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    Published on: February 14, 2012

    by Michael Sansolo

    Her name was Beverly and she told me she was into the death business. I’m not kidding.

    Ordinarily on hearing such an opening line, I’d probably find a convenient excuse to get very, very far away. This was not an ordinary experience. I was in seat 10c and Beverly in 10a on a long flight across the country. So I decided the best course of action might be to figure out where she was going. I’m glad I did.

    It turns out that Beverly works for one of the nation’s largest operators of funeral homes and had just finished a week of running training classes on emerging issues in the funeral home business. The more I listened, the more I realized that virtually every problem Beverly and I discussed had a direct parallel with sessions I was running at the NGA and IGA co-located events in Las Vegas this week.

    Consider three: recruiting, social networking and logistics.

    • Recruiting: We have a problem in the food industry when it comes to attracting new talent. For far too many people the jobs they take in our industry are just that - jobs, not careers. And many companies continue to struggle to attract the kind of talent who can run a store at a higher level or be positioned for future growth. Whatever shortcomings we might have though, it can’t match the challenges in the “death business” as Beverly put it.

    She told me her degree was in graphic design and honestly she never saw herself working with funeral homes. But she started with her company as a consultant and saw the benefits of working with them. Now she’s a full-blown trainer, running around the nation to conduct seminars. As the students on a panel I ran at NGA explained, the food industry has opportunity at a time when people are looking for jobs. The question becomes, how do we help people see the range of possibilities in the industry so that a job can turn into a career. If you need thoughts on this, just ask a student at one of the universities with food management programs. Trust me, I heard loads.

    Social networking: Now I’ve been talking about the impact of this for a while and, as I wrote in my extra column Monday, the newest section of the Coca-Cola Retailing Research Council report on social networking is now available.

    Visit http://bit.ly/UntanglingtheSocialWebPart2 to get the latest chapter, or click here to download the introduction and first section of the report.

    And in the interest of full disclosure, let me once again note that I am the research director of the project.)


    But if you want a clear sense of how much social networking can influence decisions, think of death. Obviously it is a horrible time for families. They are dealing with loss and sadness on an epic scale and suddenly they need to interact with an industry they have never before used. They don’t know services, products or pricing.

    Social networking, Beverly said, changed all of that. Now people know where to go for advice in even their darkest hour. Now they come into funeral homes armed with information on pricing and what they should and should not do. If you doubt the human need or the power of social networks to influence decisions, simply consider that. And understand that a person willing to reach out for help at the time of a family death will find it very easy to seek advice when it comes to recipes, prices and opinions on items in your store.

    • Logistics: Like every industry, supply chains make all the difference in success and failure. Poor logistics in the food industry can lead to out of stocks, inefficiency and higher prices. In the death industry it leads to horrifying errors of people being buried in the wrong graves, bodies being mishandled and businesses losing their reputation. As Beverly told me, many of her training sessions are about using emerging technologies to streamline systems and make certain everything is working as best it can.

    And just like that I found myself rethinking my apprehension at sitting with the merchant of death. There really was so much to learn, especially about keeping a business alive.


    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 .
    KC's View:

    Published on: February 14, 2012

    Notes and comment from the Content Guy...

    LAS VEGAS - There is an inherent sense of unreality when , on the way to the National Grocers Association (NGA) annual show each morning, one has to pass a “Kardashian Khaos” store in the Mirage Hotel here. (The economy must be getting better if people can afford to buy glitter t-shirts bearing the names and images of people who contribute absolutely nothing to the culture other than reality television programming and fodder for tabloid headlines.)

    That said, there were a number of things that I heard yesterday that surprised me, making me wonder if my understanding of reality is different from actual existence.

    Like the moment when Phil Lempert suggested in his early morning presentation that statistics show that “41 percent of all meals prepared at home are being prepared by the dad.” Really? Four out of ten at-home meals are made by a guy?

    I have to admit that I was shocked by that number. I’ll accept it on faith, but it is a lot higher than I would have expected. (Even twenty percent would have surprised me.) But if we accept that number, then a mainstream food retailing business has an enormous opportunity that it is not taking advantage of - marketing to these men with stores and departments that cater to the way they see the world. Most marketers still refer to the supermarket shopper as “she,” but it sounds like this could soon be an antiquated conceit.

    Phil Lempert also surprised me with his prognostication that supermarkets may start offering their version of “layaway plans,” which will allow people to essentially bank small amounts of money each week with their local food retailer, building up a balance that they then will be able to spend on big events without taking a big chunk out of distressed weekly budgets.

    Really? If retailers can convince people to do this, more power to them. And I suppose that the existence of the Starbucks card - which essentially does the same thing with automatic reloads - speaks to the possibility that, properly marketed, this kind of concept can catch on. Though it would seem to work against another prognostication, that consumers will continue to get smarter about their shopping habits, since simply handing money over to the retailer so it can get interest on it, virtually saving or investing it yourself, isn;t the smartest thing in the world to do.

    I was also caught off guard by something that single-store retailer Rob Santoni, of Baltimore, said in the panel discussion that I moderated about marketing to low-income communities. Each year, Santoni said, his store sells $3.3 million in lottery tickets ... meaning that even consumers in the toughest circumstances are able to find a dollar to gamble on the an act of faith - that one of these days they may win the lottery. (Santoni said his store has actually had one million-dollar winner.)

    But then, I got totally blown away by Juvenal Chavez, president of Mi Pueblo, a company with 21 stores in distressed communities in Northern California. Chavez said that he viewed the buying of lottery tickets as being the ultimate abandonment of faith, that people who buy lottery tickets have given up on the idea that they can earn their way to prosperity. And Chavez said that as a matter of conscience, he refuses to sell lottery tickets in his stores ... and won’t sell cigarettes, either. People of limited means should not be buying such things, he said, and he is not going to be complicit by selling them.

    And finally, Pat Burns, of Philadelphia’s The Fresh Grocer, acknowledged that operating in inner city neighborhoods and food deserts can be economically challenging, but suggested that such stores provide a kind of “moral profit” that exists less at more middle-class or upscale stores.

    Really? I’ve been doing this a long time, and I have to say that I don’t often hear retailers talk about “moral profit,” or suggest that they should be making value judgments about what to sell in their stores. It happens, but not often. I’m impressed, but surprised.

    In another general session,about social media growth, Craig Elston, senior vice president of The Integer Group, said something that seemed to resonate with the independent grocers in the audience - that “social media allows big players to have a localized discussion” with shoppers, which takes away one of the advantages that independent retailers often claim. (This was part of a broader discussion focusing on the social media study currently being done by the Coca-Cola Retailing Research Council, which Michael Sansolo has been referring to in recent weeks.)

    Elston said that the growth of social medias means that retailers need to ask themselves the following questions:

    What role can you play for your shoppers?

    How can you facilitate your communities?

    How can you add value to your communities?

    And while Elston was specifically referring to online communities, it seems to me that these questions can be thought of in a broader context, and are at the heart of how every retailer should operate ... especially independent retailers, who have their own challenges.

    BTW...the annual NGA Consumer Panel Report was released yesterday, conducted by Phil Lempert’s SupermarketGuru.com and sponsored by Valassis, and among the major findings were:

    • “Stores that help consumers feel more comfortable in this stressful economy will be better positioned to build shopping frequency and spending amounts.”

    • “Most consumers don't focus exclusively on low prices when selecting a primary supermarket.  For the fourth year in a row, low prices as being ‘very important’ slid, coming in at 39 percent in 2012, down from 51 percent in 2009.

    • “Shoppers are not exclusively loyal to their preferred store. More than three-quarters said that they would at least try out a new store in their neighborhood, especially if it was of their preferred size.”

    • “Stores supporting humanitarian causes are increasingly popular with consumers. Nearly 57 percent of U.S. adults would pay up to 2 percent more to buy food in stores that support causes they believe in, with 10 percent willing to pay up to 5 percent more. Causes that consumers want grocers to support include fighting childhood hunger and education issues.”
    KC's View:

    Published on: February 14, 2012

    Safeway announced yesterday that it has reached a definitive agreement to sell three of its Genuardi's stores in Pennsylvania - in Doylestown, Norristown, and Conshohocken - to Weis Markets.

    Terms of the deal were not disclosed.

    According to the announcement, “The transaction is subject to customary closing conditions and the completion of the previously announced sale of 16 Genuardi's stores to Giant Food Stores.”
    KC's View:
    It makes sense for Safeway to focus its efforts on places where it is stronger, and it makes sense for Weis to build its fleet in a way that strengthen its regional hand.

    This is when I start feeling old, because I start getting nostalgic for a time when Genuardi’s was one of the more progressive independent-minded retailers out there.

    Published on: February 14, 2012

    Supervalu announced yesterday that it will replace its existing private label lines - Flavorite, Richfoods and Homelife - with a new private brand called Essential Everyday. The rollout of the new label will take until early 2013 to complete, but will eventually be available to all of the more than 2,000 independent retailers serviced by the company.

    According to the announcement, “The private brand offering will include more than 2,400 products in the most important grocery and home goods categories ... Since June of 2011, Supervalu's traditional retail stores have been transitioning from their banner labels to Essential Everyday in the cereal, wholesome snacks, pasta and pasta sauce categories. Supervalu has run extensive consumer testing on the Essential Everyday name and packaging which returned very positive results. In package design research, Essential Everyday outperformed other store brands on measures of purchase interest, perceived value, premium perception and overall appeal. In addition, the change provides Supervalu with a single, recognizable brand name that will help create efficiencies in advertising and marketing the products on a national and local scale.”

    Leon Bergmann, president of Supervalu's independent business, said in a prepared statement that “early results have shown that Essential Everyday is performing very well at our 1,100 Supervalu owned stores, and we believe that our independent retailers will see a positive customer response as well.”
    KC's View:
    Lot of maneuvering going on at Supervalu these days. Check out some more email on the company’s travails in “Your Views.” It makes a switch like this private label move look inconsequential.

    Published on: February 14, 2012

    The annual Harris Poll Reputation Quotient (RQ) study is out, reporting on a survey that asked the general public to measure the reputations of the 60 most visible companies in the country.

    “This year's most reputable brand, Apple, benefits greatly from its hybrid status as a technology/consumer product/retail company, and earns the highest RQ score to secure the top spot in the ranking,” the study says. “It displaces Google -- last year's most reputable corporation, which now ranks second with an excellent score of 82.82. The Coca-Cola Company, ranked 15th in 2011, has surged into third place, despite any meaningful change in its reputation rating. Amazon.com moves up from eighth to fourth place and perennial reputation elite, Kraft Foods, ranked fifth.”

    The study continues: “RQ measures six dimensions that comprise reputation and influence consumer behavior. Apple has the greatest score overall. In fact, despite today's challenging environment, Apple records the highest score in the RQ's history, and is top-ranked in four of the six key dimensions of reputation,” including financial performance, products & services, vision & leadership, and workplace environment. Whole Foods ranked highest in the area of social responsibility.

    “Interestingly,” the study says, “ Amazon.com, which has no storefront and very limited human interaction, scores highest in the Emotional Appeal dimension -- this is the core strength of its reputation.”
    KC's View:

    Published on: February 14, 2012

    Time has a story about how McCain Foods is “using bus-shelter ads that waft the scent of oven-baked potatoes into the air. It’s a new take on scent marketing, a world that capitalizes on the consumer’s tendency to follow his or her nose.”

    The story goes on: “Using smells in advertising has been around for decades, but advances in technology will only make it easier for more companies to integrate more odors through more mediums. Stories broke last year about new smell-o-vision research being done by companies like Samsung to produce a compact add-on that could generate thousands of smells to accompany TV watching. That kind of tool could allow viewers to smell a company’s coffee while watching the tantalizing waterfall of beans.

    “In short, this potato campaign may be a boon for the food company, but it may also be a harbinger of the brave, new-fangled, smelly world to come.”
    KC's View:
    I always think things like bus stop aromas are kind of a gimmick rather than any sort of long-term trend, though I have to concede that I’d rather smell baked potatoes or any other variety of aromas rather than some of the odors that I’ve smelled at some bus stops.

    But the broader point is certainly something I agree with. I often make the point to people that in most supermarkets, if you were blindfolded, you’d have no idea you were actually in a food store - these stores are antiseptic, which means that they have given away one of their core advantages. That’s a shame.

    Published on: February 14, 2012

    Florida Today reports on how Walmart “has almost 400 in-store leases representing thousands of in-store businesses, including McDonald’s, Subway, financial institutions, and nail and hair salons,” as it leases out space to the same small businesses it often is accused of trying to destroy.

    In fact, image rehabilitation is at least part of the rationale behind the leasing strategy, the story suggests. But beyond that, the approach allows it to expand its one-stop shopping appeal to encompass even categories in which it may not be expert - like a florist, Terry Black, in Cocoa Beach with whom it contracted.

    “To be sure,” the paper writes, “Black’s arrangement is not a license to print money. His flower shop is seen by tens of thousands of shoppers each week, but that has not necessarily translated to an overflowing cash register. Among other compromises, Black must meet relatively low price points for his flowers, and he must compete for business with the cut flowers Walmart continues to sell elsewhere in its store.”
    KC's View:

    Published on: February 14, 2012

    • The Washington Post reports that the Virginia State Senate has voted “ to close the so-called Amazon loophole that has allowed the online retailer giant to duck the state sales tax.”

    According to the story, “Internet sales are subject to the same 5 percent Virginia sales tax as sales at bricks-and-mortar stores. But if an online retailer does not collect the tax, it is up to customers to pay it on their state income taxes, though it is believed that many do not know that.” The new bill, if it becomes law, “would require retailers with a physical presence in the state to collect and pay the state sales tax.” Amazon has one distribution center there, and plans to open two more by the end of the year.
    KC's View:

    Published on: February 14, 2012

    • The Huffington Post reports that Trader Joe’s has relented and “signed a Fair Food Agreement with the Coalition of Immokalee Workers (CIW), a community-based organization of mainly Latino, Mayan Indian and Haitian immigrants employed in low-wage jobs in Florida. The agreement requires the grocery store to pay a penny more per pound of tomatoes and to ensure better working conditions for tomato workers.”

    The agreement was signed as Trader Joe’s opened its first Florida store, in Naples. The story notes that chains such as Whole Foods, McDonald’s and Burger King had already signed the agreement.

    • United Supermarkets said yesterday that it has formed a strategic relationship with Red Mango, the #1 Zagat-rated frozen yogurt and smoothies chain in America, with plans to test a store-in-store concept offering healthy frozen yogurt and smoothies to its grocery guests.
     
    United is slated to open its first Red Mango counter later this month; the company says that the deal “is an important step in United’s effort to developing a well rounded health-and-wellness program for its guests.”

    • McDonald’s said yesterday that it is asking its pork suppliers to phase out the usage of gestational crates, where sows are kept while pregnant.

    The New York Times story on the move says that “animal rights advocates have singled out the crates, known as sow stalls, as inhumane, and several states have moved to ban or restrict their use not only in pork production, but also in the production of eggs and veal.”
    KC's View:

    Published on: February 14, 2012

    We continue to get email about the impact of the Supervalu layoffs.

    Yesterday, responding to a note suggesting that the company was on on the road to ruin, I wrote:

    Here’s the question that Supervalu leadership needs to ask itself: How many people who remain in the organization - as opposed to the people being laid off - feel this way? Because if these beliefs and emotions are gaining traction and growing at Supervalu, then they have even bigger problems than some believe.

    Which prompted the following email:

    Regarding the above question -- More than anyone will ever know.  Fear is not only a great motivator it’s a great shutter upper as well.

    As far as SV not existing anymore, the big question for the past few years has been “who took over who?”.  It doesn’t affect my work ethic because that is ingrained in me which is a plus for SV.  In return, I get a paycheck for which I feel fortunate.  If they want passion, however, they haven’t engaged me.  How can you feel passion where there’s no trust?


    And another MNB user wrote:

    You had challenged anyone inside SVU to comment on the recent cuts and overall situation. In a few words, it's not pretty. We're a very slow moving dinosaur with a CEO that's wrapped up in details that might be interesting but don't matter as much as the big things, examples; like sustainability or a mandate to use Yammer to talk to each other. We must crawl before we walk. We can't even agree on what's in the ad and at what price. We have a severe everyday pricing problem and the company is on a 5 year journey to correct (don't think we'll be here by the end of the journey). We keep cutting heads without really changing the workstreams or improving systems thus pushing more work on the good people that are still left. We collectively feel that a consultant, Oliver Wyman is running the show versus our leadership team.

    They have gotten rid of people that were trying change the company and kept those that have been here for many years. I've been here for over 10 years, at one time, I enjoyed what I did. Now it's tough to get up and go to work in the morning. In talking to others, we hope that someone will come in and take this thing over or minimally, the board will make some big changes in the exec wing and address key people that have been here too long (including Craig who spent 20 years with ABS) and can't think differently. Morale is at an all-time low.


    Drip...drip...drip..drip...




    Got a bunch of responses to my piece yesterday about transitional shoppers, which was inspired by a piece I read in the New York Times about interior designers who help divorced men create homes - not just houses or apartments - once they begin this new stage of their lives. This suggested to me a bigger idea - that there are a lot of people going through life transitions who can use help, and that retailers like supermarkets may be positioned ideally to help them, in the same way that Apple Store Genius Bars help people. (The Times piece was itself prompted by suggestions that an improving economy may allow some folks to pursue divorces that they could not afford to get during hard times.)

    One MNB user wrote:

    Regrettably, the vast majority of journalists leap into the recession pool with crude, common sense hypotheses that they rarely subject to serious scrutiny. While it is true that the divorce rate during the recession has indeed declined, that same rate has been in decline since its peak in 1982 - and the pattern is unlikely to ever reverse. Commonly cited explanations (depending upon the literature) include the rising median age of marriage, increasing rate of those opting out of marriage altogether, increasing rates of cohabitation, etc. Sadly, the one relic that does hold over from ages past is that working wives still tend to do more than 50% of the housework and cleaning—often much more. Shame on us men.

    But what we are forgetting is that all of those men getting divorced - and those coming down the pike in dwindling numbers - lived on their  own longer as they, on average, are getting married at older ages. Theoretically, they would have had more time to develop those skills if they wanted to. And it’s that latter point that is most relevant, for I have noticed a dramatic surge in interest in food, cooking and design by many of the men in my circle, an interest which doesn’t appear correlated at all with relationship status.

    The point here is that marketers are always looking for unique magical segments to create new demand - segments that exist in simplistic accounts of social trends - when they could be refocusing their energies on experience quality and execution for all of their customers. By the way, I agree that cooking classes are a wonderful offering, but for any and all consumers. Alas, from my anecdotal account, they don’t seemed to have panned out that well in the long run for the forward leaning retailers that dabbled with them a decade ago. Many of the “test kitchens” in Whole Foods seem to be increasingly empty. But that is, indeed, a single data point.


    From another MNB user:

    Wow.  In all my years of reading MNB, you’ve never insulted me, until now.  Your lead piece regarding marketing to newly divorced men left me scratching my head.  While I am quite happy that you have no personal experience with divorce, that lack of experience appears to have led you to some odd conclusions.  While no one would ever accuse me of being stylish (hence the interior design niche), the thought that divorced men have “no real idea how to live on their own…and are desperately in need of a civilizing influence” is false, absurd, and insulting.  I recently had a long conversation with a friend who was looking for positive male role models for her newborn son.  Many years ago (after my divorce) I tried to find positive role models in the media and, other than Marlin from Finding Nemo, only found shallow caricatures of the stereotypical incompetent man who is unfit to function in the world and is terrified of interacting with his children.  Whether the notion of the clueless divorcee comes from you or from the original article, it is false, insulting, and adds another stone to the hill that divorced men need to climb.

    Another notion that was missing from your article is that divorcees (both men and women) tend to be flat broke.  I’m not sure how anyone other than those that are independently wealthy could afford design services, so the pool of potential customers is quite limited.


    MNB user Mike Franklin wrote:

    Most times I agree with you…this time, I’m quite sure you have no idea of economic reality for most of America. These newly divorced men and women, have just lost half their income have given their ex-spouse ½ their stuff, and are deep into child support payments. These people are shell-shocked, and the last thing they need in their life is a design-therapist…Now, those that are helpless after a divorce will be re-married in a year…the capable others can’t afford a design-therapist.  Now the 1% of Americans that can afford the design-therapist services, already have one on staff.

    I certainly didn’t mean to insult anyone, and I get your points - the Times piece was about a rarefied segment of society (the top one percent?) and probably did not reflect broader economic and even cultural realities.

    But I’ll stick by my thinking that there are a lot of shoppers out there who are going through various kinds of transitions, and that they can use stores that serve as a resource, not just a source of product.



    On another subject - the decision by an Indian tribe on a “dry” reservation to sue several beer companies, accusing them of selling product in accessible locations in a way that increases the likelihood of alcoholism and addiction - one MNB user wrote:

    You may recall that I have taken each of our two high school-aged sons to the Pine Ridge Indian Reservation the last two summers to spend a week working with Oglala Sioux families building bunk beds, planting gardens, putting skirting on mobile homes, etc.   The reservation is one of the three poorest areas in not only the United States, but all of North America (with the exception of Haiti).  Unemployment exceeds 80% and alcoholism and the effects of fetal alcohol syndrome can be seen everywhere.   The suicide rate among pre-teens and teenagers is the highest in the US as young people eventually become old enough to determine that their futures are hopeless.    Our younger son was so moved by his experiences last summer that he is planning a return trip later this year.

    Despite all of these issues, the reservation itself is dry and no alcohol can be purchased anywhere within its borders.   The most egregious example of what the Oglala Sioux is suing the beer companies over exists just outside of Pine Ridge, SD.   Just 2 miles over the border from Pine Ridge is the community of Whiteclay, NE.   The village has about 15 residents and four liquor stores.   Those four liquor stores last year sold almost 200,000 cases of beer (approximately 4.5 million cans).  All of these stores have been noted for selling some of the products that you have actively campaigned against on your website (i.e., drinks containing both alcohol and caffeine such as “Four Loko”).   Several of the guest speakers we listened to during our stay on the Reservation shared with us personal examples of the horrible events that have happened to Oglala Sioux young people as a result of consuming these products.  Each year that I have visited there, the volunteer organization we work for has given us a bus tour of the Reservation and they have always included a visit to Whiteclay to show us the examples of devastation that the sale of alcohol has created.   It has not been uncommon for us to see several people passed out on the sidewalks and streets of Whiteclay well before noon.

    There does not seem to be an easy answer to this problem as the state of Nebraska appears to be unwilling to give up the revenue stream generated by the liquor sales in Whiteclay.   Apparently, the tribe has determined that they might have better success going after the beer companies.
    KC's View: