retail news in context, analysis with attitude

MNB Archive Search

Please Note: Some MNB articles contain special formatting characters, and may cause your search to produce fewer results than expected.

    Published on: December 23, 2010

    Now available on iTunes…

    To hear Kevin Coupe’s weekly radio commentary, click on the “MNB Radio” icon on the left hand side of the home page, or just go to:

    http://www.morningnewsbeat.com/Radio/Radio_Listen_S.las



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

    So this is the last MNB Radio for 2010. As Michael Sansolo said the other day in his column, the goal here is to be different, to stay away from the lists of the past year’s significant events, to not pontificate about what we think the future will bring. I’m perfectly capable of pontificating and making lists, but I figure that there are plenty of places where you can get that kind of stuff. So let me the end the year with a bit of a rant...because I believe you expect nothing less...

    The other day there was a story in the Wall Street Journal about how consumers equipped with smart phones that give them all sorts of information about price, value, content, nutrition and other qualities - or lack of quality - are “striking fear into retailers.” In the original story, and in some of the places that picked up on it, there was a lot of wringing of hands and gnashing of teeth. There was, to be frank, a whole lot of whining going on about how tough this was going to make life for retailers and manufacturers.

    Now, I can understand why these phones might be of some concern to retailers. But the implication of such “fear” is that there is nothing more worrisome to the salesperson or marketer than an intelligent, informed shopper.

    What a crock.

    The only marketers that need be worried by such technological innovations and cultural shifts are the ones who want to hide things from the shopper. But the good ship “Lack of Transparency” sailed a long time ago ... and sank. It’s not like we didn’t know what was happening. It’s actually been years since the automotive industry was able to hide behind confusing invoices and phrases like “let me check with my manager.” People trying to sell cars have known for some time that they are living in a world where the buyer has as much or more information than the seller. Why should businesses selling other products - like food and beverages and drugs - expect to be exempted from this trend?

    It’s really simple. If you’re in the business of selling stuff to people, you’d better be really good at it, you’d better be transparent as possible, and you’d better treat people like they are intelligent consumers. Lowest common denominator marketing just won’t cut it. Not anymore.

    Fear is a paralytic. Fear makes you defensive. Fear is a negative emotion.

    In this case, the promise of a better informed consumer ought to be a driving agent as retailers and manufacturers develop strategies and tactics for the second decade of the 21st century. This is the moment not to worry about how much the customer will know or will want to know, but to embrace the opportunity to be better than the other guys at being transparent, at proving more useful and relevant information, at being - to use a phrase often employed here on MNB - not just a source of product, but an invaluable resource for the shopper.

    Let the other guys be scared. The smart marketer, as 2011 begins, looks at this trend as an enormous opportunity. A challenge, sure ... but a way in which the savvy business can create a clear and transparent differential advantage.

    Do it, and you have a better shot at a happy new year. Fear it, and not so much.

    For MNB Radio, I’m Kevin Coupe.
    KC's View:

    Published on: December 23, 2010

    by Kevin Coupe

    The Financial Times this morning writes that it has named Steve Jobs, the co-founder and CEO of Apple, its “Person of the Year.”

    The Jobs story has oft been told, but here are the three passages from the FT profile that are striking ... and worth emulating.

    • “Steve’s the last of the great builders,” says Roger McNamee, a Silicon Valley financier who led a recent, failed attempt to rebuild Palm in Apple’s image. “What makes him different is that he’s creating jobs and economic activity out of thin air while just about every other CEO in America is working out ways to cut costs and lay people off.”

    • Those who have laboured under him describe him as a stern taskmaster who understands the art of the possible, rather than a long-range visionary. That means pushing relentlessly forward rather than milking old successes – even ones as significant as the iPod.

    • Inside Apple, it is clear who calls the shots on design and development. “You have to make one guy like what you’re doing,” said one recently departed executive, who spoke only on the condition he not be named. “He’s the customer, and he’s the marketing department too.”


    That’s the kind of eye-opening business leadership from which every company could benefit.
    KC's View:

    Published on: December 23, 2010

    The Winston-Salem Journal reports that Lowes Foods is putting its Lowes Foods To Go service on the fast track.

    According to the story, the company is testing in two stores an Express service that allows people ordering 15 items or fewer to do so online or via the phone and then puck them up in an hour or less; normally, the Foods To Go ordering service requires a three-hour lead time.
    KC's View:
    I like this idea a lot; I also would note that for better or worse, it raises the bar on consumer expectations, which is something that Lowes and other retailers will have to deal with in coming weeks and months. But raised expectations are never a bad thing, in my view.

    The only caveat I would have is this: The Express service replicates one of the central dichotomies of the supermarket experience, which is that the less you buy, the better service you get. (No express lines for people spending hundreds of dollars! You have to wait behind the other people spending hundreds of dollars...)

    That said, this seems to be acceptable to most customers, so Lowes isn’t making a mistake by offering the Express service.

    Published on: December 23, 2010

    The Wall Street Journal reports that “Dollar Tree, Dollar General Corp. and Family Dollar Stores Inc. have been some of the biggest winners during the recession, even as most retailers suffered. And though some luxury shops are now reporting better sales of expensive baubles, analysts are predicting that Christmas 2010 will be another good one for dollar stores ... Among consumers surveyed SymphonyIRI ... 18% of respondents said they planned to shop at dollar stores when buying food and drink for their holiday festivities. (There aren't year-earlier comparisons for the data.)”

    According to the story, “The long-term outlook for dollar stores could dim as the economy recovers but the chains are pressing ahead with plans to add hundreds of stores to the thousands that they already have.

    “To hold on to higher-income customers, many of the stores have stepped up their game in terms of what's on the shelf and how it's displayed. There's a new focus on nationally known brands and frequently purchased items like snack foods and cleaning supplies.”
    KC's View:
    As long as dollar stores don’t violate their core value promise, they’ll be able to strategically stretch their muscles. But they have to be careful; it would not take much to disenfranchise the value-driven shopper, and higher income shoppers can be a notably fickle lot.

    Published on: December 23, 2010

    The Business Journal reports that Food Lion “is offering its customers access to weekly specials, recipes and store directions via their mobile devices. The application - which runs on iPhones, iPads, and iPods - also allows customers to sign up for discounts via Food Lion’s MVP loyalty program.”
    KC's View:

    Published on: December 23, 2010

    The Associated Press reports that anyone who goes on Social Security or receives federal benefits after May 1, 2011, will get those benefits after that date either via direct deposit or a debit card - and no longer will receive paper checks.

    The story notes that people already on Social Security will not have to make the switch until March 2013.
    KC's View:
    Yet more evidence of ways in which the world is changing...and I have to wonder if indeed we might be heading toward making a decision like that already made in UK, where in just a few years the use of checks will be banned.

    I’ve always been dubious about the ability of the US to make such hard choices that will be unpopular in some circles - especially since there are Senators working on committees responsible for the nation’s financial services system who have gone on record as having rarely or never used ATM cards.

    But old world systems are going away.

    Published on: December 23, 2010

    The Cincinnati Enquirer reports that Kroger “is leading a group of grocery and convenience store chains in a lawsuit against many of the nation's largest egg producers, egg processors and their trade groups.

    “Kroger and others companies including Walgreen Co., Safeway Inc. and Albertsons LLC. claim those egg-associated entities have engaged in a decade-long price fixing conspiracy for eggs sold to stores and restaurants nationwide ... In the lawsuit, filed Nov. 16 in federal court in Pennsylvania, the plaintiffs claim that the United Egg Producers, United Egg Association, United States Egg Marketers Inc. and 14 egg producers and processors agreed to reduce the supply of eggs in order to artificially increase prices. The suit claims this resulted in a price increase of 45 percent between August 2007 and March 2008 to historic and unprecedented highs.”

    The defendants in the case are either saying that they will defend themselves aggressively or are not commenting.
    KC's View:

    Published on: December 23, 2010

    Bloomberg reports that a group of Johnson & Johnson shareholders is suing the company, accusing the company’s board “of ignoring ‘red flags’ foreshadowing product recalls and government probes of manufacturing defects and marketing practices.

    “The shareholders asked a judge to find that directors and top executives mismanaged J&J and order them to pay damages. They also want J&J to ‘improve its corporate governance and internal procedures,’ according to a complaint filed Dec. 17 in federal court in Trenton, New Jersey. Any money recovered would go to the company and not investors.”

    The story notes that J&J “recalled more than 40 types of medicines this year because of contamination and incorrect labeling. U.S. lawmakers began investigating J&J after a recall of batches of children’s Tylenol in April forced the company to suspend operations at a Pennsylvania plant. The probe uncovered the use of contractors to buy defective Motrin painkiller. J&J also faces government investigations into whether it illegally marketed drugs and devices for uses not approved by the Food and Drug Administration and paid kickbacks.”
    KC's View:

    Published on: December 23, 2010

    • The Los Angeles Times this morning reports that “with the nation's unemployment rate still high and the economy sluggish, a growing number of people are giving food this holiday season. But it's not fruitcake, eggnog or Christmas cookies. Instead, the quiet voice of frugality is prompting consumers to wrap up baskets of kitchen staples, boxes of meat and grocery store gift cards to help loved ones stock dwindling pantries.”

    • Kroger-owned Turkey Hill Minit Markets “is expanding into central Indiana. The convenience store chain opened its first Indianapolis store in October and plans to add at least five more by the end of 2011,” according to a report in the Indianapolis Business Journal.

    Dow Jones reports that Tesco is partnering with Safeway-owned Blackhawk Network to install gift card kiosks in some 600 UK stores.

    • The BBC reports that over the past two years in the UK, as there was significant government attention to what some people saw as unrestrained and anti-competitive growth by the nation’s top four supermarket chains, at least 577 new stores were approved for building - 480 of them to be built by Tesco, Walmart-owned Asda, Sainsbury and William Morrison Supermarkets.

    The debate, however, continues, as the BBC writes, “Campaigners say the stores are putting independent traders out of business. But the supermarkets say they provide thousands of jobs, and are supported by their customers.”

    Dow Jones reports that Tesco is acquiring Czech convenience stores Zabka and Koruna from the Penta Investments private equity firm for the equivalent of $53 million (US). The deal includes close to 130 stores in the X=Czech Republic, but not more than 2,000 c-stores owned by Penta in Poland.
    KC's View:

    Published on: December 23, 2010

    ...will return next year.
    KC's View:

    Published on: December 23, 2010

    I am so disappointed that when we were in Chicago over the Thanksgiving holidays, we were unable to see the theatrical production highlighted the other day in the Wall Street Journal.

    Charles Dickens’ “A Christmas Carol.”

    Performed entirely in Klingon.

    According to the story, the play “runs an hour and 20 minutes and includes three fight scenes, 17 actors with latex ridges glued to their foreheads and a performance delivered entirely in Klingon—a language made up for a Star Trek movie ... For those not fluent in Klingon, English translations are projected above the stage.”

    While the story has been adapted to reflect the Klingon world view, they say that even though the vast majority of people don’t understand the language, they know what is going on because they know the story so well.

    Sort of like opera.

    While for a lot of people this is a kind of oddity, I think it speaks a lot about the branding power of “Star Trek,” which began as a TV series back in the late sixties, and has persisted as a cultural phenomenon reflected in five different TV series and 11 movies, with a twelfth on the way. We reference “Star Trek” a lot here on MNB, and inevitably we get emails from the most unlikely places, from people who are fellow fans. “Star Trek” remains relevant, in part, I think, because it refuses to engage in lowest-common denominator thinking. “Star Trek” has an optimistic world view, which appeals to millions of people.

    And the extent of that relevance can be seen in Chicago, where a classic story is being enacted in a made-up language, and performed by actors portraying a species that once was portrayed as being the enemy, but later was seen as having its own kind of nobility, if only we could come to some sort of understanding with them. If only we could talk, and find common ground.

    That strikes me as an optimistic message for this holiday season.

    'Tlhlngan maH,” the phrase used in our headline, by the way, roughly translates to “We are Klingon!”
    KC's View:

    Published on: December 23, 2010

    Today is the final MNB of 2010. As is the custom around here, we’re going to take a little time off to catch our breath, sleep a little late (though not tomorrow morning, since I’ll be at Stew Leonard’s at 6 am picking up filet mignon and trying to avoid the crowds), go to a bunch of movies, and just generally recharge the batteries.

    I hope you’re able to do the same...or whatever it is that makes you happy...during the next week or so. Most of all, I hope you will be safe, and have a great holiday - whatever you believe in, and however you celebrate.

    Our Christmas wine, BTW, is going to be the 2007 Director’s Cut “Cinema” blend of Cabernet Sauvignon, Zinfandel, Cabernet Franc and Petite Sirah, from Francis Ford Coppola.

    (One of the Christmas wines, anyway...I suspect there may be a few other bottles opened...)

    MNB will be back on Monday, January 3, 2011, for the beginning of what we trust will be an eventful, energetic, and, yes, even prosperous year for all of us. In the meantime, the MNB archives will be open, as always.

    Slainte! And Happy Holidays!
    KC's View:

    Published on: December 23, 2010

    Kevin's Family
    As is the custom around here, we're taking a little time off to catch our breath, sleep a little late, go to a bunch of movies, and just generally recharge the batteries.

    I hope you're able to do the same...or whatever it is that makes you happy...during this holiday week.

    Most of all, I hope you will be safe, and have a great holiday - whatever you believe in, and however you celebrate.

    MNB will be back on Monday, January 3, 2011, for the beginning of what we trust will be an eventful, energetic, and, yes, even prosperous year for all of us. In the meantime, the MNB archives will be open, as always.

    Slainte!





    KC's View: