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    Published on: November 4, 2009

    by Kate McMahon

    If you had any doubts about social networking becoming mainstream and reaching beyond cool products and a hip, young audience, look no further than the laundry detergent aisle.

    We’re talking about Wisk, the stodgy stain remover I remember my mother using in the 1970s while the annoying “Ring Around the Collar” jingle blared from the TV console. This week the brand is formally introducing Wisk-It, a Facebook application that promises to help eliminate embarrassing, objectionable or unwanted photos and “clean up your image.” The app essentially allows you to find and identify photos of yourself on a friend’s Facebook page and then ask that they be deleted through Wisk-It.

    For many, this is not a vanity play, but rather a way to “wash away” (as Wisk puts it) any unflattering images (i.e. the limbo contest at your high school reunion) that a current or potential employer may find less than professional. Or a photo you may not want family or friends to see.

    Wisk’s foray into Facebook apps, a savvy move for a soap, brought to mind a recent survey which showed that U.S. executives have come to value social media very highly but still have fears about its impact on the workplace.

    The study found that 81 percent saw social media as being useful for both brand-building and enhancing customer or client relationships, 69 percent see it as a valuable recruitment tool, 64 percent think it is useful for customer service, and 46 percent thought it improved employee morale.

    But more than half of those who did not use social media said they did not know enough about it, 40 percent worried about confidentiality and security and 37 percent had concerns about employee productivity. A worldwide study earlier this year found that 50 to 60 percent of the firms surveyed blocked access to social networking sites in the workplace due to similar concerns.

    I’m sure some of these same employers felt the same way about the telephone, not to mention the cell phone.

    The latest report prompted several insightful blog postings which echo the MNB take on social networking: If you don’t embrace the consumer interaction opportunities on the internet such Facebook, Twitter and YouTube, you risk losing your competitive edge.

    Said one post: “Social media and viral marketing are a part of the consumer experience and most companies can bet that if they aren't participating, their competitors most certainly will be.”

    Another blogger wrote: “They will get it, they'll have no choice. Social media is fast becoming basic communication between brands and their audience/customers. We're going to see a tipping point where brands that won't open up are going to have to work very hard to keep up with those who do.”

    Also, social networking keeps a company in the loop and able to respond quickly, to both positive and negative reactions. Just look at role Twitter has played in everything from Iranian elections to a marketing miss-step by Motrin.

    While it’s way too soon to assess if the Wisk campaign will take off and increase sales, we can find similarities in the social networking success stories out there today: Starbucks, Whole Foods, Zappos, Ford, Coca-Cola, Dunkin’ Donuts, Pringles, to name a few. A future column will delve into why they succeed, and what other retailers, manufacturers and service providers can take away from their social media presences.

    You can reach Kate McMahon via email at kate@morningnewsbeat.com .
    KC's View:

    Published on: November 4, 2009

    The Grocery Manufacturers Association (GMA) is out with a new study entitled “Shopper Marketing 3.0: Unleashing the Next Wave of  Value,” which suggests that “nearly half of food and beverage category shoppers and almost 60 percent of health/beauty and household goods category shoppers purchase their preferred brand even when a less-expensive alternative is available, with many shoppers using coupons and price promotions simply to justify purchasing preferred brands.”

    At the same time, private brand marketer Daymon Worldwide has released a study called “The Maturing US Recession & Implications for Private Brands,” which says that “Private Brands are shaping up to be a focal point of retail strategy and a key differentiator for retailers. This is true not only from the perspective of retailer performance, but in the minds of consumers as well, with smart shoppers looking for the best Private Brands.”

    While on the face of it the studies inevitably focus on different approaches to marketing to consumers at this particular moment in history - GMA on national brands, Daymon on private brands - the two approaches actually have something in common, endorsing the notion that a strong brand identity, properly marketed and communicated, can be a differential advantage in a time of continuing

    “This research shows us that even in a recession, more often than not, shoppers are making purchase decisions based on factors other than price,” says Brian Lynch, director of sales and sales promotion for GMA. “This key finding reinforces the notion that there is significant opportunity to influence shopper behavior by having the right messages in place along the entire path to purchase.”

    “For Private Brand retailers and manufacturers,” says Alex Miller, president of Daymon, “the challenge is to fully grasp this opportunity and deal with the recession fact-set even after the recession. There is much to be done to meet this challenge. Private Brand programs are not monolithic, and the best approaches and solutions will not be, either.”

    The GMA study, which was co-sponsored by Booz & Company, suggested that enormous opportunities exist. “Most CPG manufacturers have not yet aligned shopper marketing initiatives with other marketing capabilities that influence shoppers along the entire path to purchase such as trade promotions, relationship marketing and brand advertising,” said Matthew Egol, partner in Booz’s Consumer, Media & Digital practice.  “The lack of alignment leads to disconnected marketing messages, wasted spending, and missed opportunities to drive purchase.  For shopper marketing to fulfill its potential, CPG companies must manage it as a strategic capability that is integrated throughout the marketing value chain.”

    And a similar note was sounded by Daymon, which said that “for Private Brands, the prospect of a protracted recovery and a post-recession with recession-like traits presents opportunities and challenges.” Miller says that “for Private Brand retailers and manufacturers, the challenge is to fully grasp this opportunity and deal with the recession fact-set even after the recession. There is much to be done to meet this challenge. Private Brand programs are not monolithic, and the best approaches and solutions will not be, either.”
    KC's View:
    Both arguments are in favor of a strong brand message and a coordinated, integrated message that is relevant to shoppers. In some cases, this will mean that the national brand message will resonate. In others, the private brand will be the compelling choice.

    Complacency and mediocrity will be the ultimate losers.

    Published on: November 4, 2009

    The Nielsen Company is out with new research saying that “as consumers return home for meals, the perishable department (bakery, fresh meat, deli and produce) is growing faster, leading non-grocery channels to take notice.” The report also urges retailers to get even more aggressive in marketing their advantages, using cross-merchandising, health and wellness, and online technologies to engage more effectively with shoppers.

    Among the highlights of the report:

    • “Perishable departments are becoming the most productive departments at retail:  household deli, bakery and fresh meat and seafood sales all on the rise.”

    • “While nearly half (46%) of U.S. households say they are eating out less, value-priced meals at retail are posting double digit increases in supermarkets, supercenters and club stores.”

    • “Supermarkets hold a dominant 70 percent market share in meat and seafood.  Key factors fueling sales: promotions.   Fifty-one percent of meat and seafood is purchased on sale, and prominent circular placement noted by 41 percent of shoppers.”

    • “Alternative channels making strong push for perishables. Supercenters, in particular, have done a good job with perishable formats, growing both the purchase size and frequency of purchases.  This is especially true for meat and seafood departments.”

    • “While supermarkets hold 50 percent of the deli business, smaller formats (convenience stores, delicatessens, etc) that offer "in and out" convenience are posting the biggest threat to supermarkets.”
    KC's View:
    The broader message of the Nielsen report is that while the recession has been good to retailers that have take advantage of the opportunity to market their wares aggressively to shoppers, it is not a permanent advantage...and certainly not an unassailable one.

    My only suggestion to Nielsen is along the same lines of one that I have been making to retailers for years: eliminate the use of the word “perishables,” which is used consistently in its report. Perishables rot. “Fresh foods” is a far more positive word that emphasizes the possibilities of products rather than their ignominious end.

    Published on: November 4, 2009

    Consumer Reports says in its December issue that the chemical Bisphenol A (BPA) - controversial because while it has been used in food containers, especially baby cups, for years even though there is some evidence that it may be linked to a variety of cancers, diabetes and heart disease - has been found in 19 name brand foods, including canned foods, including soups, juice, tuna, and green beans that were packaged in containers with BPA.

    As a result, the magazine’s parent organization, Consumers Union, has continued its call for manufacturers and government agencies to eliminate the use of BPA in all materials that come into contact with food.

    According to the story, “Our tests convey a snapshot of the marketplace and do not provide a general conclusion about the levels of BPA in any particular brand or type of product we tested. Levels in the same products purchased at different times or places or in other brands of similar foods might differ from our test results. Nevertheless, our findings are notable because they indicate the extent of potential exposure: Consumers eating just one serving of the canned vegetable soup we tested would get about double what the FDA now considers typical average dietary daily exposure.”

    As reported earlier this week, the National Institutes of Health (NIH) will spend $30 million to to study the safety of BPA, while the US Food and Drug Administration (FDA) is reconsidering its previous draft assessment saying that BPA does not pose a health hazard when people are exposed to small amounts; it is scheduled to release its own BPA reassessment later this month.

    However, there is an impressive lineup of organizations maintaining that BPA is safe when consumed in small amounts, including the European Food Safety Authority (EFSA) Authority, Health Canada, the World Health Organization, Health and Consumer Protection Directorate of the European Commission; the European Chemical Bureau of the European Union; the European Scientific Panel on Food Additives, Flavorings, Processing Aids, and Materials in Contact with Food; and the Japanese National Institute of Advanced Industrial Science and Technology, as well as the Grocery Manufacturers Association (GMA) and the American Chemistry Council.
    KC's View:

    Published on: November 4, 2009

    Reuters reports that Forrester Research is projecting that “online retail sales in November and December to reach $44.7 billion this year, up from $41.4 billion a year ago, providing a bright spot to a retail industry that could see total sales fall.”

    One of the things that online options are expected to offer shoppers is the ability to trade down in terms of cost. “"We expect this behavior to continue this holiday season because, given the current state of the U.S. economy, 24 percent of online holiday buyers intend to try lower-cost alternatives to the brands they typically purchase," Forrester says in its report.

    Holiday sales in the brick-and-mortar space are expected to be stagnant at best this year, with the National Retail Federation (NRF) projecting that there could be a one percent drop in sales, as opposed to the eight percent increase being projected for online sales.
    KC's View:

    Published on: November 4, 2009

    • Walmart is continuing its price slashing ways, announcing that it will sell 12-pound Thanksgiving turkeys for 40 cents a pound, or about one-third of the average price charged last year for holiday turkeys.

    • The US District Court in Las Vegas has given final approval to a settlement agreement by Walmart that will distribute as much as $85 million to current and former employees who had sued the company for denying them rest breaks and requiring them to work off the clock. The settlement is part of a larger $640 million settlement of such claims reached 10 months ago between the retailer and plaintiff workers.
    KC's View:

    Published on: November 4, 2009

    The Seattle Times reports that the National Labor Relations Board (NLRB) has upheld three out of four administrative law judge decisions that Starbucks had appealed to the body.

    According to the story, “The decision involved stores in New York, where the judge said work rules were unfairly imposed on employees who supported the union. The coffee chain was ordered to give back jobs to three former workers and compensate them for lost earnings. The company also must post notices informing employees of their labor-organizing rights.”

    The NLRB did support Starbucks’ position that one particular employee should not be given back her job; the company said it is exploring the possibility of an appeal on the cases it lost.
    KC's View:

    Published on: November 4, 2009

    Bloomberg reports that Peet’s Coffee & Tea will acquire Diedrich Coffee for about $213 million in cash and stock. The goal of the acquisition is to allow Peet’s, which has almost 200 retail locations around the country, to expand its wholesale business...especially in the supermarket sector.
    KC's View:

    Published on: November 4, 2009

    • Kraft Foods yesterday said that its third quarter earnings were $826 million, down from $1.37 billion during the same period a year ago. Q3 sales were $9.8 billion, down from $10.4 billion a year ago.
    KC's View:

    Published on: November 4, 2009

    MNB yesterday took note of a New York Times report that “public health experts worried about the spread of the H1N1 flu are raising concerns that workers who deal with the public, like waiters and child care employees, are jeopardizing others by reporting to work sick because they do not get paid for days they miss for illness.”

    According to the Timespiece, “Tens of millions of people, or about 40 percent of all private-sector workers, do not receive paid sick days, and as a result many of them cannot afford to stay home when they are ill. Even some companies that provide paid sick days have policies that make it difficult to call in sick, like giving demerits each time someone misses a day.”

    On MNB user wrote:

    I was at a local Thriftway…at the deli counter I ordered a toasted Panini sandwich. While the Panini was toasting, the person helping me, while she was standing in front of the toaster sneezed (because of a cold). She covered her mouth with her arm…but she stood right in front of the toaster, without turning her head. What little sneeze that wasn’t caught on her sleeve, went directly onto the front of the toaster oven.

    I promptly said, “forget about the sandwich…I do not want it now. “ And, she promptly replied back, “But, I was wearing gloves.” I stared blankly into her eyes and slowly turned and walked out of the store.





    Regarding the new E. coli outbreak apparently connected to ground beef products distributed by Fairbanks Farms of Ashville, New York and sold in the northeastern US, has sickened more than two dozen people and caused at least one fatality, MNB user Lisa Malmarowski wrote:

    Cheap food... cheap food... cheap food... America's love affair with cheap food is a major factor in these outbreaks - not directly of course, but our demand for cheap food puts pressure on farms to be bigger and more efficient, processing to be bigger and more efficient and corners to be cut.

    People need to start asking where there meat comes from and demanding answers from the suppliers and retailers. And yes America, that may mean meat and other fresh products cost more.   For all of the meat we sell in our stores, we know the story of where it's from. We don't offer mystery ground meat from multiple sources and yes, our meat and poultry costs more. 

    Until retailers suck it up and make this a priority, we will continue to see these sad and fatal outbreaks. Our modern food system is really messed up.

    It's not just the growers, the USDA or our processors that are at fault, it's us.





    Regarding the ongoing price wars between Walmart and Amazon, one MNB user wrote:

    When I was running a store, I had the experience of watching Wal-Mart construct a 210,000 square foot store right next door to me.   This would have been about 16 years ago as they were just getting their supercenter format rolling in the Upper Midwest.    I was not going to be intimidated by them and made a point of putting price comparison signs (along with the proper documentation) in the grocery aisles and in the departments around the store.   Within a day or two the Wal-Mart store manager sought me out and told me that it was his company policy to respond to price comparisons in the following manner:
     
    First time-------undercut the item price by one cent.
     
    Second time-----undercut the item price by 20%.
     
    Third time------undercut the entire section by 20%.

    He suggested to me that it would be better for all concerned if I no longer hung price comparison signs in my store.    (Now there's an ethical and legal conversation for you!)   After conferring with my superiors, we decided to drop the direct price comparisons…….but I devoted the rest of my time competing against them to out-promote and out-merchandise them every way I could.   Eventually, we got all of our business back and then some as other competitors in that market closed.    I don't know if that "policy" is still in effect today, but it can certainly serve as a deterrent to others who aren't nearly as big as Amazon.





    I got criticized the other day for suggesting that, as a consumer, I want to know where retailers stand on certain issues - like a call by a farmworkers advocacy group for Publix to stop doing business with growers that are guilty of abusing workers.

    MNB user Philip Bradley wrote:

    I sympathize with your wanting to know Publix' position on the labor dispute.

    Fortunately, our co-op can take a socially-conscious position on this kind of issue, as one of our principles is that we want our vendors (and their employees) to make enough money so that they can stay in business. Case-in-point: the current dairy crisis, where the market cost for milk has plummeted. However, the price for organic milk sold at the Wedge Coop has not changed, despite the fact that dairy farmers are taking a bath selling to most retail outlets.

    I'm sorry you don't have a food co-op conveniently located near your home!


    Me, too.

    However, not everyone agreed. One MNB user wrote:

    Abuses?  These farm workers get to live in Florida and work outside.  Wow, live in Florida, I can't afford to live in Florida.  I can only afford to visit Florida.  They get to work outside, enjoy the weather, and pay no state income tax.  I'm stuck up here in the Wisconsin tundra pushing a mouse around all day.  Now these workers want even more.  Give an inch, they will take a mile.  Did you notice what their cure all to their problems were?  More money.  Send them a check KC.  They will probably whack them into their swimming pools with their polo mallets and have a good laugh at your expense.

    I try not to paint with too broad a brush in this space, and to keep an open mind about the attitudes and motivations of the people who write to MNB...especially the people who disagree with me.

    But I can’t help myself. I have to say it. In eight years of doing MNB, this is one of the most moronic emails I have ever received.
    KC's View: