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    Published on: September 28, 2011

    by Kate McMahon

    It reads like a comedy skit: A start-up oral hygiene product utilizes a tongue-in-cheek YouTube campaign and $28 in Facebook ads saying “Walmart employees have bad breath” to gain an audience with the nation’s largest retailer.

    Funny thing is, in the case of Orabrush, it worked.

    Some 735,000 units of the $5 tongue cleaner shipped to 3,5000 Walmart stores this month. Credit both a savvy social media strategy and Walmart’s local buying initiative for the success.

    Orabrush, featuring ultra-soft pointed bristles designed to clean bad breath-causing bacteria from the tongue, was created in 2001 by 76-year-old inventor “Dr. Bob” Wagstaff in Salt Lake City. Frustrated by failed attempts to sell the product through infomercials and conventional media, he turned to a market research class at Brigham Young University for help in 2009.

    One student suggested a funny bad breath video for YouTube, enlisted his creative pals, and created Morgan the giant, snarky bad breath tongue (think a John Belushi character). Wagstaff had never seen YouTube but greenlighted the $500 project. The rest, as they say, is viral history. (The BYU student, Jeffrey Harmon, is now 27 and Orabrush’s chief marketing officer).

    Today, Orabrush has its own YouTube channel – Cure Bad Breath -- with more than 39 million views of its wacky, SNL-skit like shorts and 160,000 subscribers. It ranks third in YouTube branded channel popularity, behind No. 1 Old Spice (with its mellifluous hunk of a spokesman) and No. 2 Apple.

    The YouTube contingent joined Facebook (now at 300,000 fans) clamoring for the product, and Orabrush began generating sales and attention. A Walmart store manager in Utah saw the video, tried the Orabrush at home and wanted to give the product a go in his store. Under a revived company policy, he had the leeway to do so, and convinced about 20 other stores in Utah to join him. It was a hit.

    Orabrush still had trouble getting the attention of the chief buyer at Walmart HQ in Bentonville, Ark., so it used the positive Utah sales figures, created a comedic video featuring Morgan the tongue and took out $28 in Facebook ads targeted to Northwest Arkansas reading: “Walmart employees have bad breath. Walmart needs to carry Orabrush. It will sell better than anything in your store.”

    Within 48 hours Harmon had an email from the buyer, the ads were pulled, the brass reviewed Orabrush’s impressive sales figures and Walmart placed an order for 3,500 stores. Harmon told AdAge that Orabrush never planned to begin national distribution at that level, but “Walmart, because of their local program, are now more mobile than a lot of the smaller chains. They can learn faster and adapt.”

    There are many business lessons here, starting with Dr. Bob’s decision to seek help and giving the YouTube plan a shot, the young company’s “reverse marketing model” that allowed it adapt as it built a loyal consumer base, and Walmart’s local buying initiative that gave Orabrush a shot at a national market. To those who still question the efficacy of YouTube and other social networking sites in building and maintaining a loyal customer base, just consider what one $500 video and $28 in Facebook ads accomplished.


    Comments? Have you had your own experiences - good and/or bad - with Daily Deal sites? Send me an email at kate@morningnewsbeat.com .
    KC's View:

    Published on: September 28, 2011

    Walmart announced yesterday that Eduardo Castro-Wright, 56, the company’s vice chairman and CEO of global e-commerce and global sourcing, will retire in July 2012.

    The company said it plans to have his successor named by January, and that Castro-Wright will assist in the transition.

    “(Castro-Wright) has been a strong advocate for our customers and in every assignment has brought passion and commitment to the job. He has also built talented teams wherever he has led,” Walmart CEO Mike Duke said in a prepared statement.

    Forbes writes that “Castro-Wright joined Wal-Mart in 2001 and led its business in Mexico before becoming president and CEO of its U.S. operations in 2005. In June 2010, Wal-Mart appointed Bill Simon, who had been chief operating officer, to take over its U.S. operations, shifting Castro-Wright to lead the retailer’s global ecommerce and sourcing business. Wal-Mart said at the time that the move allowed Castro-Wright to relocate to California to be with his family, including his wife who was recovering from a heart transplant. It also helped Wal-Mart increase its emphasis on building its international online business.”
    KC's View:
    The general feeling out there seems to be that there are going to be a series of shufflings, reassignments, and retirements ... as Walmart tries to get its groove back.

    Published on: September 28, 2011

    by Kevin Coupe

    It is going to be an Eye-Opening week.

    Today, Amazon is expected to debut its new Kindle Fire, a tablet computer that will give users access to various forms of content, and that is likely to be positioned as a rival to the iPad. The Kindle Fire reportedly will begin shipping in early November.

    Next Tuesday, Apple will hold a press conference at which new CEO Tim Cook is expected to unveil, among other things, the next iPhone. Or iPhones. As usual, Apple isn’t offering many hints.

    There also are reports that Barnes & Noble may launch the Nook Color 2 next month.

    Interestingly, the Wall Street Journal has a story this morning that says “retailers have found an interesting characteristic of consumers who browse their websites using tablets: They're much more likely to pull the trigger on purchases than other online shoppers.

    “That discovery is making retailers focus on tablets ahead of the all-important holiday season, as the tough economic backdrop puts a premium on what the industry calls ‘conversion’ - making sure the shoppers who show up actually buy something.”

    Forrester Research says that tablet users often spend as much as 10 percent more than people using traditional computers. In addition, the conversion rate for people using tablets is between four and five percent, compared to three percent for traditional computer users.

    There are a lot of moving parts here. Lots of activity, and a lot of potential customers in play.

    It is going to be interesting.
    KC's View:

    Published on: September 28, 2011

    Advertising Age reports that after watching the Greek yogurt trend catch fire in the US, as “two little-known companies, Chobani and Fage” created the trend and rode it to “massive sales gains,” Dannon and Yoplait are finally getting into the act. Both companies, the story says, “have launched their own Greek versions backed by aggressive marketing, setting up round two in this closely watched grocery battle.”

    Sergio Fuster, senior VP-marketing for Dannon, tells Ad Age that the company missed the Greek yogurt trend at least in part because it misjudged the appeal: "You decide to invest in factories only when you see something huge coming. I think we all saw this thing coming, but the doubt on the size that it would take probably is what created the difference in the speed of the different companies in approaching the markets."

    The story also notes that the Greek yogurt purveyors managed to effectively combine the notions of health and taste, and successfully communicate to consumer that they could have an affordable, healthy indulgence - enough so that they eclipsed the biggest yogurt manufacturers in the US.

    Ad Age writes that while both Dannon and Yoplait have begun making their own versions of Greek yogurt, they are hedging their bets a bit, not overplaying the Greek connection, concerned that, as Fuster says, Greece is seen as “too old, so it's not modern.”
    KC's View:
    It is sort of ironic that as Greece seems to be collapsing, its yogurt is catching fire ... maybe if they could get a nickel for every tub of Greek yogurt sold, the country would be in better financial shape.

    But seriously ... the rise of Chobani and Fage, and the asleep-at-the-switch position of Dannon and Yoplait, is yet another vivid example of how people and companies have to be awake to the possibility that at any moment, someone can come along and steal your customers away. No matter how entrenched you may be.

    Published on: September 28, 2011

    The Naples News reports that Tom Monaghan, the founder of Domino’s Pizza, is beginning a new venture - a gourmet hamburger delivery business there that he is calling Gyrene Hamburger.

    According to the story, “Gyrene Hamburger will only sell hamburgers, which will make the operation run more efficiently and speed delivery. There will be no sides and no drinks.

    “There will be two hamburger choices, with each burger costing a little less than $6: The classic with ketchup, mustard and pickle and the deluxe with lettuce, tomato and mayonnaise. Both hamburgers will have double Angus beef patties, plus cheese and bacon.”

    The story also says that there will be no seating, that there will be pick-up but not a drive-through, that delivery will be free with a two-burger minimum, that delivery will hopefully will be in 15 minutes or less, and that “drivers will only go 1.5 miles from the store, carrying only one order at a time and jogging the final steps to the customers.”

    If the venture is successful, Monaghan says, he eventually will start selling franchises - and he says that he thinks it can be bigger than Domino’s.

    Monaghan, now 76, is also the former owner of the Detroit Tigers. He sold Domino’s in 1998 to focus on building Ave Maria University.
    KC's View:
    I’m not sure that in an age when people want everything they buy to be customized for their own tastes, that hamburgers only being served two ways will have national appeal. But hey, people don’t get rich by underestimating Tom Monaghan.

    Published on: September 28, 2011

    The Detroit News reports that “bankrupt bookseller Borders Group Inc. won court approval Monday for the sale of its intellectual property to larger competitor Barnes & Noble Inc. after a dispute about privacy issues was resolved ... Under the new agreement, Barnes & Noble will email all former Borders customers on the customer list it bought, inform them of the transfer of customer information and give them 15 days to opt out of the list.”

    According to the story, “Barnes & Noble won the auction to buy most of the trademarks and intellectual property of Borders for $13.9 million. Other trademark assets also were sold, making the sale worth $15.8 million to Borders' creditors.”
    KC's View:
    It sort of amuses me that the words “bankrupt” and “intellectual property” are in the same sentence. You’d think that if Barnes & Noble is really smart, what it will do is either take what it bought from Borders out to the backyard and burn it ... or post them on a wall somewhere with the notation, “Don’t do this stuff!”

    Published on: September 28, 2011

    • Ahold-owned Peapod announced that it is expanding its Peapod by GIANT service to Philadelphia, Delaware and Southern Montgomery, PA Counties, which make up the Greater Philadelphia metropolitan area.
    KC's View:

    Published on: September 28, 2011

    The New York Times reports that “at least 13 people in eight states have died after eating cantaloupe contaminated with listeria, in the deadliest outbreak of food borne illness in the United States in more than a decade, public health officials said on Tuesday ... The Centers for Disease Control and Prevention reported that since the outbreak began in late July at least 72 people had fallen ill in 18 states.”

    According to the story, “Many of the deaths involved elderly people, who are especially susceptible to the aggressive pathogen.”

    The cantaloupes were grown by Jensen Farms of Colorado, which has recalled the “Rocky Ford cantaloupes” that were being sold nationwide.
    KC's View:

    Published on: September 28, 2011

    Forbes reports that the Conference Board says that its “consumer confidence index rose to 45.4 in September, compared to 45.2 in August,” while “consumers’ assessment of current economic conditions fell for a fifth straight month, to 32.5 in September from 34.3 in August.

    SILive.com reports that Key Food is opening a new format on Staten Island and Queens - Fresh n’ Save Marketplace, described as being both affordable and convenient and filling a void that has existed since King Kullen left the market early last year.

    • According to the National Retail Federation (NRF) 2011 Halloween Consumer Intentions and Actions Survey conducted by BIGresearch, seven in 10 Americans (68.6%) plan to celebrate Halloween, up from 63.8 percent last year and the most in NRF’s 10-year survey history. Those celebrating are expected to spend slightly more too; the average person will shell out $72.31 on decorations, costumes and candy, up from $66.28 last year. Total Halloween spending is expected to reach $6.86 billion.
    KC's View:

    Published on: September 28, 2011

    • Nestle S.A. announced yesterday that it has hired Wan Ling Martello, executive vice president of Wal-Mart’s global eCommerce and emerging markets business, to become its new executive vice president and chief financial officer, effective April 1.

    She replaces Jim Singh, who is retiring.

    • Family Dollar announced that it has hired Michael Bloom, executive vice president of merchandising, supply chain, marketing and advertising at CVS Caremark, to be its new president/COO, succeeding R. James Kelly, who is retiring.

    Dorlisa Flur has been promoted to be Family Dollar’s chief administrative officer and vice chair of strategy.
    KC's View:

    Published on: September 28, 2011

    MNB user Annette Knapp had some thoughts about Michael Sansolo’s column yesterday, which talked about how consumers respond to changes by Facebook and Netflix, suggesting that “the bigger problem these days seems to be a consumer expectation that I can get whatever I want, whenever I want it for never increasing prices or, better off, for free.”

    C’mon Michael – using Facebook is not free. Users have given up every detail of their lives for exploitation by Zuckerburg for marketing purposes as used by advertisers. While they are data mining our every move on there, how about it remain at least user friendly for the “users”. Which it is not. I have 60 good friends on there and had to put them in a “list” so that I could look through their chronological posts after work every night. Something that was inherently in the home page design previously. Then I have to cull through the regular “Home” page to see any updates from groups I belong to – in no particular order. Plus, we now have to ask each other (sort of on an honors system) to respectfully click off on “comments and likes” for every “friend” so that you can’t poke your nose into absolutely every comment a friend makes on there with every one of their friends. Maybe Aunt Hilda doesn’t need to hear your discussion about atheism on your friend’s page that she doesn’t know by default. People with smart phones logging in have zero control over any of that by the way. They have access to everything – even if they don’t want it. So – user friendly – out the window. I’d gladly pay $20 per month ala Netflix to have it the way the users want it with some actual privacy, but that is not an option. I bet that system would be nowhere near as lucrative as what they are working toward now. But then, Facebook’s users are not the “client” we’re the “product”.

    MNB user Mark Raddant wrote:

    Michael, there is a single word that explains the phenomenon you describe: SPOILED.

    As unappealing as it is in children, it is an impossible situation for a society to find itself in.  And it’s not just the US, it’s happening in many places.  Just think of mindless riots for the sake of rioting in Britain and strikes in Greece over not being able to retire at 50. At least you can send your kids to their room; what do you do to a Congressional body?


    And MNB user Richard Lowe wrote:

    Michael, I think you screwed up today!

    Management does not always make the correct decisions otherwise there would be a lot more retailers and products around that have gone by the way side. How about Chrysler and them GM where is Pontiac, Oldsmobile, Saturn - no that was really dumb - Studebaker, Rambler and oh the Edsel!

    I think you need to rewrite today's Column with a different tact! I thought you two preached the consumer is always right!


    Michael responds:

    Richard has a point. Companies do make mistakes, do misread customer needs or forget why they are in business in the first place. And when that happens, they usually get punished, sometimes put out of business.  But shifting times create an endless need to change, to evolve and to innovate. It's never a sure thing to make a change, but it must get done.

    My column wasn't meant as a defense of Facebook or Netflix. Both companies made moves recently that seemed high handed at best. Yet, they are entitled to make the changes and the marketplace will decide if they were wrong or right.  One last point though: Stew Leonard's legendary store had two rules. 1. The customer is always right. 2. When the customer is wrong, re-read rule number 1.  It's a great marketing position, but sometimes the customer can be wrong. And companies need to find ways of having those difficult discussions.





    On the subject of China’s ability to build things faster than the US, MNB user Gary Narberes wrote:

    With regard to your segment on construction zones, while the Chinese government seems to be doing all it can to build and expand, the US Government is doing all it can to stop building with all the environmental impact reports and work stoppages for threatened species is it any wonder "How America Fell Behind in the World"?

    We, as a nation, have created bureaucracies within bureaucracies through every facet of our lives and scratch our heads as to why other countries are surpassing us!  It is time America cracks the books and reads up on what led up to the end of the Roman Empire otherwise, we are doomed to repeat history.





    On another subject, one MNB user wrote:

    A big shout out to Visa and MasterCard for raising swipe fees on small purchases to the max - hat really ought to help small business and the millions of Americans struggling to get by as the economy continues to languish. I know you can, I know it will be good for your finances but seriously, what ever happened to doing the right thing?




    Regarding a federal system that subsidizes more junk food than fresh produce, MNB user Elizabeth Archerd wrote:

    A researcher at the Institute for Agriculture and Trade Policy put some charts together several years back, showing how corn and soybean subsidies reduced the acreage of vegetable and fruit plantings. Farmers need to survive and have to follow the money.

    A subsidized product is a cheap product. An article posted at the time on MSNBC.com several years ago quoted a nutrition researched stating that 60% of the calories in US grocery stores come from one of three categories: refined sweetener, refined vegetable oil and refined flour. There's our obesity/diabetes "epidemic."

    The USDA and the food industry together been running an experiment on the population for decades, without notification or consent.


    From another MNB user:

    Agree wholeheartedly! 17 billion in subsidies for chemicals masquerading as food – and most are genetically modified at that!  (Corn) – watch and see if this actually gets traction…..the money powers behind those subsidies are not going to let go easily…..

    But oh, we can dream!  (and write to our public officials..)


    MNB user Stephanie Steiner wrote:

    When our government finally supports farmers instead of individual crops, we’ll have a food system that is far more supportive of our nation’s health and our personal health.



    And finally, MNB user Douglas Campbell wrote:

    What, no mention of the Red Sox collapse and the Tampa Bay Rays’ amazing come from behind surge!?!?!?

    I’ll get to it when it is settled. Which has to be any day now.
    KC's View:

    Published on: September 28, 2011

    The pace of global business is more feverish than ever before. Innovation, branding, design and execution are no longer enough; in addition, successful firms must gather knowledge and personal connections from a variety of places.

    Industry leaders and experts from a myriad of fields will convene on October 20 at Portland State University’s annual Food Industry Leadership Center’s Executive Forum and share knowledge critical to operating a 21st century business ...and you are invited to share in this cross-pollination of ideas.

    Among the speakers:

    • Jeff Hansberry, President, Global Consumer Products, Starbucks, who is leading the company’s consumer products business with the introduction of new brands and products to more markets around the world.

    • Lisa Sedlar, President of New Seasons Market, who will talk about her company’s unique combination of creative energy, sustainability and high quality food.

    And...

    • Tom Furphy - formerly of Wegmans and Amazon.com (where he developed the CPG business) and now the founder and CEO of Seattle-based Consumer Equity Partners, and MNB’s Kevin Coupe will engage in a provocative dialogue about where the food industry is heading, what can be learned from e-grocery successes, how to compete in the new environment, and how to understand the new consumer.

    For information and to register, click here.
    KC's View: