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    Published on: June 17, 2011

    Notes and comment from the Content Guy...

    MNB’s Exclusive, On-The-Scene Coverage of the Consumer Goods Forum (CGF) Global Summit is sponsored by TCC Global, a leader in Best Customer Marketing

    BARCELONA - What’s in your future?

    If some of the speakers on the second day of the Consumer Goods Forum (CGF) Global Summit are right, probably a little revolution, taking place at unexpected velocity, which can only be coped with if you embrace technology as a way to innovate.

    At least, that’s a start on what your future looks like.

    To begin with Joshua Cooper Ramo, managing director of Kissinger Associates and former foreign editor at Time, suggested that we are in a time of constant revolution, but that while this can be scary because it creates ongoing conflicts and issues like terrorism that seem unable to be solved, “revolutions don't just destroy things. They also are times of great opportunity.” In times of revolution, he said, great fortunes can be made and great ideas can be hatched.

    Part of the problem with embracing such opportunities, Ramo argued, is that a revolutionary age tends to baffle the so-called “experts.” This means that they are discredited, that the credibility of established institutions gets undermined and people lose confidence because “the people we rely on to get it right don’t get it right.”

    Ramo also said that people should not kid themselves that we are living through just another business cycle; what is taking place right now, he said, is a fundamental shift in economics - we live in a networked world in which it is difficult to contain anything, in which there are more people than ever before grouping together in different ways than ever before, driven by similar interests and intensity of passions that can threaten the status quo.

    And he left the audience of senior executives with the following cautionary note: “If you haven’t been shocked by the nature of our age, then you probably haven’t understood it.”

    An interesting phrase, and one that was echoed by writer Peter Hinssen, who paraphrased race car driver Mario Andretti when he said, “If everything seems under control, then you are not going fast enough.” Velocity, he said, is mandatory .... even to the point where you think you are going to flame out, because that’s when you’re going to have a transformational breakthrough.

    Hinssen, a self-described “nerd” and IT specialist, pushed the audience to begin thinking differently about technology. “The last 20 years have been about becoming digital,” he said, “but the next 20 years will be about becoming clever with digital.”

    To do so, Hinssen said, businesses actually will have to catch up with their consumers and employees, who almost certainly have better technology at home than they do at work. In fact, he said, many people now define work as “that brief period during the day when I have to use old technology.”

    The ability of these groups to cope with information - even too much information - is key to understanding them, Hinssen said. But you have to understand where the breakthroughs are. “The iPod didn’t change the world,” he said. “iTunes did.” Likewise, it was not the iPhone that changed the world, but rather the App Store that allowed people to access new and innovative ways to process information and use technology. That, he said, is where the power is.

    “If you only see technology as a way to be efficient,” Hinssen said, you are missing the point. But “if you seen technology as away to innovate, then you’re there.”

    In an otherwise mediocre presentation given by Hans Eyesink Smeets, a Dutch retail strategy consultant, a similar point was made, albeit by using a non-traditional example.

    Smeets said that his traditional walk to work through the streets and along the canals of Amsterdam used to bring him past a dozen porn shops, but that today only two are left - not because of some sort of newfound puritanism, but rather because they’ve been put out of business by the internet. The two that are left, he said, have gotten out of the content business and shifted to hardware, because that’s not something readily available online.

    “Banks, music and porn - all are primarily in the information business,” Smeets said, and all are susceptible to attack from virtual competitors. But other retailing venues, such as food, are not immune to attack, because they increasingly depend on the providing of information to close the sale.

    In other CGF news from day two...

    Doug McMillon, President and CEO of Walmart International, took the audience through his company’s efforts to be 100 percent supplied with sustainable products, have zero waste, and “sell products that sustain both people and the environment.”

    McMillon described a children’s toy truck which had originally come with six feet of wire to tie the product to its packaging.  Working with their supplier, they had managed to reduce this by 90%. 

    And, he pledged further collaboration, both with manufacturers and other retailers. McMillon said that when Walmart recently opened a store with a closed loop refrigeration system, he took great delight in calling one of his biggest competitors and inviting them in to see and learn about the system, so they could adapt it as well, if they wanted to. At first, he said, the competitor thought it was a joke. And then they brought 15 people to examine it.

    MNB will have more from the Consumer Goods Forum (CGF) Global Summit on Monday...

    While the CGF Forum considers issues of global importance, retailers all over the world still have to cope with the day-to-day challenges of doing business. How to build customer traffic and loyalty. How to generate higher sales and higher average transactions. How to differentiate oneself from the store across the street or down the road.

    That’s where TCC Global comes in. For many of the companies attending the CGF Forum, TCC has been a proven marketing partner, helping them develop meaningful and demonstrably effective programs that change shopper behavior. Because that’s the name of the game when it comes to improving store-level bottom line performance.

    To learn more, click here.




    KC's View:
    One of the great advantages that CIES, now the Consumer Goods Forum, has always brought to the table is the use of thinkers like Hinssen and Ramo who talk about big ideas that relate back to the everyday conduct of business. The idea is to shake up conventional thinking ... to get people beyond the reassuring self-deception that all they have to do is stick with fundamentals and ride out the storm.

    When the sessions work, they can be marvelously provocative. When they don’t, either because of an inexperienced speaker, bad moderation or a mis-conceived topic - as in the case of a session yesterday about umami as a cooking tool - it is like an enormous belly flop. But the risk, I’ve found over the years, generally is worth the reward...

    Published on: June 17, 2011

    The US Senate has voted to end the $5 billion annual ethanol subsidy, though the New York Times notes that the vote was attached to a stalled economic development bill and so may never actually become law. In addition, as the Christian Science Monitor reports, “the Obama administration has said it would veto any attempt to cut subsidies for ethanol producers entirely.”

    The Times writes that “it’s clear that a combination of pressures to cut the deficit, concerns about food prices and clearer information about the dubious merits of most existing methods of producing ethanol has overcome the political heft of farm states.” And, the vote also overcame objections by Tea Party activists that “a vote to kill this subsidy, if not accompanied by a tax break elsewhere, constituted a vote to raise taxes.”
    KC's View:
    I have to admit that I don’t understand the last part. Ending subsidies that need not exist - such as for ethanol production, or even or the oil companies - is not the same as raising taxes; it is just saying to industries that it is time to stand on their own two feet. Wouldn’t it make sense to subsidize efforts to find energy sources that don’t pollute, that don’t contribute (potentially) to climate change, and would help establish the US as a beacon of innovation when it comes to alternative energy that also give us great geo-political independence?

    As a taxpayer, that strikes me as a good investment.

    As I understand it, the push for ethanol took place because it was believed that it would help cut down on greenhouse gas emissions, and that the increase in the price of corn - and resultant increase in food prices - was something that most people didn’t see coming. But, as the writes, “Studies have since shown corn-based ethanol produces far more greenhouse gas emissions than earlier believed, making gains in that area only slightly better than gasoline, he says. Other environmental damage – deforestation and farm fertilizer runoff, for example – meant it was not the silver bullet many had hoped.”

    And so, it is time to change policies and find a different way. Hopefully the long-term impact will be positive.

    I know that’s what the Grocery Manufacturers Association (GMA) hopes, as its CEO, Pamela Bailey, released a statement that said, it part, "With corn prices at record levels, these votes convincingly show that the tide has turned against using food for fuel and that Americans want responsible energy policy solutions that do not pit our nation’s energy needs against food security for millions of families."

    Sounds good to me. Though it is a pretty safe bet that it won’t be all that simple.

    Published on: June 17, 2011

    Advertising Age reports on the launch of www.consmr.com, which is designed to be a social networking page for CPG brands.

    Here’s how Ad Age frames the story: “Search for a coffee shop or a dentist and you're bound to see at least one user-review site rating the product or service, if not many. But search for product names or categories such as ‘Greek yogurt’ or ‘iced tea’ and no such luck. There's no Yelp or RottenTomatoes for products we buy at the grocery or drug stores as there are for local businesses and movies ... Enter Consmr. The website gives each of 50,000 products their own brand page and provides space for user reviews and ratings. Consmr has also partnered with magazine publisher Rodale to import product reviews from Men's Health, Women's Health and Prevention and is providing incentives to product bloggers to cross-post their reviews.”

    As Ad Age notes, “the brands that are participating today are most likely of the build-it and-they-will-come mentality. There currently aren't many reviews on the site and searches like ‘granola bar’ only bring up one review out of many products.

    “If nothing else, Consmr definitely has good timing. The site launches at a time when packaged goods companies are hammering out how exactly their products hang online. Procter & Gamble Co. recently launched a new Facebook commerce platform and has been testing its own direct-to-consumer e-commerce store. Other retailers are buying up e-commerce start-ups to be there when consumers want to buy their soap and cases of Coke online. Walgreen's recently purchased Drugstore.com for more than $400 million and Amazon scooped up Soap.com and Diapers.com parent Quidsi for $540 million.”
    KC's View:
    Think about it, and what’s really amazing is that this site didn’t exist before.

    Once they come up with a mobile version that people can use on their smart phones - which is said to be in the works - this thing could have some real power, especially because the reviews almost certainly will reflect passionate feelings about products, either positive or negative.

    Published on: June 17, 2011

    The Winston-Salem Journal has a piece about how Krispy Kreme seems to have started putting the pieces back together again, coming out of a long tailspin to actually generate a profit last year and now looking to transition “from remarkable recovery to sustainable profitability.”

    The key, the company says, will be coffee (three new “signature” blends to launch later this year), and non-doughnut products (bagels, muffins and sweet rolls with a longer shelf life than doughnuts). CEO Jim Morgan says that he hopes to follow “a business plan of prudent domestic and international growth — up to 45 shops by next January” - that will gain both customer and investor acceptance.
    KC's View:
    Krispy Kreme is such a classic case of totally screwing up brand equity - going from being a cool brand with hot doughnuts to being one that was over-exposed, with diminishing attention to quality, and facing a buzz-saw known as the low-carb diet. Add to that financial problems, and it is almost amazing it has survived to the extent it has.

    Hard to know if the company will be able to survive or even stay independent. I just hope they’ve learned from their mistakes.

    Published on: June 17, 2011


    • The Wall Street Journal reports on the different challenges that Walmart is facing in various global markets, “from the mature markets of the U.S. and Europe, which face challenging conditions, to the ‘robust’ developing markets.

    Doug McMillon, CEO of Walmart International, tells the that “we are experiencing economies in the emerging markets that are growing quickly and are very robust. The more developed markets are more challenging, but everywhere customers are under different types of pressure. In the U.S. it is different from markets like India, where there is high inflation ... We try to keep our operating costs as low as we can and work with our supply chain as best we can to delay increases or avoid increases wherever we can.”

    • The Las Vegas Review Journal reports that “Wal-Mart next week is rolling out MoneyCenter kiosks, offering a variety of financial services to shoppers” to some 1,900 US stores. A company spokeswoman said that “the kiosk resembles an ATM machine and will be placed in Wal-Mart stores without full MoneyCenters.” Walmart already “has more than 1,000 full MoneyCenters across the county staffed by customer service agents that provide bill payment, wire transfers, check cashing, money orders and other services.”
    KC's View:

    Published on: June 17, 2011

    The Los Angeles Times reports that Coinstar-owned Redbox has made good on its promise, and as of today will be renting video games from 21,000 of its 27,000 video rental kiosks around the country.

    “The company, which has rented more than 1 billion movies since introducing its service in 2003, had been testing game rentals for two years at 5,000 of its kiosks,” the Times writes. “It found that the average revenue of kiosks that rented games as well as movies was 10% to 15% higher than machines that rented only movies.

    “That's partly because games cost $2 a day to rent, while Blu-ray movies cost $1.50 and regular DVDs are $1. Adding games to the mix also helps Redbox spread its bets. In the fourth quarter last year, the company's operating margins slipped to 14% from 17.6% primarily because of weakness in movie rentals.”
    KC's View:

    Published on: June 17, 2011

    The Chicago Sun Times reports that as the economic recovery sputters along, men seem to be doing better than women ... which is precisely the opposite of what was happening when the recession hit.

    “The so-called mancession saw the number of employed men plummet by 5.21 million from November 2007 through December 2009, according to Labor Department data as industries including manufacturing and construction were hard hit. Meanwhile, the number of working women sank by a much smaller 1.95 million.”

    But, the Sun Times writes, "From May 2010 through May 2011, the script flipped. The number of employed men jumped by 686,000, while employment of women fell by 85,000."
    KC's View:
    Based on the way things have felt over the last few weeks, I don’t have a lot of confidence in those numbers sticking.

    Published on: June 17, 2011

    • The Associated Press reports that Chicago Mayor Rahm Emanuel “met Wednesday with executives from six grocery chains, including Walgreen Co. Wal-Mart Stores Inc. and Aldi. They talked about eliminating food deserts in six Chicago neighborhoods,” where, Emanuel says, almost a half-million residents don’t have local access to fresh food.

    According to the story, “The grocery executives discussed future plans to expand in Chicago food desert areas. Both Emanuel and the grocery executives talked about obstacles for expansion, including transportation, security, real estate and bureaucracy.”

    USA Today this morning has a story about how brands such as Kleenex, Coke, Chips Ahoy and Corona are all spending significant money on summer-centric packaging designs that they hope will set them apart from the competition, on the theory that “even a fraction of a percentage of increased sales can separate a successful selling season from a lousy one.”
    KC's View:

    Published on: June 17, 2011

    • Big Y Foods announced that it has promoted Michael P. D'Amour to be its vice president of sales and merchandising, responsible for overall sales, procurement, merchandising, advertising and pricing.

    D’Amour, son of the privately held company’s president, succeeds the retiring Phillip Schneider.

    • Hershey Co. announced that John Bilbrey has been named the company’s new CEO. He has serving in the job in an interim capacity since David West left the company last month to be CEO at Del Monte Foods. Previously, Bilbrey was the company’s COO, and he also is a former Procter & Gamble executive.
    KC's View:

    Published on: June 17, 2011

    Yesterday’s “Kate’s Take” looked at websites that are targeting men who have taken over many of their families’ cooking duties, and it led MNB user Gary Harris to write:

    As someone who migrated from the Home Improvement industry to the Food industry a couple decades ago, I know there are opportunities to reach out to us. First off, I must thank Wegmans for taking on the task of teaching its customers (through us, its employees) about how to cook great tasting healthy meals. That initiative coincided with my wife reentering the full time workforce years ago, and our agreeing that dinner would become my responsibility. I haven’t looked back. The acquisition of new skills and the successful creation of a culinary experience for family and friends is reason enough, but there is a tremendous opportunity in the tools. I’m a guy. Guys like tools. Saws, drills, electric, cordless, gas powered, we love shopping for and getting the ‘right tool for the right job.’ Cooking is just another venue for that. We all know about the grills and grill tools, but what about cooking utensils, pots and pans, and chef quality knives? We like our computers to be the fastest, our golf clubs to take 5 strokes off our game, and our knives to cut steaks paper thin if need be. My wife has to drag me out of the Complements section at Wegmans when we go shopping, but my braising pan, slow cooker, and 25th anniversary Henckels knife set are among my most prized kitchen tools. And I’m always looking for the next and newest…



    Responding to my piece the other day about improved customer service, one MNb user wrote:

    I recently visited a Sunset Foods store in Chicago and saw the same “Invasion of the Body Snatchers. “There were at least 3 C/S reps in every aisle just waiting to help you. Wished we had something like this in Cincinnati….

    MNB user Bob Vereen wrote:

    The credit for improved service at Home Depot goes to its CEO, Frank Blake, who took over a few years ago from Bob Nardelli.  One of his first moves was to bring back qualified, trained full-time people (alas, the original modus operandi) and institute more and better training for existing personnel.   He also increased store personnel.

    Nardelli had cut full-timers, relied on part-timers and reduced personnel numbers.   Service got so bad that Bernie Marcus, one of the founders, publicly said he no longer was visiting the stores.

    Blake was smart enough to realize what should get top priority and adequate budget dollars.


    And MNB user Jim DeLuca wrote:

    Yesterday I got 4 duplicate email pitches from UPrinting.com.   I assumed it was a classic mistake and just deleted them.  Today, when I opened my email, I had 1 new one from them apologizing for the error, "someone clearly having a bad day"; it was cute, and had a pic of a smiling boy wearing a white shirt and loose tie hitting his forehead with his hand...OOPS.  The apology included a  offer of an additional 10% off any new order; on top of the 25% discount they they were touting yesterday.  Plus, this added discount could be used for any new order, not just for the product they were promoting yesterday.

    Immediate apology + humor + extra discount= pretty darn good service.


    Agreed.



    And, regarding the Boston Bruins’ Stanley Cup championship, MNB user Chris Esposito (any relation to Phil?) wrote:

    Watching the series, it was a classic example of team work and striving towards a common goal, a lesson for all of us to learn in business as well.  However, the violence and rioting in Vancouver afterwards was a disgrace.  From what I read, the same thing happened in 1994 when the NY Rangers defeated the Canucks in Game 7.  There were stores since game 6 a few days earlier of how they expected this could happen.  Thus, to me, its unbelievable that you’d be potentially anticipating this level of violence and yet not be prepared well enough to stop it?  Poor planning by the city of Vancouver.

    Which is all the more shocking because Vancouver is one of the world’s great cities, with some of the nicest people.
    KC's View:

    Published on: June 17, 2011


    by Kevin Coupe

    Content Guy’s Note: This week’s OffBeat is also available on video...just for a change of pace. You can watch the video, read the text version, or both. I look forward to hearing from you.

    Hi, Kevin Coupe here, and today I’m filing OffBeat from Barcelona, Spain.

    Just before coming over here, I did something that I swore I’d never do.

    I bought a suitcase with wheels.

    Now, I know that to most of you, this sounds absurd - that someone like me, who has spent one-third of my time over the past 20 years or so traveling, did not own a suitcase on wheels. Michael Sansolo would agree with you; he’s been nagging me to buy one for years.

    But no. For as long as I can remember, I’ve resisted. My standard line has been this: “When the day comes that I can’t carry my own luggage, I’m going to stop traveling.”

    The problem is that during a recent trip, I suffered this really severe pain in my knee. I couldn’t walk for a few minutes, and it took a load of ibuprofen to get me back in gear. It scared me, especially because I’ve had two knee surgeries and probably will have to have another at some point. When I saw the doctor, he just said it was a case of runner’s knee - which was funny since I gave up running and took up bicycling a few years ago - and he gave me some exercises to keep it in shape.

    It’s feeling fine now, but all I could think about was trudging through some airport carrying my suitcase and having my knee go out on me again. And so I decided to eat my words, put up with Sansolo saying “I told you so,” and get a bag with wheels.

    This is the first trip I’ve used it on. The thing is, I love it. Getting around airports is so much easier. And I can get so much stuff into it, the bag is amazing. It’s a Tumi, but I got it on sale, and so it wasn’t even that expensive.

    As always, I’m thinking that there is a business metaphor in here.

    How often do we make declarations about our businesses, saying that this is the way things are going to be, only to find out after a lengthy period of time that our lives would have been a lot easier and more productive if we’d only been a little more flexible?

    I’m thinking this happens a lot. We forget that many of our businesses are a unique blend of art and science, and while science is all formulas and facts, great art often comes out of improvisation and experimentation.

    We need the science. But we also need the art. We need to be flexible, to be willing and able to adjust to changing circumstances.

    It’s good for business. Not to mention the knees.

    Well, that’s it for this week. I’d tell you about the wines and beers I’ve been drinking, but I have no idea what they are - just that they’ve been delicious. I’ll try to be more specific about things next week.

    Have a great weekend...and I’ll see you Monday.

    Slainte!
    KC's View: