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    Published on: December 15, 2011

    by Kevin Coupe

    Talk about shortening the supply chain.

    That’s exactly what the comedian Louis C.K. has done with his latest concert video. Instead of putting it on HBO or Showtime, he instead decided to put it on his own website, sell it for downloading at a low cost, and see what happens.

    Here’s what his website says (with the curse words edited and the unconventional spelling left intact):

    “People of Earth (minus the ones who don't give a &#$@ about this): it's been amazing to conduct this experiment with you. The experiment was: if I put out a brand new standup special at a drastically low price ($5) and make it as easy as possible to buy, download and enjoy, free of any restrictions, will everyone just go and steal it? Will they pay for it? And how much money can be made by an individual in this manner?

    “It's been 4 days. A lot of people are asking me how it's going. I've been hesitant to share the actual figures, because there's power in exclusive ownership of information. What I didn't expect when I started this was that people would not only take part in this experiment, they would be invested in it and it would be important to them. It's been amazing to see people in large numbers advocating this idea. So I think it's only fair that you get to know the results. Also, it's just really cool and fun and I'm dying to tell everybody. I told my Mom, I told three friends, and that wasn't nearly enough. So here it is.

    “First of all, this was a premium video production, shot with six cameras over two performances at the Beacon Theater, which is a high-priced elite Manhattan venue. I directed this video myself and the production of the video cost around $170,000. (This was largely paid for by the tickets bought by the audiences at both shows). The material in the video was developed over months on the road and has never been seen on my show (LOUIE) or on any other special. The risks were thus: every new generation of material I create is my income, it's like a farmer's annual crop. The time and effort on my part was far more than if I'd done it with a big company. If I'd done it with a big company, I would have a guarantee of a sizable fee, as opposed to this way, where I'm actually investing my own money.

    “The development of the website, which needed to be a very robust, reliable and carefully constructed website, was around $32,000. We worked for a number of weeks poring over the site to make sure every detail would give buyers a simple, optimal and humane experience for buying the video. I edited the video around the clock for the weeks between the show and the launch.

    “The show went on sale at noon on Saturday, December 10th. 12 hours later, we had over 50,000 purchases and had earned $250,000, breaking even on the cost of production and website. As of Today, we've sold over 110,000 copies for a total of over $500,000. Minus some money for PayPal charges etc, I have a profit around $200,000 (after taxes $75.58). This is less than I would have been paid by a large company to simply perform the show and let them sell it to you, but they would have charged you about $20 for the video. They would have given you an encrypted and regionally restricted video of limited value, and they would have owned your private information for their own use. They would have withheld international availability indefinitely. This way, you only paid $5, you can use the video any way you want, and you can watch it in Dublin, whatever the city is in Belgium, or Dubai. I got paid nice, and I still own the video (as do you). You never have to join anything, and you never have to hear from us again.”

    Louis C.K. says that he reserves the right to do business with a big company again, but that doesn’t sound like it is likely anytime soon:

    “I'm really glad I put this out here this way and I'll certainly do it again. If the trend continues with sales on this video, my goal is that i can reach the point where when I sell anything, be it videos, CDs or tickets to my tours, I'll do it here and I'll continue to follow the model of keeping my price as far down as possible, not overmarketing to you, keeping as few people between you and me as possible in the transaction.”

    There’s a great lesson there for any marketer ... especially retailers in almost any venue, who should be concerned that suppliers will use the same logic to disintermediate them from the shopping experience, going directly to the shopper, keeping their prices as far down as possible and keeping as few entities as possible between them and the customer.

    And retailers should be thinking about how they are going to connect with the shopper in more intimate and meaningful ways ... because that may be one of the most effective ways in which they can defend their competitive positions.

    What’s really eye-opening, and most interesting, in many ways, is what Louis C.K. says he has learned from the experience:

    “I learned that money can be a lot of things. It can be something that is hoarded, fought over, protected, stolen and withheld. Or it can be like an energy, fueled by the desire, will, creative interest, need to laugh, of large groups of people. And it can be shuffled and pushed around and pooled together to fuel a common interest.”

    I love that. It ain’t comedy, but it is profound.

    One other note. I knew who Louis C.K. was, but had never watched his TV series or concert shows. But it just so happened that I heard him yesterday on NPR talking about his comedy - and this entrepreneurial enterprise - and I immediately went online and bought the concert video. I haven’t watched the whole thing, but the pieces I have watched are just laugh out loud funny. (Dirty, in some cases, but really, really funny.)

    Louis C.K. has a new fan...of his comedy, and his approach to business.
    KC's View:

    Published on: December 15, 2011

    This commentary is available in text and video form. The content is similar, but not word-for-word. Enjoy both, or either...

    This is FaceTime w/The Content Guy. I’m Kevin Coupe.

    We all rail about the indignities of airline travel these days. We don’t all go to Alec Baldwin proportions in registering our displeasure, but most of us who travel for a living would agree that to a great extent, the romance of air travel is a thing of the past.

    There are, however, exceptions.

    The Wall Street Journal had a piece the other day about how Air New Zealand actually has created a new class of travel. They’re calling it “Cuddle Class.”

    According to the story, Cuddle Class “is an innovative seat design that has given coach passengers the first real opportunity to lie flat for sleep on long flights. To create the extra space, three seats in a row have fold-away armrests and a padded foot-rest panel that flips up and locks into place. Two passengers take up three seats and pay an average of half the cost of the third seat, typically an extra $500 to $800 for an overnight flight.”

    This was not as easy as it sounds. It apparently took some time to figure out how to reconfigure the seats and make them work - it is not laziness that resulted in no major seating innovation has been achieved in coach class. (Unless you count smaller seats and less leg room as innovations.) There is only so much you can do with the space, but Air New Zealand thought outside the box.

    The good news for the airline is that the seats seem to be selling well, mostly for couples, but sometimes for families that want the extra room and are willing to pay for it. And, for the most part, people say it is easier to sleep on long flights in Cuddle Class.

    Of course, I guess the configuration and the availability of blankets also means that they may be able to do other things as well. Which is why, though it took them some time to come up with a name for the new service, “Mile High Class” apparently was snot one of the choices.

    If it had been, they would have had another problem ... like how to equip flight attendants with really long fire hoses so they could dampen the enthusiasms of more amorous customers.

    Still, this is great story, because it teaches us that even within the confines of an airplane, innovation can be achieved if you just think differently. That’s a great lesson for people working within any box.

    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: December 15, 2011

    Hy-Vee Chairman and CEO Ric Jurgens, 62, announced to stockholders at Hy-Vee’s annual meeting yesterday that he plans to retire from the company effective June 1.

    Jurgens said he will ask the board of directors at its May meeting to elect Hy-Vee’s current president and chief operating officer, Randy Edeker, to succeed him as Chairman and CEO of the company.

    Jurgens has been Hy-Vee’s top officer since 2006, and is a 42-year veteran of the company, starting as a part-time employee in Ames while attending Iowa State University.

    “I feel extremely fortunate to have spent my entire career working for a great company filled with great people,” Jurgens said. “It has been an honor to lead a team of nearly 60,000 employees dedicated to our mission of making lives easier, healthier and happier, and I’m proud of the things we have been able to accomplish together as a Hy-Vee family. We have a skilled management group in place to help propel Hy-Vee to even greater heights, so I will leave this summer with a great deal of confidence in the future of the company.”
    KC's View:
    Jurgens seems way too young and vigorous to be retiring, but perhaps it is a good thing - he can now apply all that energy to something new. He is so passionate about issues like nutrition and labeling that I can easily see him taking on some sort of advocacy role on a state or even national basis.

    Or, maybe he just wants to spend the rest of his life hanging out with his family. I can see that, too.

    I’ve told this story here before, but a long time ago Mrs. Content Guy and I were seated next to Jurgens and his wife at an industry event. Our kids were a lot younger than his, and we spent a lovely evening chatting about raising children, and I got a lot of good life lessons from him, learning things that I have tried to apply to my own life over the years.

    Talking about the importance of nutritional labeling, Jurgens once told me that his goal was “to change the world.” I’m not sure if he has accomplished that (yet), but I know he’s changed a lot of lives through his leadership. And he certainly has had an impact on mine.

    Published on: December 15, 2011

    The debate/discussion about the ongoing competition between online and bricks-and-mortar retailers that has been taking place here on MNB this week (and, to be honest, for the past 10 years) has also been taking place elsewhere, with a particularly intriguing exchange about Amazon.com worth repeating.

    The novelist and screenwriter Richard Russo started it in the New York Times with an op-ed piece excoriating Amazon for its decision last weekend to offer a special five percent discount to people who used its price comparison application to check prices at a bricks-and-mortar store and then buy for less on its site. He wrote, in part:

    “As I see it, the problem with Amazon stems from the fact that though it started out as a bookseller, it isn’t anymore, not really. It sells everything now, and it sells it all aggressively. Maybe Amazon doesn’t care about the larger bookselling universe because it’s simply too big to care. In a way it’s become, like the John Candy character (minus the eager, slobbering benevolence) in Mel Brooks’s movie ‘Spaceballs’ — half man, half dog and thus its own best friend.

    “Like just about everybody I’ve talked to about it, I first attributed Amazon’s price comparison app to arrogance and malevolence, but there’s also something bizarrely clumsy and wrong-footed about it. Critics may appear weak today, but they may not be tomorrow, and if the wind shifts, Amazon’s ham-fisted strategy has the potential to morph into a genuine Occupy Amazon movement. And even if the company is lucky and that doesn’t happen, what has it really gained? The fickle gratitude of people who will have about as much loyalty to Amazon tomorrow as they do today to Barnes & Noble, last year’s bully?”

    Russo said in his piece that he’d talked to a number of writer friends - ranging from Scott Turow to Stephen King - about Amazon’s policies, and the reactions were uniformly negative. Novelist Dennis Lehane told Russo that is smacked of “scorched-earth capitalism,” and Andre Dubus III said that the efforts would ultimately be to “further devalue, as a cultural and human necessity, the book” itself.

    But on Slate.com, technology columnist Farhad Manjoo had a different perspective, though he started from the same point: “I’m generally a fan of price comparison—like everyone else, I hate spending more than I should—but I can understand physical retailers’ fear of the practice becoming widespread. When you walk into Best Buy and get a salesperson to spend 10 minutes showing you a television, then leave empty-handed so you can buy the TV for less on Amazon, you’ve just turned Best Buy into Jeff Bezos’ chump. The Price Check promotion (which lasted only one day) was, like Amazon’s aggressive efforts to dodge the collection of sales tax, a brazen attempt to crush local retailers, and I (as did many others) found it distasteful. Sure, I’m a fan of Amazon and devote a substantial portion of my income to its coffers—but does it have to be so wantonly callous about destroying its competitors?”

    Manjoo went on: “But as I waded into Russo’s piece ... I realized that he’d made a critical and common mistake in his argument. Rather than focus on the ways that Amazon’s promotion would harm businesses whose demise might actually be a cause for alarm (like a big-box electronics store that hires hundreds of local residents), Russo hangs his tirade on some of the least efficient, least user-friendly, and most mistakenly mythologized local establishments you can find: independent bookstores ... Russo claims that Amazon, unlike the bookstore down the street, ‘doesn’t care about the larger bookselling universe’ and has no interest in fostering ‘literary culture’.

    “That’s simply bogus,” Manjoo writes. “As much as I despise some of its recent tactics, no company in recent years has done more than Amazon to ignite a national passion for buying, reading, and even writing new books.”

    And here’s where Manjoo’s thinking can even be applied to other retailing experiences:

    “Compared with online retailers, bookstores present a frustrating consumer experience. A physical store—whether it’s your favorite indie or the humongous Barnes & Noble at the mall—offers a relatively paltry selection, no customer reviews, no reliable way to find what you’re looking for, and a dubious recommendations engine. Amazon suggests books based on others you’ve read; your local store recommends what the employees like. If you don’t choose your movies based on what the guy at the box office recommends, why would you choose your books that way?

    “In the past, bookstores did have one clear advantage over online retailers—you could read any book before you purchased it. But in the e-book age that advantage has slipped away. Amazon and Barnes & Noble let you sample the first chapter of every digital title they carry, and you can do so without leaving your couch.

    “It’s not just that bookstores are difficult to use. They’re economically inefficient, too. Rent, utilities, and a brigade of book-reading workers aren’t cheap, so the only way for bookstores to stay afloat is to sell items at a huge markup. A few times a year, my wife an unreformed local-bookstore cultist—drags me into one of our supposedly sacrosanct neighborhood booksellers, and I’m always astonished by how much they want me to pay for books. At many local stores, most titles—even new releases—usually go for list price, which means $35 for hardcovers and $9 to $15 for paperbacks. That’s not slightly more than Amazon charges—at Amazon, you can usually save a staggering 30 to 50 percent. In other words, for the price you’d pay for one book at your indie, you could buy two ... With the money you saved by buying books at Amazon, you could have gone to see a few productions at your local theater company, visited your city’s museum, purchased some locally crafted furniture, or spent more money at your farmers’ market. Each of these is a cultural experience that’s created in your community. Buying ‘Steve Jobs’ at a store down the street isn’t.”

    Manjoo concludes: “So, sure, Amazon doesn’t host readings and it doesn’t give you a poofy couch to sit on while you peruse the latest best-sellers. But what it does do allow people to buy books anytime they want—is hardly killing literary culture. In fact, it’s probably the only thing saving it.”
    KC's View:
    As much as I respect the position taken by Russo and his literary brethren, I do think that Manjoo’s point - that people seem to be buying and reading books more often because of Amazon - is legitimate.

    Keep in mind that Amazon’s price-check promotion probably was bad public relations in terms of the bald statement that it made ... but it was a service that was available from Amazon before the promotion and remains available today.

    In competing with e-stores, bricks-and-mortar retailers have to have a compelling, differentiated offer. That’s true in books, and probably in most categories.

    I’m not sure if this is accurate, but let me suggest that it is at least possible that when people have an Apple Store in their vicinity, they are far more likely to shop and buy things there than to do so online. I’d be curious to know if this is true in the broad sense, but I know for a fact that I rarely buy Apple products online because there is an Apple Store about ten minutes from my house. I’d guess that a lot of people feel that way.

    There’s a lesson there.

    Interestingly, by the way, there is some evidence that bricks-and-mortar retailers are managing to compete effectively.

    The New York Times reports that “the initial weeks of Christmas shopping, a boom time for the book business, have yielded surprisingly strong sales for many bookstores, which report that they have been lifted by an unusually vibrant selection; customers who seem undeterred by pricier titles; and new business from people who used to shop at Borders, the chain that went out of business this year.

    “Barnes & Noble, the nation’s largest bookstore chain, said that comparable store sales this Thanksgiving weekend increased 10.9 percent from that period last year. The American Booksellers Association, a trade group for independents, said last week that members saw a sales jump of 16 percent in the week including Thanksgiving, compared with the same period a year ago.”

    So maybe they’ve learned the lesson.

    Published on: December 15, 2011

    The Boston Globe reports that Kayak.com, the travel website, has followed the path taken by home improvement chain Lowe’s and pulled its advertising from theTLC reality series “All-American Muslim,” which looks at five families in Dearborn, Michigan, a Detroit suburb that has a large Muslim and Arab-American community.

    Lowe’s said it was pulling its ads after being hit with complaints by the Florida Family Assn., described by the Los Angeles Times as “a conservative Christian group that lobbies companies to promote ‘traditional, biblical values’.” The Times says that the Florida Family Assn. calls the show "propaganda" that "hides the Islamic agenda's clear and present danger to American liberties and traditional values."

    Robert Birge, chief marketing officer of Kayak, accused TLC of hiding the real nature of the show, and tells the Globe, “When we received angry emails regarding our decision to advertise, I looked into the show more thoroughly. As I said, it’s a worthy topic, but any reasonable person would know that this topic is a particular lightning rod. We believe TLC went out of their way to pick a fight on this, and they didn’t let us know their intentions.”

    “Mostly,” Birge added, “I just thought the show sucked.”
    KC's View:
    Listen, if Birge hates the show, he should pull his advertising.

    But give me a break. TLC hid the true nature of a show called “All-American Muslim”? I’m just curious. What was it about that title that seemed so deceptive? You’d think that any CMO worth his salt might have flagged that before the show went on the air, at least prompting him to ask a question or two. (Maybe Kayak needs a new CMO who actually pays attention to the marketing budget and where it is spent.)

    No. That’s not what happened here. Kayak just did what Lowe’s did ... they knuckled under to the complaints of a fringe group that would rather demonize Muslims than see them humanized. A fringe group, I believe, that does not represent the essentially fair-minded character of the American people.

    BTW...is TLC guilty of producing a show and choosing a name that might be controversial and generate some heat? Absolutely. TV is a ratings game, and networks look for ways to differentiate themselves.

    I have no idea whether “All-American Muslim” is a decent show or not. I haven;t watched it, and have no plans to. I hate so-called “reality TV,” which strikes me across the board as exploitive, dehumanizing and totally unreal. (My idea of reality TV is news and sports. Other than that, give me scripted shows like “Fringe” and “Criminal Minds.”) Now, if Lowe’s and Kayak had decided not to advertise on TLC for those reasons, or to pull their advertising for those reasons, I would have been fine with it.

    But that’s not what happened here. This is a case of intolerance winning out. And when that happens, these so-called protectors of American values do much to diminish American exceptionalism.

    Published on: December 15, 2011

    With just ten days until Christmas, the National Retail Federation (NRF) has revised its holiday forecast upward, expecting holiday sales to rise 3.8 percent this year to a record $469.1 billion. NRF’s initial forecast, announced on October 6, called for anticipated sales growth of 2.8 percent. While a 3.8 percent sales increase is considerably above the ten-year average sales increase of 2.6 percent, it is still lower than the 5.2 percent increase the retail industry saw last year.

    NRF also says that its research shows that the average person has completed 46.5 percent of their shopping, less than the 49.5 percent the average person had completed by the same time last year.

    According to the survey, nearly 37 million people (16.5%) had not even started their shopping as of late last week, while 7.6 percent say they have completely finished shopping already. The survey also found the average 25-34 year-old has finished about 50.2 percent of their shopping – the most of any age group.
    KC's View:

    Published on: December 15, 2011

    • The New York Daily News reports that the Manhattan Borough President’s office is out with a new study suggesting that “a Walmart opening in Harlem could put many of the smaller stores selling fresh food in the neighborhood out of business. The study predicts that “30 to 41 supermarkets, green grocers, and bodegas that sell fresh produce would go out of business within a year if a Walmart opened there. That’s 25% of area food businesses. Another 18 to 25 stores could shutter in the second year.”

    According to the , “Walmart officials have said they are interested in opening several stores in the city but refused to publicly discuss what sites they might choose. The researchers decided to zero in on the W. 125th St. site because it is large enough for a Walmart, in a low-income neighborhood, and would not require zoning changes.”
    KC's View:
    Just last Saturday, I was driving north on the FDR Drive, and I passed a retail development in Harlem that features, among other retailers, Costco, Target, Best Buy and a Bob’s Furniture.

    And I could not help but wonder what legitimate objections to Walmart could exist in a city neighborhood that already has such a shopping center.

    Give me a break.

    Published on: December 15, 2011

    • The Wall Street Journalreports that “a simulated grocery-shopping experiment found that consumers have a limited attention span for nutrition labels on food packaging, and that they read the labels far less frequently than they say they do, according to a study in the Journal of the American Dietetic Research ... A third of the participants reported on questionnaires that they usually look at calorie content on labels. Nearly a third said the same for fat content, 20% for trans fats, 24% for sugar, and 26% for serving size. Eye-tracking data, however, showed that only 9% of the participants looked at calorie content on roughly 80% of items and even fewer people viewed other components.”

    • The Chicago Sun Times reports that “Best Chicago Meat Co. emerged as the winner in a bankruptcy auction Wednesday for the Moo & Oink brand, bidding $530,000 for the intellectual property — such as the Moo & Oink characters, web site and product recipes.”

    According to the Sun Times, Best Chicago Meat is an African-American owned company that “plans to reinstate the Moo & Oink products in the Chicago market, then test markets in Detroit and Birmingham, Ala., and look into taking the brand to Atlanta and Memphis, Tenn. Best Chicago may expand the brand to new products, such as barbecue sauce, seasonings and even vegetables.”

    Moo & Oink is a 150-year-old meat retailer with deep roots in Chicago’s African-American community, but it sales had dropped precipitously in recent years and it filed for bankruptcy protection last September.
    KC's View:

    Published on: December 15, 2011

    Drug Store News reports that Ken Finnegan, Walgreens divisional VP healthcare new business development, will assume leadership of the corporate innovation team, succeeding Colin Watts, who is taking a corporate position at Weight Watchers as SVP wellness and global innovation.
    KC's View:

    Published on: December 15, 2011

    MNB took note the other day of a Washington Post report on an analysis showing that the Walton family, heirs to the fortune accumulated by Sam Walton, founder of the Walmart chain, has a combined net worth equal “to that of the combined net worth of the bottom 30 percent of Americans.” As the story notes, this revelation plays into concerns that “income inequality in the United States is currently at its highest since the 1920s,” and suggests that “the Waltons appear to be the clearest example of that divide.”

    I commented, in part:

    For me - and, I suspect, for a lot of people - the concept of income inequality has nothing to do with how rich some people are, but the concern that the system is rigged against the lower end, that our economy has been constructed in such a way that it is harder for them to even achieve middle class status.

    I honestly don’t believe that most people care that just a few people are certifiably rich.

    They just don’t want to be poor, and with apparently diminishing options.


    One MNB user replied:

    Enjoyed your comments on the piece from the Washington Post on income inequality. I agree, certainly no one wants to be poor. I disagree that the options are diminished. I suppose its a matter of perspective. I do think that, that being the case, that perspective on the definition of "poor" has changed dramatically over time.
     
    When I was a kid, I didn't think we were poor. Nevertheless, we would be substantially poor by today's standards. Standards change. Perspective changes. What poor people have in a short period of a generation has even more dramatically changed ... It's also true that being poor in America is much different than most anywhere in the world.
      
    As a kid, we didn't have a television for a lot of the period of my childhood until my early teens. I didn't think that made me poor or that simply because it was or had become pretty much a standard household item by then that I was entitled to have one. This is only one example. There are countless others. I could go on and on. Nevertheless, I think the minimum standard of expectations had dramatically changed. I also think that perspective to a standard of entitlement has changed also.
     
    I suppose at the time, if asked if I wanted to be poor, there would be certainty in my answer then as it would be today. I didn't then. I don't now. The difference then is I didn't think I was poor. The difference today is the definition of what poor is has completely changed.
     
    But here's the thing, options then were different too. Options today lie in different opportunities that didn't even exist then. Then, options highly centered around non-skilled or manufacturing as much as anything. Today, options like in skilled areas as much as any and most all require a high level of the grasp of technology. Even so, in spite of the differences in time, the options today are more limitless than ever. In combination with that the level of minimum things within a household, schools and other areas of life compliment that change.
     
    "Poor" is a matter of perspective just as much as a bank balance, but make no mistake there are real "Poor". That condition does exist. However, just as much as that exists is the perspective of "Poor" that has less to do with the balance in the checking account and more to do with perspective and entitlement.
     
    There are options. There are choices. There is also imagination. Imagination has no correlation with the amount of ones assets. The lack of it, however, is a real liability. We could all likely use our imagination more and worry about perception and perspective less. If we all did, I think we'd likely all be richer and our definition of "Poor" would define those really in need, not those who do not yet own an iPad.


    I get what you are saying, but I do think that it is easier to say that there are plenty of options when you are looking at the field from a relatively privileged position. And it is facile to suggest that a modern definition of poverty is not owning an iPad.

    I think there is a lot more complexity here. Though I agree that there is an unfortunate feeling of entitlement out there in some segments of society.

    MNB user Mike Franklin wrote:

    It has been very interesting rereading FDRs speeches - backsliding Democracy was his pivot point...and improving Democracy was his vision.

    He spoke often about the over privileged and the under privileged…and why American had gotten to that position and what it needed to do to get out. It’s not so much that a few can get wealthy, it’s that they got wealthy on the backs of the under privileged. He was not opposed to capitalism, in fact he promoted capitalism…but with regulations to protect us all.






    We reported the other day on how the Chicago Sun Times had an op-ed piece over the weekend by Frank Keating, president and CEO of the American Bankers Association and former governor of Oklahoma, that attacked curbs on debit card transaction fees as “price-fixing schemes” that ultimately hurt consumers.

    And I was pretty harsh in my assessment of Keating’s piece. (I think I used the word “crock.”)

    Which led MNB user Jesse Ehlen to write:

    Did Keating kick your dog or something?  I’m surprised at how much “between the lines” reading you did and the vitriol in your response.
     
    Sure he’s on the side of the banks, that’s his job, but where did he argue that the banks were looking out for people or that fees were doing good?
     
    I read his points to be that 1) the banks are missing a chunk of revenue from swipe fees and are making up for it at the expense of services that used to be free, 2) a portion of the revenue they’re missing is now in the hands of big box retailers who aren’t passing any of the savings on to consumers, and 3) this is mostly because Dick Durbin doesn’t understand economics, the free market, or the retail/banking landscape. 
     
    The banks may have been pulling the wool over our eyes with their “hidden fees” but Durbin’s interference has cost many of consumers, in the forms of free checking and debit rewards, without getting the lower prices at the register.


    I believe whole-heartedly that Keating’s suggestion that regulation of the banks is bad for consumers means that he wants people to believe that lack of regulation is good for consumers.

    I don’t like banks. I don’t like bankers. Don’t trust them. They’ve done precious little as an industry to engender any trust or sympathy. (Though I should note that Mrs. Content Guy was a banker when I married her.)

    And Keating better not come anywhere near our dogs, Buffett and Parker.

    MNB user Mark Raddant had another thought on the issue:

    The only answer to this problem is to let the market decide by allowing the banks to charge fees but force the retailers to detail the transaction fee on the receipt.  When the cost of the fees is apparent, consumers will be free to compare and shop for the bank which provides the set of services and costs which suit them best.  That will probably result in all of us carrying a bit more cash with us in order to save the charge fees on small purchases.

    You say it all the time: transparency is the best solution.


    True. But my understanding is that banks prohibited such transparency, preferring to charge hidden and usurious fees.

    One MNB user agreed with my position:

    The only thing wrong with this legislation is it got watered down by Banking lobbyist in the approval process and ended up not going far enough to protect the retailers with small transactions.

    The door could have been closed on this kind of greed but there was room for the Banks to shove their toe in the door.





    We had a story the other day about how CVS was testing self-checkouts in some of its stores, which led one MNB user to write:

    The Boston Globe article on self-checkout systems points out the irony of CVS adding more of these at a time when they also launched a campaign about personal connections with customers.   What the article misses is that there is no stronger connection a retailer can make than to listen to their customers and serve them as they want to be served, a frequent point that you make in MNB.  By understanding how their customers are shopping their stores and then investing in their stores accordingly – in this case by adding more DIY for busy urban locations – CVS is doing exactly the right thing. 

    MNB user Anne Evanoff wrote:

    I would love to encounter a self-checkout lane at CVS. I usually go in for one or two items and always have to wait, since the clerk is over at the photo processing, or chatting a long time with a known customer OR processing a lady who watches the coupon show on TV and is having each item rung up one by one to see if her multiple coupons got her the lotion for free. Ugh.




    On the subject of restaurants in supermarkets, one MNB user wrote:

    A couple of years back, I invited a friend in St. Louis to lunch and he surprised me by suggesting the local Schnucks store.  I was skeptical at first but was absolutely impressed by the experience and particularly the food which was prepared to order while we watched.  I will likely return when I am in town again.

    I recently visited a Schnucks store that was had as strong a restaurant offering as any store I’ve ever seen. So I get your point.

    MNB user Mark Thorngren wrote:

    Saw your article today on Supermarket restaurants and wanted to see if in your travels you have been to Draeger's Supermarket in San Mateo, Ca.  Their restaurant is 4 star with a celebrity chef, forget which one, and is connected to a cooking school and a fabulous gift shop.  I took my wife there for dinner, after much discussion about eating in a Supermarket, and we had a delightful dinner.  Dinner was not inexpensive but the trip out thru the gift shop proved to be even more expensive.

    I have been there - a few years ago - and loved it. Great point.

    And, from another MNB user:

    My spouse and I recently went to the local Wegman’s for dinner, something we do on a regular basis.  The food is great and chef’s and servers are fantastic plus the social interaction with the other diners is wonderful.  What was different this time?  As we approached the sitting area, I was reading the daily special and a diner,  said “come on and sit down, they have great food here, I eat here all the time.”  Her dining partner shook her head in agreement.  I readily agreed and we sat down next to her.

    As our conversation progressed, we found out she was from Mississippi and dined at this particular Wegman’s at least once a month when she was in town with her spouse.  Her daughter said that they drive 45 miles, one way, for the dining experience.
    KC's View: