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    Published on: October 21, 2010

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    Hi, I’m Kevin Coupe and this a Thursday Eye-Opener on MNB Radio, available on iTunes and brought to you by Webstop, experts in the art of retail website design.

    Fascinating news from Apple this week. No, not the fact that they have a new and improved MacBook Air, an improved operating system called Lion, and a bunch of new software packages. (Talk about innovating through recessionary times!)

    No, here is the piece of news that intrigued me most of all.

    More than 74.5 million people went into one of the more than 300 Apple Stores around the world...during the last quarter alone.

    That’s more than four times as many people who went to either Disney World or Disneyland during all of 2009.

    Now, you may say, that’s apples and oranges. (In this case, that’s actually pretty close to literally accurate.)

    But the thing is, most of those people didn’t buy something when they went to the Apple Store. They were entertained, maybe even educated, they got hands-on experience with cool technology, and they got immersed in the Apple experience ... all of which makes them more likely to buy Apple when they’re ready to invest in technology.

    That’s extraordinary. The Apple Store is, in fact, far more than a store. It has evolved into a cultural touchstone for a broad array of people. It is a branded category killer that cannot be touched. (Microsoft said it was going to open a chain of stores, but they’ve sort of fallen off the radar...testament, I think, to how hard it is to do what Apple has done.)

    The lesson to other retailers can be found by comparing the Apple Store to most other retail experiences.

    I was talking to a guy the other day in the food industry who was telling me about a great food store he’d been into that had a wonderful fresh food power alley...but once you turn the corner and go into the rest of the store, it instantly devolves into same old-same old. No differentiation. No clear-cut reason to shop there rather than elsewhere. And in so many ways, all the good will built up in the first minutes spent in the store are diffused in the harsh light of aisles and aisles and shelves and shelves of most of the same grocery everybody else carries.

    And this in a store hyped as being fairly innovative.

    That’s no way to do business in the current competitive environment. Every category, every display, hell, even every product has to be thought of in terms of how you highlight your differences and advantages. You can’t afford to risk being the same as everybody else anywhere in the store.

    That’s the Apple lesson. Forget the oranges.

    For MNB Radio, I’m Kevin Coupe...with an audio Eye-Opener for a Thursday morning.
    KC's View:

    Published on: October 21, 2010

    KING-5 News reports on a new University of Washington study saying that people who shop at upscale stores such as Whole Foods, PCC and Metropolitan Market tend to be less obese than those who who shop at places like Safeway, Albertsons and QFC.

    The study suggests that there may be two reasons for this curious finding:

    People who shop at the upscale stores buy less food because it tends to be more expensive, and they don’t equate quantity with quality.

    People who shop at the upscale stores tend to be better educated, and so have a more contextual understanding of the relationship between health, exercise and food consumption. In other words, they’re smarter and act like it.
    KC's View:
    I get this...but I also think that the great opportunity is a consistent, persistent and extended strategy that not only looks to educate shoppers, but treat them as intelligent and discerning. It is creating shopping experiences that do not cater to the lowest common denominator. Such approaches are not solely the property of upscale retailers. They just do it better.

    Published on: October 21, 2010

    The Wall Street Journal reports that one of the major impediments to using vending machines to sell healthier snacks, including fruits and vegetables, is getting a machine to deliver an unbruised banana.

    But the existence of a problem just means that somebody has the opportunity to come up with a solution. As the Journal writes, “The Wittern Group Inc., one of the biggest makers of vending machines, and fruit and vegetable marketer Fresh Del Monte Produce Inc. say they are tackling this problem with a new machine specifically designed to dispense whole bananas and fresh-cut fruits and vegetables.

    “At Wittern's headquarters in a suburb of Des Moines, refrigeration engineer Jerry Parle shows off the new device, its red and orange exterior festooned with Del Monte logos and pictures of whole pineapples and other fruit. The machine - which went on the market earlier this year - has two temperature zones. The top is loaded with bananas kept at about 57 degrees. The bottom zone - kept at about 34 degrees - holds packages of fresh-cut fruit and vegetables. Wittern says having the two zones helps more than double the shelf-life of bananas, from two or three days to five days or a week ... Future models will include special elevators that will pluck fruit and vegetables from their display spirals and gently lower them to the bin.”
    KC's View:
    Innovation lives.

    What these kinds of machines do, of course, is make it easier for a wide variety of retail venues to compete with traditional supermarkets. Which is why it is so important for such stores to find non-traditional ways to market and merchandise their wares throughout the store.

    The worst thing any store or chain can do in such an environment is work under the assumption that because people have always bought their produce at supermarkets, they’ll always do so. That’s the kind of assumption that leads to marketing irrelevance.

    Published on: October 21, 2010

    The Los Angeles Times reports that “after building a successful business by shipping millions of DVDs every month in the mail, Netflix Inc. expects by the end of this year to start letting subscribers give up the shiny discs.

    “In prepared remarks for a conference call discussing the company's strong third-quarter earnings, Chief Executive Reed Hastings said Netflix was looking to offer a new lower-cost plan through which subscribers could access movies and TV shows solely online ... Netflix will still offer users its current subscription plans, all of which include Internet streaming and DVDs through the mail.

    “The move comes as Netflix for the first time will deliver more hours of content via the Internet than on DVDs. In addition, Netflix is now spending more on content for its streaming service than for discs.”
    KC's View:
    This is such an important example for all retailers to mimic. Think about it. Netflix became successful because it created a disruptive business model that managed, in fairly short order, to marginalize a company (Blockbuster) and a business model (video stores) that for a time seemed ubiquitous and forever.

    But even as that happened, Netflix looked to the next disruptive technologies - downloading and streaming - to see what it needed to do next to remain relevant. There is no blind loyalty to its “traditional” way of doing business ... just adherence to the simple competitive principle that it is in the business of getting entertainment products into the hands of people, whatever the delivery system.

    This is such an important lesson...but one, I fear, that too many retailers ignore.

    Published on: October 21, 2010

    The Nation reports that the Coalition of Immokalee Workers (CIW), an farm worker advocacy organization, plans to target the US supermarket industry for reforms that it feels are necessary.

    According to the story, “the coalition's focus falls squarely on the $550 billion supermarket industry. With the exception of Whole Foods, which signed an agreement with the CIW nearly two years ago, the US supermarket industry plays an active role in farmworker exploitation. Publix, Ahold, Kroger and Trader Joe's all pack a particularly heavy punch given their market power in the produce industry and all of them are refusing to address the same workplace exploitation issues which its corporate brethren have made peace with.”

    The goal of the campaign is to get retailers to agree to pay a penny per pound more for tomatoes, with that money used to pay farmworkers who are said to be vastly under-compensated for their efforts.
    KC's View:

    Published on: October 21, 2010

    • Published reports say that Tesco has identified a third book that it plans to produce as a straight-to-DVD movie that will be available exclusively to its shoppers.

    “Tiger Eyes,” a young adult novel by Judy Blume, will be financed as a motion picture by Tesco’s Amber Entertainment division; the story concerns a young girl coping with the death of her father and its implications.

    Rob Salter, Tesco’s category director for entertainment, said in a prepared statement: "By financing the adaption of top selling novels to feature films, such as ‘Tiger Eyes,’ Tesco brings a new and exciting way for our customers to see films that might not have been made in the conventional way. This means we can deliver more value for our customers. Judy Blume is already known to our customers so we felt she was a good match for Tesco and the 20 million or so people that shop in our stores every week."
    KC's View:
    What interesting about this that Tesco is reaching out to a demographic than the one that probably was attracted to its earlier productions, which included the adaptation of a Jackie Collins novel called “Paris Connections.” This one is a younger customer...but one who likely will be the center of the target for Tesco is just a few years.

    Smart marketing. Get ‘em while they’re young.

    Published on: October 21, 2010

    In the UK, the Telegraph reports that the European Food Safety Authority (EFSA) has ruled that probiotics, which make a series of health claims, cannot scientifically prove that they “either boost the immune system or aid digestive health.”

    According to the story, “EFSA's independent panel of scientists found that the claims that these products could strengthen the body's defences, improve immune function and reduce gut problems were either so general as to be inadmissible, or could not be shown to have the claimed effect ... EFSA's ruling is being challenged by the industry, but if these appeals fail the companies will no longer be allowed to market the foods as aiding digestion or helping the immune system in future.”
    KC's View:

    Published on: October 21, 2010

    Bloomberg has an interesting story about the burgeoning African middle class, which it says “prompted Wal-Mart Stores on Sept. 27 to propose purchasing Massmart, the continent’s third- largest retailer, for $4.6 billion. With 288 stores in 14 African countries, purchasing Johannesburg-based Massmart would enable Wal-Mart to profit from one of the world’s fastest- growing retail markets.

    “Africa’s population reached 1 billion last year and after economic growth averaging 4.9 percent from 2000 to 2008 the number of families with an income of more than $20,000 a year has exceeded India’s, according to a report by McKinsey & Co. With China investing in the continent to exploit its mineral wealth and the population rising by more than 2 percent a year, that market is set to expand.”

    And while Walmart is expected to face challenges as it works to set up a supply chain infrastructure that is reliable, efficient and effective, the opportunity to get relatively early to cater to this growing customer base is simply too enticing to resist.
    KC's View:

    Published on: October 21, 2010

    Interesting piece in the New York Times about what it takes to get a product on store shelves these days. Experts tell the Times that it is a) important to start small and local, b) listen to the buyers during the development process, c) expect to be rejected but never give up, d) go to trade shows and exhibit, e) consider the use of a broker, and f) find ways to generate enough enthusiasm that they request your product at stores, which forces the retailer to take the first step.
    KC's View:
    Of course, I like two additional rules.

    One, actually come up with something unique, not just a me,too product.

    And two, if you are trying to get into a small or regional retailer, tell them that you aren’t planning to sell to Walmart anytime soon...which suggests a kind of exclusivity that many retailers find to be appealing.

    Published on: October 21, 2010

    Food Safety News reports that “Japan, which used to be the largest export market for U.S. beef before the 2003 mad cow scare halted imports, is reportedly reviewing the safety of American beef in an effort to break down trade barriers,” which some estimate cost US meat companies as much as $1 billion a year.

    There are multiple published reports that Starbucks has launched its much-hyped new digital network that serves as a landing page/portal for customers who access the internet while in its stores; the coffee retailer has established relationships with a number of media companies - including the New York Times, USA Today, Rodale, Zagat, Yahoo, and Nickelodeon - to provide content for the Starbucks Digital Network.

    FastCasual.com reports that “London-based YO!Sushi is entering the U.S. market through an area development program spearheaded by full-service franchise sales outsourcing firm Franchise Dynamics. U.S. expansion will focus initially on the East Coast, as well as other major markets such as Chicago, Dallas and Miami. Projections call for development agreements for five restaurants to be in place by May 2011 and a cumulative total of 45 commitments signed by the end of 2013, including five to 10 locations open and operating in the United States.”

    YO! Sushi is an intriguing concept because it embraces theatricality as being part of the food experience, delivering sushi and more than 100 traditional Japanese dishes to patrons via a conveyor built that goes from the kitchen to diners.

    • Whole Foods Market has received a Green Power Partner of the Year award from the U.S. Environmental Protection Agency (EPA) for a third time. Whole Foods Market was one of only four organizations and the only grocer to win the award. The competitive Green Power Partner of the Year award recognizes EPA Green Power Partners who distinguish themselves through their purchase, leadership, overall strategy, and impact on the green power market.
    KC's View:

    Published on: October 21, 2010

    I commented the other day that supermarkets need to do a better job of explaining results of initiatives - such as the shift away from single-use bags to reusables - to shoppers, which is a great way of getting them on board.

    Which led MNB user Elizabeth Archerd, of Minnesota’s Wedge Co-op, to note that the following information was provided on the cover of Wedge’s October/November newsletter:

    Just say NO to...bags?

    Between July 1, 2009 and June 30, 2010, $11,952.10 was taken by customers as credit for not using a bag. That's 119,521 bags (of whatever size) NOT used.

    In addition, customers donated $18,515.60 in green patches. That's 185,156 bags NOT used.

    So Wedge customers just said NO to 304,677 bags in the last fiscal year. Way to go, Wedge shoppers!

    And:

    How Local did we go?

    During the Eat Local, America! Event in August, we sold $911,957 worth of locally grown or locally produced items - 37 percent of all our sales that month!

    Way to go, Wedge shoppers!


    Exactly.




    MNB noted the other day that despite all the accolades, Southwest Airlines has lost a step when it comes to on-time performance, which led us to suggest that even the most lauded of companies has to work hard to avoid complacency.

    Which led an MNB user to write:

    Southwest may be getting there a “little” later but my wallet is arriving a “little” heavier, they still have the best customer service and they still do not charge for bags…..I am more than willing to give them a pass on this one because I believe that your article mentions that Southwest will fix this and fix it fast. You know why? Because they have done it in the past.

    I agree.




    We had a piece here on MNB about Supervalu lowering prices to compensate for declining market share and sales, which led MNB user Joe Ciccarelli to write:



    Another MNB user wrote:

    Super Valu is coming out with more reinvention ideas than A&P.  Price cuts, layoffs, fewer SKUs, and putting hopes on Save-A-Lot, a format that Aldi and Wal-Mart are making sport of.  Can't be as low as Aldi and Wal-Mart regardless of format.  Can't provide high levels of service because of mass layoffs.  Can't compete on variety because of fewer SKU's. Losses now in the billions and a CEO that comes out with a new press release every month.  We've seen this before right?

    And another MNB user chimed in:

    I heard a rumor that there is a potential deal between A&P and SVU – from some support services all the way to A&P becoming a wholly owned subsidiary of SVU. This of course coming from some of the 100ish people that were let go over the past month including the 33 Sr Directors on Friday. But honestly, can you imagine a more terminal relationship?




    And, on another subject to close to my heart, MNB user Steven Ritchey wrote:

    Did you ever think you would see this from the Texas Rangers?  I was 13 when they first played in Arlington.  The lowly Rangers, who’d only been to the post season three times, and before this year had never won a post season series are playing the vaunted Yankees to go to the World Series.  I don’t know if they will win this series or not, but I’m glad to see them giving the Yankees a run for their money.
     
    There are so many lessons to be learned from the Rangers season:

    Don’t ever give up.

    It’s not how much money you have, but how you use what you do  have.

    Success can come from the most unlikely of places.

    A good manager puts his  people in a position to succeed, and creates an environment that fosters success.

    A good manager holds his employees accountable.

    Sometimes success happens  because you had the ability to seize the moment and run with it.


    I agree. And I admit it. I am rooting for a Giants-Rangers World Series. Because as a Mets fan, another Yankees-Phillies series would simply be the source of too much pain. (While the Rangers and Giants have been doing well, by the way, I have too much respect for the Yanks and Phils to think that they’re going away any time soon.)




    Yesterday, MNB posted a short obit for Tom Bosley, the “Happy Days” actor who passed away. Which led one MNB user to write:

    What does Tom Bosley’s passing have to do with Retail News in Context, Analysis with Attitude. Please keep your news relevant to the topic. We can learn about Tom Bosley’s passing in other news channels.

    It has been a tradition here on MNB over the past nine years to mention prominent deaths of people when a) it interests me, b) I think it will interest baby boomers (many of whom make up my audience), or c) I feel like it.

    I do this for the same reason that I feature football scores on Mondays ... book, movie and wine reviews on Fridays ... and use as many cultural allusions as I can when discussing various topics (a percentage of which probably would not make the "strictly relevant" list).  My job (at least as I define it, and nobody else has written a job description) is to make sure MNB is as entertaining and engaging as possible, to try to surprise people whenever I can, and to keep in mind that as important as business is, it is not everything.

    And to be honest, while I get criticisms and complaints for lots of opinions I express or post from other people, the wine and movie reviews, sports scores and occasional obits have rarely annoyed people.

    But I do appreciate the criticism. I like it when people force me to consider and reconsider how I do things.
    KC's View:

    Published on: October 21, 2010

    In the American League Championship Series, the New York Yankees defeated the Texas Rangers 7-2, which leaves the Rangers with a 3-2 advantage in the best-of-seven series.

    And in the National League, the San Francisco Giants defeated the Philadelphia Phillies 6-5 to take a 3-1 lead in the best-of-seven series.
    KC's View: