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    Published on: May 25, 2011

    by Kevin Coupe

    The MNB community has a lot of Margaritaville fans, so we’ll use this opportunity to take note of a USA Today story this morning about how singer/writer/philosopher Jimmy Buffett “is collaborating with game developer THQ on a free-to-play online social game, due this year on Facebook and Apple iPad, stocked with attractions custom-built for Buffett's Parrothead following ... Like other online games, Margaritaville Online will let players earn virtual currency to buy in-game booty and spend real money to customize their game more quickly. Buffett hopes to incorporate a feature that lets players parlay virtual goods into rewards at Margaritaville restaurants.”

    According to the story, “Characters and destinations in Buffett's game are based on his life, songs and books. There's a Captain Tony's Boats and Planes outpost, based on the late former Key West mayor — chronicled in the song ‘Last Mango in Paris‘ - as well as Joe Merchant's Trading Post, a nod to his 1992 book Where is Joe Merchant?.”

    The story goes on: “Buffett's music is in the game, and players can create their own band. Eventually, he hopes to let players input performances into tracks to identify the ultimate Coral Reefer cover band.

    “In the future, Buffett foresees Parrotheads at his concerts ‘in a parking lot, tailgating, having a beer, grilling a dog and playing Margaritaville on their iPhones or on their Blackberrys waiting to get into the real show’.”

    Just don’t drip Heinz 57 on the equipment.

    And that’s our Wednesday Eye-Opener.
    KC's View:

    Published on: May 25, 2011

    The Financial Times has a story suggesting that Walmart’s decision to get into online grocery sales is an indicator that the e-grocery business is reaching a certain level of maturity, a decade after “a raft of venture-backed start-ups collapsed under the weight of overly ambitious expansion plans.”

    According to the piece, Walmart is following in the practiced footsteps of companies such as Peapod and FreshDirect, though there remains doubt in some quarters as to whether online ordering and delivery of groceries will have the legs to establish a national presence. in part, this is because to this point, e-grocery still represents just 1-2 percent of the total US grocery market.

    “Obviously there was a bit of a false start 10 years ago, when people thought the traditional grocery store was going to go away,” Peter Larkin, CEO of the National Grocers Association (NGA), tells FT. “I think as technology has improved and access to broadband has improved, the future of online grocery is actually quite bright.”
    KC's View:
    Not sure I agree with the basic premise of this story. I think we have a long way to go before e-grocery is a “mature” business, because I believe that 1-2 percent is just the tip of the iceberg. This will change with the next generation of shoppers, which has been raised to think that everything is available on Amazon, and which has less allegiance to traditional shopping experiences than their elders.

    Speaking of Amazon, it is amazing to me that FT did not mention Amazon’s efforts in the online food business ... nor did FT mention the many retailers out there that are using online grocery to considerable success. To be sure, the pick-up model is more profitable than the delivery model, but this also gets little attention.

    Expansion this time around will be more measured, but it also will be considerably more sustainable. A mature business? I think not. The future upside is too great.

    Published on: May 25, 2011

    Inc. has a good piece about how to create customer loyalty programs that work, with suggestions like “create enlightening experiences for the customer”and “resolve customer complaints quickly,” as well as suggesting that businesses do everything possible to quantify the way people feel about them, and to differentiate programs whenever possible.

    But there are a couple of other interesting suggestions worth noting:

    • “A handful of luxury brands have for decades used promises of status to encourage customers to spend more through loyalty to their brands. Today, brands of all stripes are experimenting with the psychology of status and power in rewarding customers. A generation raised on video games is wired to love incentives—and that doesn't just mean freebies. Gaming reinforces players through positive feelings generated by achievements, which are perceived through points, badges, discounts, or any award—tangible or not. Game mechanics are, simply, ways of generating those positive feelings. And it can be good for you: Giving customers something positive encourages additional interaction with your brand, service, or product.”

    • “You know loyalty cards. They might be punch cards, or plastic fobs dangling from countless key rings. They may soon fade into history, pushed out by smartphone apps that do more than just offer a high-tech alternative - they also provide businesses with a trove of useful information about their customers ... Several start-ups have recently launched loyalty-card apps - check out Cardstar, Checkout, PlacePop, and Cardagin - to help businesses attract customers and reward their regular fans. At the same time, these apps ferret out marketing data, giving even the smallest shop access to high-powered analysis.”
    KC's View:
    Two things here.

    First, loyalty programs have to be customer-centric. It always seems to me that too many of these things are created by marketing and/or technology folks who know what they want to get out of the program, but who make ease of use a secondary consideration.

    Second, the game theory explained in the piece is interesting ... and backs up the point made in this morning’s Eye-Opener.

    Published on: May 25, 2011

    In the UK, Retail Gazette reports that a Tesco store in Essex is testing a new satellite navigation system for Android mobile phones that “will be able to design a quickest route round the Tesco Extra store by inputting a list of the items they wish to purchase.

    “If rolled out to all Tesco stores it should significantly speed up people’s shopping trips as unnecessary aisle meanders become a thing of the past. Customers will even be able to send a list to a friend or family member who will be able to pick up wanted goods with the minimum of fuss.”

    Nick Lansley, Head of Research and Development for Tesco.com, writes, “The new service is able to show you where all your wanted products are on a store map, show you where you are on that map, and guide you round the store to pick up your products using the shortest route.”
    KC's View:
    So much for impulse sales...

    This doesn’t mean that people won’t go up and down the aisles - just that retailers will have to do a better job at baiting the hooks that will compel people to go beyond their comfort zones. And it will make the fast-and-convenient shopping trip potentially even faster and more convenient. Yippee!

    (BTW, I love the British. I wish I were the kind of person who could use phrases like “unnecessary aisle meanders” so casually.)

    Published on: May 25, 2011

    The Hartford Courant reports that Anheuser-Busch InBev has bowed to the wishes of more than a dozen state Attorneys General and agreed “to reduce the alcohol content on its fruity malt beverage, Tilt, from 12 percent to 8 percent.”

    Tilt has been described as a “binge in a can” beverage, combining alcohol content with a fruity taste that is particularly appealing to underage drinkers.

    Other products said to be of concern are Pabst’s Colt 45 "Blast" fruity malt beverage, as well as Phusion Projects' "Four Loko" and United Brands' "Joose."
    KC's View:
    We approve.

    Published on: May 25, 2011

    The New York Times reports on a mobile payments start-up called Square, which is trying “to make cash obsolete by giving small businesses, like farm stands and cafes, a way to turn their cellphones or tablet computers into credit card terminals.,” and now also is “trying to make wallets obsolete, too, by upending the way that consumers pay for purchases.”

    Here’s how the Times explains the concept:

    “Square’s goal is to replace cash registers and point-of-sale terminals and the companies that make them, like Verifone. Square is also taking on the many start-ups that offer cellphone loyalty cards, like Foursquare, and competing with Google, Apple, PayPal and major credit card companies and banks to provide mobile payments.

    “Square’s new payment services are available at only 50 merchants in New York, San Francisco, Washington, St. Louis and Los Angeles. Shoppers can use the Card Case app to search for those businesses, pay their bill and store receipts. A shopper opens the app, which looks like a brown leather wallet, clicks to open a tab at a store and then gives the merchant his or her name. The shopper’s credit card number is already stored with Square. Merchants see a photo of the Square user so they can confirm it is the same person.

    “With the Register feature, merchants can appeal to nearby shoppers who have the Square app by posting deals or menus. They can also store receipts digitally and track customer behavior.”
    KC's View:
    It seems like a stretch to believe that one new start-up will be able to centralize the entire transaction process in one system and successfully do battle with all the other players involved. And there certainly seems to be plenty of opportunity for either fraud or invasion of privacy if the system somehow breaks down...

    Still ... I have to admit that I am fascinated by all this, and would suggest that whether Square succeeds or not, this certainly seems like the future of how commerce will be transacted in an entirely frictionless way. Or at least one possible future. And probably one that will come true a lot faster than many of us would expect.

    Published on: May 25, 2011

    Bloomberg reports that Judith McKenna, CFO of Walmart-owned Asda Group, says that that consumer spending in the UK “is showing signs of weakening,” in May after a strong April that was bolstered “by good weather and the royal wedding.”

    • The Wall Street Journal reports that “Bharti Wal-Mart Pvt. Ltd. Tuesday said it aims to open up to 20 more cash-and-carry stores in India by the end of 2012, as the company continues to expand its business in the country ... The joint venture between U.S. retailer Wal-Mart Stores Inc. and India's Bharti Enterprises Ltd. currently has four stores in Punjab state and one each in Rajasthan and Madhya Pradesh.”
    KC's View:

    Published on: May 25, 2011

    There has been a lot of coverage of how Barnes & Noble suddenly has become a hot property, despite the fact that its traditional business model seems to be heading toward irrelevance - a point that is driven home as bankrupt Borders tries to figure out its next move.

    The reason for Barnes & Noble’s sudden hotness? Liberty Media Corp., a cable television empire, sees the retailer’s Nook e-reader as a possible “application of choice for consumers on all tablet devices built on Google Inc.'s Android operating system,” according to the Wall Street Journal, and so has made a bid to acquire 70 percent of Barnes & Noble for $1.02 billion. At the same time, Ron Burkle’s Yucaipa Cos., which previously was unsuccessful at trying to gain more control of the company, increased its holdings to 19.7 percent of the retailer’s stock.

    The feeling seems to be that Barnes & Noble is strengthened by Border’s fall, and that people will be looking for alternatives to Amazon’s Kindle, which has dominated the e-book market. And Liberty Media says that it continues top believe that Barnes & Noble’s physical presence is a long-term advantage, even in a virtual world.
    KC's View:
    What interests me here is the idea that obviously people a lot smarter than me are seeing Barnes & Noble and seeing possibilities beyond its traditional business model, seeing synergies between cable television and e-readers that could change the profitability picture entirely.

    Published on: May 25, 2011

    USA Today reports that the US Department of Agriculture (USDA) has adjusted its recommendation for when pork is safe to eat, saying that you can now serve it “pink,” or when its internal temperature is 145 degrees, and not the 160- degrees previously recommended.

    Experts say that the change should allow people to serve pork that is more juicy and flavorful.

    According to the story, “Trichinosis, a parasitic disease caused by eating raw or undercooked meat infected with roundworm larvae, was once common but is no longer a problem in commercially grown pork and hasn't been for years,” experts say.
    KC's View:

    Published on: May 25, 2011

    • The Times-Tribune reports that Pennsylvania-based Weis Markets has “reached a class action settlement over allegations it printed too many numbers on some customers' credit or debit card receipts ... Some Weis Markets' customers filed the class action lawsuit, which revolved around paper receipts that allegedly contained more digits of the credit or debit card account number than was allowable when the federal Fair and Accurate Credit Transactions Act went into effect. Weis Markets denied liability, but the parties agreed to settle the claims to avoid the risk of further litigation.”

    • The Great Atlantic & Pacific Tea Company (A&P) announced the launch of a brand new line of premium-quality Angus beef “featuring steakhouse-quality meat at affordable supermarket prices. Woodson & James Choice Angus Beef, exclusive to A&P banner stores, will replace the current beef steak and roast offerings in all A&P, Pathmark, Superfresh, Waldbaum’s and The Food Emporium stores beginning Friday, May 27.”

    According to the story, customers who shopper in certain stores within a specific time frame may be eligible to get a $7.50 voucher.

    • The Wall Street Journal reports that JM Smucker Co. is increasing the list prices “for most of its coffee products by an average 11%, its fourth rise in about a year. The food company, which also makes jams, jellies and Jif brand peanut butter, said the move is driven by sustained increases in green coffee costs. It disclosed similar price increases in February, August and last May.”
    KC's View:

    Published on: May 25, 2011

    • The Grocery Manufacturers Association (GMA) announced the appointment of Sean Darragh as Executive Vice President, Global Strategies, a newly created position within the association.

    Darragh currently serves as Executive Vice President, International Affairs at Biotechnology Industry Organization (BIO), where he leads BIO’s international regulatory and policy advocacy operations, and oversees BIO’s efforts to build its international presence, membership and global reach. Prior to taking on that role, Sean served as Executive Vice President for BIO’s Food and Agriculture Division, where he directed the diplomatic, legislative, regulatory and communications strategy for the Food and Agriculture Section.
    KC's View:

    Published on: May 25, 2011

    Yesterday, MNB took note of an Ohio story reported by the Business Journal saying 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 Belgium 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.

    I commented:

    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.

    One MNB user responded:

    Kevin, how about compete any way that works, (including in Ohio where outsourcing may be a hot button), not *just* by being better? It is not mutually exclusive to be better and to be based/owned in the USA, with profits being directed for the most part back to this country. That would be especially true for a franchise operator.

    The article noted that the Sav a Lot stores would utilize local suppliers, and would be opening in some vacant store locations as well. I think the message may resonate with those customers who want to return the Youngstown area to a higher employment level. It also may remind local officials that people working at those local suppliers of the Sav a Lot stores vote.

    Since the Delhaize stores are opening in an inner city location(s), which may be the source of the criticism of the local officials, reflecting service that may be happening in tougher neighborhoods.

    At any rate, I would use all the tools at my disposal to increase my competitive advantage, including making the new franchise locations a welcoming environment for customers, and highlighting the Made in Ohio and owned in the US/Ohio area as part of my marketing push. I see nothing wrong with using both.

    For the record, I don't live in Ohio, and have only seen the Youngstown exit signs on the Ohio turnpike, when on my way to the Midwest.


    Another MNB user wrote:

    I see your point of view as well as the Save A Lot operators.  I will point out that our abject lack of jingoism or "local" protectionism, be it clouded for ignorance or greed, has gotten us into a much, much larger mess on many fronts.  As you sip your nightly carefully selected wine at night over a nice meal at home or on the road or you sip a glass while you read from your Kindle, there are a lot of Americans not so comfortable anymore. So ease up on the condemnation - there is a lot more emotion going on in that pitch than there is a reliance on it being a retailer success model.

    A personal shot at the Content Guy’s drinking and reading habits. I love it.

    And from MNB user Steve Brackett:

    WOW!

    Your reply is incredible.  If you think that things like that do not matter to customers, then YOU, Mr. Kevin, have simply lost touch with reality.

    I'm not saying one should key in on that aspect and let that be their only torch, but customers definitely care about issues like this.

    Maybe not in your world in Connecticut, but here in Maine they do.

    MNB user Bob Vereen made a different point:

    Do the Save-A-Lot people have the guts to say the same thing about Aldi?




    Got a number of responses to my piece the other day about why McDonald’s - hardly my favorite company - should resist calls to retire Ronald McDonald because of the clown’s alleged outsize influence over kids’ decision making. I said that parents should exert some control, and that McDonald’s should only be forthright and transparent about calories, fat, etc... on its menu boards.

    MNB user Brian Anderson wrote:

    I’m with you on the McDonald’s piece!  Their menu boards now have the calorie count on each item in font at least as big and clear as the price of the item.  This is no “buyer beware” situation but rather “buyer be aware” … and stop blaming someone else! 

    MNB user Robert Dyer wrote:

    Great comments, Kevin.  I applaud the investors and management for standing up to the ‘no personal responsibility/nanny state” folks.  I have seen the new menu boards at McDonald's, and they communicate calorie counts very well, and do impact your decisions at the counter. 

    MNB user Bill Welch wrote:

    As a long time reader who perceives your “Views” as typically slightly left of center, I was encouraged on your take of the McDonald’s article.  I too am frustrated by the unwillingness of people to take responsibility for their own choices and those of their children.   But then you go and back track by your non-committal opinion on the Four Loko story.   Kevin, these are parents who are trying to score a payday off of their son’s illegal actions.  It still comes back to people unwilling to take responsibility for their own choices and those of their children.

    The Four Loko story, just to be clear, was about how the family of a 15-year-old boy who was fatally struck by a car after he drank two Four Loko beverages filed a wrongful death suit against Phusion Projects, the Chicago-based maker of the party drink.” The family maintains that the company was “careless and negligent” in manufacturing a beverage with alcohol and caffeine that “desensitizes users to the symptoms of intoxication and increases the potential for alcohol-related harm."

    I wrote:

    Look, I hate these guys. Even though they now are taking the stimulants out of these drinks, I do think they created something that had real potential for disaster. And this kid’s death is a tragedy. That said ... he was a 15-year-old kid drinking alcohol. If it hadn’t been Four Loko, it might have been something else. I don’t know how he got the product, but I’m not sure that Four Loko can be held responsible legally for something that happened when this kid was breaking the law. Morally responsible? Sure. I’ll buy that. But much as I’d like them to take the heat legally, I’m not sure it is entirely fair.

    So I’m not sure there is as much difference in our opinions as you suggest.

    Another MNB user weighed in:

    Since when has personal responsibility been forgotten by our society?! Now, we have people telling us that we can’t drink what we want, eat what we want, and that we have to wear our seat belts! If I die or am injured in a car accident where I am not wearing my seatbelt, my insurance company will not pay my damages on the grounds that I was negligent. This reckless teenager was not only illegally imbibing alcohol, but he was also doing so in public. That would give him at least two criminal counts of minor consumption and public intoxication.

    Furthermore, if we really want to get crazy, the driver of the SUV that struck him could also sue the family of the intoxicated minor for severe emotional distress, as a result of killing the minor. Seeing that the “victim” was a minor, his parents are ultimately responsible and should also face charges for extreme negligence. If they kept an eye on their child, this would have never occurred. Four Loko is designed for adults, not children. Furthermore, if a minor illegally acquires alcohol, they are breaking the law, and the company should not be held responsible. That is tantamount to suing Four Loko is NOT at fault, the parents are.


    I think it is time to get over the seatbelt laws.

    Besides, while I understand the whole “government intrusion” argument, I’ve got kids. I think legally mandating seat belts is probably a good thing., just like outlawing the use of handheld cell phones while driving.

    Responding to our various pieces about the Rapture that was supposed to happen - but didn’t - last weekend, one MNB user wrote:

    Just my opinion, but this whole judgement day thing seemed like an opportunity for people to poke fun at Christians as if most of them were on board with this. I live in the southeast, AKA the bible belt, and I didn't know of a single person who gave this any credence. The media turned this into a WAY bigger story than it really was.

    Maybe it is because I'm in the media, but I would respectfully disagree. 

    Was the media supposed to ignore all the road signs and people handing out pamphlets all over the place? (I saw them almost everywhere I went.)

    I've read a lot of the coverage, and I found it to be generally respectful even if incredulous.  And I'd also be willing to bet - though I have absolutely nothing to base this on - that a sizable percentage of the people who wrote those stories probably are Christians.  And I know that I went out of my way to be respectful in what I wrote.
    KC's View: