retail news in context, analysis with attitude

Published on: October 18, 2011

by Michael Sansolo


If there’s one theme that dominates here on MorningNewsBeat.com, it is the changes that affect our business and personal lives, and what appears to be the constantly quickening pace of change.

Consider the world of customer satisfaction. Specifically, let’s examine the speed with which one customer’s experience can change a business forever. For this case, let’s use what is widely considered one of the most famous movie scenes ever shot.

The odds are that when I mention the movie When Harry Met Sally, you will have one of two responses. Some people have never seen the movie, but most will remember the famous restaurant scene, start giggling and immediately tell those who haven’t seen the movie to go rent it, stream it, or buy the DVD. While the movie is fun, that one scene is worth more than the price of admission.

And here’s where the pace of change sets in. When Kevin and I came out with our book The Big Picture: Essential Business Lessons from the Movies less than two years ago, When Harry Met Sally was a movie we knew we had to include. Yet when we look at it now, we realize that chapter needs a complete rewrite.

If you haven’t seen the movie (or just need a chuckle on a Tuesday morning), THE scene takes place in a New York City restaurant. Good friends Harry and Sally (Billy Crystal and Meg Ryan) are discussing life as they always do. Harry, a recent divorcee, is bragging about his successful return to the dating scene and all that comes with it. Sally tells Harry that men (like many marketers) really don’t really know if a date (or the customer) is satisfied. In a moment that any marketer can understand, she says sometimes people seem satisfied and say they are satisfied, but really aren’t.

(Okay, they are talking about sex, but it’s a Tuesday morning so cut me some slack here.)

Harry brushes off Sally’s suggestion, so she takes action. Sitting in the booth of a crowded New York City delicatessen, she slowly and loudly begins to demonstrate what we can politely call extreme customer satisfaction. Harry is mortified, the other patrons are transfixed and moviegoers roar with laughter. But the scene’s pay-off is yet to come.

Once Sally’s demonstration is complete she smiles and casually returns to eating lunch. At that moment the camera takes us to another table where the waitress asks an older woman for her order. The woman (played by director Rob Reiner’s mother, Estelle Reiner) gestures to Sally and says, “I’ll have what she’s having.”

It’s the ultimate moment in word of mouth marketing. New customers want to share the experience of another customer who appears outrageously happy with her own experience. It builds sales, buzz and success.

Now, When Harry Met Sally was released in 1989. Our book came out early in 2010. But if you were to shoot that scene today, the payoff would have to be very different. And in fact, the difference is one that we did not even consider when we wrote the book.

Let’s consider the scene in 2011 terms.

If this type of moment played out today, people in the restaurant would have a very different reaction. Sure they would be transfixed by Sally’s scene, but just as certainly a good number would pull out their smart phones and start recording. Within seconds of Sally’s happy ending, the video would be up on Facebook, Twitter, YouTube and more. We all know what happens next.

The video would be shared again and again. The scene in the restaurant would be played thousands if not millions of times from New York to New Delhi, New Zealand and more. Suddenly that restaurant in New York City would have lines stretching around the block filled with people from around the world who are ready to walk in and select their order by saying, “I’ll have what she’s having.”

That’s the good news, but it doesn’t always play out that way. It’s just as likely that a negative scene will also get that kind of publicity because that’s the world we live in. Word of mouth always matters, but now it is shared at light speed with the planet.

And that is something that not only didn’t happen back in 1989, but wasn’t even as prevalent in 2009-2010 as it is today.

The reason Kevin and I wrote the book was our feeling that stories and characters from the movies help educate, inspire and explain business realities in a way that anyone can understand. In this case, When Harry Met Sally also offers a textbook case of how these realities keep changing, and why me must constantly be on our game in order to take advantage of them.


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 .

Published on: October 18, 2011

by Kevin Coupe

Old soldiers never die. And sometimes, they even resist fading away.

There was a piece in the Wall Street Journal the other day that was fascinating, not just because of the particulars of the story, but because it offered a broader lesson about the importance of experience in any organization.

The article was about Staff Sgt. Don Nicholas, who, at 59, “is the oldest of the 6,000 soldiers in the 25th Infantry Division in eastern Afghanistan ... And he is probably one of the very few Vietnam vets now back for more in Afghanistan. He's certainly the only one who saw first-hand the ugly end of that war from the roof of the U.S. embassy in Saigon.”

Nicholas joined the Marines in 1971. His story is impressive, and can be read in its entirety by clicking here.

Suffice it to say that Nicholas is such a dedicated soldier that even after he left the Corps in 1978 to go to college and eventually become a podiatrist, he kept hoping to get back in. The Marines kept saying no, but in 2004, the US Army Reserves said yes. And he went back in.

“He joined the Army's psychological-operations branch because there he had a good chance of going to war,” the Journal writes. “ And war he got. He spent his first Afghanistan tour, in 2005, in such infamous valleys as the Korengal and Pech. He had shuttered his podiatric practice, so after his tour he made a living from house calls until the Army accepted his request to deploy again. This time he spent 11 months north of Baghdad.

“Soon after he got home, he put his hand up one more time. In March he arrived in Kunar Province, along the Pakistan border, for a year.”

Nicholas is apparently not someone who takes “no” for an answer. As the Journal writes, “Next July, Sgt. Nicholas turns 60, and the Army will tell him that he can't go to war anymore, one of the few things he finds truly frightening. He's trying to get a quick commission as an officer; that would allow him to join the medical corps, which has a higher retirement age.”

Beyond the fact that any nation should feel blessed to have people like Nicholas doing this kind of work and feeling this kind of commitment - so that the rest of us don’t have to - there’s also a great lesson here about the importance of experience, institutional memory, and, yes, age.

There is a temptation in hard times to offer early retirement to the people with experience, because they also tend to be the people with high salaries. But this is not always a good idea. Experience can be a good thing, and the people who have it may feel a commitment to the business that younger folks may lack. It’s not always the case, but often it is.

Experience can be an Eye-Opener.

Published on: October 18, 2011

The American Banker has a piece suggesting that the decision by some banks to levy monthly debit card fees on their customers, in an attempt to compensate for the regulation by the federal government of hidden and usurious “swipe fees,” is having a positive effect - on smaller banks and credit unions that are not assessing those fees on their customers.

In one example, according to the story, Community Bank in southwest Florida is taking advantage of the recent PR nightmare by “offering to pay people $5 per month to open a checking account instead of charging for debit transactions. In just a couple of days, it's become the most successful promotion in the bank's two-year history, and the institution partly has the bad mood of consumers to thank.” "We've gotten dozens of account openings per day,” Trevor Burgess, the bank’s CEO, tells American Banker.

The story continues: “Through a focus on personal, local service -- the bank takes deposits from local clients and makes loans locally -- Burgess says Community Bank has grown rapidly and has a high enough demand for new loans that it's able to actually pay people to open savings accounts ... Community Bank's not alone among smaller institutions in noting a change in consumer mood and a spike in activity since Bank of America announced it would charge customers who use debit cards for purchase. While B of A has taken most of the heat in the press, other large banks such as Wells Fargo and Chase are also testing similar fees.”

Another example: “Since the announcement, LA Financial Credit Union says it has seen requests for membership skyrocket. The credit union, which is open to anyone who lives or works in Los Angeles County, says it received 175 applications in the two weeks following the B of A announcement, compared to 27 in the same period in 2010.”

Published on: October 18, 2011

The Wall Street Journal has a piece suggesting that “in an effort to cut costs and create new products and services, firms are seeking ideas from their own employees on everything from money-saving strategies to product design ... It's often the employees - rather than outside consultants - who know a company's products and processes best. According to management experts, many of the most innovative companies tend to solicit ideas from staff throughout the organization, not just the executive ranks.”

It is, however, still an upstream swim for many companies: “Research has found that the average U.S. employee's ideas, big or small, are implemented only once every six years, says Alan G. Robinson, a professor at the Isenberg School of Management at the University of Massachusetts, Amherst.”

Published on: October 18, 2011

Good piece from Bloomberg about something that seems to be happening less and less these days - impulse buying.

The reason? According to Bill Martin, CEO at ShopperTrak, the combination of technology and economic hard times has created a climate in which people go to the store less, which makes it easier for them to avoid browsing the aisles.

More often than ever, people are either making their purchases on the Internet, or are researching their purchases on the web before going to the store, and then walking in with a list and greater sense of purpose. Browsing happens less, and therefore, impulse purchasing happens less.

“These mission shoppers visit fewer stores -- three per trip, down from five pre-recession, according to ShopperTrak. As a result, foot traffic may fall 2.2 percent during the holiday shopping marathon, says the Chicago-based research firm.”

Bloomberg goes on to report that “the shift will hit some chains harder. Electronics stores such as Best Buy are most at risk because it’s so easy to research gadgets online first ... Apparel chains like Limited Brands Inc. may fare better because even mission shoppers have to stick around long enough to try on clothes.”

The climate means that “retailers are being forced to adapt at a time when they’re closing stores and trying to attract consumers made cautious by a 9.1 percent jobless rate. The rising competitive pressures may accelerate an ongoing shakeout, said David Maddocks, who runs an eponymous consulting firm in Portland, Oregon.”

Published on: October 18, 2011

Richard J. George, Ph.D, chair and professor of food marketing at Saint Joseph’s University, is out with a new paper entitled “Mature Millennials v. Mature Baby Boomers: Foodservice Attitudes and Behaviors – Similarities, Differences, Opportunities,” recently published by the International Foodservice Distributors Association.

George’s paper focuses on Mature Millennials, those who are 25 to 34 years of age, and Mature Baby Boomers, who are 55 to 64 years of age.

“Both generations have been studied extensively, however there is no publicly available research that describes in-depth their attitudes and behavior toward foodservice,” says George. “In order for the industry to enhance its offerings and broaden strategic planning, it needs to understand the similarities and differences of these two engines that drive the business.”

The research uncovered key similarities between the generations:

• Cleanliness, taste, value, convenience and customer service are the most important attributes when selecting a restaurant.
• Restaurant.com is the primary site used to select a restaurant.
• The main reason for joining a Facebook fan page is to receive coupons and discount offers.

The study also points to revealing differences between the two generations:

• 72 percent of Mature Baby Boomers prefer to order by phone compared to 59 percent of Mature Millennials.
• 9 percent of Mature Baby Boomers prefer to order via the Internet compared to 32 percent of Mature Millennials.
• 25 percent of Mature Millennials use Smartphones for tasks such as making reservations and checking menus compared to less than 10 percent of Mature Baby Boomers.

The research, George says, illustrates the importance of customizing marketing strategies and tactics for each generation: “A one size fits all approach will be doomed to failure. The sheer numbers and purchasing power of these generations represent untapped potential if we can get each generation to perceive ‘your restaurant as their restaurant.”

Published on: October 18, 2011

Wegmans opened its first store in Massachusetts, near Boston, over the weekend.

The press coverage was rhapsodic.

The Boston Globe wrote: “Forget Tom Brady and the New England Patriots. Their come-from-behind victory didn’t stop Wegmans Food Markets from saying that the grand unveiling of a new store in Northborough yesterday set an opening-day crowd record for the chain.”

The Globe continued: “Wegmans claims to be more than a mere supermarket. With 138,000 square feet of space, the Northborough location aims to be a culinary pleasure dome stocked with more than 70,000 items. There’s a Dim Sum bar, a Thai bar, and an Indian bar. There is also a vegetarian bar where foodies can chow down on the likes of coconut cream kale and shaved brussels sprouts.

“Shaved Brussels sprouts indeed. Who could be bothered with a football game when such splendid roughage is on offer?”

And, from the journalistic competition...

“The curious came in droves, and for devotees who have long awaited Wegmans’ arrival, the doors of the Bay State’s new supermarket superstore opened onto a big slice of grocery shopping heaven,” writes the Boston Herald, reporting that “Wegmans estimated that more than 2,000 people were in line prior to the 7 a.m. opening, making it the biggest opening day crowd in the 79-store New York-based chain’s history. By noon, the ramps off Route 9 and Route 20 in Northboro were backed up for a mile.”

Published on: October 18, 2011

At least one company, apparently, is not intimidated by the Wegmans marketing and merchandising machine.

Bloomberg reports that Trader Joe’s plans to open its first store in upstate New York in autumn 2012 - in Pittsford, New York, just a few hundred yards from a Wegmans store.

Published on: October 18, 2011

• Ubergizmo.com reports that while Amazon.com has not yet confirmed it, the company plans to expand its “Amazon Locker” test to New York City, having already begun testing the concept in Seattle and London.

The lockers go into a central location - in Seattle, for example, it is a 7-Eleven - and allow shoppers to have products delivered there if they are not home during the day. When placing the order, they are given a code number, which they can then enter into a kiosk keyboard at the locker location. The locker opens, they can collect their goods, and the locker is then available to be stocked with someone else’s merchandise.

Published on: October 18, 2011

• The Star-Telegram reports that HEB-owned Central Market plans to open a small-scale version of its format early next year - a 30,000 square foot unit in the Dallas-Fort Worth market. If successful, the format could be expanded throughout HEB’s market area.

• Florida Today reports that Publix Super Markets plans to open its second “hybrid store” in Florida, in Brevard County, during the second quarter of 2012. The unit blends its “GreenWise Market concept with its traditional grocery operation.” and is “designed to compete for customers now shopping at places like Whole Foods or The Fresh Market.”

• Pennsylvania-based Weis Markets announced that its Fight Hunger program “generated 275,200 meals in September for local food banks and emergency food providers in its five state market area.”

“Over the past three years, our Fight Hunger program has helped generate nearly 900,000 meals for local emergency food providers that worked with our stores,” said Weis Markets president/CEO David J. Hepfinger. “We are grateful to our customers for their generosity during a time when food bank demand continues to sharply surge and will supplement their generosity with corporate donations throughout our market area.”

• Interesting piece in Advertising Age about how marketers are having to take a more global view of their target consumers - in part because of growth outside the US, in part because of stagnation in the US.

“The combination of more rapid economic and population growth and the emergence of rising middle classes in developing markets stands in stark contrast to the stagnation of the U.S. economy and erosion of the middle class,” Ad Age writes. However, “many companies are still focused by business footprint and management structure squarely in the U.S. But that's starting to change as marketers adapt to the market.”

One example: Procter & Gamble. The company’s chairman/CEO, Bob McDonald, says, “I don't think there's any question, if someone looks back at our company 10 years from now, they'll wonder if the leadership of the company at this time took the right steps to move the center of gravity of the company more toward Asia, more toward Africa, where the babies are being born, where the new households are being formed, and certainly we've been in the midst of that.”

Published on: October 18, 2011

Got two interesting emails about the Occupy Wall Street movement, which I think has some potential long-term implications for retailers.

MNB user Gary Lochrie wrote:

Kevin, I’m a long time reader and (for the most part) admirer but you have totally misread these protesters. They want attention, not jobs. They don’t know what they are protesting other than ‘Wall Street’ (which most can’t even define). They don’t protest the very institutions or leaders (read that Universities and Professors) that have failed to provide them with marketable skills. I haven’t seen them protest Apple, which is a Wall Street darling, or Google, or Amazon. Perhaps we can test my opinion by having Mr. Bezos  set up a Job Fair and ask for applicants to work at Amazon under the same conditions that made this company so successful and admired by (almost) everyone at the protest.

I’m betting Amazon won’t have to worry much about a flood of new applicants IMHO.

I agree that this protest movement is in its early stages, without clearly defined goals or targets. They’re just finding their narrative...and when they do, it’ll be interesting to see how much traction the movement gets. I’m betting it could be profound, and I’m less dismissive of the protestors than you are.

But let’s hear from one of them, who also wrote to me yesterday:

After reading so many opinions about discontent, entitled youth, I thought it might be interesting to hear from one of them.

When I graduated from a public university three years ago, I had over $60,000 in student loan debt (NOT credit cards).  I was one of the few people who found a job in my field:  marketing.  If I continue to work 60 hours per week, and live very conservatively (and by living conservatively, I mean no house, kids, TV, cable, dvd player or computer) I may be able to pay off my debt in under 30 years.

Many of the young 99% find themselves with similar debt, but fewer employment options.   Surely, some are less-motivated than others, but I don’t think that they are entitled.  They are only asking for the conditions that boomers graduated with.  Remember:  In the 1960s, a student could pay for college tuition working 6.5 hours per week at minimum wage.  Once they graduated, they were far more likely to have found work than those searching for a job today.

I don’t think many of those critical of this movement understand what it’s like to begin their adult lives owing more than they could hope to make.  Watching the richer get richer adds insult to injury.

I would argue that the very fact that some people are so dismissive of this new protest movement is perceived by the protestors as proof of their rationale - that there is an unequal distribution of wealth and power in this country.

And I’m not saying that they are right about everything they say. Just that they need to be taken seriously.




Lots of reaction to yesterday’s piece about books, which played off a quote from author Maurice Sendak:

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.

I wrote that 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.

And, I suggested, 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.

One MNB user responded:

Interesting note and timing about E books....I was going to write you a note anyway because I noticed in the USA Today last week that three of the top 20 selling books in the US aren't even available in printed form, and don't have traditional publishers....if I have the verbiage right they read "self published via Amazon digital services".....how amazing is that?  A technology that didn't exist until a few years ago now owns 15% of the top 20 listings!  As to Mr. Sendak, closing your eyes and mind to a genre is a bit like hearing about your friend gettin' busy with a group of women he is unwilling to meet!!

MNB user Marv Imus wrote:

Hmmmm, I love to read and I love books most of all but since I got my Kindle the format has been reduced in my decision process. I love the feel of a hardcover book, the smell, the weight, but I found out when I got my Kindle that I love the story more, the convenience more, the easy of use more. When I travel now my whole library goes with me in a size that never changes no matter if I have 1 or 3 or a couple of hundred (actually I have around 600 ). When I want to my sense of smell satisfied I go to the library.

Same goes for wine. I have over a hundred bottles in my cellar but why should I care if they are corked, screw capped, boxed, or bottled? It's all about the wine inside that matters and I have no problem with boxed wine as long as when I pour myself a glass, have a sip, and say "Ahhhh"!

Marv makes an excellent point here - and it is a well-deserved shot at my constant derision of the whole idea of boxed wine. He correctly points out that while I may be agnostic about form when it comes to books, I’m a lot less so when it comes to vino.

That’s true. My only defense is that we all make value judgments about the things that are important to us, and wine seems to be one where I am unwilling to put content over form.

Other than that, I have no defense for my double standard.

Another MNB user wrote:

I agree with Sendak; I think it’s about the aesthetic experience and to that end I say yes retailers had better be mindful of the experience they deliver (in any/every format)!  For “me”, an e-book can never match the aesthetic experience of a good leather bound book.  Just sayin’!

MNB reader Jeff Foster chimed in:

Showing my age, much of my earlier music listening was on vinyl records.  As years went by and cassettes became popular I replaced some of my favorite LP's with cassettes.  Then when CD's came into play I purchased some, but fewer of the same music on them.  But as each change came along I found that I upgraded fewer and fewer albums.  I guess the gist of this is that to me it is the music, or message, that is important and not the means of conveyance it comes in.  By the way, it is amazing how much better the sound is on the CD's than it ever was on vinyl records or even on the old car radios.

MNB user Ann Hernandez wrote:

I am a die-hard bookie.  The paper kind.  I love the smell (ink is nostalgic) and the ability to take it with me into the hot tub with a glass of wine and know that if it takes a dip, I’m only out $8.95.  My Mom gave me a Kindle last year this time.  After my first download, I was hooked.  I have not bought a paper book in a year.  I bought my Mom and sister Kindles and we all read books together.  A one-gallon ziplock bag protects my Kindle in the hot tub.  I LOVE books and this is the most amazing way to experience them.

From another MNB user:

I really enjoy my Kindle though I would say that it seems that I find more errors in the Kindle editions than I do in hard copies. It is very aggravating to get involved in a novel and have your attention diverted by an error. It's apparent the conversion process needs work.

MNB user Debra Botteril wrote:

I've had my Kindle for 18 months. Have given them as gifts and "sold" them to friends and co-workers alike. I've read more books (was always an avid reader) and have instant access to so many more since buying my Kindle. And yet, I still run into these "paper snobs" who continue to believe that they have to cling to old technology. I wonder if mankind ran into the same objections when the printed word replaced the town crier.

And, this email came from another MNB user with a profound connection to the changes taking place:

As a small, used book seller in Wisconsin I have a different view of E-readers because BOOKS in their original format are the basis of my business and livelihood.  I have seen a marked drop in customers and an increase in those stopping in for fewer weekly reads than they used to buy because they now have a "Kindle", a "Nook" etc. 

I can understand that a writer would be encouraging the sale of their work in any form as they are making money whether it is in paper format or as an E-book.  If I were a writer, Kevin, I would agree with you.  Get my work out there in any way possible for sales and exposure. Though a writer may write because it's what they love, royalty checks are nice too.

At a time when the economy is so bad what E-readers are doing is putting small brick & mortar booksellers out of business.  And no, business is not necessarily better at this time in the economy for a used bookstore.  Libraries provide reading materials for FREE. 

Maurice Sendak is mainly a children's book author.  Anyone ever hear of "Where The Wild Things Are"?  Maybe you don't agree with Sendak but would you prefer to sit your kids down at bedtime with a cold little box in your hands and "read" them "Where The Wild Things Are"?  It's mainly illustrations.  Fantastically wonderful illustrations that lose all sense of wonder I'm sure if seen on an E-reader.  Sendak is the one quoted but I venture to say there are many, many writers/authors/illustrators who may agree with him whether their comparison is sex or not.

Sendak has every right to slam E-readers and E-books to the ground.  I agree with him.

I am doing what I love in going to my bookstore every day and trying to stay in business as a bookseller in a small town.  I do not have the room, nor the money, to add a coffee kiosk, a gift shop, another type of merchandise to help with sales.  I sell BOOKS.  Every corner, every wall, every possible inch of space has a book in it.  And lately...those books are piling up because people are not understanding "buy local", "support your local small business",  or that E-readers/books really DO affect the little guys. 

When my doors close for the last time it will not be because I didn't try to sell books in the best way I possibly could.  It will be because technology is taking us into the realm of Arthur C. Clarke and Robert Heinlein.  Technology, is a wonderful thing.  I do not say that new idea's are not needed.  I do say that not EVERYTHING needs to be improved upon to the extent that it becomes cold and impersonal. 

Soon the book will go the way of the stamped and mailed personal letter.  It's feeling more and more inevitable every time I add up my daily sales.

First of all, I feel your pain. And I feel awful that your livelihood is falling victim to the march of technology.

To be clear, I am not saying that e-book technology improves on the physical book. Just that for some people, some of the time, no single form is an improvement over the other. And that what makes a book are words and ideas, not paper and ink.

Sendak has every right to hate e-books. And he has every right not to have his books available as e-books. (Best I can tell, they are not.) While I get your point about reading “Where The Wild things Are” to my kids, I also can imagine a scenario in which an e-book could make his words and pictures an even more robust experience. But it is up to him.

One other point, which I’ve sort of debated with myself about making.

There is an irony in the fact that Maurice Sendak decided to use sex as his point of comparison, saying that as far as he is concerned, there is only one kind of book, just like there is only one kind of sex.

If my cursory research is correct, Maurice Sendak is gay. No value judgment here, but that very fact suggests that his idea of sex and mine probably are a little different.

Published on: October 18, 2011

In Monday Night Football action, the New York Jets beat up on the Miami Dolphins 24-6.