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    Published on: April 25, 2011

    by Kevin Coupe

    The Dayton Business Journal writes that “gas prices across the country continue to set new records, with stations in some states starting to charge $5 per gallon. But some oil analysts say $6 gas could happen this summer, sparking an energy crisis that would be bad for the economy ... Gas stations in states such as California, Hawaii and Florida have already started charging more than $5 per gallon in isolated cases, and CNN.com reported that a gas station in Orlando, Fla., was charging $5.69 per gallon of regular gas. That currently is the highest price per gallon in the country.”

    The rapidly changing gas prices stand as a constant reminder to consumers of how precarious the nation’s economic “recovery” is; every increase in the cost of fuel is money that consumers will not be able to spend elsewhere.

    Additionally, the business community needs to be concerned about what this is doing to consumer confidence, especially because the wildly fluctuating prices seem to have no relationship to reality. At a gas station a mile from my house, over a 12-hour period we watched as gas went from $4.02 per gallon to $4.09 to $4.19 and then to $4.12. And it is a safe bet that the task force named by the White House to investigating price gauging will do little in terms of instilling confidence in a shaken American public.

    It is a situation that all retailers - regardless of the venue - need to integrate into their thinking. The impact is not just economic, but also psychological and even spiritual, as consumers try to rationalize the constant changes, adjust to the impact on their wallets, and figure out what their next, best steps should be.

    The smart retailers - the ones with their eyes open - will be there to help them figure all this out.
    KC's View:

    Published on: April 25, 2011

    Walmart reportedly has begun testing an e-grocery service in Northern California under the Walmart To Go sobriquet, allowing “customers to purchase food, health and beauty products, medicine and other basic household goods online and have them delivered to their doorsteps for fees starting at $5,” the Wall Street Journal writes.

    The Financial Times puts the stakes in stark relief: “The world’s biggest retailer began the ‘limited test’ on Saturday as it looks to online commerce to offset the mediocre growth performance of its bricks-and-mortar stores in the US.”

    According to the Journal story, “Wal-Mart said the test was limited to a single market and may not be expanded further, depending on results. Wal-Mart declined to elaborate further.

    “But the world's largest retailer, which already operates a successful home grocery delivery business in the U.K. through its Asda store chain, appears serious about the potential of leveraging a blend of store and Web retailing to provide services pure online competitors cannot.”

    The Reuters story notes that “the online grocery business has proven difficult to succeed in given the perishability of fresh food and the industry's small profit margins, analysts have said. If WalMart decides to stay and expand in the online grocery delivery business, its competition would include Peapod and Amazon Fresh,” both of which have been expanding.

    FT suggests that “online groceries are regaining popularity among US retailers and consumers after several start-ups went bust a decade ago after trying to expand too quickly during the heady days of the first internet boom,” but says that Walmart’s “internet credentials are limited,” especially when compared to more experienced competition in this segment.

    The New York Times story says that “for the test, Wal-Mart is shipping groceries from a San Jose store, packing them in tote bags and delivering them in temperature-controlled trucks that the company owns. Deliveries can be scheduled for the next day.

    “Currently, the groceries available lean toward prepackaged goods. Customers cannot order beef to specifications, for instance - they must buy precut meat in a range of packages. And in the produce category, while fresh mangoes and bananas are available, oranges and lemons come in bags of several pounds rather than individually.

    “Its prices are competitive. A 64-ounce carton of Horizon milk was $3.50 on Wal-Mart’s site, $3.99 from Peapod and $4.29 on Fresh Direct.

    “Sixteen ounces of celery at Wal-Mart to Go was $1.98, where 16 ounces of celery at Peapod was $3.29 and at Fresh Direct $3.49.

    “On shelf-stable food like crackers and candy, Wal-Mart had a broad selection — it sells 12 varieties of Triscuits, for instance, versus 10 at Peapod and two at Fresh Direct.”
    KC's View:
    This moment was inevitable. We’ve been saying that here on MNB for years. The only surprise, I must confess, is that it took Walmart so long.

