retail news in context, analysis with attitude

Published on: October 17, 2011

by Kevin Coupe

A friend of mine - who notes that he is an enthusiastic Kindle user - sent along to me a quote that he’d read from the writer Maurice Sendak, speaking to a UK reporter about how much he hates e-books. Here is what Sendak said:

I hate them. It’s like making believe there’s another kind of sex. There isn’t another kind of sex. There isn’t another kind of book! A book is a book is a book.

That’s a great line. It speaks volumes about Sendak’s experience with both e-books and sex.

Sendak is absolutely within his rights when he says that he hates e-books, and that for him, a book is a book is a book - which is to say that for him, a book must be paper, and within two covers.

However, I would argue that the most important two words of the previous sentence are to him.

But he is absolutely wrong if he believes that this is the way it should be for everyone.

For me, a book is about ideas expressed through words and sentences, put together in a way that provokes thought and feeling, sometimes at the same time. I’m agnostic about format - it usually is a matter of convenience, cost and who the author happens to be.

And as a writer, I am completely neutral about form - it matters not a whit to me whether someone reads our book in physical form or as an e-book.  They're still reading our book.

I’ve used Tom Stoppard’s play “The Real Thing” here before to illustrate this point, but my feeling is that you can’t quote Stoppard too often. The play, which I’ve seen in two vastly different Broadway productions, is about a writer named Henry, and at one point in the play he speaks about the connection between words and ideas:

“This thing here (a cricket bat), which looks like a wooden club, is actually several pieces of a particular wood cunningly put together in a certain way so that the whole thing is sprung, like a dance floor. It’s for hitting cricket balls with.  If you get it right, the cricket ball will travel two hundred yards in four seconds and all you’ve done is give it a knock like knocking the top off a bottle of stout, and it makes a noise like a trout taking a fly.  What we’re trying to do is write cricket bats, so that when we throw up an idea and give it a little knock, it might travel ... I don’t think writers are sacred, but words are.  They deserve respect.  If you get the right ones in the right order, you can nudge the world a little or make a poem which children will speak for you when you’re dead.”

Henry talks of words and ideas ... but not of paper and ink. It seems to me that writers ought to be in the business of making their sure their words are seen and their ideas experienced by the most number of people, not passing judgment on one form of book vs. another.

In the same way, traditional retailers need to be careful about making value judgments about one form of retailing over another. Do that, and they run the risk of seeming irrelevant to an entire swath of population, and one that may be broadening and deepening over time.

They need to keep their Eyes Open. Personally, they can shop any way they like ... but they have to be careful about assigning their own values to others.

Published on: October 17, 2011

Reuters reports that Walmart plans to close down all four of its Marketside small format stores, on October 21, conceding that this attempt to create a convenience-driven concept has not worked.

The stores were opened in 2008 in four Arizona markets, at around the same time as Tesco was launching its Fresh & Easy Neighborhood Market format in California, Arizona and Nevada.

According to the story, “Wal-Mart is banking on another small-store concept, more aligned with its roots, as a potential growth vehicle in rural and urban locations where its larger shops would not work.

“Wal-Mart's Marketside stores, at roughly 16,000 square feet, are about the same size as the Walmart Express test format the company launched in June.

“So far, Wal-Mart is pleased with the five Walmart Express stores in Arkansas, North Carolina and Chicago. It plans to have 11 such stores by the end of the year.

“Walmart Express stores, which range from about 10,000 square feet to 15,000 square feet, feel more like traditional Walmart stores than the Marketside shops. Walmart Express stores are stocked with groceries and some housewares. Pharmacies are included in some of the locations.

“Earlier this week, Wal-Mart said it would ramp up openings of its Neighborhood Market stores, which at about 42,000 square feet are much larger than Marketside or Walmart Express stores but much smaller than Walmart supercenters.”

Published on: October 17, 2011

The Wall Street Journal had an essay over the weekend by Richard L. Brandt, adapted from his new book, "One Click: Jeff Bezos and the Rise of Amazon.com." It is a fascinating piece, that does a great job of selling the book....and here are a couple of excerpts:

• Re: Customer Service... “The company's customer service—which Mr. Bezos later called ‘the cornerstone of Amazon.com’ —started with the founder himself answering emails. By 1999 it was manned by 500 representatives packed into cubicles and answering customers' questions.

“The people handling these emails were generally overqualified and underpaid, with no experience in bookselling. Disaffected academics were popular because they were well-read and could supposedly help find books on a huge variety of topics. They were paid about $10 to $13 an hour, but with the possibility of promotions and stock options dangled before their glazed eyes. The best of them could answer a dozen emails a minute. Those who dropped below seven were often fired.

“One customer-service manager recalled that, when the staff got a week and a half behind in answering emails—despite putting in 12-hour days, seven days a week—Mr. Bezos called her to complain. When she told him they couldn't work any harder, he came up with a solution: They dedicated one weekend to competing with each other to see who could get through the most unanswered emails.

“During that 48-hour period, everyone worked at least 10 hours beyond their regular shifts. Each person was given a cash bonus of $200 for every thousand messages he or she could answer. It cleared out the backlog.”

• Re: Customer Usefulness... “From the beginning, Mr. Bezos was fanatical about squeezing from Amazon.com every incremental degree of usefulness. New features were often simple things, like 1-Click ordering—whose notorious patent was called by one law journal ‘probably the most memorable example of an unoriginal software patent.’ It forbids any other online retailer from using a one-click purchasing option without paying a royalty to Amazon.

“An elderly woman once sent an email to the company saying that she loved ordering books from the site but had to wait for her nephew to come over and tear into the difficult-to-open packaging. Mr. Bezos had the packaging redesigned to make it easier to open.

“He continues to try to improve the site. In June 2008, Amazon filed a patent application titled ‘Movement recognition as input mechanism.’ Customers may soon be able to make purchases simply by nodding their heads at their computer, Kindle or cellphone. Industry wags have dubbed it the ‘1-Nod patent’.”

Published on: October 17, 2011

• Bloomberg reports that whatever Walmart’s troubles convincing the world that it still always has low prices, an analysis of current prices of 15 high-profile and popular toys suggests that Target is nine percent more expensive and Kmart is 13 percent more costly to shop.

And, the story says, “ Wal-Mart, the world’s largest retailer, also had lower prices than Amazon.com Inc. on 18 items and Toys R Us Inc. on 12 comparable toys, the study showed.”

Published on: October 17, 2011

• The Seattle Post Intelligencer reports that Starbucks executives are expressing an ongoing concern - that “climate change is already spurring severe hurricanes and more resistant bugs that are reducing crop yields,” which could mean less coffee down the road.

"What we are really seeing as a company as we look 10, 20, 30 years down the road – if conditions continue as they are – is a potentially significant risk to our supply chain, which is the Arabica coffee bean," says Jim Hanna, Starbucks’ sustainability director, adding that the company has joined a business coalition trying to get the federal government to be more aggressive in dealing with the issue.

• The Grand Rapids Press reports that Meijer Inc. plans to phase out bulk food sales, a move that it believes will help assure high food safety standards and also help reduce shrink, which has been in the 10 percent range.

• The Los Angeles Times reports that McDonald’s “is launching the McDonald's Channel, a digital network of exclusive original content targeted at dine-in customers. The programming will be customized to specific communities around the individual restaurants, and will include local news and entertainment features, such as spotlights on upcoming films, albums and TV shows.”

As the Times notes, “McDonald's move is part of a broader digital-age strategy by corporate America to create its own platforms to speak directly to customers in an environment uncluttered by other media. Just as individuals have flocked to social media to tell their own stories, McDonald's is the latest in a growing number of image conscious corporations and institutions that will reach out to consumers by acting as their own studio and network.”

• USA Today reports that one of the newest food trends is so-called “mini desserts.”

According to the story, “Food gurus say this trend not only has legs — it's also got an appetite for growth. Foodmakers are rolling out these micro-desserts at a record clip, with some 228 mini cakes and pastries hitting shelves over the past five years, reports research firm Datamonitor. More than eight in 10 chefs recently surveyed by the National Restaurant Association dubbed these bite-sized desserts a ‘hot’ trend.”

People apparently think if they eat a small dessert instead of a big one, it will help them lose weight, or at least gain less of it.

Unless, of course, they eat lots of the small desserts.

Published on: October 17, 2011

The New York Times this morning reports that two of Walmart’s top executives in China have resigned, “just a week after the government of the largest city in western China ordered the closing of all 13 Wal-Mart stores there for 15 days as punishment for a series of food handling and mislabeling violations.”

Ed Chan, president/CEO of Walmart China, and Clara Wong, senior vice president for personnel for Wal-Mart China, both are said to have stepped down “for personal reasons.” The company said that the timing of their resignations was a coincidence and had nothing to do with the food labeling scandal. Walmart stressed that it is cooperating with the investigation being conducted by the government.

According to the story, “Scott Price, the chief and president of Wal-Mart Asia, will temporarily assume Mr. Chan’s duties in addition to his own, while the company will name a replacement for Ms. Wong in coming days.”

Published on: October 17, 2011

• The Food Marketing Institute (FMI) announced that Kristie Grzywinski has been hired as technical manager for the Safe Food Quality Institute (SQFI).

Prior to joining SQFI, FMI said, “Grzywinski structured and promoted the Illinois Institute of Technology's (IIT) Professional Science Master’s programs. Prior to her role at IIT, she worked for the National Restaurant Association Educational Foundation (NRAEF) for 11 years as its director of science and regulatory relations.”

Published on: October 17, 2011

The New York Times has an interesting story about the “not in my backyard” (NIMBY) attitude that often can occur when industrial or commercial developments are proposed in various communities: women, it seems, are more likely than men to feel that way.

Here’s how the story is framed by the Times:

“A consulting firm that conducts an annual poll on public attitudes toward development has come up with a new twist on Nimbyism: women are far more likely than men to fight proposals to build new power plants, shopping malls and big-box stores.

“According to a nationwide telephone survey of 1,000 people last June by the Saint Consulting Group, support for local projects with potentially negative environmental consequences is uniformly higher among men than among women. In fact, apartments and condominiums are the only kind of local development that women are more likely to support than men.”

Once you dig down into the numbers and attitudes, it seems that there is a simple reason for the disparity: “Worries about harm to the community, the survey showed, were more likely to hold women back, while hopes for the local economy were more likely to attract men’s support for new projects.”

Published on: October 17, 2011

• Golub Corporation-owned Price Shopper Supermarkets has signed a deal with Mercatus USA to use its Smart Shopping Technology to provide it with what is called “an ultra-comprehensive platform that it can use to advance its digital marketing strategy.”

"We believe that the Mercatus Smart Shopping Technology can help us communicate and connect more meaningfully with our customers on a variety of levels and ultimately, to contribute to the growth of our overall business," said Russell Zwanka, Senior Vice President Sales, Merchandising and Marketing for the 128-store chain.

Published on: October 17, 2011

On Friday, we had an Eye-Opener about growing discontent about the shape of the US economy, the seemingly expanding chasm between the haves and have-nots, and the expressions of discontent that are finding their way onto America’s streets and could have an impact on what and how people spend.

One MNB user wrote:

I hate to say this but all the hubbub about corporate greed is misdirected in my view.  I recall an article about the iPhone where Apple was being scrutinized for having it built in China.  Even Steve Jobs had to wrangle with the disparity in labor rates in a world economy and could not justify or compete with a product that, had it been built here, would have cost twice as much.  We the US consumer is to blame because we don’t care.  We don’t care that when we buy a cheap product made somewhere else that your neighbor lost a job so you could get it so cheap.  We vote with our wallets and we want the iPhone even if it means shipping the job overseas.  People don’t get it.  Walmart though struggling today was wildly successful by encouraging manufacturers to move overseas to provide ever cheaper products that we were all too eager to gobble up.

Where was our government in all of this?  And this I think is the crux of the issue and that people are completely missing.  Our elected officials were asleep at the wheel for allowing the mass exodus of manufacturing jobs and their living wages to disappear with no corporate consequence!  I blame the politicians squarely for allowing this to happen.  Their inaction and on-the-take corruption created the situation we are in right now. 

All the talk about Bush created it, Obama’s made it worse, blah, blah, blah.   Presidents are nothing more than rubber-stamping talking heads.  The Legislature writes the laws that He signs plain and simple not the President.  I’d love to see line-item veto power for the Presidency but it’s been overruled numerous times by the Supreme Court.  It will take a constitutional amendment to create and since it takes power away from Congress probably has little chance.  Then there is the unscrupulous activity of having amendments being created “in committee” behind closed doors so that it doesn’t get pinned on any one politician directly, no author as such.  Transparency took a hit, and I’m sure our wallets did as well.

Then there’s the tax code.  It is outdated and full of holes as in loop-holes.  Plenty of blame can be found on either side of the aisle for this one.  And shame on the politicians for spinning and framing the effort to close corporate loop holes as a tax increase!  It’s not! 

If you have a problem with a Corporation quit buying their stuff.  Want to fix the Country, fire a politician on the take.

MNB user Gary Lochrie wrote:

Always interesting to note that those who ‘have’ (FOR THE MOST PART), work harder, with more focus, are more competitive and perform at a higher level, than the ‘have nots’.

Imagine (for example) if all high schools had protests against those students who had better test scores, could play a musical instrument, played on the football team and spoke foreign languages. FOR THE MOST PART, these students worked a lot harder to accomplish these goals and now enjoy the rewards. I’d suggest these same have not’s were the ones who made the choice not to work harder and did not have much in mind for their career goals or future. They simply thought showing up was going to make them successful. Failing in that, they now complain about those same students who worked a lot harder in high school and beyond. Remember, many of these same students were raised by parents who demanded that their children not be held back because of low scores, be given awards for ‘trying’ (and not accomplishment) and downplaying the role of competition. If the parents had a business, they would know that hiring the best employees gives any business its greatest chance at success. I’d suggest that those who ‘showed up’ thinking they didn’t have to perform at a high level are now convinced the ‘Haves’ are cheating them out of their entitled wealth.

MNB user Mike Franklin wrote:

Interesting reading on these two trends…the only thing for sure is that we are changing.

Recent articles discuss one of two trends are taking place, “The BIG SHIFT” or “The GREAT DISRUPTION,” but, I am not really sure these are the only two options especially, speaking only from a U.S. perspective, if we are able to downgrade corporations to servants of the people (they are not citizens) and to reverse globalism back to localism and convert capitalism to natural capitalism…and restart the broken compact between the upper class and the middle class…but then maybe that’s just me speaking from a glass half full perspective…still thinking the American dream can be preserved.

MNB reader Avie Rosacci wrote:

We are challenged with finding unemployed people who are employable.  Record number applying with with felony records.  Regarding the youth....we are so restricted on hiring youth as well as the fact that so many of them are spoiled rotten and don't really want to work.  The kids in our neighborhood have such a sense of "entitlement". Not all of them, but a vast majority.  Keep giving them more...I am worried about the next generations ability and desire to be employable.

I was talking to an oil man and they cannot get people to move to the oil wells in South Dakota because they can stay in Denver and remain on unemployment.  Back in the day, they would move from oil field to oil field...now we pay them to stay home.

From another MNB user:

This is a disgrace, how many more jobs must be lost and our standard of living lowered before we wake up?

How many groceries would the employees of 42,000 closed factories since NAFTA and the China WTO be buying? How much would that ripple through the economy and how much lower would our unemployment rate be?

This benefits no one except the large Multi-National Corporation, from whom being an American means as much to them as me being an honorary citizen of World means to me, which is...........nothing!

Here’s what I think.

There is no question that there are people out there who feel entitled, who believe that by being born in the US over the past 30 or 40 years, they are constitutionally guaranteed to have a job where they don’t have to work hard or take any risks, and are guaranteed to be able to own every gizmo made by Apple, or their equivalent.

But I think it is a mistake - and short-sighted - to work on the premise that the vast majority of people who are expressing their discontent fall into this category. There are a lot of people out there who are having problems finding jobs, who even with jobs are having trouble supporting their families and sending their kids to college, and who are suddenly realizing that the American dream can become a nightmare.

To dismiss these people as malcontents is to deny the facts and ignore the numbers.

And I think that marketers need to be open-minded about the possibility that there’s something happening here, even if what it is ain’t exactly clear...




I took a minor shot at the whole idea of boxed wine the other day in a story about unorthodox marketing efforts engineered by Black Box, a wine company, and BzzAgent, a marketing firm owned by Dunnhumby.

Which led MNB user Harvey Posert to write:

What an odd dig at BiB wines.  Most of us (I was at Robert Mondavi for 20 years) wanted several things for wine in America -- quality and value being primary, but also innovative marketing and now environmental positives; all things you have favored.  With cost- and carbon-savings initiatives at the industry forefront (The Wine Group is the leader), and BiB the best of wine packages in that area, please pause a minute and share a glass from the spout.

You mean you actually want me to spend money on boxed wine?

Really?

I’ll have to think about this one. But I’ll promise to keep my eyes open for Black Box wine when I’m doing my wine shopping.

But it may hurt.

Published on: October 17, 2011

It is Week Six in the National Football League....

Carolina 17
Atlanta 31

Indianapolis 17
Cincinnati 27

San Francisco 25
Detroit 19

St. Louis 3
Green Bay 24

Buffalo 24
NY Giants 27

Jacksonville 13
Pittsburgh 17

Philadelphia 20
Washington 13

Houston 14
Baltimore 29

Cleveland 17
Oakland 24

Dallas 16
New England 20

New Orleans 20
Tampa Bay 26

Minnesota 10
Chicago 39




And, in Major League Baseball playoff action...

On Saturday night, the Texas Rangers defeated the Detroit Tigers 15-5, winning the best-of--seven American League Championship series 4-2 and moving on to the World series.

In the National League Championship Series on Sunday, the St. Louis Cardinals defeated the Milwaukee Brewers 12-6, winning the series 4-2 and advancing to the World Series, which begins on Wednesday night in St. Louis.