retail news in context, analysis with attitude

MNB Archive Search

Please Note: Some MNB articles contain special formatting characters, and may cause your search to produce fewer results than expected.

    Published on: October 20, 2011

    This commentary is available both as text and video. The two versions are similar, but not identical. Enjoy either, or both.

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

    Physical books, or e-books? Boxed wine, or bottled wine? The virtual store, or the brick-and-mortar kind?

    It has been interesting this week to see the debate back and forth about which of these people like, which ones are better, and if any of these have implicit value beyond the others.

    I love this kind of debate, because it speaks not just to what people think, but how they feel.

    Here’s how I feel about it. The discussion is not just about value, but also but values. And we all have different values. We all prize different things, at different times and for different reasons.

    And in case you can’t tell, I’m making this argument while riding on a train.

    I’m traveling from Seattle to Portland via Amtrak. I could’ve flown, I could’ve driven, I even could have taken the bus. But I decided to take the train, for two reasons. One, it is dirt cheap - just $31 one-way. Two, I love train travel. It appeals to the romantic in me, and while it isn’t the same thing as train travel around Europe, it is close enough. Besides, I get on the train and I think of movies like “North by Northwest,” “Strangers on a Train,” and “From Russia With Love,” and “Murder on the Orient Express.” And I’m a sucker for a good movie connection.

    In this case, I choose a fairly old--fashioned method of travel. In picking out a wine, I’m also a traditionalist. When it comes to reading a book, I’m sort of agnostic - I’m traveling with both a hardcover novel and my iPad this week, so I can have plenty of choices. When I check in at the airport, however, I’m perfectly happy to get my boarding pass from a kiosk, just as I prefer to do at least some of my supermarket shopping online.

    Faced with all these options, you might make the opposite choices. And that’s fine. Neither of us is right, and neither of us is wrong.

    But here is the incontrovertible truth. Things are not going back to the way they were. As one MNB reader said earlier this week, we all have to deal with it.

    Another basic truth is this: Shoppers evolve. we can’t expect the shoppers of the future to share our values, or even to assign value to the same things we do. They might, but they might not. And that’s something we also have to deal with.

    I think it is healthy that all these options exist, and I hope they always exist. I would hate to see a day when I could not pick up a hardcover book, or a good bottle of wine with a cork, or go to the supermarket to shop for food. But as a marketer, I have to concede that my kids, and their kids, may not feel the same way. And so approaches have to evolve along with the shopper, or marketers lose their relevance.

    It is the same as the debate that’s been taking place lately about self-checkout, as some companies move away from this technology. I think that is a perfectly sound idea if you’ve looked at your value proposition, thought about your shopper, and come to the conclusion that they are incompatible. On the other hand, if you’ve made the decision simply because your equipment is old and you don;t want to spend money to replace it, and your customer actually likes it, then maybe you’re making a bonehead move.

    Sometimes evolution is a good thing. One of the best things about the Amtrak train I’m riding on, for example, is that it has free Wi-Fi.

    I may be sentimental, but I also hate being out of touch.

    That’s what is on my mind this Thursday morning. As always I want to hear what is on your mind.

    KC's View:

    Published on: October 20, 2011

    by Kevin Coupe

    Yesterday, MNB reported that there was a least a little criticism of the new Wegmans in Massachusetts by the Boston Herald, which pointed out that despite its promise to have the lowest prices in the market, a Market Basket store 37 miles away was lower by $1.80 on a list of 25 staple items.

    In response to that story, we received more than a dozen emails from MNB users who criticized the Herald story as not understanding the differences between Wegmans and Market Basket, as not understanding that 37 miles is a long distance between supermarkets, and as not understanding that Wegmans’ value proposition is unique.

    And, almost all of these emails suggested that I look at a blog posting by a customer who not only has a unique relationship with Wegmans, but a compelling story about the retailer’s customer service levels.

    It is worth watching, and you can see it here.

    It is an Eye-Opener.
    KC's View:

    Published on: October 20, 2011

    The New York Times reports this morning on a new report from the Pew Research Center saying that “birth rates in the United States declined sharply during the recession ... According to preliminary data from 2010, the rates dropped to 64.7 births per thousand women ages 15 to 44, from 69.6 births per thousand women in 2007, the year the recession began.”

    According to the Times, “the link between financial distress and lower rates of childbirth surfaced clearly in the regional data. North Dakota, with one of the lowest unemployment rates in 2008, about 3 percent, was one of two states to show a slight increase in its birth rate from 2008 to 2009. The other was Maine.”

    Every other state saw a birth rate decrease, with Arizona showing the steepest decline at 7.2 percent.

    In all other states, birth rates declined, said Gretchen Livingston, the lead author of the report. Arizona had the deepest decline in its birth rate, down by 7.2 percent.

    Historical precedent suggests that the birth rate is likely to pick up when the economy improves. “What people seem to be doing is not so much deciding not to have children, but postponing until things start to recover,” says Gretchen Livingston, lead author of the report.
    KC's View:
    Of course, the way things are going, that may not happen until the beginning of the 2020’s. This could be a lost decade in more ways than one.

    Published on: October 20, 2011

    The Los Angeles Times this morning reports that Hallmark and several other greeting card companies are out with a new lines of cards - expressing sympathy and encouragement to the newly unemployed.

    Some of the expressions are heartfelt, as in, "Losing a job is just plain painful. So I want you to remember I'm in your cheering section."

    Some have a tinge of shared bitterness, as in one with a photo of a cat that reads, "Is there anywhere I could hack up a hairball, like say, on a former employer's head?"
    KC's View:
    The way things are going, this may not just be a temporary product line. It could have legs ... which isn’t a good thing.

    Published on: October 20, 2011

    The Wall Street Journal reports this morning that “packaged-food manufacturers that make products like cheese and juice hope to cozy up to colorful and fragrant tomatoes, apples and pumpkins—in some cases fundamentally changing traditional store layouts.

    “The produce section ... is increasingly located near the supermarket entrance, so every shopper passes through it. And stores are finding that consumers consider even packaged foods placed there to be fresher and higher quality—researchers call this a ‘halo effect.’

    “But some grocers are grumbling, wanting to keep packaged goods from invading the produce section, which they say gives them ‘freshness credibility’ that distinguishes them from the competition, such as warehouse clubs and convenience stores. With limited space, grocers are most likely to display fresh, high-margin items in the produce section.”
    KC's View:
    I think that retailers need to very careful about this, and resist the urge to take things like slotting allowances and preserve the produce department’s role as a fresh-oriented image-setter. Short-term bucks could have a negative long-term impact.

    Published on: October 20, 2011 reports on how one small business owner is using social media to build traffic and sales.

    For her homemade ice cream sandwiches company, Coolhaus, CEO Natasha Case's “social media team regularly tweets secret passwords for specials as well as off-the menu items to keep customers engaged. Her trucks each sell as many as 500 ‘sammies’ per day, at $4 to $6 apiece.”

    According to the story, “Social media has been at the heart of Coolhaus's impressive run, which began two-and-a-half years ago when Case and fellow cofounder Freya Estreller started their venture in spite of a poor economy. Next month, they will launch two trucks in Miami, bringing their enterprise to 11 mobile commerce units in four markets. Coolhaus also has trucks in Los Angeles, New York City, and Austin, TX, employing 35 people in all.

    “Coolhaus has 32,000 Twitter followers and 9,000 Facebook likes. Each market has its own Twitter handle. Even though the Miami trucks do not debut for a couple of weeks, @coolhausMIA already has 148 followers after tweeting a few dozen times.”
    KC's View:
    No pun intended, but this is a cool story. It is encouraging when you hear about companies that have a unique product and are using unique methods of spreading the news and generating sales.

    And also a good lesson for traditional retailers.

    Published on: October 20, 2011

    The New York Times reports that federal officials are saying that “a nationwide listeria outbreak that has killed 25 people who ate tainted cantaloupe was probably caused by unsanitary conditions in the packing shed of the Colorado farm where the melons were grown ... Government investigators said that workers had tramped through pools of water where listeria was likely to grow, tracking the deadly bacteria around the shed, which was operated by Jensen Farms, in Granada, Colo. The pathogen was found on a conveyor belt for carrying cantaloupes, a melon drying area and a floor drain, among other places.”

    The story goes on: “The farm had passed a food safety audit by an outside contractor just days before the outbreak began. Eric Jensen, a member of the family that runs the farm, said in an e-mail that the auditor had given the packing plant a score of 96 points out of 100.

    “F.D.A. officials did not criticize the auditor directly. But Michael R. Taylor, deputy commissioner for foods, said the agency intended to establish standards for how auditors should be trained and how audits should be conducted.”
    KC's View:

    Published on: October 20, 2011

    Advertising Age reports that former Walmart CEO and current board member Lee Scott told the National Beer Wholesalers Association conference in Las Vegas that the retailer plans to ramp up its selection of craft beers.

    Walmart, Scott said, "built the company on two things: One was price, but the other was assortment, and you can't take an area like beer where people are moving to craft and 'under-assort' yourself because the person who is buying craft beer and wants that assortment will drive to Kroger and pay the 15% more."
    KC's View:
    Assortment is a good thing. Keeping product in-stock is another, and that’s been a growing problem under Scott’s successors.

    Published on: October 20, 2011

    • The Wall Street Journal reports that “for the second quarter ended Sept. 10, Supervalu returned to the black from a prior year weighed down by charges, but sales dropped 2.6% to $8.43 billion, reflecting a 1.8% drop in same-store sales, the 14th consecutive quarter of declines.”

    According to the story, the company “expects its growth to be stunted this fiscal year given the rocky economic environment and its reinvestments in the business,” as it struggles to “reconcile rising food costs with its ongoing effort to reduce prices to levels more competitive with rivals like Kroger Co. and Safeway Inc.”

    • The New York Times reports that as the Glad Products Co. introduces its new Glad kitchen trash bag, said to be made with less plastic and therefore more environmentally friendly, the company is talking more about the fact that it is stronger than the fact that it is made with less plastic. And, it is not charging higher prices for the new bags, which reflects a consumer reality - that they want to “make more responsible choices but they don’t want to make the tradeoffs if they involve either an inferior product or a greater price.”
    KC's View:

    Published on: October 20, 2011

    • The Grocery Manufacturers Association (GMA) announced the appointment of Robert Burns, Ph.D., as GMA Vice President, Health and Nutrition Policy.

    Burns most recently was owner of Nutrition Implications, LLC, a consulting business, where he helped food organizations and companies develop strategic approaches to nutrition and health, including engagement with external stakeholders and development of research programs and communication initiatives.  Prior to that, he held nutrition leadership roles in Cadbury Schweppes and Mead Johnson.

    • Ahold announced that Per Strömberg, former CEO of Lantmännen (a food, energy and agriculture company), to be the new CEO of its ICA subsidiary. He succeeds Kenneth Bengtsson, who is departing after more than a decade in the job.
    KC's View:

    Published on: October 20, 2011

    ...will return.
    KC's View:

    Published on: October 20, 2011

    In the first game of the 2011 World Series, the St. Louis Cardinals defeated the Texas Rangers 3-2, taking a 1-0 lead in the best-of-seven series.
    KC's View: