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    Published on: March 10, 2011


    by Kevin Coupe

    Content Guy’s Note: Below is a commentary on the same subject as the video piece, but it isn’t word-for-word the same. You can look at both, or either...it is up to you. I look forward to hearing from you.

    I know I’m going to get a little grief about this, but once again I want to talk about Apple. Some of you don’t like it when I do this, the same way some people think I ought to spend less time writing about Walmart. But the thing is, these companies are leaders and newsmakers, and we can learn from what they do and don’t do. So I’m going to keep writing and talking about them until they’re irrelevant.

    First up... CNET reports that most if not all Apple Stores around the country plan to cut back on the minimal space that they devote to boxed computer software, as well as on their selection of computer peripherals such as printers, scanners and hard drives.

    The reason? Well, Apple thinks that the space would be better devoted to personalized one-on-one sessions that help people learn how to use various Apple products, and that it is this level of service that is really the company’s differential advantage at retail.

    While my first reaction to this was negative, the more I thought about it, the more it made sense. After all, the stuff that Apple would be taking off its shelves is the stuff that you can get anywhere - including from the company’s website. And if Apple stocks this stuff in the back room, providing a kind of menu listing of what it carries to people looking for software or hardware - something rumors say it may do - then this may be a very smart move.

    Too many retailers, in my view, spend too much time and space selling the stuff that does not make them special ... though I recognize that there often are good financial and marketing reasons for competing on the same playing field as everyone else. But compelling retail stories are constructed out of differences, not sameness. No surprise that Apple, a retail pioneer if ever I’ve seen one, recognizes this and is acting on it.

    The second thing I wanted to note about Apple has to do with Steve Job’s recent introduction of the iPad 2, and a phrase he kept using during that event - “post PC.”

    In part, this is what he said:

    “And a lot of folks in this tablet market are rushing in and they're looking at this as the next PC. The hardware and the software are done by different companies. And they're talking about speeds and feeds just like they did with PCs.

    And our experience and every bone in our body says that that is not the right approach to this. That these are post-PC devices that need to be even easier to use than a PC. That need to be even more intuitive than a PC. And where the software and the hardware and the applications need to intertwine in an even more seamless way than they do on a PC.

    “And we think we're on the right track with this. We think we have the right architecture not just in silicon, but in the organization to build these kinds of products.”


    My question here is simple. A few years ago, I’m not sure many people would have thought that a “post-PC” world would happen anytime soon. And yet, here we are, and the plethora of tablet computers about to be unleashed on the marketplace suggests that a fundamental change is happening, faster than maybe anyone (other than Steve Jobs) expected.

    So here’s my question: Are food retailers preparing for a “post-supermarket” world? Are they trying to envision what it might look like, how it might be completely different from what has come before, and how they might be relevant?

    Change happens faster than ever these days, and takes us in directions both unexpected and challenging. None of us knows the answers, but we have to keep asking the questions, so that when the moment comes, we have the right organizational architecture.

    Steve Jobs likes to say that “it is in Apple's DNA that technology alone is not enough. That it's technology married with liberal arts, married with the humanities, that yields us the result that makes our hearts sing.”

    That’s a pretty good definition for what great retail can be, should be, and will be.

    That’s what is on my mind. As always, I want to hear what is on your mind.
    KC's View:

    Published on: March 10, 2011

    Bloomberg reports that Walmart is about to start building its first three Express stores, in the Arkansas communities of Gentry, Prairie Grove and Gravette.

    The story says that “the Express stores, concrete square boxes with metal roofs, will cost $1.2 million to build and sit on lots just under 5 acres, according to building permits filed in Gentry and Prairie Grove, which has a population of 4,380. The stores will have 75 parking spaces, a pharmacy and three or four checkout counters, said Jackie Baker, Prairie Grove’s building and planning director ... Sections for fresh produce, refrigerated foods and frozen items will go down one side and along the back of the Express store, Baker said in an interview. The store will have about a dozen aisles, according to Gentry city superintendent David McNair.

    “It’s not clear from the planning materials how much of the product assortment will be groceries compared with general merchandise. Groceries accounted for 51 percent of Wal-Mart’s $258 billion in sales in the U.S. in fiscal 2010, according to company filings.”

    Meanwhile, Crain’s Chicago Business reports that Walmart plans to build an Express store in the Windy City, “in the Chatham Market at 83rd Street and Stewart Avenue on the South Side ... The world’s largest retailer will build out an existing 10,000-square-foot building immediately to the east of a Potbelly’s sandwich shop along 83rd Street.” It will be the first urban iteration of the Express small-store format to begin construction. the story suggests, though maybe not the first to open.

    The story notes that Walmart CEO Mike Duke is looking for ways to improve the company’s US performance after a series of quarters in which same-store sales have been stagnant; Bill Simon, who runs the company’s US operations, has been quoted as saying that there “there are hundreds, if not thousands of opportunities in the U.S.” for stores smaller than its supercenters.
    KC's View:
    I read this, and all I can think about is all the empty commercial real estate space available around the country. Just the old Blockbuster locations alone could be an enormous opportunity. Or maybe they could take some old post offices off the government’s hands?

    Done right, this could be a game changer for Walmart.

    Oh, any by the way ... expect that these stores also will be delivery depots for people who want to order from the company’s website or maybe even some of its bigger stores.

    Published on: March 10, 2011

    Good piece on TheStreet.com suggesting that while “the Internet killed the music business, ruined the newspaper industry and has effectively brought the publishing world to its knees, and for years there has been speculation it would do the same to bricks-and-mortar retail stores, as consumers began to flock online for their shopping needs ... rumors of the death of the bricks-and-mortar store may be vastly overstated.”

    The story concedes that more people than ever are shopping online, but that “doesn't mean they'll stop shopping at stores completely. Indeed, for most retail sectors, a physical store can serve a fundamentally different function, giving consumers the ability to see, taste and touch the products in a way that is impossible online. The challenge for retailers in the future, industry analysts say, will be to figure out a way to play up the strengths of the bricks-and-mortar store while incorporating new technology into the experience.”

    According to TheStreet, that means creating a more customer-specific experience in the store that is designed “to tailor products to the demands of individual customers in the same way popular e-commerce sites such as Amazon target customers based on purchase history.” And, the story goes on, “As stores get better at matching the products they offer to the products their consumers actually want, it will eventually allow many retailers to reduce the size of their stores while remaining equally or even more productive and profitable than with a larger space ... At first blush, the idea of shrinking stores may seem like the ultimate sign they are in a weaker position, but experts say bigger isn't always better. A smaller store may not only function more efficiently, but be more attractive to customers.”

    And, TheStreet writes, “Ultimately, even if retailers make their bricks-and-mortar stores into exciting destinations and provide quality customer service, all this guarantees is that customers will choose to stop by the store to waste a few minutes before going elsewhere. To get customers to buy in the store rather than look for the same product elsewhere online, stores may need to begin offering items unique to the physical store.”
    KC's View:
    They’re preaching to the choir here.

    It is foolish for people to think that online shopping will ever replace the physical experience, but it strikes me as a no-brainer to begin thinking about the two as an integrated opportunity to speak to the customer, listen to the customer, and provide goods and services to the customer in fundamentally different ways. Some products will work better online, and others will work better in the store; the customer of the future will want options, and the retailer that can provide a variety of them around a central theme and world view - whatever it happens to be - will have the differential advantage.

    And yes, the physical experience will have to be more customized, more unique, more differentiated if retailers are going to make their footprints stand out in the communities they serve.

    Published on: March 10, 2011

    Ad Week reports that “according to a new report from Forrester Research, just 6 percent of 12-17-year-olds who use the Web desire to be friends with a brand on Facebook, despite the fact that half of this demographic uses the site.

    “Among Web-connected 18-24-year-olds, that figure doubles - meaning that 12 percent of that demo is OK with befriending brands—though the vast majority of young adults are not, per Forrester. Even scarier for brands: Young people don’t want brands' friendship, and they think brands should go away.”

    Many brands are looking to social media as a strong digital channel to communicate with these consumers, since it’s where 12- to 17-year-olds are spending so much time,” Jacqueline Anderson, Forrester’s Consumer Insights Analyst, tells AdWeek . “But research shows that it is important to consider more than just consumers’ propensity to use a specific channel. Almost half of 12- to 17-year-olds don’t think brands should have a presence using social tools at all.”
    KC's View:
    Nothing like a cold dose of reality to make one re-examine a marketing plan...

    What’s interesting about this is another sentence from the story:

    Regardless of their willingness to interact with brands, nearly three-quarters of 12-17 year olds - 74 percent - use social networks to talk about products with friends and make recommendations.

    So this means that a key demographic - that in a few short years will be the center of the target for brand marketers - wants to talk about brands via social media, but does not want brands to be part of the conversation.

    Yikes.

    It just so happens that I am moderating two different panels at the end of the month - one at the annual Western Michigan University Food Marketing Conference, and another at the SymphonyIRI Summit - that will be looking at mobile marketing and social media, and I’ll be curious to find out what people far smarter than I about such things believe brands should do in response to such information.

    I wonder to what extent this may have to do more with brands than social media. For example, maybe they want the world to be a brand-free zone. Maybe they think that brands are guilty of a kind of crass and omnipresent commercialism that they find oppressive.

    I know I feel this way every time I listen to a baseball game on the radio, and it seems like the announcers can’t comment on how green the grass is without saying that the observation is sponsored by this company or that one. The rhythm of the game calling gets interrupted by incessant commercials, and this becomes a kind of symbol for the brand clutter that surrounds and infiltrates our lives.

    I’m not sure it is a bad thing if studies like these may us think twice about how commercial we get.

    (I got a dose of this the other day when Mrs. Content Guy sent me an email saying she’d just been reading MNB, and noticed that Michael Sansolo had plugged our book in his column. Just as I’d plugged it a day or two before. Now, these plugs were relevant to the points we were making, but make no mistake about it, they were plugs. Mrs. Content Guy suggested - “urged” might be a better word - that it is time for us to shut up about the book...that at some point the salesmanship gets tiresome. She’s right. Point taken. I like to think that we have the capacity for personal growth...)

    Published on: March 10, 2011

    The Tampa Tribune reports that Delhaize chains in the US - including Hannaford, Food Lion and Sweetbay - are launching “a new, store-wide brand of products called ‘My Essentials,’ with prices and nutrition levels directly targeted to beat comparable items at price-driven rivals like Walmart, Target and super-discounter Aldi.

    For instance, if Walmart's ‘Great Value’ sandwich bread is 88 cents a loaf, Sweetbay spokeswoman Nicole LeBeau said say they'll beat that price on Sweetbay's ‘My Essentials’ bread. Same with yogurts, cheese, paper towels, eggs, trash bags, soda, canned beans, Ketchup, frozen pizza, bran flakes and more than 500 other items.”

    The entire line should be in stores by summer.

    According to the story, “The new food items will be trans-fat free, with lower sodium and sugars ... tested in third-party kitchens to match or beat rivals on taste and performance, the company said. Nutrition information (normally printed on the back or side) will appear on the front of the package. And Sweetbay officials say they'll offer a double-money-back guarantee if customers don't like the products.”
    KC's View:
    These days, it pays to have as many arrows in your quiver as possible if you are going to compete in the mainstream grocery business. So this would seem to make a great deal of sense.

    Published on: March 10, 2011

    USA Today reports that tomorrow, “Seventh Generation, a maker of non-toxic household cleaners, will announce plans to roll out a laundry detergent bottle made from 100% recycled cardboard and newspaper ... On the outside, the new bottle looks as though it's made from the kind of cardboard used to make egg cartons — except it's smooth and flat. Inside, there's a plastic pouch that holds the detergent. Overall, the bottle - which still has a twist-off plastic lid - uses 66% less plastic than conventional laundry bottles. When empty, the bottle can be ripped in half and recycled with newspapers. The plastic bag is recyclable in many cities, too.”

    The story continues: “In a nation of eco-minded consumers who increasingly shun plastic, the move could be an environmental slam-dunk. Major brands from Wal-Mart to P&G have major environmental programs in place. Some 53% of consumers say they prefer to buy from firms that conserve energy and protect the environment, says a study by the non-profit Carbon Disclosure Project.”
    KC's View:
    If it works, this could be a home run ... and one that could influence how a lot of other products and companies come to market. And I hope it works.

    Published on: March 10, 2011

    In Minnesota, the Star Tribune reports on the efforts being made by Schwan Food Co. - which is major supplier of school lunches in the US - to decipher the tastes of America’s schoolchildren through a series of studies and focus groups in which they are actually talking to kids.

    “The bedrock of Schwan's Food Services' business is primary and secondary schools, an $8.5 billion-a-year market nationally as measured by manufacturers' shipments, according to restaurant consultant Technomic Inc.,” the paper writes, noting that “Schwan's is gung-ho enough on school lunch that it requires its sales and marketing staffers to get certified by the School Nutrition Association, a professional organization for school meal directors. Certification as a ‘school nutrition specialist’ entails continuing education beyond a college degree.”

    One example of where Schwan’s efforts are focused is in pizza - which is a huge item in school lunchrooms, but which also has been identified as a prime source of sodium and fat in kids’ diets, and therefore a contributor to the obesity epidemic. Schwan’s is working overtime to develop a healthier pizza and will pass muster from a taste perspective, but also deliver a more nutritious experience.
    KC's View:
    This is a perfect example of a company doing what needs to be done in the nutrition arena. Would Schwan’s have done it had there not been a great deal of time and attention paid to the obesity problem in this country? Unlikely. Would the company have done if there were not the threat of more stringent regulations on what can be sold in schools? Probably not.

    Some will decry this as the “nanny state.” But I have a hard time seeing how coming up with healthier products is a bad thing for these kids, and for the nation’s future.

    Published on: March 10, 2011

    • In Minnesota, the Star Tribune reports that “after years of sitting on the sidelines as CVS and Walgreens rapidly opened medical clinics nationwide, Target Corp. said Tuesday it will open eight new Target Clinics by the end of July, including four in the Twin Cities.

    “It marks the second eight-store burst in six months for the Minneapolis-based retailer, after expanding into Chicago and Palm Beach for the first time in September. The new clinics mean Target will have 44 locations in Minnesota, Maryland, Illinois and Florida.”

    • IGA announced that IGA has joined forces with Wounded Warrior Project (WWP) to create IGA USA’s first IGA Private Brand cause marketing initiative. During this national campaign - running in participating IGA stores from Memorial Day Weekend (May 27) through Labor Day weekend (Sept. 5) - IGA will donate 10 cents from the sale of every specially marked case of IGA Brand water to Wounded Warrior Project, an organization whose mission is to honor and empower wounded warriors. By fall of this year, IGA’s hopes to have donated up to $100,000 to WWP.

    • The Associated Press reports that Walgreen Co. “is leaving the pharmacy benefits management business, selling that operation to Catalyst Health Solutions Inc. for $525 million in cash and freeing it to focus on its drugstore network, the largest in the United States.

    “The companies expect to complete the deal by the end of June assuming regulators approve. The pharmacy benefits management business, known as Walgreens Health Initiatives, has never approached the size of Caremark, the pharmacy benefits management business of CVS Caremark Corp., which is Walgreen's largest drugstore competitor. Caremark says it manages prescription benefits for about 60 million people.”

    • The Seattle Times reports that Fred Meyer has announced “that electric car-charging stations will be available at a handful of its Puget Sound-area stores this summer.
    Melinda Merrill, a spokeswoman for the Portland-based retailer, said stores in Kent, Bellevue, Everett, Lake City and Alderwood were being considered as charging-station locations, along with a Maple Valley store that hasn't been built yet. Another five or six stores in Oregon, some in the Portland area and others in strategic locations along the Interstate 5 corridor, are also set to get charging stations. The cost of using the stations hasn't been determined yet.
    KC's View:

    Published on: March 10, 2011

    David S. Broder, an old-school journalist and columnist who won a Pulitzer Prize and pretty much defined political coverage during a 45-year career with the Washington Post, died yesterday of complications from diabetes. He was 81.

    In its obituary, Politico wrote, “Broder was legendary for the amount of time he spent talking with ordinary voters in battleground states. He picked precincts based on their behavior in previous elections and then flew across the country to knock on doors or talk to people in supermarket parking lots.” And after Broder’s death was announced, tributes to his long and productive career came in from both sides of the political aisle.
    KC's View:

    Published on: March 10, 2011

    Got the following email from Alex Leopold regarding Michael Sansolo’s column about the Akron Aeros minor league baseball team’s food choices at its concessions this year:

    Read your article on the MorningNewsBeat.com about the Akron Aeros and their plethora of hot dog topping choices. It's quite incredible but I think I may have something that is even more of an "overload" for you...

    The CLAWlossal from the Hickory Crawdads (Texas Rangers Single-A affiliate) in Hickory, NC.

    It's an absolutely ridiculously amount of food on a platter that would probably test both Kobayashi's heart and stomach. If you ever find yourself able to come down to Hickory, NC, we would love to have you and you can see it for yourself.The CLAWlossal includes:
    - Footlong hot dog with chili & cheese- Pub chips- Eight ounce hamburger- BBQ sandwich- Corn dog- Five onion rings- Four cheese sticks- Two pickle spears.It only costs $25 which is great deal when you think about the enormous amount of food you're getting. If someone finishes it in an inning or less, they receive a CLAWlossal t-shirt, a photo on the CLAWlossal wall, AND, of course, their money back.


    And the next day, I’m guessing, they post the person’s obituary on the scoreboard.

    (Just joking. We kid because we love.)



    We had a story yesterday about how the former head of the Canadian Food Inspection Agency (CFIA) says that food labels with “B.S.” claims are “rampant” in Canada - but that regulators ought not crack down on them. And I was a little surprised by this, commenting:

    I know I will be accused by some of favoring a nanny state, but I think that one of the things that government ought to do is protect its citizens from lies that are perpetrated by people and companies looking to make money on the wings of these falsehoods ... And the companies that don’t lie or try to mislead their customers ought to be out in front calling for such regulations and severe consequences.

    Which led MNB user Andy Casey to write:

    I couldn’t agree more.  The role of government in business is to protect competition rather than competitors, and ensuring companies are dealing fairly and honestly with consumers is a big slice of that.

    Another MNB user wrote:

    The problem is that it will cost money to do this. That would imply additional tax dollars (revenue) would be needed. The only segment of our society that could meet the expense of more taxes is too busy using their money to create jobs…so what will we do?

    I say most of this with a bit of sarcasm and as I have a boss to answer to please do not post my name…





    Regarding Walmart’s slippage and Target’s gains in their price wars, one MNB user wrote:

    When you live by price, you die by price…

    True.




    And, responding to my minor rant about St. Patrick’s Day over-commercialization, Hortencia Espinoza wrote:

    I second your Bah Humbug. I do the same thing every year on St Valentine’s Day and St Patrick’s Day.

    I wonder if the NRF asked the people they polled:

    Who is St Patrick?
    Why do the Irish celebrate him?

    What does the Shamrock symbolize?

    Do you know you can’t drink on that day because it’s during LENT?

    I am very lucky. I get to celebrate it every year with my friend Karl who was born and raised in Dublin. He moved here when he was 25. I get to eat true Irish corned beef and cabbage (although this year it will be cabbage since I’m giving up meat for Lent.) Then we sit on his balcony and make fun of all the “daft Americans” as they walk the streets of San Francisco drunk.


    I’m giving up Catholic guilt for Lent.

    Can I get an “amen”?
    KC's View: