retail news in context, analysis with attitude

Published on: November 24, 2009

by Michael Sansolo

In the universe of MorningNewsBeat columns, it’s pretty obvious that we find lessons in nearly everything. Sports, history, television shows, songs and, of course, movies. The one area that always seems a struggle is politics. Unlike all the other areas, where metaphors and lessons seem to work, politics seems to elicit polarizing views that instantly set off portions of our audience, in the process killing any hope of discussion.

For instance, think about Sarah Palin. At the mere reading of her name, some of you have lost sight of this column through involuntary eye-rolling, while others are waiting to see if I dare take a cheap shot at her. Instead, I want to propose looking at the picture a different way and how that might help us view customers and (at times) politicians.

Smithsonian magazine ran an article last month that should be mandatory reading for business people, politicians and more. Titled “Training Cops to See,” it told the story of a training program offered to the New York City Police Department by an art historian at the Metropolitan Museum of Art. The historian leads the cops through the galleries with the challenge of looking at paintings for only their details. In short, they are viewing the art as if they are examining a crime scene. The cops are told never to use the words “obviously” or “clearly” because things aren’t always that way. In addition, they are forbidden from reading the labels on the pictures.

And it’s a real challenge. The cops, like most of us, look at the entire picture too quickly and at times make a judgment too soon. But as they move through the gallery, they start learning the skill and suddenly the works of art provide untold information and perspective.

As the art historian and the cops explain, the exercise pays almost immediate benefits back on the streets. The cops find they become better able to provide precise descriptions of suspects, which helps them and fellow officers in difficult situations. Even the searching of a crime scene improves because of their new perspective. And it is all because they stop making judgments before they look at details.

Now thinking of Sarah Palin (or any politician for that matter) you can do almost the same. Some of you love everything about her; some hate it all. Yet probably very few have actually looked at all the details. We look at the whole picture first and make all our judgments even though we know that in the details we will all probably find things we like and dislike no matter our overall feelings about the former governor. (Sadly, I’d argue, our entire political structure has fallen into this trap.)

That’s a long metaphorical trip to finding a new way to look at shoppers, at stores and products. So much of our viewpoint is based on experience, just like the cops on the street or in the museum. But at times that view can obscure the details in which we might find opportunities or mistakes. It might blind us to details that need attention and rethinking because we can’t even see them.

One last question: when I mentioned Sarah Palin how many of you thought: working woman, five kids, one grandkid - great sales potential on convenience items and bulk products? I’m betting not many did that.

Sometimes you need to see forests and sometimes you need to see trees. Either way, you need to be looking.

Happy Thanksgiving.

Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com .

Published on: November 24, 2009

There are reports this morning that two Chinese citizens implicated in a tainted milk powder scandal have been put to death.

The contaminated milk is said to have been responsible for the deaths of six children and more than 300,000 cases of related illness. In this case, the powder was tainted with melamine as way of boosting the appearance of protein in the milk, which increased the price of the product.

Published on: November 24, 2009

The New York Times has a page-one story this morning about the online battle between Walmart and Amazon:

“In what is emerging as one of the main story lines of the 2009 post-recession shopping season, the two heavyweight retailers are waging an online price war that is spreading through product areas like books, movies, toys and electronics,” the Times writes.

“The tussle began last month as a relatively trivial but highly public back-and-forth over which company had the lowest prices on the most anticipated new books and DVDs this fall. By last week, it had spread to select video game consoles, mobile phones, even to the humble Easy Bake Oven, a 45-year-old toy from Hasbro that usually heats up small cakes, not tensions between billion-dollar corporations.”

The story notes that Amazon’s annual sales are just a fraction of Walmart’s - $20 billion a year in sales compared to $405 billion - and that their online customer demographics are different. But that almost doesn’t matter, because the fight “is all about the future.”

The Times writes, “Rapid expansion by each company, as well as profound shifts in the high-tech landscape, now make direct confrontation inevitable. Though online shopping accounts for only around 4 percent of retail sales, that percentage is growing quickly. E-commerce did not suffer as deeply as regular retailing during the economic malaise, and it is recovering faster than in-store shopping. People are also shopping on smartphones and from their HDTVs.”

The story continues, “For rivals both real and putative, Amazon is expanding its slice of the retail pie at what must be an alarming rate. In the third quarter of this year, regular retail sales dipped by about 4 percent and e-commerce over all was flat. But Amazon sales shot up 24 percent, sending its shares soaring.

“More important for Wal-Mart, sales in Amazon’s electronics and general merchandise business - which competes directly with much of the selection in Wal-Mart stores - were up 44 percent.”

And so, experts conclude, Walmart has no choice but to force a series of direct confrontations.

Published on: November 24, 2009

Bloomberg reports that Whole Foods is adjusting its employee health care program, offering premium discounts ranging from 20 to 30 percent depending on people’s blood pressure, cholesterol levels, body-mass index and whether they smoke or not.

CEO John Mackey, who has been a public advocate of a health care system that rewards individual responsibility, says that the program is voluntary and will begin in January 2010.

According to the story, “For employees considered high-risk because of obesity, type 2 diabetes or other health issues, Whole Foods already offers a retreat-style immersion program ... Whole Foods pays health care premiums for its 40,000 full- time employees, or more than 75 percent of its work force ... Part-time employees pay their own premiums.”

Published on: November 24, 2009

The Los Angeles Times reports on a new study from NPD Group saying that “the number of people visiting restaurants has plunged for four consecutive quarters,” which means that “restaurant owners are worried that tight corporate entertainment budgets, cash-conscious consumers and greater competition from price-cutting supermarkets will make for another dreary Christmas.”

Restaurants at every end of the spectrum are working overtime to combat this trend - using social media, aggressive advertising and price cuts to get people in their front doors.

According to the story, “Research firm NPD doesn't expect an industry turnaround any time soon. ‘It is not a pretty picture,’ said Bonnie Riggs, a restaurant industry analyst with NPD in Chicago. ‘Consumers have pulled back so much.’ “In 33 years of tracking restaurant traffic, NPD ‘has never seen this type of a weakness for this long of a period,’ Riggs said. ‘The industry really has its work cut out for it’.”

Published on: November 24, 2009

• The Wall Street Journal reports on a bidding war between Peet’s Coffee & Tea and Green Mountain Roasters for Diedrich Coffee Inc.

According to the story, “Peet's, which sells premium coffee and tea, is pursuing Diedrich to get a foothold in the fast-growing market for single-serve coffee, in the form of K-Cups, which are plastic pods used in Keurig coffee machines. The machines, and ones similar to it, have exploded in popularity in recent years, as they offer a convenient way to brew a cup of coffee from a choice of multiple flavors ... The Keurig technology, however, is owned by Green Mountain, which appears to want to bring more of the brands licensed to sell K-Cups under its wings. Last week, Green Mountain bought a separate coffee brand, Timothy's Coffee of the World Inc., for $157 million.”

Published on: November 24, 2009

...will return.

Published on: November 24, 2009

In Monday Night Football action, the Tennessee Titans defeated the Houston Texans 20-17.

Published on: November 24, 2009

• Campbell Soup Co. says that its first quarter profit was up 17 percent to $304 million, on Q1 sales that were down 2.1 percent to $2.2 billion.

• Tyson Foods said that its Q4 loss was $455 million, compared to a profit of $48 million during the same period a year ago. Sales for the quarter was up to $7.21 billion from $7.20 billion a year earlier.