    I”m also a little surprised that Walmart has gone for a delivery model; I suspect that over time, the Bentonville Behemoth will shift to a store pickup model, which is easier and cheaper to manage, not to mention more profitable than delivery.

    Walmart will take its time, but not too much time, to roll this out. The stakes are too high, and the potential competition too formidable.

    And the competition, by the way, will also ramp up its offerings. Which will raise the stakes for everyone.

    Published on: April 25, 2011

    Unionized employees at Safeway-owned Vons, Kroger-owned Ralphs and Supervalu-owned Albertsons have voted to allow union leaders to authorize a strike in the event that negotiations with management cannot be successfully concluded.

    According to the Los Angeles Times, the vote in favor of a strike authorization was “overwhelming,” though union leaders would not quantify the vote. The Times writes that a “strike authorization does not mean that a walkout or employer lockout is imminent. Some analysts said it could help jump-start the labor talks, which have dragged on for weeks. The labor contract that was reached in 2007 expired March 6 and is being extended day to day.”

    Points of contention are said to “include the retailers' wanting to cut back their contributions to workers' pensions, increase workers' share of health insurance premiums and eliminate HMOs as a healthcare option.” Chains also reportedly “want to shrink meat cutters' hours and use more management employees in stores, which could potentially eliminate 700 union jobs.”
    KC's View:
    No way there is a strike or lockout. Not at this moment in economic history. It simply makes no sense for either side.

    Published on: April 25, 2011

    Larry Wahlstrom, who returned to Supervalu-owned Shaws as CEO less than a year ago when the then-CEO, Mike Witynski, departed “to pursue other interests,” announced last Friday that he is retiring, effective immediately.

    In a letter to company associates, Wahlstrom said that he would be succeeded by Mike Stigers, saying that his “long and diverse history in the grocery industry makes him uniquely qualified to lead Shaw’s and to unite our great associates as we fulfill our mission of becoming a neighborhood grocer in New England.

    “Mike began his grocery career in 1974 as a part-time courtesy clerk at Safeway. During the next 14 years, he took on managerial positions of increasing responsibility before joining Jons Markets, an independent retailer based in Los Angeles.  During the 1990s, he expanded his scope of experience by working for retail technology companies. He joined PW Supermarkets of San Jose, Calif., in 1999 as director of Operations. He served in executive roles in operations and merchandising and was promoted to senior vice president and chief operating officer in 2003. He subsequently became chief executive officer of the independent retailer. He comes to Shaw’s from Sterilox Food Safety, where he has been a regional vice president. Sterilox is a leading supplier of water-based food safety solutions for perishable items such as fresh produce, floral, and seafood in supermarkets.”

    Walhstrom concluded, “The past year has presented a variety of challenges for Shaw’s, and they continue today as the economy is still putting pressure on consumer spending. We remain focused on the customer and have started to execute initiatives and promotions that will bring people into our stores. We are confident in Mike’s ability to lead Shaw’s and carry the momentum into the future.”
    KC's View:
    That future, a lot of people think, includes finding a way of getting Shaws off the books at Supervalu. There will be a lot more on this story, I suspect, as the chattering class (of which I am a proud member) starts speculating about the story behind the story.

    Published on: April 25, 2011

    In California, the Daily Breeze makes an interesting observation in what otherwise is a fairly sobering piece about the prospects for Tesco-owned Fresh & Easy Neighborhood Markets, which lost more than $300 million last year and continues to have trouble gaining traction with US consumers.

    One reason “ for optimism,” the story says, “is the potential for a Southern California grocery strike, with a 20,000-member union voting Wednesday to authorize a strike if necessary.

    “Despite harsh criticism from labor activists, Tesco is non-union.”
    KC's View:
    This is the other reason that there won;t be a strike or lock out in Southern California - it’ll give non-unionized competition an opening, and none of the big three food retailers want that to happen.

    Published on: April 25, 2011

    Advertising Age reports that Weight Watchers is placing a $10 million bet on being able to attract men to its weight control program, spending that much money on a marketing effort to attract males to a system that has largely been focused on women.

    According to the story, “Weight Watchers, the biggest player in the $3.3 billion commercial weight-loss category, is following the lead of its smaller competitors, which have been after men for a while. Nutrisystem has for years relied on celebrity spokesmen, such as former NFL greats Dan Marino and Don Shula. And Jenny Craig last year added actor Jason Alexander to its stable of star endorsers, joining Valerie Bertinelli, Sara Rue, Carrie Fisher and others.

    “The companies are all trying to move the needle in a category that has leaned heavily on women. Roughly 90% of clients are female, according to Marketdata Enterprises, which tracks the category.”

    Among the innovations on its men-only website - a “beer cheat sheet” that lets men know how many points are accrued when specific beers are consumed.
    KC's View:

    Published on: April 25, 2011

    USA Today reports that lamb prices in the US are on the rise, driven by increased demand and decreased imports.

    The American Sheep Industry Association says that wholesale lamb is going for about $2.20 a pound, versus $1.39 a pound a year ago.

    According to the story, “About 30% of lamb is purchased near Easter and Christmas, and consumers this year likely have noticed the increased cost at supermarkets and non-traditional markets that cater to people of Hispanic decent and those from Middle Eastern and African countries who live in urban areas of the Midwest and Northeast.”
    KC's View:
    Prices for almost everything have gone up, so why not lamb?

    That said, it did not matter yesterday, when I made lamb and artichoke stew for dinner, served with a nice rice pilaf and an excellent and cold Black Pig Albarino.

    The thing is, prices matter more when we think of products in terms of being commodities. They matter less - at least, a little less - when we think of foods in terms of occasion, in terms of family connections, in terms of the emotions that they stir. The food becomes about the story, not the cost. And that’s something that food retailers need to tap into, especially as costs continue to rise.

    Published on: April 25, 2011

    The Wall Street Journal reports the bankruptcy judge overseeing the finances at Borders Group has approved a plan “to pay executives and other high-level employees more than $6 million in bonuses, after the bookseller worked to satisfy both his concerns and those of the Office of the U.S. Trustee.” According to the story, the judge said that “the amended bonus packages, which tie the $6.6 million in payments closer to the financial performance of Borders, were needed so Borders could ‘maintain its experienced work force’.”

    The story goes on: “The executive bonuses, which won't be paid unless the company is either sold or reorganized, had called for executives to get up to $7.1 million. That number is now $6.6 million, including as much as $1.5 million to Mike Edwards, chief executive of the company's principal operating unit Borders Inc. The ‘key employee’ retention plan would give director-level employees a total of $933,000. An additional $300,000 could be awarded on a discretionary basis.”
    KC's View:
    This is just so profoundly annoying ... because it is all about top-down management, ignoring the fact that the best ideas rise from the bottom, that success and/or failure will be determined, to a great degree, on how people on the front lines deliver on the Borders promise and value proposition.

    That’s not to say that top management does not have a significant role to play. But man, this whole bonus structure sends the wrong message to the people on the front lines.

    Published on: April 25, 2011


    • The Boston Globe reports that today, “Modiv Media Inc. of Quincy will launch a software app to allow customers with Apple Inc.’s iPhone to scan groceries and even check out at three local Stop & Shop stores ... By aiming the phone’s camera at the bar code on a product package, a user can see the price and add it to an electronic shopping cart. Once shopping is done, the app relays the information to a checkout register, where the customer can pay with cash or a credit card. There’s no need for a store employee to manually scan the items, making checkout much faster.”

    The general sense seems to be that for the moment , the system is too expensive for many stores, but that the rapid increase in smart phone usage is likely to make it more palatable in the near future.
    KC's View:

    Published on: April 25, 2011

    • Tesco-owned Fresh & Easy Neighborhood Markets in the US announced the introduction of Green Things, described as “a new range of eco-friendly household cleaning and paper products. Designed for customers looking for ways to reduce their impact on the environment without compromising on quality, Green Things uses natural cleaning agents and sustainable paper resources.”

    The company says that Green Things household cleaners “are made with plant-based formulas that are biodegradable and pH-neutral. They are also made without chemicals like 1,4-dioxane, phosphates, dyes or perfumes. All fresh&easy Green Things household cleaners meet high standards for health and environmental safety and are certified by the Environmental Protection Agency as part of its Design for the Environment program. And, of course, like all fresh&easy products, Green Things household cleaners are never tested on animals.”
    KC's View:

    Published on: April 25, 2011

    • The Wall Street Journal reports that General Mills “has teamed up with Groupon Inc. to offer a limited deal. It is the first large consumer-products company to test the waters with the popular daily discount website, and early results are promising.

    “The Groupon deal offered only in Minneapolis and San Francisco Thursday includes 12 General Mills products, including Fiber One bars, Cinnamon Toast Crunch and Kix cereals, Fruit Roll-Ups snacks and other items, for $20 - a discount of more than 50% off the value of the package. The deal also includes a $15 coupon book for General Mills products, all which will be delivered to buyers' homes.

    “The company had 5,000 total packages for sale. By late Thursday morning, the offer was sold out in Minneapolis and on its way to doing so in San Francisco.”

    • The Chicago Sun Times reports that Yum Brands concedes that there has been a continuing economic impact from the lawsuit - now dropped - charging it with having not enough beef in its taco meat to actually call it beef. The company says that it has not been able to reverse the trend, though it is “working on other solutions” to generate improved sales figures.

    Bloomberg reports that “Mead Johnson Nutrition Co., the baby-formula maker that Bristol-Myers Squibb Co. took public in February 2009, lost a bid to overturn a $13.5 million jury verdict in a false-advertising case over its product Enfamil.

    “A federal appeals court in Richmond, Virginia, today affirmed a 2009 finding that the Glenview, Illinois-based company engaged in false advertising in a mailing to more than 1.5 million people that said ‘store brand’ infant formula was inferior to its Enfamil LIPIL.”

    “As the litigation history of the parties demonstrates, despite having twice been restrained from disseminating misleading advertising, Mead Johnson continued to do so,” Circuit Judge Andre Davis wrote in his decision. “PBM cannot fairly compete with Mead Johnson unless and until Mead Johnson stops infecting the marketplace with misleading advertising.”

    • The Organic Trade Association (OTA) is out with its annual industry survey, revealing that “the organic industry grew at a rate of nearly eight percent in 2010, bucking the current trend whereby ‘flat is the new growth’ for many other segments of the economy. Further, some sectors of the organic market enjoyed annual growth of well over 30 percent ... In 2010, the organic industry grew to over $28.6 billion.”
    KC's View:

    Published on: April 25, 2011

    On Thursday, in “OffBeat,” I recommended a 2006 Havens Merlot from Napa Valley, which I described as having “a little more heft than a lot of merlots.”

    I don’t back off that description. I loved it.

    That said, it may be hard to get it. Or any other Havens wine. Because, as was pointed out to me by an MNB user, the Havens winery was liquidated in late 2009. It is no more.

    The fact is, I was looking for a bottle of red wine last week and was browsing through my wine cellar, and grabbed the Havens.

    (Okay. It isn’t a wine cellar. It is a basement with a bunch of wine racks. Allow me my fantasies.)
    KC's View:

    Published on: April 25, 2011

    • Wilson Smith, who with Ralph and Brown Ketner founded the supermarket chain that evolved into what is now known as Food Lion, has passed away. He was 93.

    • Jess Jackson, founder of the Kendall-Jackson winery, has died of cancer. He was 81.
    KC's View:
    Never met Jess Jackson, but when I read of his death, it made me think about how the connectivity that food and drink can have to moments of occasion can have profound impact on our lives ... and is the connection that retailers ought to be seeking and encouraging.

    I think of Kendall-Jackson, and I think of their Chardonnay, which Mrs. Content Guy and I share with our best friends whenever we visit them - always at the Bonefish Grill, always with a double order of Bang Bang Shrimp. And always, I smile. And can almost taste the moment.

    Published on: April 25, 2011

    Last week, we had a story about 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.” Indeed, the study revealed that many people think that “Green” behavior is limited to elitists and hippies.

    According to the Marketing Daily 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.”

    I commented:

    Y’know what makes me crazy? The mere suggestion that we have to make a choice between behaving in an environmentally responsible way and curing cancer.

    Have we gotten to the point in America that we cannot hold two such thoughts in our minds at the same time?

    Maybe companies have to do a better job of marketing. But I also think that some of this plays into an inherent - and unhealthy - American view of elitism.

    People who behave as if they are better than other people are, of course, worthy of suspicion. But some people are smarter and wiser than others, and I’m perfectly content to treat someone who is smarter than me about cancer research or environmental studies as if they are smarter than me about cancer research or environmental studies.

    Being smarter doesn’t make one immediately worthy of suspicion.


    MNB user Sara Murphy wrote:

    I believe your assertion this morning that companies have to do a better job of marketing is correct. I would say the way that the marketing departments of CPGs and retailers do not understand how best to approach that 66% segment of the population.

    I have a good example for you of a company that is trying to break into this segment. There is a Web site called RecycleBank.com, which offers rewards for being green – whether it’s just educating yourself on the various ways to be green through their promotional contests or quizzes, or if you’re actually physically doing something to be more green (i.e. recycling), the company seems to have created an interesting way to market green products, get consumers to try them and/or buy them, and at the same time pushing ways for us as consumers and inhabitants of this planet to be more green. You earn points for taking the quizzes, doing the recycling, or sometimes CPGs will have promotions on their Facebook page (Aveeno did this recently) where you make a pledge and earn points for the pledge. The points can then be redeemed for high value coupons or freebies. I think this breaks us out of the idea that all green products are perpetually expensive and taste like crap. Untrue! I recently redeemed some points to get coupons for Honest tea, which is a 100% organic tea filled with antioxidants. Mind you, I’ve never tried it before, but wow – very good stuff. I got four bottles for free with the coupons I scored at RecycleBank.

    Another thing I like about this site is they have articles about different ways to be more green, such as repurposing containers or starting a garden in a city. So it’s more of a repository for green initiatives, not just a site containing how-to articles. Personally I think this Web site design mission drives more traffic and interest in the site. Maybe CPGs need to hop on the RecycleBank bandwagon and start thinking a little bit more like the 66%.


    MNB user Ellen Feldman-Ornato wrote:

    Here’s what we find with regard to the Middle Greens – they’re most interested in their own families, their own health and their own communities. If I ask someone if she’s aware of how that choice of (for example) a plastic water bottle affects the planet and how few are recycled, I lose her. If I ask that same woman if she realizes how EXPENSIVE bottled water is compared to buying large bottles or (better yet) using tap water in reusable bottles, we can have the conversation. I want the result – she chooses reusables instead of disposables. She wants the result – she gets the same product (water) and it’s more cost effective. I can talk about pollution and landfills until I’m tired and her eyes will roll;  if we talk about BPA leaching into the water and the studies about this toxin I have her attention. As always we need to talk to people about what’s in it for them and for their families.

    From another MNB user:

    Only people who ignore long term economic trends are surprised.

    Core economic issues always trump environmental issues. If you follow trends in merchandising, all the way back since the Carter Administration, you can see that when economy sours, energy prices spike and jobless rates increase above average the core economic issues take precedent over cost-prohibitive environmental solutions to perceived (or outright falsified) environmental problems.

    In short, when times are good most consumers can afford to appreciate Mother Earth and “Gia” but when money is short and families are cold and, consumers will readily turn our friends, the trees, into firewood.


    And I repeat - economics and environmental issues don’t strike me as oppositional concepts. Then again, I suspect that’s because too many people in this country are committed to ideology rather than actual thinking.




    Regarding last week’s Eye Opener about Amazon creating a lending function for the Kindle that will allow people to borrow e-books from libraries, one MNB user wrote:

    Kevin, this is an eye opener but from my perspective not for the reason you think. 

    Amazon’s position is changing because the competition is forcing it to.  I am the proud owner of a Nook Color and the primary reason I purchased it is that it reads standard formats rather than proprietary formats.  E-books have been available from Libraries for awhile and are all in open format that can be read by every device but the Kindle.  To me the eye opener is that regardless of how successful you are you still need to ask yourself everyday who is my customer and am I giving them what they want.  In this case the extremely successful Amazon.Com has reassessed it’s position with the Kindle to make sure that their customer is getting as much value as they can from their e-reader.

    Excellent point.




    I got a lot of email responding to last week’s video rant about Starbucks CEO Howard Schultz, who said recently that his company “has no technology,” that its competitive advantage ids “humanity,” and that the internet “is not a channel to sell things, but one to build trust.” I suggested that the characterization was a little pompous, that Starbucks uses technology (though not well) with its frequent shopper program, and that the folks at Amazon have found that the internet is a pretty good place to sell stuff.

    One MNB user wrote:

    Kevin--- calm down .. obviously you have gone over to the dark side!!!!

    More and more technology.... less and less contact between seller and buyer.  I received a "snail mail coupon" from Starbucks. Thanks to your "ranting" I reflected on my thoughts when I received the card. It was a pleasant, warm fuzzy thought that someone ( a retailer) had sent me a gift.  Put the card in my car and redeemed it the following week ..... again the sense that I was given something. It sounds as if you are too busy to "smell the coffee" and would rather see a credit on your account so you do not have to think about it. The old Kevin used to preach about retailers losing contact and experience with their customers. This has been Starbucks objective since day one. I live in Seattle and I believe that all three major retailers founded and have their HQ's here (Starbucks, Amazon and Costco) in their own way within the confines of their industries (internet, foodservice and retail) have a very successful priority to reach out to their customers. Maintain that point of difference that identity of "feel good or satisfied" when there is a transaction. Kevin the "dark side" can get lonely with just you and your computer spreadsheet...


    All I argued was that instead of spending a post card with a coupon for a free coffee - which both wastes paper and makes it more likely that the coupon will be lost - Starbucks ought to program its card program so the 16th coffee is free. There’s no difference in human contact - I still have to walk up to the counter,m still have to place the order, still have the pleasure of chatting with the barista if I choose to. The only difference is that the savings come y=to me automatically, and that the program is customer-centric, not retailer-centric.

    This “dark side” stuff is nonsense. Great technology heightens the opportunity for great customer service. It is a tool and a tactic, not a strategy or a culture. That is, if it is used right.

    Another MNB user wrote:

    Keep in mind that the Starbucks loyalty card program is not consumer driven.  Fast food retailers have a theft rate of 100% and are trying to reduce cash in the register.  Consumers still overwhelming pay for coffee, burgers, etc. with cash, even business travelers.  I was a Regional HR Manager overseeing several Starbucks (franchisee) and theft is insane.  That is why they have switched to the loyalty cards.  They still do very little if any consumer research, but perhaps that will change in the future.

    Card programs without data mining strike me as silly. But maybe that’s just me.

    MNB user Jeff Heddinger wrote:

    Just an observation from a Panera Rewards member.  When I drop in on Panera they swipe my card (or enter my phone # if I don't have my card), this calls up my account and all available rewards are read to me by the associate working the register.  I can redeem all, none or some of what is available just by asking for it - no special card or coupon required.  In my opinion Panera has done the program the right way - it is seamless and easy, but most of all, it is rewarding as I don't know what I have coming until I enter the store... it's a surprise each time I visit, and a welcome one at that!

    Another MNB user chimed in:

    Choice Pet supply, with only 4 locations (as far as I know) has 2 programs..every 10th bag of dry food is free (of the same brand and size) and every 10th visit is a 10% off.  They remind you, and you can save your 10% for another visit if you don't want to redeem it on the exact visit.  No coupons, no things to swipe..just  "are you in our computer?"  -- and that only when the clerk is new and doesn't recognize me.

    That's the way to do it.


    MNB user Glenn Cantor wrote:

    After listening to this mornings’ “rant” about Starbucks’ misuse of technology, and then reading the news items about Kindle’s e-book library, it occurs to me that many of us older industry leaders are not as technologically fluent as we think, or as our younger counterparts.  Even though I consider myself an expert at Microsoft office, this realization was brought home recently by a stop at a little, Grateful Dead store, called “Sunshine Day Dream,” while traveling through CT. 

    I asked if they have any Grateful Dead CD’s.  The reply from the young man working at the store was, no, people don’t really buy or listen to CD’s anymore.  Really! I do.  This opened my eyes to torrents and the world of file sharing.  I immediately learning about file sharing, and replaced my car CD player with one that offers a USB port with I-pod compatibility.  Now, I can “borrow” music, listen, and update fluidly.

    Kindle is realizing that people, especially younger people, don’t “buy” books as much as in the past, even their e-books.  Why buy when you can share?  Leaders like Howard Schultz, and me for that matter, think we understand technology.  We don’t, because the statement “constant change” is not merely lip service but reality.  Our young counterparts more readily adapt to this constant change because it is integrated into their lifestyles much differently than it is part of ours.  While we use words like change, internet, social networking, and loyalty marketing, our perception of the life integration of technology is much different that the younger generation.

    P.S., to Mr. Schultz.  Even though my 20-year-old daughter is addicted to Starbucks, she doesn’t have time to mess (her word, although a regular part of the younger vernacular, is still unprintable to us “old” folks!) with a loyalty program or frequent shopper card.  Your snail and email end up in the trash.

     
    MNB user Gary Harris wrote:

    Hmmm, I believe you might have missed something here. Anyway, here’s my $6,000,000 take on this. I think Mr. Schultz was trying to say something you’ve been saying all along, Kevin. That while the technology can enable us to do things we haven’t been able to before, we still need to cultivate and nurture a relationship with our customers, built primarily on trust. You will do what you say you’ll do, and you’ve got a track record to prove it whether I’m in your store or on your website, and whether or not you have both venues in your current business model.

    It reminds me of a conversation I had with someone about my iPad. While they were marveling at the technology behind it, the magic (or humanity, or engagement, or relevance..) was that when people were using it, the technology disappeared. My 13 month old granddaughter can play the alphabet app or The Wheels on the Bus, and my 92 year-old father in the dementia ward can scroll through our latest vacation pictures. They are immersed in the content in way they couldn’t before, enabled by technology that is so elegantly crafted that the users are oblivious to it.

    I think that’s what Howard Schultz wants to accomplish. Was he speaking with a bit of hyperbole? Probably. Could their own systems and processes be improved? Whose couldn’t! The point I got from his comments is that if that’s what he truly believes then he’s looking at technology the right way, as a means rather than as an end and a way to extend the promise of the brand first, and thereby increase sales as a result.


    Maybe that’s what Schultz was saying, but if so, he did it with a high pomposity quotient. If I’d been advising about that speech, I would have suggested that he phrase it differently - that he should have said that technology won’t take you any further than your people, and that great technology serves the purpose of allowing us the privilege of creating a better, friendlier, more compelling retail experience.

    He just annoyed me. So I ranted.

    Because that's what I do.
    KC's View:

    Published on: April 25, 2011

    The Los Angeles Times reports that among the investors looking to buy the Los Angeles Dodgers - control of which was seized last week by Commissioner Bud Selig, who said that the once-prestigious franchise had been improperly burdened with debt by the current ownership - are former Dodger star Steve Garvey and billionaire investor and supermarket magnate Ron Burkle.

    The story notes that “Burkle teamed with franchise icon Mario Lemieux in buying the NHL's Pittsburgh Penguins in 1999; the Penguins won the Stanley Cup in 2009. Burkle has pursued the Pittsburgh Pirates and Washington Nationals in recent years, according to press reports.”
    KC's View: