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    Published on: September 13, 2011

    by Michael Sansolo

    We are having a special occasion in the Sansolo house this week: My wife has a pair of sneakers about to celebrate their first birthday. Now you are probably thinking these must be one special pair of sneakers or the Sansolos have fallen to a state of boredom in which footwear purchases become an event. Happily, you’d be wrong in both cases.

    The sneakers are special because she bought them from Zappos.com exactly a year ago. Zappos, masters of marketing that they are, sent us an e-mail reminder of the event noting that my wife can order the exact same pair in the same color and size right now. Just like that, Zappos had a conversation with us that no marketer has ever done before.

    Now, Zappos specializes in what it calls the “Wow!” moment, doing things like rushing orders so that customers like my wife go to their gym flush with the tale of how quickly shoes arrived from the website. The beauty of these “Wow!” moments is we customers appreciate them and willingly change our relationship with a company.

    Apparently even a traditional brick and mortar retailer can get into that game and thanks to Bed, Bath & Beyond, we have a model that every retailer (and manufacturer) had better check out really quickly. Because what Bed, Bath & Beyond is doing is about building relationships in a way that could pay dividends for years or decades to come.

    B, B & B (let’s shorten that name) is one of my least favorite places to shop. There’s something about endless alcoves of towels, placemats or whatever that drives me into naptime. But there are times that incredible array of products is exactly what you need and no one needs that assortment and price level more than young people starting out in their first apartment. B, B & B understands that and has done something spectacular.

    On B, B & B’s website is a tab called “college insider,” detailing a challenge that many college students and recent graduates face: furnishing a first apartment. Go click on the site and prepare to be amazed because it is a marvel of relationship building.

    Ordinarily you’d expect a site like this to do nothing more than sell products, but this site isn’t ordinary. The first sections featured are about apartment hunting and how to deal with landlords and leases. (There’s even a breakout on whether you are living alone or with a roommate.) The language is simple and easy to follow; the tips are straightforward and sensible. In short, it’s a website that a first-time apartment dweller would use again and again. Just like that B, B&B starts building the relationship without mentioning a single product!

    There are tips on how to pack, how to budget, decorate and even how to throw your first party. (Shockingly, it isn’t buy a pizza, a bag of chips and a six-pack. I needed this guide years ago.)

    Of course the site also plays right into B, B &B’s market. There are checklists for items an apartment must have—most of which you can find at the store—but there are also lists for key food products and tools that you buy elsewhere. In fact, every supermarket operator should be looking at how to link up with B, B& B. (Hopefully, it will lead to supermarket sites listing the essential foods, spices, non-foods etc. you need for a first home.)

    The bottom line is that this entire site is something a new apartment dweller will keep bookmarked to make loads of correct decisions as they fill in their first living space and whatever comes after. This is a site people will likely share with friends and family as a must have, a must use and a must keep. It’s a site that will make Bed, Bath & Beyond a trusted friend for today, tomorrow and beyond.

    In other words, that is a “Wow!” moment and the start of a beautiful friendship.


    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: September 13, 2011

    by Kevin Coupe

    It is an Eye-Opening number.

    Americans spent 53.5 billion minutes on Facebook during May 2011 - more than any other website, and way more than Yahoo (second with 17.2 billion minutes) and Google (third with 12.5 billion minutes). Facebook reportedly had 140 million unique visitors during the month - which, if my math is correct, means that each one of them spent an average of 382 minutes on Facebook during the month, or more than six hours apiece.

    According to the San Francisco Chronicle, a new Nielsen study “found nearly 4 of every 5 active US Internet users went to social-networking and blogging sites, accounting for 22.5 percent of the total amount of minutes people spent online. Online gaming was next with 9.8 percent, followed by e-mail at 7.6 percent.”

    Two other interesting observations from the study:

    • A majority of social network users are women.

    • More than a third of social network users - 37 percent - are accessing these sites from their smartphones.

    Y’think this whole social networking thing might catch on?

    None of this is done by design, but it is interesting to me to see the confluence of stories running on MNB this morning.

    Peapod celebrates its 20 millionth delivery. Whole Foods offers a national “daily deal.” Groupon looks to compete more effectively with Amazon. Amazon looks to expand its services (yet again).

    It strikes me as critical for retailers of all stripes to be looking at all these numbers and trends and to be working actively to engage with this consumer audience and to find ways to be innovative and relevant.

    If you aren’t playing, if you aren’t trying to figure out the rules (including trying to figure out which ones you can break), you can’t win.

    That’s an Eye-Opener.
    KC's View:

    Published on: September 13, 2011

    Peapod announced that it has made its 20 millionth delivery, an achievement reached over the space of 22 years in 23 different markets.

    The pioneering e-grocery retailer, owned by Ahold USA, said that it would celebrate the milestone “by coordinating hunger-relief efforts in the communities it serves. The online grocer has partnered with the Greater Chicago Food Depository, the Northern Illinois Food Bank, the Midwest Food Bank in Indiana and Feeding America Eastern Wisconsin. Peapod shoppers and employees will contribute food, friends and funds to the hungry in their local communities.”
    KC's View:
    Think about that number. Twenty million deliveries. Peapod has a lot to be proud about, because the founders saw possibilities when a lot of other folks were merely skeptical, and they built a business that has been sustainable, which only as few other e-grocery companies can claim. Good for them.

    Published on: September 13, 2011

    Reuters reports that LivingSocial, which counts Amazon.com as one of its major investors, will today offer a national “daily deal” in conjunction with Whole Foods Market - offering $20 worth of product at any Whole Foods store for $10.

    There is a cap of one million vouchers.

    LivingSocial is a Groupon competitor. Reuters notes that both “daily deal” sites “have run grocery deals before, but those offers have been focused on small areas or niche outlets like gourmet butcher shops and bakeries.”
    KC's View:
    There also is a suggestion in the story that in a move to build national market share, LivingSocial may be helping to subsidize the deal, sine even Whole Foods - sometimes referred to as “Whole Paycheck” - may not have margins large enough to absorb a half-price sale.

    Either way, this is fascinating ... and I’ll be anxious to see how fast they reach that one million voucher number. As I write this, it is 8 am EDT, and the offer hit my email an hour ago ... and more than 100,000 vouchers already have been purchased.

    Published on: September 13, 2011

    Bloomberg reports that in the UK, Groupon has begun offering deals and discounts on online purchases in addition to the local bricks-and-mortar retailers on which it has built its “daily deal” business.

    According to the story, “When users purchase a product deal, they receive a code to enter into the manufacturer’s website for a discount on their online order.”

    The story suggests that this move puts Groupon into more direct competition with online retailers such as Amazon.com and eBay.
    KC's View:
    The competitive juices are flowing, and everybody is working the angles, trying to make sure that nobody else has the advantage. The game, as Sherlock Holmes might say, is afoot.

    Published on: September 13, 2011

    The Wall Street Journal reports that Amazon.com “is talking with book publishers about launching a Netflix Inc.-like service for digital books, in which customers would pay an annual fee to access a library of content.”

    The story suggests that Amazon would mostly include backlist, or older books, in the program, and is likely to put the service under the Amazon Prime umbrella as a value-added for people who pay $79 a year for expedited “free” shipping and access to a digital library of television shows and movies. The service could be announced at the same time as Amazon releases its new tablet computer, which has rumored for months, and that would be positioned to compete with the iPad.

    The Journal writes that “the proposal is another sign that retailers are looking for more ways to deliver content digitally, as customers increasingly read books and watch TV on computers, tablets and other electronic devices.”

    Not everyone apparently likes the idea, according to the Journal: “Several publishing executives said they aren't enthusiastic about the idea because they believe it could lower the value of books and because it could strain their relationships with other retailers that sell their books, they said.”

    The Boston Globe reports that “with its popular Kindle, Amazon would have almost a lock down on the e-book market should it launch this service.”
    KC's View:
    It is all about “locking down” consumers ... which is the same thing as taking them out of the marketplace and making sure they are not in play for other retailers to attract.

    That strikes me as something that out to be a strategic imperative for more retailers - asking themselves how they can “lock down” their shoppers, demonstrate their loyalty to those shoppers, and insuring that they are not in play. If you don’t do that, not only do you leave shoppers in play, but you potentially leave money on the table. Which is dangerous. Especially these days.

    Published on: September 13, 2011

    • The New York Times reports that the US regulators “will ban the sale of ground beef tainted with six toxic strains of E. coli bacteria that are increasingly showing up as the cause of severe illness from food ... The new rule, which officials said would be announced on Tuesday, means that six relatively rare forms of E. coli will be treated the same as their notorious and more common cousin, a strain called E. coli O157:H7. That strain has caused deaths and illnesses and prompted the recall of millions of pounds of ground beef and other products. It was banned from ground beef in 1994 after an outbreak killed four children and sickened hundreds of people.”

    “We’re doing this to prevent illness and to save lives,” said Dr. Elisabeth Hagen, the head of food safety for the Agriculture Department, which regulates meat. “This is one of the biggest steps forward in the protection of the beef supply in some time.”

    • The Rochester Democrat and Chronicle reports that because of higher ingredient and labor costs, Wegmans has been forced to raise the price of some of its $6 takeout meals - which include an entree and two side dishes - to $8. However, the company said that most of the $6 meals would remain at that price.

    Advertising Age reports that “the growth in U.S. ad spending continued to slow in the second quarter of 2011, increasing 2.8% from the second quarter of 2010, according to a new report from Kantar Media. U.S. ad spending had increased 4.4% in the first quarter, the smallest rate of growth since ad outlays began rising again.”
    KC's View:

    Published on: September 13, 2011

    • Delhaize Group announced today the creation of a Delhaize Europe organization that will encompass the operations of Delhaize Belgium and Southeastern Europe and be led by Stéfan Descheemaeker, currently Executive Vice President and Chief Financial Officer of Delhaize Group and member of the Delhaize Group Executive Committee.

    Additionally, Dirk Van den Berghe, currently serving as Senior Vice President Logistics, Procurement and Quality of Delhaize Belgium, has been appointed Chief Operating Officer of Delhaize Belgium, effective today, reporting to Michel Eeckhout, Chief Executive Officer until the end of 2011. On January 1, he will succeed Eeckhout as CEO of Delhaize Belgium.

    Eeckhout will remain as Executive Vice President of Delhaize Group and member of its Executive Committee.

    • The Chicago Sun Times reports that CJ Fraleigh, CEO of Sara Lee’s North America business, has resigned to pursue other opportunities ... urged on by the company’s board, which indicated that it is looking for “a different approach...to transition the North American business into a pure-play company.”

    While a search is conducted for a replacement, Sara Lee CEO Marcel Smits will take on responsibility for the North American business.
    KC's View:

    Published on: September 13, 2011

    Got some emails yesterday about the “Consumer Hourglass Theory,” which suggests that all the growth is in the low end and high end of the shopper spectrum, with the middle slowly vanishing as they chasm grows between the haves and the have-nots.

    MNB user Ben Ball wrote:

    Re: “middle market erosion” – I think there may be an analogy here to the science of global warming. “Huh?” you ask…

    Well, here goes.

    The science certainly confirms that the earth is in a warming stage – not much to argue with there. The only open question (to some at least) is the degree to which the current cycle is either a) caused by, or b) accelerated by manmade causes. I would argue that most folk’s conclusion about that second question is driven as much by their ingoing paradigms and ideology as it is by “science”.

    There is also a clear move to lower cost alternatives in the marketplace for consumer products. But is it “driven by the growing income disparity in America” as you state? Or is it possible that middle-class America is simply in “recession protection mode” and looking to spend their dollars more wisely --- maybe even (gasp) SAVING some of them? My point is not to argue the wealth gap – but rather how and why it has grown and the direct relationship between that statistic (“cause and effect”) and the choices consumers are making at the grocery store.


    Seems to me that these things feed on themselves. Sure, maybe middle class people are saving more, which leads to a greater emphasis on lower priced items. Which leads to big companies offering more low-priced items, which cater to these shifting consumers. Which may make it more palatable for those shoppers to buy more low priced items. And so on.

    Doesn’t change the income gap.

    I’m also not sure I buy your analogy, especially because I reject the suggestion that people who think that there has been some human contribution to the global warming problem is as much a reflection of their own biases as it is an acceptance of science.

    For me, I just think that rejecting the possibility that all the crap we’ve spewed into the atmosphere has had any impact on the environment is the height of arrogance and denial. For me, the scientists saying that there is no cause and effect are the same people who said tobacco doesn’t cause cancer.

    But put that aside for a moment. Let’s work on the premise that such a cause and effect is not scientifically certain. It seems to me that the responsible thing is to develop policies that allow for the possibility, as opposed to rejecting it out of hand.

    Another MNB user wrote:

    I can’t help but make the observation or maybe I should say ask the question…..Has the consumer been “ripped” off in the past by paying too much for their food?  I’ve been on both sides of the desk, and as Retailers continue to drop their retails making the spread between regular priced and sale priced too large we are left open to the choice of only buying some things when it’s on AD.

    If the AD price still brings a fair margin to the retailer why not leave it there? 

    Unfortunately the AD price is often below cost, and the consumer would not know this.  To them it just looks like the regular price is overcharging them.  And the spread between the “haves and have not’s” continues to grow as the middle class buys whatever is on AD this week and waits for next week to see what is on AD then, saving pennies for what? Maybe gasoline?  How to fix it?  I don’t know, but the theory that by dropping retails consumers will automatically buy more is not working.  They are only buying what they need and if that is “1 unit” instead of “5 units”, that is what they do. 

    At a lower or below cost price, the sales at the Retailer continue to drop off.  Vicious circle and our consumer choices get smaller and smaller as well.  I guess that principal of selling a great product at a fair price will continue to suffer.





    On the subject of what needs to be done for effective loyalty marketing, MNB user Gary Loehr wrote:

    The challenge here is finding something that provides real value to the consumer, that is not a discount.  For most people the e-mail content sent out by most marketers just isn't all that relevant or compelling.  Who wants to have a relationship with someone who wants to talk, but not listen, doesn't have a lot to say, and talks endlessly about a subject you just don't care that much about?

    I can't tell you how many e-mail campaigns I have "unsubscribed" to, because they just weren't providing anything interesting or of value.

    KC's View:

    Published on: September 13, 2011

    In a Monday Night Football doubleheader, the New England Patriots defeated the Miami Dolphins 38-24 (with QB Tom Brady throwing for a whopping 517 yards), while the Oakland Raiders beat the Denver Broncos 23-20.

    Meanwhile, Novak Djokovic defeated defending champion Rafael Nadal in four sets to win the men’s singles U.S. Open title, clearly reinforcing Djokovic’s position as the top ranked male player in the world.
    KC's View: