retail news in context, analysis with attitude

MNB Archive Search

Please Note: Some MNB articles contain special formatting characters, and may cause your search to produce fewer results than expected.

    Published on: May 24, 2011

    by Michael Sansolo

    This is going to be one of those moments of blasphemy in the Internet based world of MorningNewBeat, so brace yourself: Sometimes the real world can beat the virtual. There, I said it.

    Obviously, I am one huge fan of web-based commerce and I use it in countless ways. But there’s one unexpected area where I frequently go old school and apparently I’m not alone. I use a travel agent.

    I know I shouldn’t be ashamed to admit this, but somehow it seems so 1990’s. I mean I like Expedia, Kayak and Trip Advisor - all of which, I find, produce a wealth of information, give me great choices, guidance and unparalleled access to information, discounts and more. I can cite countless times when I’ve found deals on Expedia (my personal favorite) that hotels, airlines and rental companies couldn’t match.

    Yet, there is something Expedia cannot provide: peace of mind. For that, I turn to Gary.

    Because my speaking schedule requires a steady dose of travel, I need the assurance that my travel plans will always work. Gary makes that happen. Occasionally I encounter problems with trips ranging from weather to airline related. Gary fixes those problems. And sometimes I simply need the security that complex travel (international or multi-city) is being done right. Gary does that too.

    There was a time when travel agents dominated their industry and drew their fees from the airlines, hotels and car rental companies whose business they fed. That changed a while ago and now Gary and his agency, Pro Travel in New York, charge me for their service. In four years of working with Gary, I’ve learned a powerful lesson. Gary knows things that Expedia doesn’t and with great regularity he finds a way to lower a ticket cost through some strange alchemy. I don’t ask, I just say thanks. I pay my fee and feel well served.

    Apparently, I’m not alone. A recent article in the Washington Post detailed the sudden resurgence of the travel agent. Increasingly, travelers are finding that they get good value for their services in all the ways I described. Most prominently, as one person said in the article, travel agents clean up the messes travelers create for themselves on the road.

    In that way, travelers find value that more than justifies a fee and that’s causing a significant share of travel to return to an industry that in many ways appeared headed for web-based irrelevancy. There’s a big lesson in all of that for all of us. What gets people to a specific store, product, website or experience is a feeling of value. That is the time or money spent on the experience will be outweighed by the benefit. It’s the reason the cheapest solution isn’t always the best for all or any of us.

    One has to believe the travel agent experience is one that retail needs to study carefully while keeping a wary eye on every move Amazon makes. Increasingly the question facing us could become how to overwhelm the Internet advantage. But I have to believe that special shopping experiences - like those at Whole Foods, Wegmans, Trader Joe’s or Costco, among others - can win by bringing that something extra day after day.

    There’s one more piece of this story that matters. I found Gary based on a glowing recommendation form Kevin, who as we all know loves web experiences. It was the kind of customer recommendation that every business seeks because it turned a passerby into a loyal customer. And as long as Gary stays on his game, I’m staying loyal to him and his industry that I thought was dying.


    Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com . His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available by clicking here .
    KC's View:

    Published on: May 24, 2011

    by Kevin Coupe

    Since Michael Sansolo has begun the day with a treatise on the value of travel agents, let’s continue the theme by noting that there have been various reports saying that the nation’s first frequent flyer program was launched 30 years ago this month.

    While many of these programs can be justly criticized for a variety of reasons - like award seat availability - in a lot of ways they remain the purest of loyalty programs. Customers get points for every purchase they make. The more purchases, the more points. Once you reach a certain level, you can cash those points in for products and services. Better customers get better service, and best customers get the best service.

    Simple.

    Compare that, for example, to the average supermarket loyalty program, which is generally used as a coupon delivery program. Best shoppers often don’t get any better service than anyone else; in fact, stores generally make it so that people buying the least number of products get dedicated lanes, while the people with full baskets have to wait online. Often these programs are linked to card usage, and sometimes they are delivered via cash register receipts that must be kept and proffered to get any value. And frequently, there is little about the programs to differentiate the store from any other retailer - which is why so many people have a collection of cards attached to they key fobs.

    In so many ways, it seems that retailers that have created such programs have done so in the hope of creating a kind of artifice of loyalty, rather than something of actual value.

    Though this may not be as big a mistake as that made by retailers with no program at all, retailers that have no idea who their customers are, how often they are shopping, what they are buying. Which is a dangerous lack of knowledge at this point in retail history.

    Thirty years of frequent flier programs. In those three decades, some have learned the lesson well. But others have not, and that is an eye-opener.

    Or should be.
    KC's View:

    Published on: May 24, 2011

    The Hill reports that a new survey from the Pew Charitable Trust indicates that “two-thirds of likely voters support additional funding for federal regulators to carry out their new responsibilities under the food-safety law that went into effect this year ... The poll also found almost three-quarters of respondents felt funding new food-safety measures was worth a 1 percent-to-3 percent increase in the cost of food.”
    KC's View:
    I believe this. If I’d been polled, I almost certainly would have answered this way.

    However, I’m at least a little bit skeptical about these poll results. Americans love to answer one way and behave in a different way - not because of any sense of malice, but because their is a disconnect in how they think about issues. People want tax cuts, for example, but generally are unwilling to give up programs upon which they depend. They like programs to be eliminated, but not the programs that cater to them. And they support certain fundiung increases, but I’m not sure sure that they believe that they actually will have to pay for it.

    But like I say, I’m a cynic.

    Published on: May 24, 2011

    In Ohio, the Business Journal reports that a local company, in announcing the fact that it would open three Save-A-Lot franchises there, took a pot shot at Delhaize-owned Bottom Dollar, seemed to criticize it for being owned by a Belgian company.

    According to the story, the Cafaro Company’s “announcement noted that in recently praising the intentions of the Belguim company to open grocery stores in Youngstown's Fosterville and Midloathian neighborhoods, some public officials ‘made disparaging remarks regarding the service and the quality of products that local retailers have provided to the Valley. The operators of Save-A-Lot find those remarks disappointing and shockingly inaccurate’.”

    "Save-A-Lot/Horizon Management will proudly serve the Mahoning Valley long after foreign operators have left the area," the Cafaro Company stated in its announcement.
    KC's View:
    This kind of stuff makes me nuts.

    Compete by being better. Not by making cracks about “foreign operators.”

    Didn’t you get the memo about globalization? Don;t you realize that there are a lot of American companies that make a ton of money bringing products and services to other countries, and that would find it hard to grow without those markets?

    Delhaize has been operating in the US a long time. It pays taxes, has local management, hires local people, and invests in local economies. To me, as a consumer, it is more about the products and services that you provide being relevant to how I live my life, to your values being in synch with mine.

    I repeat. You want to compete, do it by being better than the other guy. And cut out the jingoistic stuff.

    Published on: May 24, 2011

    Marketing Daily reports on a new study from BDO USA suggesting that “as retailers gain confidence in the strength of the economic recovery, their worries are shifting ... Consumer confidence, which worried them last year at this time, has dropped way down on the list. But dependency on consumer trends -- figuring out what shoppers want to buy -- has jumped up, and was mentioned as a concern by 87% of stores.”

    In other words, retailers are less concerned about people not having money to buy stuff, and more concerned about staying in synch with the trends that affect what people want to buy. Which means that a lot of retailers are focusing on things such as online marketing and social media, and "shifting away from the defensive recessionary mode.”
    KC's View:
    No question, there is some sort of recovery in the making. And there is a customer segment that has some money and is willing to spend it.

    But I’m not sure that this segment is as big as it used to be. There have been plenty of studies reported here on MNB indicating that even the affluent are concerned about saving money, and are buying smarter with less attention paid to branding and status. (Sure, some people have $500,000 revolving credit lines at Tiffany’s ... but not most people.)

    Part of this is memory - people haven’t forgotten the “too big to fail” experience yet. Part of this is having to pay four bucks a gallon for gasoline, and a sense that things are out of control.

    Anyone not paying attention to recessionary mindsets - at least to some degree - makes a potentially serious mistake. You don’t have to let it dictate every decision, but it has to remain a factor in most retailing decisions.

    Indeed, there is a new SymphonyIRI study out today saying that men - traditionally viewed as cluelessly wandering the supermarket, prone to impulse purchases and with very little idea of how to shop efficiently - have gotten a lot better in the last few years.

    According to the study, “difficult economic conditions have prompted consumers to become more conservative and self reliant in many ways. While fewer men are making changes versus women, the ranks of those adapting remain significant.”

    For example: SymphonyIRI says that 35 percent of men shop at multiple stores to find the lowest prices; 35 percent of men purchase only needed items, rather than stocking up, to keep weekly budget in check; 31 percent of men buy more “all purpose” cleaning supplies to reduce the number of items needed.

    In addition, 54 percent of men eat out less often; 44 percent of men make cleaning products last longer; 27 percent of men go to the doctor less often and are self treating more; 19 percent of men use at-home beauty treatments more (e.g. hair coloring, facials).

    I’m not sure about that beauty treatment figure, but other than that, it all makes sense ... especially because it is generally conceded that men took the brunt of the recession in a way that women did not.

    And the implication is that if men can and do save money when shopping, it is trend to which attention must be paid.

    Published on: May 24, 2011

    • The Washington Post reports that Walmart has decided to build a new Orange County, Virginia, store three miles west of the one it originally targeted, which was the subject of considerable controversy because of its proximity to a Civil War battlefield site.

    Civil War Trust president James Lighthizer tells the that by choosing an alternative site, “Wal-Mart has demonstrated that preservation groups and retailers can work together to find universally beneficial resolutions.”
    KC's View:

    Published on: May 24, 2011

    The Wall Street Journal reports this morning that “the U.S. Department of Agriculture has announced plans to rewrite its regulations so that hot-iron brands will no longer be recognized as an official form of identification for cattle sold or shipped across state lines.

    “Instead, the USDA wants every cow to have a unique numerical ID, stamped on an inexpensive ear tag, to make it easier to track animals from ranch to feedlot to slaughterhouse ... The proposed regulation won't bar ranchers from branding their livestock. Individual states will be free to recognize brands as official ID if they so choose. And some ranchers who have tried the numerical IDs say they are no hassle and can actually be an asset, as they allow more detailed record-keeping on each individual cow or steer.”

    However, the change has raised one concern: “Ranchers say they fear the withdrawal of federal support for branding might embolden animal-rights activists who call the practice barbaric. Some ranchers fear the new rules could even erode the legal standing of the brand as proof of ownership in cases of lost or stolen cattle.”
    KC's View:
    Anyone asking the cows?

    Published on: May 24, 2011

    • Tesco-owned Fresh & Easy Neighborhood Markets in the western US announced that it will open its first two San Francisco stores this summer, on 32nd Avenue and Clement Street on June 222, and on 3rd Street and Carroll Avenue on August 24.

    “We could not be more thrilled with the strong performance of our first 11 stores in Northern California and we’re excited to get our doors open in San Francisco,” said Tim Mason, Fresh & Easy CEO. “Judging by the fantastic reception we’ve seen from customers throughout the Bay Area, we are certain these stores will also be a hit.”
    KC's View:

    Published on: May 24, 2011

    It hardly is the worst consequence of the serious storms that have hit the US this year, but the Des Moines Register reports that Monsanto Co. has been dealing with one unexpected consequence.

    The biotechnology company has developed a new breed of corn seeds that it believes is resistant to drought ... but there’s been so much rain, the company has had problems doing its field trials, which are necessary to get farmers to invest in the product.

    "We have a joke around here that if you want it to rain, plant a drought trial," says Bill Reeves, regulatory affairs manager for Monsanto.
    KC's View:

    Published on: May 24, 2011

    • The New York Times this morning reports on how “the nation’s largest union for retail workers has embarked on its first broad campaign to unionize Target workers. The union, the United Food and Commercial Workers, is trying to organize 5,000 workers at 27 Target stores in the New York City area. A majority of workers at the Target store in Valley Stream, N.Y., have already signed cards supporting unionization, and a government-supervised election there on June 17 will be the first time in more than two decades that Target workers will vote on whether to join a union”

    This despite the fact that Target, unlike Walmart, “enjoys a reputation as a model corporate citizen that sells the latest in cheap chic. “

    Advertising Age reports that Supervalu “has hired Kaplan Thaler Group as its new creative advertising agency,” with a portfolio that includes “advertising, digital and direct marketing across all of Supervalu's banners, which include Cub Foods, Albertsons, Jewel-Osco and Save-A-Lot. Previously the Eden Prairie-based supermarket chain did not have a creative agency.”

    • The BBC reports that in the UK, there remains considerable skepticism about last year’s acquisition by Kraft Foods of Cadbury, with one Parliament committee criticizing Kraft CEO Irene Rosenfeld for a “regrettably dismissive attitude” for refusing to testify before the panel.

    Some ministers also are upset at Kraft for having closed a Cadbury plant near Bristol despite pledges to keep it open and retain some 400 jobs, and Kraft has been criticized for an “utterly cynical” attitude bordering on contempt.

    Kraft continues to maintain that it has been “a good steward” of the Cadbury business.
    KC's View:

    Published on: May 24, 2011

    Internet Retailer reports that Belk Inc., the department store company, has hired Dawn Bronkema, who has been working in Meijer’s e-commerce division, to be its director of digital experience.

    • Avon Products announced that it has hired Kimberly A. Ross, CFO at Ahold, to be its new CFO, succeeding Charles Cramb, who has been working in that role on an interim basis.

    Advertising Age reports that Google has hired “Procter & Gamble Co. digital marketing director Lucas Watson as VP-sales and marketing for YouTube and video, part of its latest bid to bring TV ad dollars to the world's largest video site.”
    KC's View:

    Published on: May 24, 2011

    ...will return.
    KC's View: