retail news in context, analysis with attitude

Published on: April 21, 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.


Hi. I’m Kevin Coupe, and this is what is on my mind this morning....

There was a story the other day, first reported in the Chicago Sun Times, I think, about how Starbucks CEO Howard Schultz said that “Starbucks has no technology,” and that the company’s competitive advantage is “humanity.”

And then, after he brought the tablets down from Mount Sinai... Just kidding.

He also said, apparently, that the internet “is not a channel to sell things, but one to build trust.”

Let me work backwards on some of this hogwash.

First of all, if he really thinks that the internet is not a channel to sell things, he ought to pay a little more attention to what’s going on in Seattle. There’s a little company there called Amazon that might disagree with him.

In addition, I would point out that Starbucks sells stuff over the internet. In fact, I have a subscription to Starbucks coffee that has two bags showing up at my office door once a month. I’m not sure I am saving any money on this deal, but I am assured that while I am on the road, I’ll never get a text message or phone call from Mrs. Content Guy wondering if we’re out of coffee. And Starbucks is assured, by the way, that I won’t be choosing another brand of coffee, at least not anytime soon.

(This is, by the way, the essence of the Amazon Subscribe-and-Save model. Which sells stuff. On the internet.)

I would also disagree with the assertion that Starbucks does not have technology. It uses plenty of technology, though in some cases, I’d argue, not particularly well.

An example of the company’s missteps, I would argue, is its frequent shopper program. Buy 15 coffees using your Starbucks card and you get a free one. Very nice. Except that the free one comes in the form of a post card delivered via snail mail, which you then have to carry with you to get the free coffee.

This makes no sense. They’ve got the card. They’ve got the data. It would be much simpler - and easier for the consumer - to just adjust the system so that every 16th cup of coffee I order at a Starbucks is free. If I want to find out how close I am, I just have to go online to see. (Which I can, by the way. So the technology is in place.)

Unless, of course, the whole idea is to offer a freebie that will largely go unredeemed. That couldn’t be the idea, could it?

At the same time, for people who use cards to buy their coffee, Starbucks ought to offer the option of having receipts emailed to the consumer. The company makes such a big deal about sustainability, this should be a no brainer.

All this kind of stuff is technology-driven, but it also is consumer driven. It makes our lives easier and more rewarding. And it serves as a shopper-friendly response to the study we ran here on MNB just yesterday saying that Americans are leaving one-third of all loyalty rewards on the table, unredeemed.

C’mon Starbucks. You can rebuild this. You can be better than you’ve been. Better. Stronger. Faster.

Because like it or not, you have the technology...

One other thing. I may be talking specifically about Starbucks here, but I could also be talking about any number of other retailers in a variety of venues that have loyalty programs that seem specifically designed to drive down reward redemption, or just plain annoy us.

That’s what is on my mind this Thursday morning. As always, I’d like to hear what is on your mind...

Published on: April 21, 2011

by Kevin Coupe

The Los Angeles Times reports that Amazon has developed a way for people using its Kindle reader to check out e-books from as many as 11,000 libraries, beginning later this year ... “Amazon said its Kindle library lending will be available for all generations of Kindle e-readers and its free Kindle apps found on desktops, laptops and devices, such as many popular smart phones and tablet computers.”

According to the story, “The Seattle-based retail giant did not specify when its ‘Kindle Library Lending’ program would start, but the company did say that the perks of reading a purchased e book on a Kindle e-reading device or through a Kindle app will be in place -- such as syncing of notes across Kindle apps and readers, finding the last page read and highlighting of text.”

No word yet on how long e-books will be available to borrowers, nor if there will be any restrictions on how many books can be loaned out at any single time.

Now, we’ve had discussions - sometimes contentious - here on MNB about the future of libraries in America, with me suggesting that even the most modern of libraries may have to rethink their business model in a world where the internet makes research materials available on every smart phone, and where e-books are a fast-growing phenomenon. Some have disagreed, suggesting that libraries occupy a sacrosanct position in American culture and society, and that even technological revolutions cannot change this fact.

While I agree that libraries are to be revered and treasured, I would also argue that words like “sacrosanct” suggest an unassailable advantage ... and I think that most of us would agree that there is no such thing.

Like all businesses, libraries across the land need to be see this story and ask themselves, “What does this mean to our business?” And, “What does it suggest about where we need to be in one year, five years, ten years?”

There will be no easy answers. But just the questions will be Eye-Openers.

Published on: April 21, 2011

The New York Times this morning reports that a number of food companies “are rewriting the rules for reaching children in the Internet age. These companies, often selling sugar cereals and junk food, are using multimedia games, online quizzes and cellphone apps to build deep ties with young consumers ... When these tactics revolve around food, and blur the line between advertising and entertainment, they are a source of intensifying concern for nutrition experts and children’s advocates — and are attracting scrutiny from regulators. The Federal Trade Commission has undertaken a study of food marketing to children, due out this summer, while the White House Task Force on Childhood Obesity has said one reason so many children are overweight is the way junk food is marketed.

“Critics say the ads, from major companies like Unilever and Post Foods, let marketers engage children in a way they cannot on television, where rules limit commercial time during children’s programming. With hundreds of thousands of visits monthly to many of these sites, the ads are becoming part of children’s daily digital journeys, often flying under the radar of parents and policy makers, the critics argue.”

Published on: April 21, 2011

The Wall Street Journal reports that Ahold “is on the hunt for acquisitions, and growth in new markets will be a key strategic priority in the coming years.” However, CEO Dick Boer did not specify which markets he had in mind.

Boer made the comments at the company’s annual shareholders meeting in Amsterdam.

"The recent opening of our first store in Belgium indicates how we want to use our expertise as a retailer in new markets," he said.

The general sense of the story is that Ahold has plenty of cash to make an acquisition, but that investors are getting impatient.

Published on: April 21, 2011

Marketing Daily reports on a new study from OgilvyEarth saying that while “thousands of companies try to link their marketing messages to Earth Day, scheduled this year for April 22 ... the vast majority are not having any impact on consumer behavior.”

According to the story, “While 82% of Americans have ‘good green intentions,’ only 16% are dedicated to fulfilling them. And the 66% -- or ‘the Middle Green’ -- are pretty much ignored by marketers. Overall, 82% have no clue how to estimate their carbon footprint, and 70% would rather cure cancer than fix the environment.”

The story goes on:

“The problem, the agency found, is that green continues to feel like a niche position. ‘Existing green marketing is either irrelevant or even alienating to most Americans,’ it notes. ‘Half of Americans think the green and environmentally friendly products are marketed to ‘Crunchy Granola Hippies’ or ‘Rich Elitist Snobs’ rather than ‘Everyday Americans’,

“It also found that the group it calls Super Greens -- the most devoted -- pay a price for that commitment, and that in addition to often paying more of goods, ‘there is relatively high social and emotional cost. This segment reveals that they feel ostracized from their neighbors, families, and friends.’ And the more they learn about sustainability, the worse they feel, with the study finding they feel twice as guilty as Middle Greens.”

Published on: April 21, 2011

A new study from Northern Kentucky University suggests that people who drink energy drinks mixed with alcohol are more likely to drive and less likely to sense their own impairment than people who drink alcohol all by itself.

According to USA Today, the researchers “split 56 college students between the ages of 21 and 33 into four groups. The students received either an alcoholic beverage, an energy drink, a mixed drink with both ingredients, or a placebo.

“All drinks were made to look and taste like alcoholic energy drinks, so participants did not know which they were consuming. Researchers measured how quickly the students could execute and suppress actions after the dose and asked them to rate feelings such as stimulation, sedation, impairment and levels of intoxication.

“All of the students who drank alcohol showed impaired impulse control. But those who drank the alcoholic energy drink perceived themselves to be less impaired than those who drank the same dose of alcohol alone, the study authors said, which could make them more likely to take risks such as driving while intoxicated.”

In addition, the story says, “Bruce Goldberger, director of toxicology at the University of Florida College of Medicine, said his research in this area indicates that drinkers are more likely to drive if they mix alcohol with energy drinks. Other studies show increased risks of violence, unprotected sex and even sexual assault among those who consume this combination, he said.”

Published on: April 21, 2011

• In the UK, the Independent reports that Tesco has acquired an 80 percent stake in Blinkbox, a movie streaming service provider.

Terms of the deal were not disclosed.

Richard Brasher, the UK chief executive of Tesco, said in a prepared statement, "Whether customers want to own the DVD, download a digital movie, stream a rental or all three, Tesco is committed to giving customers choice."

Published on: April 21, 2011

DiversityBusiness.com is out with its annual list of the “Top 50 Organizations for Multicultural Business Opportunities,” which it says identifies firms that score the highest when it comes to volume, consistency and quality business opportunities granted to women and minority-owned companies.

Among the companies on the list are Walmart (1), Coca-Cola (4), Office Depot (6), PepsiCo (10), Kroger (15), JC Penney (17), Home Depot (18), Supervalu (26), Johnson & Johnson (28), Procter & Gamble (29), Target (33), Nordstrom (34), Accenture (42), Office Max (43), and Ahold USA (47).

The announcement notes that “as multicultural and female owned businesses gain more buying power and their lifestyles become more affluent, multicultural markets are growing in economic muscle. This in turn attracts more corporations, as they compete for market share. The Div50 list has therefore become the consumer guide for women and minority consumers.”

Published on: April 21, 2011

The Los Angeles Times on how a business in the ultimate car-culture region, Southern California, has come up with a unique take on convenience.

The Robert L. Adams Mortuary in Compton has installed a new drive-through facility, allowing people to view caskets and visit wakes without actually getting out of their cars. Or even stopping, if they are in a real hurry.

"I think it's wonderful, "said one woman told the Times. "It's nice to be able to drive through. You don't have to go inside. It's real convenient."

The owner of the mortuary said that she believes the feature gives her facility a differential competitive advantage.

Published on: April 21, 2011

• Advertising Age reports that “PepsiCo is in the process of creating a Center of Excellence to handle key areas of media and marketing procurement and embrace a more global approach.

“In an internal memo obtained by Ad Age, Grace Puma, senior-VP and chief procurement officer, detailed changes within PepsiCo's advertising and marketing sourcing team, and highlighted the creation of a Center of Excellence (COE) for advertising and marketing.”

• J & J Snack Foods Corp. announced that it has entered into an agreement to acquire the frozen handheld business - worth about $50 million in annual sales - of ConAgra Foods. Terms of the deal were not disclosed.

Among the brands included in the acquisition are Patio, Hand Fulls, and Holly Ridge Bakery.

• Food Marketing Institute (FMI) Senior Vice President of Food Safety Jill Hollingsworth, who has been leading FMI’s food safety initiatives for almost 15 years, has received the 2011 NSF Food Safety Leadership Award for Lifetime Achievement at the Food Safety Summit in Washington, DC. 

“We are very proud to have Jill recognized for the extraordinary contributions she has made to the food industry, specifically in the food safety arena,” said FMI President and Chief Executive Officer Leslie G. Sarasin.  “Her knowledge, insight and leadership have been invaluable to our members as they work to address food safety challenges and ensure a safer food supply for consumers.”

Published on: April 21, 2011

• The Food Marketing Institute (FMI) announced the appointment of Robert Rosado, formerly the policy manager for the food and agriculture issues at the Biotechnology Industry Organization (BIO), to be its new director of government relations. 

• Rite Aid announced that Tony Montini, the company’s senior vice president of category management, has been promoted to the role of executive vice president of merchandising.

• Family Dollar announced that Brad Rogers, regional vice president for real estate, has been promoted to be vice president of real estate development.

Published on: April 21, 2011

Major League Baseball Commissioner Bud Selig said yesterday that he will appoint a trustee to take over and run the Los Angeles Dodgers, and sources say that Selig is considering forcing a sale of the one of the league’s most storied franchises under the “best interests of baseball” provision of the league’s bylaws.

According to the New York Times story, owner Frank McCourt “has burdened the once prestigious franchise with more than $400 million in debt, and been embroiled in an ugly and lengthy legal fight with his wife over the terms of their divorce.

“Earlier this month, a San Francisco Giants fan was severely beaten outside Dodger Stadium in an incident that McCourt conceded exposed a lack of adequate security at the once venerable ballpark.”

And, sources tell the Times that “Selig believes that McCourt has badly damaged the value and reputation of the Dodgers while concerned only with his own profits and perks.”

Published on: April 21, 2011

... will return.

But ... keep those emails coming in about your favorite pizza parlors. The list is getting longer all the time, the descriptions are wonderful, and the passion is palpable.

At some point, I’ll post the list ... and we’ll all have some pizza parlors to add to our culinary bucket lists.

Published on: April 21, 2011

When the new Newsweek began being published a few weeks ago, I have to admit that I was unimpressed. There just wasn’t enough there for me - not enough news to make it a must-read, not enough analysis to make it a can’t-stop-reading experience.

But the April 25 edition, just out, has gone some way in changing my mind.

The cover story, “The Beached White Male,” is a terrific piece about how guys who used to think of themselves as Masters of the Universe have been treated cruelly by the recession and its aftermath; it isn’t a new story, but it is put together in a way that makes it compelling reading (especially for those of us in the demographic being described in dire terms). Which is the best one can say about a magazine story.

There’s also a wonderful story about Arnold Schwarzenegger, who seems unusually reflective as he considers what his next career/life move should be. ‘Arnold 4.0,” he calls it, but he’s not sure in what direction he should go.

My only problem with the Schwarzenegger story is that several times in the piece, people are quoted as dropping the f-bomb and other, similar epithets.

Now, I have no particular problem with the f-bomb, but it was startling to read it in Newsweek. I think you can get away with it in New York or The New Yorker or Vanity Fair, but I suspect that the editors of Newsweek will be getting some complaints from people who think of it as a family magazine.

“Inappropriate” is the word that comes to mind. I think Newsweek was going for edgy, but they may have gone a bridge too far.




The Conspirator, the new movie about the events following the assassination of Abraham Lincoln, directed by Robert Redford, is a very interesting story. It is not, however, a particularly great movie.

This pains me to say, because it obviously is a film put together with great care; shot on a relatively low budget, this period piece reeks of authenticity, sort of like a Matthew Brady photograph. But that may be the problem - Redford’s direction is sort of flat, and doesn’t have any real juice to it. (I actually would make the same argument about his most successful film, Ordinary People, which, inexplicably, beat out Raging Bull for the Best Picture Oscar in 1980.)

The movie is well acted - especially by Robin Wright as Mary Surratt, the boarding house owner accused of conspiring to kill Lincoln, and James McAvoy as the former Union soldier assigned to defend her in court. But it is hard for me to get worked up about a movie that is smart, stylish but ultimately uninvolving.




My wines of the week...

2009 La Crema Chardonnay from Monterey ... which is a deliciously creamy chardonnay that is Mrs. Content Guy’s favorite of the moment.

2006 Havens Merlot from Napa Valley ... which has a little more heft than a lot of merlots.

2009 The Black Shiraz, from Australia ... which is just terrific - bold, juicy and great with a stew or spicy food.




That’s it for this week...

Published on: April 21, 2011

Tomorrow is Good Friday, and MNB will be taking the day off. We’ll be back Monday...and hope you have a great weekend.

Slainte!