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    Published on: February 7, 2011

    by Kevin Coupe

    The New York Times had a story over the weekend about the AgeLab at the Massachusetts Institute of Technology (MIT), where they’ve created something called the Age Gain Now Empathy System - called “Agnes” for short - which is a kind of “age empathy” suit designed to “help product designers and marketers better understand older adults and create innovative products for them. Many industries have traditionally shied away from openly marketing to people 65 and older, viewing them as an unfashionable demographic group that might doom their product with young and hip spenders. But now that Americans are living longer and more actively, a number of companies are recognizing the staying power of the mature market.”

    According to the story, Agnes “is calibrated to simulate the dexterity, mobility, strength and balance of a 74-year-old.” A user describes the experience of wearing it this way:

    “A helmet, attached by cords to a pelvic harness, cramps my neck and spine. Yellow-paned goggles muddy my vision. Plastic bands, running from the harness to each arm, clip my wingspan. Compression knee bands discourage bending. Plastic shoes, with uneven Styrofoam pads for soles, throw off my center of gravity. Layers of surgical gloves make me all thumbs.”

    Marketers don’t need Agnes, however, to show empathy for an important consumer market. The question that retailers and suppliers need to ask themselves is whether they are engaged in an ongoing - and culturally organic - effort to understand how their customers are changing, and what adjustments need to be made in order to adequately serve them.

    There’s a good reason. As the Wall Street Journal notes in a separate story, “The 76 million boomers already account for an estimated half of total U.S. consumer spending. With longer life expectancy and lower savings rates than previous seniors, they are projected to spend an additional $50 billion over the next decade, according to market-research firm SymphonyIRI. Rather than passing on their wealth to future generations, they're expected to splurge mostly on themselves as they move households and pursue active lifestyles.”

    There is however, something that marketers need to keep in mind as they engage in this process ... and it is something that is noted both in the Times story and a separate story in the Wall Street Journal:

    • “Often, visitors learn hard truths at AgeLab: many older adults don’t like products, like big-button phones, that telegraph agedness. ‘The reality is such that you can’t build an old man’s product, because a young man won’t buy it and an old man won’t buy it,’ Professor Coughlin says.

    “The idea is to help companies design and sell age-friendly products — with customizable font size, say, or sound speed — much the way they did with environmentally friendly products. That means offering enticing features and packaging to appeal to a certain demographic without alienating other consumer groups. Baked potato chips are just one example of products that appeal to everybody but skew toward older people. Toothpastes that promise whitening or gum health are another.” - New York Times

    • “Baby boomers, famously demanding and rebellious, don't want anyone suggesting they're old. Surreptitiously, companies are making typefaces larger, lowering store shelves to make them more accessible and avoiding yellows and blues in packaging - two colors that don't appear as sharply distinct to older eyes.” - Wall Street Journal

    In other words, cater to aging baby boomers ... but do it without being obvious.

    And that’s our Monday Eye-Opener.
    KC's View:

    Published on: February 7, 2011

    The Associated Press announced over the weekend that it plans “to test a mobile version of the preprint circulars that newspapers insert in their weekend sections.

    “The mobile advertising solution, called iCircular, differs from other online coupon and shopping solutions in that it focuses on driving customers into their local retail stores and providing them tools to manage their shopping lists. A rich media ad module, newspapers can incorporate iCircular into their mobile websites or apps.”

    According to the announcement, “Circulars that are inserted into newspapers continue to be highly effective marketing vehicles for retailers, reaching about 80 million customers a week. But retailers are also seeking ways to reach the 28.4 million readers who already access news on a mobile device – a number that is growing rapidly.

    “iCircular would be an extension of the preprint circulars now inserted into newspapers, only on smartphones. It would allow retailers to target by Zip Code the customers they want to reach. Retailers can highlight their offerings by product and product category and consumers could view the offerings in a variety of ways. In addition, customers could search for particular products, create shopping lists and share deals with friends.

    “Over the next four months, AP will build out the product for market testing, with a pilot group of publishers and retailers.”
    KC's View:
    The opportunity here to target specific consumers and to provide meaningful coupons is enormous. Those preprint circulars may go into the newspapers of 80 million people, but it is my impression they are seen by a lot more garbage cans than actual human eyes. The stuff that I get on my computer, iPad or iPhone is a lot more impactful, because it tends to be related to my actual behavior.

    But if they’re only going to replicate the preprint circular experience - without any meaningful targeting - then they’re not taking advantage of the technology. It’ll be like using a loyalty card to simple distribute electronic coupons - it seems like an advance, but really only repeats the scattershot mistakes of the past.

    Published on: February 7, 2011

    The San Antonio Express News reports that H-E-B president/COO Craig Boyan gave a speech last week to the St. Mary’s University Entrepreneurship Breakfast Series in which he said the key to his company’s continuing success was “restless dissatisfaction,” which pushes its people to “constantly want to make our business better.”

    According to the story, “H-E-B has used that philosophy to become one of the nation's fastest growing retailers even during the recent recession, the executive said. More growth is anticipated even though H-E-B is not planning to expand outside of its current footprint in Texas and Mexico, said Boyan,” who added that “H-E-B has outperformed Wal-Mart since consumer spending began to sag as the recession hit. Pricing is a big part of it. Boyan said H-E-B's prices typically are 1 percent to 2 percent below Wal-Mart's.”
    KC's View:
    “Restless dissatisfaction” sounds like a pretty good credo to me.

    Published on: February 7, 2011

    There is a fascinating piece on CNN.com about a controversy being faced by the Chick-fil-A fast food chain,which has come under fire from some gay rights groups for having contributed food to an anti-gay marriage group.

    The story notes that the chain occupies a unique niche in the marketplace - it is privately held and makes no bones about its conservative Christian culture, to the point where it closes all of its stores on Sundays so that its employees can go to church and be home with their families. Indeed, the heirs to company founder Truett Cathy have signed a “covenant” promising to preserve the company’s “Christian DNA” as it grows.

    According to CNN, “The current controversy erupted when some college campus and gay rights groups blasted the restaurant chain for donating free food to a Pennsylvania organization opposed to gay marriage.

    “The Human Rights Campaign, a major gay rights group, launched a letter writing campaign to the company, while the Indiana University South Bend went so far as to temporarily suspend Chick-fil-A service in its campus dining facilities.

    “The fallout provoked Chick-fil-A president Dan Cathy to defend his company in a Facebook video and in a written statement. ‘In recent weeks, we have been accused of being anti-gay,’ Cathy said in a written statement last Saturday. ‘We have no agenda against anyone ... While my family and I believe in the Biblical definition of marriage,’ the statement continued, ‘we love and respect anyone who disagrees’.”

    Lake Lambert, author of a book called “Spirituality Inc.,” tells CNN that “if you have a faith-based corporate identity and you want to function in the national marketplace, you’re going to continue to encounter resistance to those values because not everybody is going to share them. The only other option is some sort of secular identity and that’s not where Chick-fil-A is going.”
    KC's View:
    The simple truth, it seems to me, is that companies - especially private ones - have the right to support whatever groups they want. In doing so, they have to face the possibility that they will be criticized by those who disagree with them, and who have the right to air their grievances. And, they’ll have to face the possibility that their ability to grow and make more money may be limited by their political positions.

    It will strike some of us as disingenuous to say “we love and respect gay people,” and then support the denial of equal rights to them. Not my definition of love and respect ... and I suspect that there are a lot of gay people who don’t feel the love and respect, who won’t feel that the words match the actions.

    And by the way, I’m not a Biblical scholar by any means, but it always has been my impression that Bible sanctions a lot of things in various contexts that we likely would find to be abhorrent today. So I’m always a little uneasy with that whole “Biblical definition” thing.

    But that’s just me. Chick-fil-A can do what it wants. And live with the consequences.

    C’est la vie.

    Published on: February 7, 2011

    The New York Times this morning reports that First Lady Michelle Obama has been involved in talks with the National Restaurant Association (NRA) over the past year “in a bid to get restaurants to adopt her goals of smaller portions and children’s meals that include healthy offerings like carrots, apple slices and milk instead of French fries and soda.”

    According to the piece, “The discussions are preliminary, and participants say they are nowhere near an agreement like the one Mrs. Obama announced recently with Wal-Mart to lower prices on fruits and vegetables and to reduce the amount of fat, sugar and salt in its foods. But they reveal how assertively she is working to prod the industry to sign on to her agenda.”

    The Times story notes that the restaurant negotiations reflect the Obama’s administration’s approach to the obesity issue - to work hard to keep it front and center, but to use gentle prodding rather than regulatory threats to get industry buy-ins.
    KC's View:
    Michelle Obama’s imprimatur is like the Good Housekeeping Seal of Approval, at least when it comes to obesity issues.

    Published on: February 7, 2011

    Forbes columnist John Tammy weighed in on the debate over whether Walmart should be allowed to open stores in New York City, concluding that efforts to prevent it from doing so amount of a kind of “local protectionism” that results in “collateral economic damage.”

    Tammy writes:

    “For one, money saved is money that, if left in the bank, is lent out to entrepreneurs and businesses eager to grow. In short, were Wal-Mart given the freedom to open its stores in the largest city in the U.S., not only would many of its citizens receive instant raises, but the realized savings would expand a capital base that is presently a bit subdued as evidenced by difficult economic times.

    “Extrapolated across the country, though Wal-Mart’s reach is impressive, it remains the case that it’s not everywhere it wants to be not because it lacks the means, or consumer demand, but thanks to local barriers meant to protect well-connected, local businesses. If removed, Wal-Mart’s continued expansion would on its own enhance the capital outlook for a country populated by businesses ever needful of more of it.

    “When prices of goods are kept artificially high thanks to government barriers, the first-stage losers are those with limited funds forced to do business with merchants whose prices don’t reflect market realities. Not mentioned enough, though, are the successful businesses actually offering what customers desire, but that are similarly weakened by unnatural hurdles that keep the most efficient businesses from opening.

    “Indeed, assuming a removal of the impediments to Wal-Mart’s expansion, its customers would quickly find themselves more flush, and if eager to consume rather than save, more able to patronize other local businesses eager to serve them. The beauty of free trade is that it expands the range of businesses that consumers can do business with. In Wal-Mart’s case, the presumed decline in receipts for inefficient grocery stores would redound to the sales of other businesses giving customers what they actually want.”

    Tammy concludes, “Imposed on consumers by governments, protectionism at its core is the cruel process whereby weaker, less efficient businesses are kept in operation thanks to barriers that keep the goods and services of the more efficient producers out; either locally or internationally. Put simply, protectionism subsidizes the weak at the expense of the enterprising. And in a world of limited capital, this is problematic because it ensures the perpetuation of business practices that would otherwise cease if market forces were allowed to prevail.”

    • The Wall Street Journal carries an interview with Walmart CEO Mike Duke in which he spoke about balancing a “big picture” approach to his job with a more granular view of the business.

    “If I spend all of my day in the details as a CEO of a company like Wal-Mart, I think it would be trouble, because I wouldn't really be prepared to speak to the big issues that the country or the world should face,” Duke says. “But at the same time, if you spend all of the time at 50,000 feet, (you) really are not out talking to customers and know real people. ... I think it's often the interaction directly with customers in the details of their family and their issues is what inspires me to want to help solve the big issues.”

    And Duke also addressed how much attention he pays to the company’s stock price:

    “Maybe every other day ... I look at sales every day, and customer traffic, and (the) average (shopping) basket. I look to see how we're doing in Brazil and the UK and China every day. I don't necessarily check the stock price every day. I think if I were a shareholder and the CEO spent all of his time focused on the share price, then I would probably be concerned, because the share price follows the results of the company.”

    • The Financial Times reports that “Walmart is aggressively discounting the cost of digital films as it competes with Apple in an intensifying battle between two of the world’s biggest companies over the future of the entertainment industry.”

    The story notes that Apple dominates the download business through its iTunes service, and that Microsoft ranks number two. But in the final month of 2010, Walmart competed actively for third place with the likes of Amazon and Sony, renting digital copies of movies for as little as 99 cents.

    According to the piece, “IHS Screen Digest data suggest renting a film digitally is fast becoming more popular than buying one online: in the US, digital rental transactions rose more than 50 per cent in 2010 to 38m, compared with 25m transactions in 2009.”
    KC's View:

    Published on: February 7, 2011

    Bloomberg reports that the Teamsters labor union is asking C&W Wholesale Grocers to delay its plans to move the operations of six New Jersey facilities to Pennsylvania, Maryland, Connecticut and Delaware.

    According to the story, “Leaders of Teamsters Local 863 — which represents about 1,300 workers at the New Jersey facilities — and a group of elected lawmakers held a news conference Thursday to call on the company to delay the move for 90 days so negotiations could continue. They also released report that estimated the closings would cost $129.9 million in lost sales and $48.9 million in lost profits for local businesses, as well as $11.7 million in lost tax revenue for the state.”

    • The Associated Press reports that “Target Corp. has agreed to pay $22.5 million to settle claims that the retailer violated California's hazardous waste laws by improperly disposing of pesticides, bleach and other potentially toxic items ... As part of the deal, Target does not acknowledge any wrongdoing.”

    • Tops Friendly Markets, which serves upstate New York and northern Pennsylvania, announced that it is teaming with Smithfield to bring “Paula Deen Live!” - a live version of the Food Network program - to Buffalo, NY on April 20, 2011.

    From February 6 through March 5, Tops shoppers can register their BonusCards at www.topsmarkets.com, and every time they check out at any Tops store they’re automatically entered for a chance to win a Paula Deen Live! VIP package, including a meet-and-greet with Paula Deen, an autographed cookbook and two tickets to see Paula Deen Live! on April 20, 2011. Each time Tops shoppers purchase any Smithfield product using their registered Tops BonusCard, they are automatically given 10 extra chances to win.

    • The Los Angeles Times reports that “organic, raw and even gluten-free food choices ... are showing up at local pet shops that are looking to distinguish themselves from big-box competitors. After a slowdown in sales of premium-priced food during the recession, independent pet shops said the sector was recovering.”

    According to the story, “Nationwide, annual retail sales of organic and natural pet food are expected to grow three times as fast as pet food sales overall through 2015, according to an industry report to be released this week by the Packaged Facts market research company.”
    KC's View:

    Published on: February 7, 2011

    Crain’s Chicago Business reports that “Heineken USA is tapping a candy marketer at Kraft Foods as its new chief marketing officer, as the nation's No. 2 beer importer seeks to rejuvenate its flagship brands.

    “Lesya Lysyj, a 20-year marketing veteran with extensive consumer packaged goods experience, will start on Feb. 28. She replaces Christian McMahan, who resigned at the end of last year. Ms. Lysyj most recently served as Kraft's VP-marketing for confectionary in the U.S., managing brands such as Halls and Trident, which Kraft assumed when it acquired British company Cadbury in 2010.”
    KC's View:

    Published on: February 7, 2011

    • Jimmy Ming Lang, chairman of the board of eight-store Centro Mart in Northern California, died over the weekend at age 80.
    KC's View:

    Published on: February 7, 2011

    We continue to get email about my commentary last week about how the growth of people working at home or for themselves means that they have lost the “community of work,” which could be an opportunity marketers could use to build traffic.

    MNB user James P. Kiehm wrote:

    I think you have stumbled onto something bigger than you may have thought originally.  The Wall Street Journal recently had an article on spouses who spend a lot of time working out and its causing issues in their marriage.  My wife is giving me a lot of heat over my workout schedule.  She thinks there is some hottie I am hooking up with.  But, I work the normal office grind and travel but I like to stop at a local gym and run on their treadmills.  We have the identical equipment at work.  Its a nice room with everything the local gym provides but has no atmosphere or energy.  No one is ever in there working out.  It’s kind of sad the company spent so much money on numerous locations like this in our buildingsI but they seem to be rarely used.  I suspect I know why.

    I like to go to a local gym on the way home from work because there is an energy there that I wouldn't get if I was the only person running in the company facility after work.  There is something about the gym community that keeps me going on a regular basis.  I really don't chat with anyone there.  By the end of the office day I am pretty much chatted out.  I show up, run and go home to my angry wife wondering who she is.  But there is no one.  Up to now I have not been able to articulate to my wife why I have this need to pay $50 a month to go to a gym vs. using the company equipment for free.  But its the energy of the gym community that keeps me coming back.  They have all sorts of programs going on after work.  There are young and old and handicapped people all trying to get or stay fit and healthy.  It’s not a meat market like some are though I suspect some relationships have developed there and I won't deny there is some eye candy there occasionally.  But I am hands off and focused on just working out and listening to tunes on my iPod.

    For me to continue my regimen of running I need the energy the gym community gives me.  Hopefully I can convince my wife that all is pure in my going to the gym and that there is no one I am hooking up with and not fall victim to the issues the WSJ talked about.
     
     
    Another MNB user wrote:

    ...Comments on the concept of a "Third Place" rang a bell with me after a recent conversation I'd had with one of my clients…..a semi-retired woman whose husband is still working full time as a university professor.   I was attempting to track down her husband for a phone call when I heard her utter the comment, "of course, he is likely at his 'de facto office' ".    When I asked her what she meant by the term "de facto office" she replied, "he just loves to spend so much time at Panera Bread that I now refer to it as his "de facto office".   It seems that the Panera locations that are in or near college towns have a magnetic attraction for university students and staff.

    One MNB user wrote:

    As a home-based consulting business, one of the ways I build community is by having interns and sub-contractors.  I get my people fix in smaller doses.

    Interns get real-world and fast-paced experiences outside of the classroom and I ‘hone’ my mentoring skills.  It is a job to select the right candidate---but it works on so many levels.


    MNB user Dave Howald wrote:

    I have worked out of a home based office for over 25 years.  I know many people now who also work at home.  My only question is despite all the people we know who work out of their homes how come traffic is still so bad?




    Regarding Starbucks’ complaint that Kraft Foods dropped the ball when selling its packaged coffees to grocery stores, one MNB user wrote:

    Dunkin’ Donuts retail coffee was introduced in August, 2007.  For the latest rolling 52 week period Dunkin's all outlet sales are over $350 million dollars.  Although there is no way to confirm exactly how much of these sales came directly from Starbucks' retail packaged coffee, suffice it to say that a reasonably large amount of these sales came directly from Starbucks.  I seriously doubt that if Starbucks had anyone other than Kraft representing their product at retail that the impact to the Starbucks brand would have been any less.  Dunkin' Donuts retail packaged coffee has been the biggest news in the premium coffee segment in 15+ years.

    A fair point.




    I wrote last week about being surprised that Sports Illustrated has to find new ways of merchandising its swimsuit issue, since sales have been declining for the iconic publication. One MNB user wrote:

    I’m disappointed that you made not one mention of the inherent sexism in the swimsuit issue and societal implications of treating women like objects.  How would you feel if, upon turning 18, your daughter were featured “almost clad” on a beautiful beach?     The swimsuit issue is the magazine equivalent of Hooters in my opinion: openly sexist yet generally passing as “mainstream” and even family friendly.

    Also a fair point.




    I had a little fun last week with a story about Marsh deciding to change the name of some of its stores as a way of changing their image, and it led one MNB user to write:

    Kevin, nice little chuckle you gave me on proposing to change your name to George Clooney and expecting great results.  When will retailers learn? Now, I'm not educated on the particulars on how Marsh Supermarkets do business; I will assume that since they are a 100 store chain, they do some things (OK, a lot of things) right.  To compete in the 'home' territories of Kroger and Meijer speaks good things as well.  And lastly, I think that it's great that the chain has remained a privately-owned company.  Kudos!

    The article indicated that this name change would signify a distinction between the philosophies that the stores operate on.  So the question arises, does the average customer see the difference between the two operations and respect the company's decision on a name change?  Shoppers today are astute and perceptive.  They realize that everything different under the new name, be it signage, employee uniforms, ads, logos, all cost money, and customers will assume they will be paying for that new logo with higher prices.  I can see Sally Shopper at the checkout right now, "What?  You're raising prices in this economy?"  Yikes!!

    Now, I don't own a store chain, my phone hasn't rung with CEO's wanting to offer me outrageous consultant fees, I can only offer a little bit of reason from 30 years around the business.  If you want something to, and I quote Frank Lazaran, "stand for in the community", "and add a much more customized marketing approach for these stores", then do it.  Offer outrageously clean stores with top-notch customer service and happy employees.  Offer expanded selections and items that work in their neighborhoods.  Refresh tired stores and re energize your employees with contests, promotions.  Hey, remember the old philosophy that the reason people shop your store is how they are treated by the employees?  It still works.  Make grocery shopping and grocery employment fun again.  I bet these ideas would cost a lot less and yield bigger results than a name change and it's inherent expense in this economy.

    By the way, I'm thinking of changing my name to Andy Richter and offering my services as his vacation fill-in on Conan's show.  Wait a second, I look like him already and I'm not nearly as funny, so maybe I would just be wasting my money on a name change........?





    I noted last week, after Walmart did not show up for a New York City Council hearing into the economic impact that could occur if it is allowed to open stores in the city, that Woody Allen once said that “90 percent of life is showing up.” Which led MNB user Steve Paris to write:

    While Woody Allen may be correct, I think the point that you are continually trying to make with your Eye Openers is that manufacturers and retailers that “just show up” will become less and less relevant.  We are moving quickly into a world where the information and choices available to consumers will put them firmly in control.  Retailers will need to understand and communicate with their customers in a deeper and more meaningful way if they hope to engender the loyalty that will be the true differentiator in the future.  Perhaps that is the extra 10%...

    Absolutely. Under almost no other circumstances would I suggest that “showing up” is 90 percent of the battle. It just seemed appropriate to the moment...




    I love it when I get email about my movie reviews....

    I read with great interest your review of the new Sofia Coppola movie, Somewhere.  I have not seen this film (and have no interest in doing so) but I have found that a great number of films being released these days lack a critical key element: sympathetic characters or characters that exhibit some humanity.  The last movie I saw was Ben Affleck's The Town.  Granted, this isn't an art house drama and the main characters are bank robbers, but the movie left me cold.  I have to admit that I am an aficionado of classic films, especially the film noir genre.  Although many of the film noir movies of the 40's-50's-60's were shot on a shoestring budget with B-movie actors, a good number of them are more compelling than the slick, Dolby-Digital products that are being churned out today.  I am all for High Definition, 3-D, IMAX and Dolby-Digital, but give us some characters that the average hard-working American really cares about and can identify with unless you want to limit your audience to the Hollywood elite and film festival audiences.  Compare a drama like Leo McCarey's Make Way For Tomorrow (1937) to Somewhere and you'll see what I mean.  Call me old-fashioned (I am in my early 40's) but, in my opinion, the lack of humanity (and decency, for that matter) in a good number of films (or television programs) these days is more a reflection of those who are producing this stuff.  Just like the fast food business which you comment about from time to time, if the entertainment industry would produce a "healthier" product, I have no doubt that the public would embrace it.

    A legitimate point of view, though I respectfully would disagree with you on the broad point.

    I think we have the tendency to romanticize the movies and TV shows of the past as being superior to much of what is produced today, but I’m not sure it is fair. I happened to like The Town a lot, though I’m not sure I would compare it favorably to the best film noir efforts of the past; it also isn’t close to being on the same level as a movie like Bonnie & Clyde, which a lot of people said when it was released that was indecent and overly violent and simply not a good movie, but which I think has proven to be one the greatest Hollywood movies ever made.

    Movies and TV programs are a product of the times in which they are created. Some are good and some are bad and most should not be compared to the classics of the past, not because they don’t stand up, but because it simply doesn’t make sense.

    Another MNB user wrote:

    USA Network has found two devoted viewers of the shows "White Collar" and "Burn Notice" in my two high school-aged sons.   I kept seeing the episodes of both shows accumulating on our DVR and didn't bother to watch them until I read your comments on your website.    Between your favorable feedback and the enthusiasm our boys have for watching the show, I've seen most of the episodes of the last three years for both shows and can follow both story lines fairly well.    It's fun to watch them in hi-def with the sound turned up…..and they seem to have a handle on their use of gratuitous sex and violence, as opposed to some other shows.

    And the best thing about shows like these is that you can share them with your kids. When my sons lived at home we’d watch these kinds of shows together, and I miss that. A lot.

    For my daughter and me, it is “Castle” that is appointment TV ... and I’ll miss that a lot when she goes off the college.
    KC's View:

    Published on: February 7, 2011

    In Super Bowl XLV, the Green Bay Packers held on to defeat the Pittsburgh Steelers 31-25, winning their 13th N.F.L. championship and their first Super Bowl in 14 years.
    KC's View:
    The game was great. The commercials, not so much. Though I did like the Volkswagen/Darth Vader ad, the Chrysler/Detroit epic, and the Doritos commercial in which the chips brought the fish, plants and even a cremated grandparent back to life. And based on the commercials, I really want to see Cowboys & Aliens and now actually am curious about Captain America: The First Avenger, which I didn’t care about before.

    Published on: February 7, 2011

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    KC's View: