retail news in context, analysis with attitude

Published on: June 25, 2009

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Hi, I’m Kevin Coupe, and this is MorningNewsBeat Radio, available on iTunes and brought to you this week by Webstop, experts in the art of retail website design.

The last few weeks has seen two major smart phone introductions – the new Palm Pre, and new iPhone 3GS, the sales of which have suggested that maybe the recession isn’t quite as bad as we thought…or at least that when it comes to setting priorities, new smart phones tend to be fairly high on the list.

Not surprisingly, there have been tons of stories about these phones and the ways in which they have evolved and will continue to shape and define the ways in which we communicate. Fast Company talked about how they began as a technological marvel and evolved quickly into a social phenomenon, allowing people to engage with each other and with the broader universe in ways that might not have been imagined just a few years ago.

The New York Times put it this way: “The smart phone story is as much about consumer sociology and psychology as it is about chips, bytes and bandwidth. For a growing swath of the population, the social expectation is that one is nearly always connected and reachable almost instantly via e-mail. The smart phone, analysts say, is the instrument of that connectedness — and thus worth the cost, both as a communications tool and as a status symbol.”

So what does that tell us? I think it suggests that while smart phones are far from being the dominant mobile technology at the moment, we’re certainly headed in that direction.

Just in the last few weeks, applications have become available for the iPhone that include the ability to access Whole Foods’ recipe database, and the “Good Guide,” which allows me to identify a wide variety of products as being safe, healthy and/or green. I’ve got Cellfire on my iPhone, which allows me to access online coupons, CardStar which allows me to keep all my frequent shopper card numbers and bar codes on my iPhone, and Kraft’s iFood Assistant, which allows me to download recipes, create shopping lists and even watch cooking videos on my phone. And that doesn’t even include al the other stuff I have on my iPhone – everything from applications that allow me to identify constellations in the sky above me to applications that allow me to buy books and movie tickets and make restaurant reservations and even check out where the closest and cleanest public restrooms happen to be. I can send Twitter messages from the road, see how the Mets are doing, and even read books because it has been synched up with my Kindle.

I’ve even seen and tested technology being used by MorningNewsBeat sponsor MyWebGrocer on the Google Android phone that allows customers to use their smart phone to scan a bar code and see who is selling a specific product within a given radius and what they are selling it for. It is amazing and almost limitless. I do this for a living and it takes my breath away.

Oh, yeah. I also can make phone calls and send email, too. And listen to music and watch movies and TV shows on the built-in iPod.

I tell you all this not because I want to dazzle you with my technological expertise. Far from it – it continually amazes me how long it takes me to figure out each new application compared to my kids, who seem to be able to pick up my iPhone and instantly understand how to make everything work.

(For so many of us, smart phones seem like something out of “Star Trek.” In many ways, they seem far superior and more sophisticated than the supposedly futuristic communicators used by William Shatner and Leonard Nimoy in the original series.)

No, I tell you this because if you are not using a smart phone and are not turning your research and development people loose on the idea of adapting smart phone technology for your business purposes – both B2B and B2C – then you are making a serious mistake.

More and more I find myself wondering why retailers with which I do business do not have an iPhone application that will allow me to research and buy products without having to sit down at a laptop or desktop computer. And that’s me – a fairly unsophisticated guy when it comes to this stuff. Think about my kids and your kids and all the kids out there for whom this is all second nature.

It will be the retailers and manufacturers that embrace this technology, either through their own internal initiatives or by aligning with technology and content providers who can help do the R&D for them, that will be the winners in the long run.

Look at the smart phone sales numbers. Look at the enormous number of applications that have been invented just for the iPhone in just the past couple of years. And then look at recent history and how fast things have changed and then think about how fast things are likely to change in the near future.

We cannot run analog businesses in a high-def digital world. Not and succeed. Not and be relevant. Not and survive.

For MorningNewsBeat Radio, I’m Kevin Coupe.

Published on: June 25, 2009

Arkansas Business reports that there’s a new Walmart Neighborhood Market open in the Pinnacle Hills section of Rogers, Arkansas – a 36,000 square foot store that is described as “a testing ground for some product offerings and concepts new to the Neighborhood Market brand. The layout is similar to the newest layout of some of the retailer's Supercenters, with lower shelves, wider aisles and brighter lighting.”

According to the story, the store features an “NM Café” that brews Starbucks coffee, a gelato service counter, a bakery with artisan breads, and a variety of environmentally friendly features.

The store is said to be appropriate to the local community, which is fairly up-market; it also is just a few miles away from Walmart headquarters in Bentonville. However, Arkansas Business notes that there have been a number of foreclosures in the area surrounding the new Neighborhood Market.

Published on: June 25, 2009

BrandWeek reports on a new study by Miller Zell suggesting that concerns about the impact of the recession on in-store marketing efforts may be overstated.

There has been a lot of discussion in the food industry about how the nation’s economic difficulties have prompted more consumers than ever to make up lists before going to the store – with companies agreeing that if their products are not on the list, they’re probably not going to be bought.

The Miller Zell study, however, “found shoppers are making brand decisions 60 percent of the time after entering the store,” according to the BrandWeek story. “More shoppers (70 percent) say they are engaged by end-of-aisle signage than by merchandising displays (62 percent), department signage (58 percent), shelf strips (55 percent) or shelf blades (50 percent).”

BrandWeek also writes that the survey suggests that “more shoppers (32 percent) rated in-store signage as ‘very effective’ than they did out-of-store advertising, including television ads, billboards and other media (27 percent). Compared to older shoppers, though, Generation Y consumers (born between 1982 and 2003) were more likely to regard both indoor and outdoor advertising as ‘very effective’.”

Published on: June 25, 2009

The Private Label Manufacturers Association (PLMA) is out with a new study that addresses the question of whether people will return to national brand buying habits when the recession ends. The results of the study:

• More than 30 percent of consumers confirm that they are now buying more store brands than a year ago.

• Nearly three fourths say that the recession is important to them in deciding whether to purchase store brands.

• Over 90 percent say that will continue buying store brands when the economy improves.

Published on: June 25, 2009

The Wall Street Journal reports that Netflix CEO and founder Reed Hastings is planning for the day when his company’s method of delivering DVDs is both irrelevant and obsolete, and is trying to shift his business model to one that emphasizes the downloading and streaming of videos from the Internet.

The story points out that Netflix has been allowing its subscribers to stream selected video from the Internet since 2007, a system that has the advantage of being much more cost effective than snail-mail delivery. And more than 20 percent of Netflix’s 10.3 million subscribers reportedly use the streaming service.

According to the Journal, “Companies across the entertainment and technology landscape are struggling with how to profit from Internet video. There's still significant risk that Netflix could falter or lose out to another company that figures out how to do it first. And having picked his battle, the intense former engineer may risk missing other growth opportunities: Mr. Hastings hasn't yet expanded internationally or mounted a direct challenge to kiosks, such as Coinstar Inc.'s Redbox, that let customers pick up $1-a-night DVD rentals.”

Perhaps the biggest obstacle facing the Netflix strategy is resistance from Hollywood studios to online streaming within the same time frame that it releases DVDs, as it worries about already diminishing DVD revenues.

Published on: June 25, 2009

The Cincinnati Enquirer reports that “with a growing number of Americans cutting back on eating out, major grocery chains like Kroger and Meijer are going head to head by sponsoring deals on food and tickets at Reds games at Great American Ball Park.”

Call it a marketing tool or call it a “customer appreciation tool” (which is how Meijer characterizes it), offering discount tickets and family-friendly packages to the ballgame seems to be a way for retailers to take some of the sting out of the recession. And it isn’t a bad deal for baseball either, with a number of teams suffering attendance declines because the economic downturn has reduced the amount of money that people have to spend on tickets.

Published on: June 25, 2009

The Denver Post reports that unionized Safeway employees have rejected the retailer’s latest contract offer and have re-authorized a strike that was first authorized on May 8.

No date has been set for a strike, and new negotiations have not yet been scheduled.

Published on: June 25, 2009

• The Austin American-Statesman reports that “H-E-B is on track this summer to become Austin's first grocery store and its largest retailer to use solar power … The project includes a 2,500-square-foot solar array on the building's roof, due to be completed next month. The project will cost about $195,000. Store officials said the array will produce about 31,000 kilowatt-hours of renewable energy yearly — a small fraction of the store's overall power usage.”

• The Wall Street Journal reports that Best Buy plans to open 40 mobile phone stores in an effort to “quintuple its share of the US mobile phone market to 15 percent.” The goal, according to the story, is to stress technology that enables connectivity…and to fight off what it sees as increased competition from Walmart and Amazon.com in this category.

• The Chicago Tribune reports that Walgreen plans to test diabetes treatment programs in some of its in-store health clinics, saying that Type 2 diabetes is a prime driver of the nation’s high health care costs. The exact nature of the programs, and the locations where the pilot program will be offered, have not yet been disclosed.

Published on: June 25, 2009

• MarketWatch reports that Supervalu is saying that is first quarter same-store sales will be down three percent and that its Q1 earnings will be “substantially below” analysts’ estimates. Full first quarter results are to be reported on July 28.

According to the story, “To drive more store traffic, Supervalu has been boosting promotional activity, such as meals that cost $15 for families of four -- dubbed ‘415.’ It also has jacked up its investment in store-brand products, which sell for less than brand-name foods.”

• Rite Aid Corp. reported a first quarter loss of $98.4 million, an improvement over the $156.6 million loss reported during the same period a year ago. Revenue was down one percent to $6.53 billion, on same-store sales that were up 0.6 percent.

Published on: June 25, 2009

MNB took note yesterday of an Ad Week report that Interpublic Group has completed new research showing that “the recession is having a far greater impact on consumer spending habits than previous downturns, and that some behavior patterns, as well as brand perceptions, will be permanently changed … 75 percent of consumers have altered their purchasing behavior over the past year, in some cases trading down and in others making wholesale lifestyle changes.”

The report states: “"Consumers are spending more time researching products and gathering opinions from other people before purchasing. As a result, people are thinking more deeply about products, raising huge opportunities for brands to develop and strengthen their relationship with consumers."

My comment:

It seems to me that while there is a lot of debate about how the recession is going to shape people’s attitudes and lives, one of the things that is largely being ignored is that the recession may be empowering people to do a better job of shaping their own lives – albeit under somewhat more modest circumstances than they might have just a few years ago.

The empowered consumer may be scary to a lot of retailers and manufacturers, but in fact this can be very good for business – at least, for the businesses that embrace an ongoing conversation with the people who patronize their stores. Sure, consumers are going to be more demanding and more informed, and this raises the bar for business. But when you clear the bar, the connection between store and shopper has the potential to be far more profound and, dare we say it, loyal in both directions.

And that’s good for business.

One MNB user responded:

Kevin, I agree with the point you are making…but…your source research, conducted by Interpublic Group, was based on 3200 interviews in the U.S., Europe and China…that’s 3200 interviews representing 1.8 billion people. I know the research reveals what we want to hear and intuitively feel is going on…but you need to question the source - agenda, sample size, understand the questions asked and how the responses were weighted to represent 1.8 billion people in three very different cultures.

Good point.




On the subject of Alice.com, a new pure-play e-commerce site for household goods, MNB user Rhonda Williams wrote:

I’ve signed up for Alice.com and will be comparing prices with Walmart, where I usually buy my household goods and many non-perishables. I price checked a few grocery items (snack bars and cereal) – two items were approximately $1 per item more than Walmart and they didn’t carry the third. So far, it doesn’t look good for Alice.com. However, if other items are more competitively priced, I might give them a try as I do not enjoy shopping at my local Walmart where customer service is non existent.

Another MNB user wrote:

Wow, hadn’t heard of this yet. Could make a major impact on e-commerce, if the consumer does in fact experience a significant cost savings. I can’t wait to read the dialogue from the MNB community about this, as CPG placement and such usually heats people up…




More email about CLEAR going out of business, as MNB user Mike Bach wrote:

What might help TSA understand the importance of what CLEAR was trying to do would be to make both TSA & all government officials subject to the same travel checkpoint requirements those of us who pay the airline taxes are when they need to go into secured space at an airport. Waiting 45 minutes (minimum) to clear the checkpoint at Orlando or Cincinnati (for example) might change their minds as to the importance of a two/three tiered checkpoint structure to fast-track those of us willing to give up a lot of personal information in exchange for the right to get to our gate faster. Even deadheading (or pass riding) airline personnel wear their uniforms to clear the TSA checkpoints (since they can go to the front of the line) then change back into “civilian clothing” for their flights. One really has to wonder if there isn’t a “job security” motivation by TSA to not work more closely with CLEAR to fast track those fliers who have live their lives right every day…





We had an email yesterday from someone bemoaning the fact that as people’s methods of gathering information and watching entertainment programs change, cherished memories – like of Howdy Doody – will vanish. “What is this world coming to?” he asked.

My response:

It continues to spin, that’s all. Nothing to fear. Lots to celebrate. The glass is half full, my friend. Not half empty.

To which MNB user Kevin Nolan channeled George Carlin:

There is a third option to the “glass is half full” analogy. Maybe, just maybe the Glass is twice as big as it needs to be!

I get the joke, but I don't agree with the sentiment.

I’m one of those people who believes that the glass can't be too big or too full. (I also believe that there can’t be too many chips on a chocolate chip cookie, which is a constant source of debate between Mrs. Content Guy and me.)

Published on: June 25, 2009

There was an extraordinary story the other day that the city of Bozeman, Montana, is asking people who are applying for jobs there to provide their user names and passwords for any Internet social networking groups to which they belong.

Now, the city government says that this is only a request, not a requirement…and that the information will only be used to verify application information.

This strikes me as more than just an absurd invasion of privacy. It is a classic example of a government that is completely out of touch with the way people live their lives in the 21st century.

I have no problem with any potential employer using Google or any other search engine to see what job applicants are up to; that’s legitimate and in the public domain. If you’re not willing to stand by the things you do in public online forums, you probably shouldn't be saying or doing them. (If I ever have to look for a job, I’m going to be the easiest guy in the world to research. My feeling is that if they don't like MNB, they won’t like me…so it’ll actually be a great filter.)

But providing user names and passwords? What a crock.




Stop the presses. (Or whatever the Internet equivalent of that time-worn phrase is.)

HealthDay News reports that a new study by the Queens College of the City University of New York, based on data compiled from a National Institutes of Health/AARP database, has come up with a radical new theory:

If you maintain a healthy diet, you are likely to live longer.

Yikes.




My wine of the week is a lovely red – the 2003 Solinero Syrah from Sicily, which is a medium-bodied wine that my son Brian gave me for Father’s Day. (Great kid with excellent taste. Must have raised him right.) It is soft and elegant and has just a hint of spice – a wonderful bottle of wine.




I finally saw “The Curious Case of Benjamin Button” the other night, watching it on DVD with my 15-year-old daughter. I wasn't all that enthused about the concept, which is why I missed it in theaters, but found the movie to be oddly affecting as it traces the strange life of a person who is born old and ages backwards. The production values are excellent, as are the performances by Brad Pitt in the title role and Cate Blanchett as the woman he loves…if I have one complaint it is that Benjamin becomes a kind of Forrest Gump-like observer through much of the story, an observer rather than the protagonist. Not my favorite movie of those that came out last year, but very good.




BTW…Can it possibly be 20 years since “Field of Dreams,” “When Harry Met Sally,” and “Indiana Jones and the Last Crusade” all came out?




One last movie note. I can't wait to see “Public Enemies,” starring Johnny Depp…because in the background of one pivotal scene there ought to be a young actor named David Coupe (unless he ends up on the cutting room floor). Look for him in the big dining room scene – he’s the one with the rakish smile.




There was a story in the New York Times the other day about how the Australian wine industry has fallen on hard times – as its sales and popularity during the past decade, it found itself selling more wine for less, which made it hard for many wineries to survive and created a worldwide image of Australian wines as not being as high-quality as those from other countries. Because of the popularity of high-volume low-cost Australian Shiraz, the industry allowed itself to be defined by one type of wine and one region…and that doesn’t bode well for the rest of the industry there.

And all I could think to myself was how the Australian wine industry also has been at the forefront of moving toward screw-tops and away from cork.

Now, I’ve long been a proponent of the cork as being emblematic of the romance that wine represents, though I’ve been coming around lately as more and more really good wines come in screw-top bottles.

But I wonder if the relationship between Australia’s lowest-common-denominator-wine image problems and the use of screw-top bottles is more than just a coincidence.

Just wondering…

Published on: June 25, 2009

As has become a tradition at this time of year, I’m taking the week adjacent to the Fourth of July off…it is the beginning of the summer, the news cycle tends to be a little slow, and at this point in the year I can use the break.

My little holiday is going to start tomorrow (I’m getting a head start), and I’m planning to return on Monday, July 6.

Have a great weekend…a great week…and I’ll see you soon.

Sláinte!!

Livin' for the weekend,
Jumpin' off the deep end,
With just enough money to buy
A license to chill
And I believe I will…

Published on: June 25, 2009

A special report by Michael Sansolo

WASHINGTON -- There’s little reason to care about exactly where a specific sheep is currently grazing in Norway. Except thanks to RFID chips combined with global tracking devices, Norwegian consumers can care if they wish. Because when they shop for lamb a quick cell phone photo of the product’s data bar will lead them to recipes, information about the sheep and a map of the specific sheep’s grazing pattern.

The convergence of technology, traceability and food safety was widely discussed at the food supply briefing held Wednesday on Capitol Hill by IBM. Featured speakers from industry, consumer groups and government talked about the erosion of consumer confidence due to the food safety problems and the inexact nature of recalls and prevention. Dean Acheson, associate commissioner for food at the FDA, explained that a lack of precision on product source causes food safety recalls that are wider and
more damaging to business and confidence than necessary. Dr. Harold Schmitz, chief science officer at Mars, summed it up simply: “Nobody wins in a food safety situation.”

Other speakers detailed how improved use of technology - like the case in Norway - could help the food system more quickly find a problem, minimize its impact and alert the right suppliers and consumers quicker and more efficiently.

Caroline Smith DeWaal, food safety director at the Center for Science in the Public Interest (CSPI), said there is reason to believe that legislation currently in front of the US House could finally produce real change to the tracking system and food safety overall.

IBM is out with a survey, by the way, saying that:

• 55 percent of respondents say they trust manufacturers to appropriately handle food product recalls, down from 64 percent two years ago.

• 72 percent say they trust the store in which they shop to properly handle recalls.

• 60 percent of consumers say they are more concerned about the safety of the food they eat, and 57 percent say that they have stopped purchasing certain foods because of food safety concerns.

• 83 percent of respondents say that they could recall a food product that had been recalled (peanut butter was the big winner/loser in this category), and 74 percent of consumers said that they want more data about products are grown and manufactured.