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    Published on: March 21, 2011

    by Kevin Coupe

    The Boston Herald reports on how more stores than ever “are offering the option of ‘paperless receipts’ for environmentally conscious consumers who don’t mind giving out their e-mail addresses ... Major retailers such as Apple, Anthropologie, Urban Outfitters and Nordstrom already give customers the option to go digital while the Container Store and Best Buy are participating in a pilot program with Intuit, the software maker of Quick Receipts, and Whole Foods is piloting a paperless option in the mid-Atlantic region that could spread nationwide.”

    For retailers, offering this option ought to be a no-brainer ... and in fact, ought to be part of a timely, integrated, comprehensive marketing program that targets best customers.

    There likely is a growing percentage of customers that would be willing to get their receipts emailed to them; not only does it cut down on paper, but it also makes it easier for them to track their food-related expenses - which is more important than ever as food prices get higher and people are looking to get the most for their money. Once people say they’d like to have their receipts emailed to them, that opens the door to other kinds of email communications between the store and the shopper - relevant, without being abusive of the open channel, because permission has been given. And, it plays into the growing trend toward mobile marketing, and social networking. It connects a retailer to a future in which the relationship with the shopper needs to change, to deepen, to become more compelling if a retailer is to have a differential advantage.

    Paperless receipts are happening in a broadening number of retailers, and those with their eyes open ought to be running - not walking - to adopt it as an option.
    KC's View:

    Published on: March 21, 2011

    CNBC has a report on the increasing democratization of food fads, which “can go viral in the time it takes to upload a picture of salted caramel ice cream. The arbiters of trendy tastes include big-name chefs, bloggers, urban hipsters, eater tweeters and journalists. Usually, they work in some hard to-quantify combination ... Food fads are older than the fondue pot in the back of your parents' pantry. But the lines of dissemination were easier to track before the existence of the Food Network and the Web. The high-brow authority was Gourmet magazine. Home cooks took cues from cookbooks and friends. There were just a few famous culinary authorities, like Martha Stewart or Paul Prudhomme, who helped popularize Louisiana cuisine.

    “Top-down authorities live on in the food world, even if they now share the stage with the cyber-masses. Serious eaters still are influenced by the magazines like Food & Wine and Bon Appetit. But the rise of food TV has dramatically multiplied the number of celebrity cooks who can popularize a food item. Think of what Rachael Ray did for extra-virgin olive oil, or what Bobby Flay did for grilling.”

    The primary examples cited by the piece are the increased popularity of bacon, cupcakes and food trucks - all of which seem to have been fueled not by chefs ands gurus who make proclamations from on high, but by social media that give these trends momentum and a sense of grass-roots popularity. Old world media do play a role, but the opportunity for trends to bubble up is much greater than it was back in the 20th century.
    KC's View:
    It isn’t just food trends that have been democratized. I think what we are seeing around the world that people’s emotions and opinions can bubble up via technology and take on a viral quality, spreading quickly and disrupting traditional ways of doing business; the institutions affected can includes both governments and private industry.

    Marketers need to pay close attention and be part of the process. Or risk irrelevance and eventual obsolescence.

    Published on: March 21, 2011

    Forbes has a piece about Sam Martin,the new CEO of the troubled and bankrupt Great Atlantic & Pacific Tea Company (A&P), and how he analyzed what was needed for a turnaround of the company.

    According to the piece, Martin believes that there are five things always necessary for a retail turnaround, and in A&P’s case, they were all “woefully in need of being addressed.” They include the installation of a strong management team, the strengthening of liquidity, reducing structural and operating costs, improving the value proposition for customers, and enhancing the int=store shopping experience.

    Martin, the story says, “was concerned that the situation would deteriorate and that he needed a ‘path to success’ so he could rally the larger team behind his view to success.” He tells Forbes, “It was essential to have an articulated plan available to share robustly around the organization and with all our stakeholders…If (our employees) are not properly armed with the right information, they will give the wrong message – because they’re going to give a message anyway. So getting the right message in the right hands quickly is important and essential to getting off on the right foot and having any chance of success in the outcome.”

    Forbes continues, “Leading an organization into and through Chapter 11 or any turnaround is tough stuff. People generally don’t like change and they certainly don’t like uncertain change. Any time an organization goes through this, there are tremendous unknowns and stress. While it’s in no way certain that Martin and his team will be able to help A&P regain its former glory across all of its previous vast distances, they have been clear and consistent in driving the turn-around imperative. That helps a lot.

    “The burning imperative is a cornerstone building block and involves creating an understanding among team members what they are supposed to do immediately and how this works with the larger aspirations of the team and the organization. Everything pivots off a business’ mission, vision, objectives, goals, strategies, plans and values.”
    KC's View:
    The sad reality may be that A&P’s brand equity may be so tarnished after years of neglect and mismanagement that the best Martin and his new management team can do is stop the hemorrhaging and get the company in some sort of shape that makes it an attractive acquisition target ... or makes it more appealing for shareholder Yucaipa to take a controlling position in the company.

    Published on: March 21, 2011

    Here are the numbers when it comes to rising food prices, according to USA Today: “Corn has soared 52% the past 12 months. Sugar’s up 60%. Soybeans have jumped 41%. And wheat costs 24% more than it did a year ago ... You’re paying about 6.8% more for that steak than you did a year ago, according to the Bureau of Labor Statistics. Fruits and veggies are up about 4.3%.”

    According to the story, “The surge in food prices has many causes. Rising population. Speculators. Soaring oil prices. Trade policies. And, ironically, improved standards of living in emerging nations.” And while the impact of rising food prices has been relatively modest in the US because the average American spends about nine percent of his or her income on food (and another three percent dining out), the greater impact is being seen in emerging nations where people may spend half or more of their income feeding their families.

    “By itself,” the paper writes, “the soaring cost of food didn’t cause the political unrest in the Middle East and elsewhere. Those tensions have been building for a long time. But higher food prices amplify those tensions.”
    KC's View:
    Increased food prices also will have a kind of domino effect, even here in the US. One MNB user passed along a local news story from Arkansas saying that Simmons Foods, a chicken processor, is laying off 180 employees as it slows down production because of the rising cost of grain, which is caused by corn being used for ethanol.

    Published on: March 21, 2011

    The Associated Press reports on rising apprehensiveness in Japan about radiation contamination of food there, with spinach and milk being of particular concern to shoppers despite the fact that “the government said the level of radiation detected on spinach and milk was minuscule and should be no threat to health. Chief Cabinet Secretary Yukio Edano said he had received no reports that would require special measures to be taken regarding tap water.”

    According to the story, “The tainted milk was found 20 miles from the plant, a local official said. The spinach was collected from six farms between 60 miles and 75 miles to the south of the
    reactors.Farmers and merchants expressed fears of their own that public anxiety might hurt even producers of goods that were free of contamination.”

    Meanwhile, the Los Angeles Times reports that while “there's no indication that food imported from Japan has been tainted as the country grapples with a nuclear crisis ... shipments from Japan will be checked for radiation by U.S. regulators.

    “The Food and Drug Administration is ‘closely monitoring the situation in Japan and is working with the Japanese government and other U.S. agencies to continue to ensure that imported food remains safe,’ an agency spokeswoman said. The FDA ‘will be examining both food products labeled as having originated in Japan or having passed through Japan in transit.’

    “The Customs and Border Patrol, which is in charge of inspecting cargo arriving in the U.S., has the capability of scanning entire shipping containers for radiation. Current plans call for subjecting Japanese food cargo to such screening, the FDA spokeswoman said.”
    KC's View:
    This probably is going to be one of those areas where transparency is going to be critical, because the rumor-mongering is going to be enormous.

    Published on: March 21, 2011

    The Wall Street Journal this morning has an interview with Walmart’s William Simon, who is charged with reviving the flagging fortunes of the company’s US stores, which have been showing stagnant same-store sales over the past seven quarters. His strategies include getting back to an Every Day Low Prices (EDLP) approach, as well as opening small stores in urban and rural areas that will expand the company’s footprint and give it a greater presence.

    One excerpt:

    “I think we tried to stretch the brand a little too far ... A lot of things have distracted us from our pricing mission. We got enamored with presentation as an example. We walked people through our [remodeled] stores and they were gorgeous.

    “But they cost more. And if you spend more on your building, your prices can't be as low as you want them to be. ‘Every Day Low Price’ can't come from the supplier because they have to make money too. ‘Every Day Low Price’ has to come from every day low cost, which means we have to operate for less.

    “Sustainability and some of these other initiatives can be distracting if they don't add to every day low cost.”
    KC's View:

    Published on: March 21, 2011

    Multiple press reports take note of the decision by fast feeder Jack in the Box to get into the food truck business, developing a 34-foot-long truck - complete with kitchen, refrigeration equipment, satellite radio and 47-inch flat screen menu board - that is bringing its burgers, tacos and fries to the streets of Southern California.

    According to the Associated Press, “Jack in the Box said its truck - which features the company's mascot Jack, with a spatula in hand - will support restaurant activities as well as community events. The Munchie Mobile is also available to cater public or private events in Southern California, and can be tracked via Twitter.”
    KC's View:
    Man, this would have been great during my college days ... my vague memory is that when we all had hangovers, a trip to Jack in the Box for tacos and milkshakes somehow seemed to be the best possible cure.’ If they could have rolled one of these up to campus, it would’ve been terrific...

    But seriously, this is the way that more businesses need to think. Thinking outside the box, while it has become a cliche, is precisely the right way to characterize the Jack in the Box initiative.

    Published on: March 21, 2011

    The Washington Post reported over the weekend that “the number of supermarkets employing union workers in the Washington area has steadily declined over the past three decades, accelerated in recent years by the entry of Wal-Mart, Whole Foods and others into the grocery niche. As more nonunion shops, such as Target and CVS, expand their food offerings, labor leaders worry the trend will accelerate.”

    According to the story, “Only four of the top 10 chains selling groceries in the Baltimore-Washington area are union: Giant, Safeway, Costco and Shoppers Food Warehouse ... Nine of the top 10 local supermarkets were all under union contracts in 1979 -- some closed, others lost market share to Giant and Safeway.”
    KC's View:

    Published on: March 21, 2011

    In-N-Out, for many the best hamburger chain in the country, reportedly is expanding beyond its west coast roots and will open at least eight units in the Dallas, Texas, area over the next two months. That’s a much faster rate of expansion than the company achieve din Utah, where it took three years to open eight stores.

    According to the Orange County Register, “To recreate a phenomenon that for 62 years has been isolated to the West Coast, In-N-Out will build a second meat commissary in Texas. The company is leasing a temporary warehouse in Dallas to support their initial Texas growth.   The 60,000-square foot facility will house a beef processing plant and warehouse that mirrors the chain’s distribution headquarters in Baldwin Park (California).”

    No word yet on whether In-N-Out is planning to expand elsewhere. Mouths, however, almost certainly are watering.
    KC's View:
    I can think of a 16-year-old girl for whom Texas isn’t quite far enough...but I think the interesting part of this story is the fact that the folks at In-N-Out are doing their best to create the infrastructure to support the stores, rather than doing this on the cheap and making it more a marketing challenge. If you are going to do this, you have to do it right.

    Published on: March 21, 2011

    Bloomberg reports that General Mills “is in exclusive talks to buy 50 percent of Yoplait, strengthening ties to the yogurt maker to expand its line of dairy products.” According to the story, “General Mills has had the U.S. license for Yoplait since 1977,” but would like to “build Yoplait’s market share in western Europe and accelerate expansion in developing countries.”

    • Attorneys for the Center for Food Safety (CFS) and Earthjustice have filed a lawsuit against the US Department of Agriculture (USDA), arguing that the agency’s recent unrestricted approval of genetically engineered (GE), “Roundup Ready” Alfalfa was unlawful. According to a statement, “The GE crop is engineered to be immune to the herbicide glyphosate, which Monsanto markets as Roundup.  USDA data show that 93% of all the alfalfa planted by farmers in the U.S. is grown without the use of any herbicides.  With the full deregulation of GE alfalfa, USDA estimates that up to 23 million more pounds of toxic herbicides will be released into the environment each year.”
     
    “USDA has once again failed to provide adequate oversight of a biotech crop,” said Andrew Kimbrell, Executive Director of the Center for Food Safety. “This reckless approval flies in the face of overwhelming evidence that GE alfalfa threatens the rights of farmers and consumers, as well as significant harm to the environment.”

    • The Canadian Council of Grocery Distributors (CCGD) announced that it has been dissolved, and that former members of the organization “and the issues managed by them are being addressed” by the Canadian Federation of Independent Grocers (CFIG) and the Retail Council of Canada.

    Fox News reports that singer/songwriter/entrepreneur Jimmy Buffett has trademarked the name “tiger blood” and plans to use it for a new cocktail. cashing in on the use of the term by Charlie Sheen, who referred to an red-colored energy drink as “tiger blood” during the recent media tour in which his rants led to him being fired from his hit series, “Two and a Half Men.”

    According to the story, a company named XANGO makes the beverage that Sheen drinks; the story says that “despite recommendations that it should be consumed in small dosages, Sheen allegedly drinks a bottle of the juice every day.”
    KC's View:

    Published on: March 21, 2011

    by Kevin Coupe

    Last week, we took note of how Netflix, which over the past few years has helped to completely rewrite the rules of video rental, has been flexing its muscles in a variety of directions, moving aggressively to gain an advantage in the video streaming business. And now, it actually is competing with pay-cable channels such as HBO for original content - potentially rewriting some more rules in the process.

    Today, the Wall Street Journal reports that Netflix has “cut a deal to debut a new television series by Oscar-nominated director David Fincher on its Internet streaming service, in an agreement that departs dramatically from how traditional television programming is made and aired.

    “Under the deal with independent studio Media Rights Capital, Netflix said ‘House of Cards’ - a political drama to be executive produced by Mr. Fincher and star Kevin Spacey - will begin playing exclusively on Netflix's Internet streaming service late next year.

    “Netflix executives committed to a minimum of 26 episodes - two full seasons - of the series even before a test episode of the show was made, something that's highly unusual in the TV business. In general, TV networks don't commit to a show without a test episode, and usually reserve the right to cancel production of the series after a certain number of episodes if it is unpopular.”
    KC's View:
    The lesson needs to be driven home to every marketer - that competition often comes from unexpected, unanticipated directions, and from people and companies that are willing to change the rules or not adhere to conventional wisdom.

    Published on: March 21, 2011

    Last Friday’s Eye-Opener looked at the recent events in Japan and suggested that there are lessons to be learned there about the importance of transparency:

    There has been a sense throughout the process that the Japanese government has been downplaying the problems and not being upfront with the citizens there about the dangers they are facing. On the one hand, it is kind of understandable - they don’t want to create broad panic in the streets. But the problem has been that with each successive announcement that things are worse than they thought, the government seems to lose a little credibility ... which is the one thing it needs right now.

    That’s a business lesson. Sure, you have to balance “need to know” with “ought to know,” especially in times of crisis. But especially today, when everybody is talking to each other via various forms of technology, institutions cannot afford to be in the position of being anti-transparent, because they then out their own credibility and sustainability in jeopardy.


    One MNB user responded:

    I don’t think it is fair to compare government response to a crisis in the same way that a business should or could run.  Meaning transparency is best.  Because in this case it is not. 

    An alternate argument is that full transparency in a crisis can also hurt people via panic and over reaction to situations. 

    There are differences in the best ways to run the private vs. the public sectors and this is one.  Unions are another major difference but that’s another story! 

    No business in their right mind always practices full transparency in every crisis either, no matter what people are told or what they want to believe.

    Therefore, I submit to you that some institutions, like government, are forced to choose the lesser of two evils….and in this case, losing a little credibility may be the best choice.

    I think Japan would lose much more credibility if they chose to completely evacuate the country and not deal with their problems in a prescribed manner, which they have been doing.

    And it isn’t that things are worse than they thought with each announcement as you claim….it’s that the situation with the reactors has become worse as time went by and efforts for control have failed.  Bad news but it doesn’t mean that they are withholding information.  The liberal media is covering this very poorly to insinuate that the Japanese are not doing everything they can do or hiding something.  That just isn’t true.  No, I think Japan is doing just fine in the face of a monstrous national disaster and they need our support and not our criticism. 

    Another thing I don’t appreciate is how this disaster has gained so much more media time than the disaster going on in Libya and the middle eastern countries right now.  Or our own economy.

    Our US government is losing credibility at a record setting pace due to poor leadership and poor foreign policy decisions that can destroy the world economy and plunge the USA into a serious economic meltdown that would make the meltdown in Japan look like a picnic in the park.  But I don’t see that gaining much air time on the news or in your editorials…





    We also had a story last week about an piece saying that - go figure - honesty is the best policy in management.

    MNB user Warren Love wrote:

    Leading by example and facing the truth has always been a good way to move forward in life and in business.  Ask Suzi Orman about the importance of facing the truth about ones financial situation when pursuing successful money management.  How about when the new President of Kimberly Clark stood up in front of the company and asked the question " Why do we suck so badly in delivering value"?   Apple, Johnson and Johnson (Tylenol) have all showed that walking the walk is builds more credibility than just hyperbole.  Smart people understand that it's what we do that defines us, not what we say.  I think Domino's CEO expressed his personal values and having the courage to act on them.

    I wrote in my commentary:


    Does this mean that transparency, honesty and candor are marketing tools and tactics, rather than real core values that are cultural in nature? (Sure sounds like that.)

    And when - and why - did obfuscation and dishonesty become accepted management tools to begin with?

    Just asking.

    What bothers me at some level is the notion that “honesty in business management” is even considered to be newsworthy. That alone speaks volumes.


    Which led MNB user John Shelford to write:

    Right on comment!!  Since when has honesty been a negotiable?  You are right on!!

    But MNB user Richard Thorpe disagreed:

    You appear to be rather naive in thinking that dishonesty and obfuscation have not been the norm for American business and American government. Look at our history - look at our industries and look at national history.  We are no different than any other country and we, as a nation, have been tremendously successful at profiting at the expense of other countries and our own poor.  Tobacco industry - Viet Nam, our Pharmaceutical industry (global not just national) etc etc.  The shoe does not fit everyone but it sure is the exact size for too high a percentage of our businesses and government operations. On the very bright side - the internet has allowed us the opportunity to actually make our government and our business community become LESS obfuscatory and therefore less dishonest. For the government it will become more difficult to hide truth and get re-elected and for business it will be hurt profits to get caught doing the "wrong thing", e.g. Apple's handling last year of the I phone problems.

    And another MNB user wrote:

    I think that transparency, honesty and candor can be both "real core values" and "marketing tools." First of all, I'm not sure that honesty can exist, or at least be believed, without transparency. This NFL lockout isn't something that I'm paying much attention to. But I saw the other day that the players want a neutral third party to audit ownership's books and the owners are refusing. Maybe there is a logical reason for their stance, but it makes you wonder.

    By the way, I have been impressed by the Domino's campaign and I see a marked improvement their quality and service. Clearly better than Pizza Hut and Papa Johns in my opinion.





    On another subject, one MNB user wrote:

    I know that Kevin and Mike will appreciate the movie reference, but a few weeks ago I was watching The Company Men and besides the fact that it rekindled many of the emotions that I had when I was let go from SUPERVALU after 16 years, it also reinforced a very important fact of business:  “You cannot cut your way to prosperity.”

    SUPERVALU, especially under Craig Herkert, is the perfect case of how cutting expenses may provide some short term benefit to bolster earnings, but unless you are growing sales, any benefit is illusory.  The lack of any solution for the free fall in sales at SUPERVALU is the reason that bottom line earnings continue to decrease and that the stock price is sooooo low.

    Some other key business lessons from The Company Men:

    When executives pay too much attention to Wall Street and their stock price, they are destined to lose control of their company.

    Anytime that key personnel reductions or changes are made in a division or department without the knowledge of the executive in charge of that department or division, it is definitely time for that executive to go.

    Do not become too enamored with your short term success or live at the very edge of your current means.  This leads to Ben Affleck losing his house and car.  As soon as possible in your career, try to develop a f.u. fund of 6 months expenses to allow you find a new job when the stuff hits the fan.

    Finally, thank god for the strength and benefits that come from your family and close friends.





    Finally, thanks to all of you who said you enjoyed my piece in Friday’s “OffBeat” about college visits with my 16-year-old daughter, and who shared your personal stories about getting older, letting go, and learning from both experiences. We’re all in this together, and one of the things I treasure about MNB is the sharing.
    KC's View: