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: January 23, 2012

    by Kevin Coupe

    The subject of customer service is an ongoing hot topic here on MNB, with people telling tales of the best of times and worst of times that they’ve encountered at various retailers. And, as you may have noticed, some of this discussion focused recently on Best Buy, with varying opinions expressed about that company.

    Well, I thought that it made sense to share with you a story told to me by MNB user Kevin Brouillard, whose wife, Liz, had a very specific Best Buy experience. It is best to share the story in her own words...and so first, here is the email that Liz sent to Robert Kelly, the store manager at her local Best Buy:

    Dear Mr. Kelly,

    My name is Liz Brouillard, and I am a customer. On Monday, January 15th, I was
    shopping at your Waterford store with my 10-year old daughter and her friend.
    For months, my daughter has been saving to buy an I-pod touch, and she finally
    had enough money. Erik, I believe, was helping explain the different features
    when my daughter realized the "bunny" wallet containing her money was gone (She
    had left it on a display. When she went back to get it, it had been moved and
    the money removed). Immediately, Erik and your team of professionals mobilized
    an effort to identify the thief/thieves. Within a few minutes, they had reviewed
    a video tape that clearly showed a couple taking the money from the wallet.

    Unfortunately, the couple had already left the store. We knew it was entirely
    our fault that the money had been stolen; and, my ten year old daughter and her
    friend were a bit shaken because they realized they had been unaware that
    someone had been watching them.

    Both Fred and Erik went above and beyond any customer service I have ever
    received (or given) by offering us cash to replace part of what was stolen. We
    refused the cash, as we knew it was entirely our fault. Insisting, Fred and Erik
    explained they felt terrible that a theft happened in their store, and added "we
    want to be your local neighborhood store---a store you can count on."
    Ironically, my husband owns a local store, and I understood exactly the depth
    and sincerity of his statement. I reluctantly accepted the money, and added we
    would continue saving until my daughter could afford a new I pod. Without
    hesitation, Fred asked what color I-pod and Erik retrieved one for Riley. We
    paid a fraction of the price (the amount of money that was in the wallet was
    credited to the sale). Seriously!!! Who does that? That is above and beyond any
    customer service I have ever known.

    Erik and Fred turned what could have been a very scary experience for my 10 year
    old into a very positive experience. She saw compassion at work. When we left,
    we vowed to do something kind in the name of Best Buy. Within minutes, we came
    upon a woman with a flat tire, and my daughter and I offered to help
    (Unfortunately, we offered only support until real help arrived). However, as we
    look for more people to help, we continue to share this story with the people we
    know. Erik and Fred (I hate that I don't know their last names) made a very big
    difference that I guarantee will grow through the rippling effect, as I am a
    local teacher and teach about 100 students a year and my husband is a local
    grocer who is also connected to many. We will share our story and are forever
    loyal to Best Buy...our neighborhood store.


    And Robert Kelly responded with the following email:

    Thank you taking the time to write me. Fred and Eric will be recognized for the
    great job they did here helping out what sounds like could have been a huge
    disappointment for your daughter. I am a great believer of Karma and Paying it
    Forward. I am so glad that things worked out for you and hope the next time you
    are in you will ask for me. I would like to meet you and Riley.


    There is a powerful lesson here.

    Great customer service has nothing to do with whether a store is big or small, or whether a company is a chain or just an independent. It has to do with attitude. It has to do with people at the top understanding that it is the people on the front lines who make the difference in terms of customer service and creating an environment where people like to shop.

    The most important phrase in Liz Brouillard’s email, it seems to me, is when she refers to Best Buy as “our neighborhood store.” That is enormous - and it has to do with people like Fred and Eric and Robert Kelly, who, I suspect, empowered them to represent their company in this way.

    Best Buy has plenty of issues to deal with, and it seems fairly certain that not every all of its store personnel would have dealt with a similar situation the same way.

    But this is a great story, an Eye-Opener, and it suggests to me that if Best Buy can spread this kind of culture throughout the company, it probably is going to be okay. Or, at the very least, have much better odds on its survival.
    KC's View:

    Published on: January 23, 2012

    Walmart announced on Friday that Brian Cornell, who has been running its Sam’s Club business since 2009, is leaving the company, and will be succeeded by Rosalind Brewer, who has been serving as president of Walmart’s Eastern US business unit. Brewer is the first woman to be named as CEO of one of the company’s three major business units.

    The Wall Street Journal notes that under Cornell, Sam’s “has been doing well, seeing steady same-store sales growth while Wal-Mart U.S. has been struggling to grow its comparable-store sales.” Cornell had been growing sales by expanding Sam’s food offerings and creating a private label for the unit. The Journal postulates that by putting Brewer in charge of Sam’s, it may be making a statement about even greater emphasis to be put on its membership club business.

    Cornell reportedly informed Walmart’s management that he and his wife would like to move back to the Northeast for family reasons. “Being part of the Sam's Club family has been a wonderful personal and professional experience, one that I will always value," he said. "I have felt at home here and have a strong connection to the associates, the company and its values and mission. However, after 30 years of asking my family to follow me all around the globe, it is time to put them first. My wife and I want to put down roots in the Northeast and live in the same ZIP code as our children - not just occasionally seeing them in hotels and restaurants."

    The company also announced a number of other executive moves:

    • Rollin Ford, the company’s chief information officer, was promoted to chief administrative officer.

    • Karenann Terrell, Walmart’s assistant chief information officer, will take over as chief information officer.

    • And Gisel Ruiz was promoted to executive vice president and chief operating officer for Wal-Mart U.S. She most recently served as executive vice president of people for Wal-Mart U.S.
    KC's View:
    It has long been the feeling around here that it won’t be long before the person sitting in the CEO chair at Walmart will be a woman, especially since the company has had more than its share of challenges in recent quarters. And you start to get the sense with some of these moves that maybe that time is coming closer.

    It is going to have to be the right person, as well as the right woman - someone who has an intuitive feel for the stores, the shoppers, and the people on Walmart’s front lines. But the ground may be shifting a bit at Walmart, with people at the highest executive levels of the company not all looking alike, not all belonging to the same country clubs.

    Published on: January 23, 2012

    Sources tell MNB that Amazon.com is implementing changes in what it requires from its grocery suppliers, demanding what one person called “an incredible discount from all grocery suppliers. It's my understanding that a lot of suppliers, big and small, are walking away from Amazon."
    KC's View:
    I haven’t been able to get my hands on the actual correspondence, but I’ve gotten this from enough places that I’m assured of its authenticity. And, I am assured that the demands from Amazon are perceived in a number of places as unreasonable...though “unreasonable” isn’t exactly the word that people used to describe them.

    In thinking about this story, I was reminded - as I often am when considering any story - of a movie. In this case, John Huston’s The Man Who Would Be King (1975), based on the Rudyard Kipling short story.

    You may remember that the story follows Daniel Dravot (Sean Connery) and Peachy Carnehan (Michael Caine) two British adventurers who venture into Kafiristan (actually Afghanistan) in search of treasures and riches. They only get into trouble when Dravot is seen as a kind of god by local villagers, and he begins to believe his own press ... and then things go badly. It is, the story says, a short leap from being a pioneer to becoming arrogant.

    Amazon better be careful on this one. There are all sorts of projections suggesting that in less than a decade it will be as big as Walmart, but it isn’t going to help if suppliers feel they are being plundered and exploited in the process. Amazon will go from being a partner to the enemy ... and suppliers will be motivated to do what they can to help Amazon’s competition.

    Published on: January 23, 2012

    The New York Times reports on a new study from the Pew Research Center’s Internet and American Life Project saying that the number of US adults who owned tablets and e-readers almost doubled from mid-December 2011 to early January 2012.

    According to the story, the report “found that the share of adults who owned tablet computers increased to 19 percent from 10 percent, with the same increase for adults who owned e-readers.”

    The Times writes that “the increased ownership of tablets was especially pronounced among highly educated people with household incomes of more than $75,000. Almost one-third of people with college degrees now own tablet computers, the report said. Women were heavier buyers of e-readers than men, a finding consistent with surveys that indicate women tend to buy more books than men.”
    KC's View:
    This is huge movement, and emblematic of the shifts taking place in consumer behavior.

    Published on: January 23, 2012

    The Denver Post reports that it looks like Trader Joe’s plans to plant a flag in Colorado - the company has registered its business name with Colorado’s secretary of state.

    The always prescient and reliable Burt Flickinger, of Strategic Resource Group, says that he expects that Trader Joe’s could have 15 stores there within five years and 25 stores within seven to eight years.

    "Colorado is a perfect market for them," Flickinger tells the Post. "There is a newer strategic shift by Trader Joe's to open stores close to major public and private higher-education institutions, and Colorado has those in Boulder, Denver, Fort Collins, Colorado Springs, Durango and elsewhere.”
    KC's View:
    One of the things that the story notes is that “Colorado's liquor laws have posed a stumbling block to Trader Joe's expansion plans in the state,” but speaking as someone who patronizes a Connecticut Trader Joe’s that is not allowed to carry wine, I wouldn’t worry about that too much.

    Great stores, and I’m sure they will find a profitable home in the Rocky Mountain State.

    Published on: January 23, 2012

    The Los Angeles Times reports that kids have Nickelodeon, women have Lifetime, and sports enthusiasts have ESPN ... and so the time seems to have come for aging baby boomers to get their own cable channel. Hence, a new network called RLTV, described as “a cable channel designed for the AARP-adjacent.”

    RLTV, the story says, has “talk shows including ‘Making Medicare Work for You,’ documentaries such as ‘To Not Fade Away’ about the early stages ofAlzheimer's disease and, on a lighter note, reality shows including ‘Another Chance for Romance’ and ‘Sunset Daze,’ best described as a"Jersey Shore" for adventurous senior citizens in Surprise, Ariz.

    “Fronting the shows is a collection of aging TV presenters. Former morning news hosts Joan Lunden, 61, and Deborah Norville, 53, have RLTV shows. So do former prime-time personalities Sam Donaldson and Florence Henderson, both 77.”

    The story notes that cable companies will see the advantages of carrying such a network: “The power of the aging baby boomers can't be ignored. According to the 2010 census, there are more than 99 million Americans older than 50. The over-50s are also one of the fastest-growing groups on Facebook.

    “And they have money. The AARP, citing information from the U.S. Consumer Expenditure Survey, says adults over the age of 50 spent $2.7 trillion on consumer goods in 2010.”
    KC's View:
    If you want to talk to these shoppers - and it has been pretty well established that a lot of marketers want to - then it is important to know about the availability of such networks.

    BTW...I love that RLTV originally stood for “Retirement Living TV,” but now has been recast as “Redefine Life TV.”

    Published on: January 23, 2012

    Delhaize-owned Bottom Dollar Foods has announced the opening dates for its first 14 Pittsburgh stores, with seven scheduled to debut on Thursday, January 26, with appearances by a range of Pittsburgh Steeler football players (who have nothing else to do at the moment). Seven more stores are slated to open on Thursday, Feb. 9.

    The company has 29 stores in Pennsylvania and New Jersey, and will soon open its first stores in Ohio. After the 14 grand openings in January and February, Bottom Dollar Food will operate 43 stores in three states.

    "We look forward to opening our doors to the greater Pittsburgh and Youngstown, Ohio, communities over the next several weeks and bringing a new grocery option to consumers," said Bottom Dollar Food President Meg Ham in a prepared statement. "Customers will find Bottom Dollar Food unique because we offer unbelievably low prices, carry quality private brands and the national brands that matter most, and offer a meaningful, efficient assortment of fresh produce and meat. Additionally, our associates provide our customers an energetic and lighthearted shopping experience."
    KC's View:

    Published on: January 23, 2012

    • Walmart-owned Asda Stores in the UK said today that it plans to invest the equivalent of close to $800 million (US) to open 25 new stores and three new warehouses there, as well as renovating 43 existing stores and creating some 5,000 jobs. The announcement comes after market leader Tesco said it would spend millions renovating its stores after a disappointing profit projection for the remainder of the fiscal year.
    KC's View:
    The competition has been hot and heavy the past few years in the UK ... but past, it seems, may just be prologue.

    Published on: January 23, 2012

    • In the UK, This Is Money reports that Tesco plans to “tailor product ranges in individual stores to cater to the incomes of nearby families. The move is designed to breathe life into UK sales after a disastrous fall in Christmas takings.

    “In poorer areas, where there is a threat from successful budget chains such as Aldi, Lidl and Iceland, Tesco will stock and promote more value lines, it is claimed. And in affluent areas stores will push the retailer’s top-of-the-range Finest lines in an attempt to stop customers deserting to the likes of Sainsbury’s, Waitrose and Marks & Spencer.”

    • Also in the UK, the Guardian reports that Tesco has fallen out of the top 20 in that nation’s “Thought Leadership Index,” which rates “companies that have caught the public mood or are highly rated by senior business figures.”

    According to the story, “In 2007, Tesco was placed third, behind Google and Apple. In the 2012 survey, Apple is top followed by the John Lewis Partnership and Google. The Co-operative Group and Marks & Spencer are the only other retailers to make the top 10, which also includes Twitter, Innocent, Facebook and Microsoft.”

    Tesco is 24th in the current survey.
    KC's View:
    Tesco has to be careful not to fall into the trap of throwing anything and everything against the wall to see what works. There will be that temptation, especially because the financial markets seem to be casting a jaundiced eye at the company for the first time in a long time.

    Published on: January 23, 2012

    The Chicago Tribune reports that Office Depot is testing a new PayPal in-store point-of-sale system in a few of its stores. The announcement follows a similar announcement that Home Depot is testing the new PayPal system in 51 of its units. And PayPal has said it plans on having the service working in some 20 brick-and-mortar retailers by the end of the year.

    According to the story, “PayPal's ‘wallet in the cloud’ initiative lets shoppers who have a PayPal account pay by simply typing their mobile numbers and PINs at checkout counters. They can also pay by swiping a PayPal card and entering a PIN.”
    KC's View:

    Published on: January 23, 2012

    ...with occasional, brief and sometimes even gratuitous commentary in italics...

    • The Wall Street Journal reports on the letter that Target sent to its vendors, asking them for help in preventing “showrooming,” which is when people go into a brick-and-mortar retailer to look at a product and then go online to purchase it, often at a better price.

    The Journal notes that Target “suggested that suppliers create special products that would set it apart from competitors and shield it from the price comparisons that have become so easy for shoppers to perform on their computers and smartphones. Where special products aren't possible, Target asked the suppliers to help it match rivals' prices. It also said it might create a subscription service that would give shoppers a discount on regularly purchased merchandise.”

    This doesn’t happen very often so I have to point out that MNB had this story - and the complete text of the memo - six days before the WSJ did.

    But I believe that Target is doing what is has to do - create and exploit points of differentiation wherever and whenever possible.


    • The Washington Post reports that Costco “is making greater inroads into the Washington area with plans for a new store on a 12-acre tract in Alexandria, one of three locations in the works in the region. Costco stands to gain grocery market share, albeit marginal, at a time when traditional players, like Food Lion and Superfresh, struggle to compete in a changing industry.”

    • The Los Angeles Times reports that Taco Bell is coming out with a new “First Meal” breakfast menu that “will include Cinnabon Delights, breakfast burritos, Johnsonville sausage and egg wraps, Tropicana orange juice, Seattle’s Best Coffee and more.” This is part of a broader effort to upscale the fast feeder’s menu offerings to better position it against Chipotle.
    KC's View:

    Published on: January 23, 2012

    • Safeway announced that Tom Keller, president of its Vons division, is retiring from the company after 40 years in the food industry, most of them with Safeway. Keller has been president of Vons since 1999.

    Gary Rocheleau, currently Vice President, Retail Merchandising Execution, will lead the Vons Division on an interim basis.

    KC's View:

    Published on: January 23, 2012

    I really liked this commercial yesterday, which ran during the football games. The message is a good one, the production is strong, and the music is catchy. It’s worth watching by by clicking here.
    KC's View:

    Published on: January 23, 2012

    MNB had a piece last week about Apple working to get textbooks onto iPads and iPads into the hands of students, which I think is a really good idea because it allows for constantly updating of material (textbooks are notorious for being out of date) and engaging with students in ways they will find accessible.

    But one MNB user demurred:

    ...except for underprivileged students who can't afford iPads and have to suffer the effects of a widening achievement gap as more privileged students taking advantage of the new technology.

    It will be our responsibility as a society to make sure that this gap does not exist. One of the ways to do this would be to view such a shift as an investment, not a cost ... an investment in having a better educated citizenry that is better equipped to work and contribute productively to society.

    I did a quick check, and it costs more than $5 million to build one drone aircraft for the military. Let’s make the math easy and assume you can buy a tablet computer for $500. This means that for the cost of one drone, you could buy 30,500 tablet computers. Which is a better investment? And could there be a lot of other places where you could economize as a way of helping to educate these underprivileged students?

    I’m just asking...



    On another subject, an MNB user wrote:

    Here is a great example of the disconnect between On-line vs Brick and Mortar.

    I ordered a GPS unit for my car on Staples.com. I checked to see if the local store near me had inventory. They did, so I ordered and selected in-store pick up as my delivery option. I was traveling the next day and would not be around for the delivery. After placing my order, I called the store to see if I could come immediately to pick up the unit since I had just paid via credit card on line. I was told by store management that while they had inventory on my particular SKU, they could not release it to me since I needed to wait until they receive my particular order from their warehouse. Delivery should take about 3 days. The .com business is operated independently from the brick and mortar.

    So, as a customer I had to wait 3 days for an item I had paid for and was already in the store that I had requested a pick up from. My other option was go back and cancel my original order on line and then go and purchase from the store directly. Staples - you had better execute better than this. I am a customer who uses your product and services on a regular basis. However, this is unacceptable.





    MNB user Gary Harris had some thoughts about Kodak’s bankruptcy:

    Although not a surprise to us in Rochester who have witnessed the shrinking of a giant industrial leader to its present state, a sad day nonetheless. In the 1980’s Kodak employed over 60,000 people in Rochester, today the number is closer to 7,000. Unlike many other communities who lose such a large part of their economic engine, Rochester has been one of the more stable economies over the past several decades and is still in a good position to weather this reorganization.

    It’s important to note that the main reason Rochester is in such good shape is the influence of George Eastman and the company he founded to not only change the way the world records its memories, but to give back to the community to strengthen it for the future. We have world class institutions for community giving (Greater Rochester United Way), education (University of Rochester, Rochester Institute of Technology), health care (U of R Medical Center and Strong Hospital), and culture (Eastman School of Music, Eastman Theater, Hochstein Music School) and many more examples which can trace their roots and their growth to the philanthropy and vision of George Eastman and Eastman Kodak Company.

    No matter what the future holds for this iconic brand, all of us can learn from their successes and their failures, and for those of us in Rochester particularly, we have a tremendous legacy of community support and involvement which we now are the stewards of. May we be found worthy of the task before us.


    Another reader chimed in:

    It is obvious that the Digital Revolution has victims as well as success stories. The successes , like Google, Facebook, Apple and Amazon.com are well chronicled. The losers are the US Postal Service, music publishers, book retailers, newspaper publishers, and now Kodak. In all cases the losers have “emphasized the fundamentals“, and desperately tried to make a out dated business model work through cost cutting and short term revenue enhancers. I guess the message is that if you see the digital steam roller heading towards your business, think revolution not evolution. Hard to do, but it is what separates the successful managers from the footnotes.




    Regarding Friday’s story about the “Bizzie” awards, given by Michael Sansolo and me to 2011 movies that we thought offered the best business lessons, one MNB user wrote:

    I'm not blasting you and I loved The Guard and The Way in particular but it would be nice if some great movies (especially involving leaders) from 2011 had a female lead.  I took my 14 year old daughter to see Iron Lady on Saturday night.  She was the youngest in the theatre and we had great discussions afterwards.  I make it a point to take her and her younger sister to see any movies with female leads.

    You are absolutely right about the importance of seeing movies with strong women in leading roles, though I can assure you that we didn’t pick guy-oriented films on purpose.

    I will have to respectfully disagree with you on The Iron Lady, though. I’ll write in more detail about it on Friday in “OffBeat,” but I have to say that I hated it. I mean, really, really hated it. But more on that later in the week...

    Another MNB user wrote:

    Thanks for your post on business lessons from movies – I’ve loaded up my Netflix queue with the movies you mentioned.

    That makes us supremely happy. Our work here is done. (At least for the moment.)
    KC's View:

    Published on: January 23, 2012

    In the AFC Championship Game, the New England Patriots defeated the Baltimore Ravens 23-20.

    And, in the NFC Championship Game, the New York Giants went into overtime to beat the San Francisco 49ers 20-17.

    The Giants and the Patriots will meet on Sunday, February 5, in Super Bowl XLVI, in a rematch of their 2008 Super Bowl meeting (which the Giants won 17-14, ending a season in which the Patriots went undefeated until that final game).
    KC's View: