chicago Sun Times reports that Walgreens has hired two Walmart executives and one Kraft Foods executive for its merchandising team.

Shannon Petree and Eddie Frail are moving from Bentonville to Walgreens, taking the posts of general merchandise manager for beauty and personal care, and general merchandise manager for seasonal and general merchandise, respectively. Petree most recently was senior buyer in the beauty department for Walmart, and Frail was general merchandise manager for seasonal, hard lines and sundries.

Maurice "Moe" Alkemade, who most recently has been running Kraft’s Target business, will become Walgreens’ general merchandise manager for private brands.

Published on: June 17, 2009

• Smithfield Foods reports that its lost $78.8 million during the fourth quarter, compared to a $2.4 million profit during the same period a year ago. Sales were down one percent to $2.85 billion.

Published on: June 17, 2009

Yesterday, MNB reported that The Nielsen Co. has named James Kilts, the former CEO of Gillette who helped to engineer that company’s acquisition by Procter & Gamble, to be its new chairman. But an MNB user points out that Kilts, in fact, was named chairman of the company’s supervisory board.

Sorry for the error.

Published on: June 17, 2009

…will return.