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    Published on: September 15, 2011

    by Kevin Coupe

    Content Guy’s Note: Below is a commentary on the same subject as the video piece, but it isn’t word-for-word the same. You can look at both, or is up to you. I look forward to hearing from you.

    Hi, I’m Kevin Coupe and this is FaceTime with the Content Guy.

    A couple of things on my mind today.

    One is the confluence of stories that we had on Tuesday - perhaps it was the first time that we had six stories, one after another, that referred to some kind of virtual marketing. It started with and its influence on bricks-and-mortar retailing, and included stories about how Whole Foods used a daily deals service to build traffic, Peapod’s continuing success, Amazon’s new strategic efforts, and so on.

    And it makes me think that there is absolutely no excuse - none - for any retailer not to be engaging with, testing, and embracing these technological innovations, from online shopping to social networking, and beyond.

    You might as well as making phone calls with a rotary phone, listening to music on an eight-track tape player, and thinking that the post office is the fastest way to get a message from here to there.

    This stuff is real. And to not be developing strategies and tactics that take advantage of these innovations is like playing with one hand tied behinds your back - you’re simply giving away advantages to the competition and leaving money and customers on the table.

    The other thing that I’ve been thinking about is the notion of a “Consumer Hourglass Theory,” which suggests that investors should focus on companies best positioned to cater to the highest-income and lowest-income consumers, and that the most successful companies will be those that cater to either end of the spectrum. Forget the mushy middle - this theory suggests that it has become a kind of quicksand for marketers that traditionally have focused on a shrinking middle-class mainstream consumer.

    I think there may be a corollary to this - that the key to a great business model these days may the ability to help people deal with shortages...whether it is a shortage of money...a shortage of time....or even a shortage of ideas. It goes beyond the notion of giving people what they need, and says that what smart marketers really need to do is figure out where the shortages are, even if people aren’t aware of those shortages.

    These are confusing times we live in. There’s an apparent growing chasm between the haves and have-nots, and yet we still don’t see bread lines while we still see plenty of iPad and iPhone lines. And shifting consumer attitudes and priorities - ranging from an ability and willingness to engage with technology to the ongoing challenge of sorting out needs and wants and priorities - are tough for marketers to handle.

    But we can’t run away from these challenges. We have to go toward them, and embrace them ... because that’s the way best way to deal with them on our terms.

    That’s what is on my mind this morning...and as always, I want to hear what is on your mind.
    KC's View:

    Published on: September 15, 2011

    Massachusetts-based Big Y announced this week that by the end of the year, all of the self-checkout lanes will be removed from its 58 stores.

    In a prepared statement, the company said: "After extensive research, Big Y has concluded that these self checkout lanes not only do not save their customers time but usually take them even more time to check out than customers in standard checkout lanes. Self-checkout lines get clogged as the customers needed to wait for store staff to assist with problems with bar codes, coupons, payment problems and other issues that invariably arise with many transactions.”

    The story continues: “Big Y is not the first major grocer in the nation to make such a move. In July, Idaho-based Albertsons announced it was pulling the machines from its stores, citing a growing disconnect between the customer and the level of service the company wanted to be a standard. The Ohio-based grocery chain Kroger is also removing the self-checkout machines from some of its stores as part of routine renovations.
    KC's View:
    To be honest, I’ve used a lot of self-checkout lanes in my life, and I’ve rarely if ever run into a systemic problem of clogged lines. But maybe I’ve just been lucky.

    I’m not in a position to say whether Big Y is right or wrong - that’s up to them. But I am wondering whether it had the right equipment ... since I’ve been told that in Albertsons’ case, the real reason for getting rid of self-checkout was that the equipment was antiquated and too expensive to replace, not a high-minded feeling that it could offer better customer service without them.

    The thing about self-checkout is that it is ideal for the next generation of technology-savvy shoppers. But it is hard to say definitively that a store without self-checkout has a competitive disadvantage ... though it certainly is a good option to offer.

    BTW...I have no reason to think that this is the case at Big Y, but supermarket chains are well known for adopting strategies and/or technologies that they think will totally change the economics of their world, only to be disappointed when things don’t change as radically as they expect. And then, they abandon these efforts. it is like institutional ADD.

    Published on: September 15, 2011

    The Associated Press has published an analysis of the programs instituted by the federal government to protect the nation’s food supply from acts of terrorism, and while “the government has spent at least $3.4 billion on food counter-terrorism in the last decade ... key programs have been bogged down in a huge, multi-headed bureaucracy. And with no single agency in charge, officials acknowledge it's impossible to measure whether orchards or feedlots are actually any safer.”

    Among the conclusions reached by the AP:

    • “The fragmented system leaves no single agency accountable, at times slowing progress and blurring the lines of responsibility. Federal auditors found one Agriculture Department surveillance program to test for chemical, biological, and radiological agents was not working properly five years after its inception in part because agencies couldn't agree on who was in control.”

    • “Bureaucratic delays and funding concerns have slowed efforts to move an aging animal disease lab from an island near New York City. A report by leading scientists also found an accidental release of foot-and-mouth was likely to happen at the new facility in America's beef belt.”

    • “Congress is questioning whether $31 million the Department of Homeland Security spent to create a state-of-the-art data integration center to monitor biological threats to food and other arenas has accomplished anything because agencies are not using it to share information.”

    • “Despite the billions spent on food defense, many of the changes the government put into place are recommendations that the private sector isn't required to carry out. As a result, it's difficult to track successes and failures, and the system's accomplishments remain largely hidden from public view.”
    KC's View:
    We get the government we deserve. The thing is, government should be doing these things. It just has to do them better.

    Published on: September 15, 2011

    Walmart announced that it has acquired OneRiot, described by ZD Net as a social media ad firm that “has technology that analyzes social media streams and then delivers ads against it. In some respects, OneRiot is one part ad optimization with an analytics spin ... For the retail giant, OneRiot is another building block as it looks at the mix between e-commerce, social networking and mobile applications.”

    OneRiot reportedly will move from its Colorado headquarters to Silicon Valley, where it will become part of @WalmartLabs.
    KC's View:
    It seems like Walmart is making announcements like this one every couple of weeks, as it arms itself for the coming online battles that it knows it is going to face.

    Published on: September 15, 2011

    Even in these days of broadband internet service and big servers, having a highly desired item can be enough to bring a website crashing down. That’s what happened to Target this week when it put on sale a bargain priced designer line called Missoni, which generated so much interest that Target’s website crashed just three hours after the product line was posted, and kept crashing intermittently as the day went on.

    It wasn’t just the website, however. Published reports say that there were long lines at Target’s bricks-and-mortar stores, and one store in New York City - scheduled to be open temporarily for just three days to hype the Missoni collection - had to close after six hours because everything got sold out.
    KC's View:
    Even in recession - especially in recession - smart and innovative marketing schemes can have a big impact.

    Though, as they say in Jaws, you have to bring a big enough boat. Which Target didn't.

    Published on: September 15, 2011

    The Toronto Star reports that Loblaws, long a private label leader, “is introducing President’s Choice Black Label, featuring products normally found in specialty gourmet stores ... From the smoky bacon marmalade, to the crumbly eight year old cheddar, to the cherry shiraz fruit jelly, Loblaw hopes the line will also appeal to ordinary consumers with a sense of culinary adventure despite the current challenging economic times.”

    According to the story, “Starting with 200 items, the group will represent a niche product amid Loblaw’s private label line, from its value priced No Name brand to its PC organics specialty segment.

    “In the stores, the Black Label products will be supported by displays that tell their story, how they were sourced, from whom, and how they might be used to transform an ordinary meal into a masterpiece.”
    KC's View:

    Published on: September 15, 2011

    • Walmart-owned Sam’s Club announced that it has begun selling three new proprietary brands - Simply Right, Artisan Fresh, and Daily Chef - which it says “provide premium quality products and a fresh look to popular items previously known as Member's Mark brand in selective categories, with the same great quality and value.”
    KC's View:

    Published on: September 15, 2011

    • According to the National Retail Federation, retail industry sales (which exclude automobiles, gas stations, and restaurants) in August increased 0.1 percent seasonally adjusted over July and 6.0 percent unadjusted year-over-year - tempered, NRF said, “by a continued lack of confidence in the strength of our economy.”

    • The Chicago Sun Times reports that “two of Moo & Oink meat markets’ three stores in Chicago — at 8201 S. Racine and 4848 W. Madison — have been closed due to a seasonal slowdown in business, while talks continue with a potential new buyer or buyers that would allow them to reopen and the company to continue in business, the company said Wednesday.”

    • The Chicago Sun Times reports that “this year’s peanut crop is projected to drop 13 percent from last year, according to the United States Department of Agriculture. That will translate into pricier peanuts. Makers of JIF peanut butter, for example, have already announced a 30 percent price hike is on its way.

    • Rite Aid announced that it “is joining the Diabetes Prevention and Control Alliance (DPCA), an initiative aimed at tipping the scales against the epidemic of diabetes, pre-diabetes and obesity by expanding access to innovative, community-based programs that use evidence-based approaches to help prevent and control diabetes.”
    KC's View:

    Published on: September 15, 2011

    • Ahold announced the appointment of Jeff Carr, currently the Group Finance Director at First Group, to be its new Chief Financial Officer (CFO) and Executive Vice President (EVP), effective November 12, 2011. He succeeds Kimberly Ross, who is becoming CFO of Avon.

    • PepsiCo announced yesterday that Al Carey, the three-decade company veteran who has been running its Frito-Lay North America, has been named CEO of PepsiCo Americas Beverages, succeeding Eric Foss.

    Carey will be replaced at the snacks unit by another Pepsi executive, Tom Greco, who currently is the chief commercial officer for Pepsi Beverages.
    KC's View:

    Published on: September 15, 2011

    Got a number of emails about the Whole Foods “daily deal” promotion that was run by LivingSocial. One MNB user wrote:

    I think you may be drawing the wrong conclusion. Until I see actual data otherwise, my assumption is that the vast majority of people purchasing the deal are current Whole Foods shoppers. Therefore, my conclusion is that people always want free money.

    Living Social did this a year or two ago with Amazon - I think it was a $20 gift card for $10. If I remember correctly, it was later revealed that Living Social had paid for the difference itself, probably as a way of building their membership list.

    Since it seems to me that the deal benefits Living Social much more than Whole Foods, I'm assuming a similar relationship is in place.

    MNB user Michael Galef wrote:

    I believe that the wild acceptance of Whole Foods coupons states a couple of items:

    The mass appeal of the social coupon and how the format much more effective it is than a offer.

    People are looking to eat healthier but prices especially Whole Foods almost prices itself out of the market.  Yet, I have read many articles such as a recent Wall Street Journal that the middle class is shrinking and companies such as P&G are focusing on premium brands vs. value brands.

    Many CPG companies will now be figuring out a way to get such a targeted trial coupon including me.

    And, from another MNB user:

    I like the Whole Foods offer for a different reason. Given the way Groupon’s economics work for business owners, it makes sense the business owners  would prefer Living Social over Groupon to deliver these types of offers.  That this offer sold out so fast shows that Groupon has strong competition in the space. Ultimately, this should benefit the economics of business owners.

    Also got the following email, on a couple of subjects, from MNB user Don Skiver. He began by commenting on an email we got yesterday about the “outraged bloggers” story:

    I think Steven Ritchey hit the nail on the head!  The internet is a great source of information, especially checking on products/services with customers reviews.  But for so many people it has become their "ten minutes of fame" and created some very self absorbed people that feel their opinion on anything is fact.  Having a realistic expectation of a product or service I think is just common sense.  I totally agree with him on his example, I do not go to McDonald's and expect gourmet food.  I expect to eat filling food, in a clean, safe, fast environment.  I appreciate the fact that if I am in Los Angeles or Kansas City or wherever, it will be predictable.

    I also wanted to make a quick comment on Kate's blog, couple of years ago, during our Thanksgiving dinner all the power went out, and I was glad I still had my "obsolete" yellow pages that I could use to call someone on my cell.  In the next decade maybe we won't be slaves to King Oil, but we will be to Mr Electricity . . .

    Regarding the Postal Service’s desire to use junk mail to keep it afloat, one MNB user wrote:

    Why keep a dinosaur that only adds to the landfills and most people do not recycle all the junk mail - some times we just need to admit the times have changed.

    MNB user Tom Devlin had some thoughts about the piece we had about the growth in diabetes:

    Ironically just the other day in our office we were having this conversation between the Old and the Young guys at the office. The 24-30 crowd will be in meetings and the topic came up regarding energy drinks. A few “Kids” who are very intelligent individuals admitted to drinking four to five Red Bulls, Monster or some type of energy drink a day. This does not include, soda  in the morning or fast foods several times a day and many times late at night. We all have our failings when it comes to nutrition but I feel these numbers are going to sky rocket much higher when the next generation gets a decade or two  older.

    The sad part is one comment from one of our young studs was “by the time I get to your age they will invent a pill to get rid of diabetes and” .... Get this... “eliminate my tattoos at the same time..”

    Now, if we could just find one pill to do both, I think we’d be onto something...

    Regarding our story about the 290-pound New York state man who suing his local White Castle restaurant for bigger seats, claiming that the chain violated the Americans with Disabilities Act, one MNB user wrote:

    I saw this story on CNN yesterday and last night after a grandsons football game we stopped at a Steak & Shake to grab a quick bite to eat on our way home.  While waiting on our food two couples came into the restaurant and were seated across from us…..the one guy was so big it took him several minutes to get into his booth and once there needed to keep his left hand secured to the back of the booth so that he would not fall out on the floor.  I really felt sorry for the gal with him as she was in the corner and could barely move her arms.  When their food came he had three large Burgers, a giant order of fries with cheese and chili and two of their known for milk shakes.  We didn’t stick around to see if he had desert or how he was able to get out of the booth after eating…….

    As I left I told my wife about the story on CNN and chuckled as to whether we had just seen their star.  “WHY” would an attorney or judge waste their time of something like this and “WHY” would the media waste time and money broadcasting it to the world and giving others the idea that this might be a way to earn an quick buck?

    Well, judges do it because everybody gets their day in court. Attorneys do it because that’s how they make a buck. And we in the media pay attention because it’s a good story ... and our dirty little secret is that more than anything else, we all like good stories.

    Finally...thanks to all of you who sent me Brussels sprouts recipes, telling me that my preference for a colonoscopy as opposed to eating the vegetable was a clear indication that I’d never had them properly prepared.

    I appreciate your concern. The thing is, I’ve had them different ways, and I simply don’t like them. I even hate them more than I hate beets. But not as much as I hate egg salad.

    But thanks.
    KC's View:

    Published on: September 15, 2011

    With a 1-0 shutout pitched by ace Roy Halladay against the Houston Astros, the Philadelphia Phillies yesterday became the first Major League Baseball team to clinch a playoff spot - its fifth in five years - and it seems likely that it is just a matter of days before the Phillies clinch their fifth straight National League East title.
    KC's View:
    It pains me, as a Mets fan, to say this. But congrats to the Phillies. Of course, the reality is that with that pitching staff, if they won;t win the World Series the season will end up being a disappointment ... so the biggest challenges remain in front of the Phillies.

    And one other thing...

    Published on: September 15, 2011

    by Susan Viamari, editor, “Times & Trends,” SymphonyIRI Group, Inc.

    The quest for affordability is driving consumers to seek out better deals no matter the cost. However, counterintuitive that statement may seem, it is spot on. Even as the price of gas continues to soar ever higher, 75 percent of shoppers still visit five or more stores to meet their CPG needs.

    Consumers’ cross channel search for the best deals clearly underscores the mindset of today’s CPG shopper—a mindset in which consumers are living with less and making purchases deliberately and cautiously.

    Consumers’ attitudes and behaviors today differ rather significantly from days gone by, when many Americans lived “outside their means,” drawing upon credit to keep up with the Joneses. Today’s attitudes and behaviors were shaped by prolonged economic downturn, and by the longest and deepest recession to hit this country since the Great Depression. Today, a full year after the recession has passed, aftershocks are still shaking the nation. Key economic indicators, including unemployment and inflation, remain less than favorable, and, consequently, consumers are firmly entrenched in savings mode.

    During the beginning of the economic downturn, shoppers flocked to value retailers, particularly supercenters and mass merchandisers, demonstrating a willingness to drive the extra distance in a desperate effort to save money. Today, grocery, drug, dollar and club stores are enjoying increased shopper visits, at the expense of supercenter and mass stores. Share trends reflect these shifts in shopper behavior.

    Across CPG channels, purchase frequency increased by 2 percent during the past year, with grocery, dollar and club channel trends closely mirroring industry average. Across other channels, though, trends vary significantly. For example, frequency within the drug channel accelerated sharply within the last year, increasing by 6.7 percent. This growth is being driven by a number of factors, including shifting trip mission trends.

    Quick trips, small “need-it-now” excursions with an average basket size of less than $40, have become more common as consumers look to minimize large one-time outlays of cash. With a broad assortment of health and wellness solutions and a growing assortment of food and beverage offerings, close-to-home drug stores are a logical destination for shoppers looking to quickly pick up needed items with only minimal gas and time investment. Dollar stores also are benefitting from this trend due to generally convenient locations and broader, expanded assortments. These efforts are clearly paying off, with dollar channel frequency increasing by 2.6 percent during the past year.

    When thinking about channel migration trends, CPG and retail leaders must consider changes in the channels themselves and how those changes will impact shoppers. For instance, as ‘big box’ retailers open smaller format stores, such as Target opening CityTarget, closer to downtowns, will shoppers continue driving to traditional value formats that tend to be located in more out-of-the-way locations?

    In the CPG industry, channel lines have definitely blurred during the last couple of years. As strategists, formats and technologies evolve, and as CPG prices continue to rise, this blurring is expected to continue.

    For more information about channel migration trends, download SymphonyIRI Group’s Times & Trends Report, “Channel Migration: A Quest for Affordability” by CLICKING HERE.
    KC's View: