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    Published on: February 23, 2012

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

    Couple of great stories lately that struck me as highlighting innovative organizational behavior and that I thought were worth sharing here on MNB.

    Both were from the New York Times. The first one was in the “Corner Office” column, a Sunday feature in the business section that has terrific interviews with CEOs. (If you’re not reading it each Sunday, you should be.)

    The interview was with Steve Stoute, CEO of the Translation LLC ad agency, and he talked about the importance of organizations having very specific belief systems, and of being vigilant lest bad behavior erode those systems and lead to the demise of the organization. Those belief systems often are summarized in mission statements, and Stoute says:

    Sometimes, I would even go as far as to have people sign a group document — almost like a constitution — so that everybody is aligned around the mission statement, so everybody knows what they’re responsible for. I’m very upfront, I expect the best, and I hold people accountable for everything that comes out of their mouth. Don’t say you’re going to do something and not do it, because in a company of this size, everybody is directly responsible for the person next to them.

    It’s like one of those moments where everybody’s holding hands. So if somebody doesn’t do something, it’s felt throughout the organization. The organization’s not big enough to withstand those kinds of errors. At big companies, that happens all the time, and it can take years before it starts to affect the bottom line. Small organizations have the benefit of being nimble, but the threat is that when one person catches a cold, everybody catches a cold.

    While he’s talking about small organizations, I think the concept can apply to big companies, too ... maybe they have to be broken down into smaller segments (like, say stores?), but it is critical for any business to be coalesced around a point of view and a way of doing business.

    The other story that intrigued me was about Boston Beer Company and its founder Jim Koch, and how something he did back in 1995 could be brewing up a small revolution in how companies go public.

    To be honest, I didn’t remember this ... but when Koch took his company public 17 years ago, he structured it so that his loyal customers were at the front of the IPO line, “and made sure that they could buy shares at the most favorable price. He wanted to help beer guys, not Wall Street guys. He did this not as a philanthropist but as a die-hard capitalist, believing that his fledgling beer company would be better off in the long run if he democratized its initial public offering.” In Koch’s words, he was “more interested in beer drinkers than wine drinking fund managers.” And he acted on that belief.

    Koch even hung fliers on six-packs telling customers that he was selling shares in the company. He guessed, when talking to the SEC, that some 30,000 people would be interested in buying shares ... and some 100,000 people sent in checks. (He had to run a lottery to pick out 30,000 people at random, and sent 70,000 checks back.)

    There are great examples of business leaders thinking differently.

    In the case of Steve Stoute, he seems to understand that his organization is only as powerful as the people on the front lines, and he’s found a way to get people to focus on a corporate value system. And in Jim Koch’s case, he seems to have avoided the problem of putting Wall Street first and Main Street second.

    Those sound like pretty strong cultural imperatives to me.

    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: February 23, 2012

    by Kevin Coupe

    An MNB user passed along an Eye-Opener from the MIT Sloan Management Review, in which management consultant Don Peppers, who suggests that there is one possible way for retailers to ”make a profit when your customers know everything about your costs and pricing and have more or less instant access to your strongest competitors, anywhere in the physical world.”

    Charge admission.

    There is some evidence that this can work, he says. Costco does it. Sam’s Club does it. Some bookstores, Peppers suggests, charge admission for readings and book signings by big-name authors.

    “It isn’t hard to imagine a retailer charging customers a one-time fee for entry, and refunding that fee against any product bought within, say, 48 hours,” Peppers says.

    Maybe it is because I’m not as smart as Don Peppers, or because I don’t have as vivid an imagination. But I’m not sure that in today’s competitive environment this really makes a lot of sense, except as consultant-speak.

    But it strikes me that Peppers really is using hyperbole to make a bigger point - that price and accessibility simply are not differentiators anymore, because anybody can underprice you, and anybody can be more accessible. Enlightened marketers instead have to focus on the value of the product, the values behind the product, and the ultimate utility of the product in a person’s life.

    That, to me, makes sense. And is the real Eye-Opener.
    KC's View:

    Published on: February 23, 2012

    Inc. has a piece about the newly released “U.S. Retail Highlights: 2012 Outlook” report from Collier’s International, which points to a number of trends to which retailers need to pay heed if they are going to be successful:

    1. E-commerce will continue to grow “exponentially,” with mobile sales likely to grow 49 percent to $10 billion. But the numbers don’t look quite so rosy for the totality of retail, with the National Retail Federation predicting “a mere 3.4 percent increase in retail sales for 2012, compared to 2011’s 4.6 percent.”

    2. “The report recognizes the bargain hunting consumer who uses their phone to search for better deals elsewhere while shopping at a store as a ‘potential game-changer’ and that businesses need to find new ways to snag their attention and cement loyalty.”

    3. “Although offering discounts or sales is typically a sure-fired way to attract business, when it comes to determining a retailer’s value, more consumers will choose ‘experience’ over price - in that they seek unique products, intuitive customer service, more flexible shopping options with multi-channel integration, etc.”

    4. “There will be a significant increase of retailers offering limited-time-only (LTO) items and mobile-device deals to generate a sense of urgency to buy and to be where consumers are in the digital and social media spaces.”
    KC's View:
    There is a lot of wisdom in some of these trend prognostications.

    Think about it. It suggests that consumer behavior is going to change in some fundamental - even contradictory - ways. People using mobile devices to find better deals, sometimes on a limited-time basis, but simultaneously responding to value propositions that are not just about price, but that also recognize their own life situations and values.

    The real shift is to a more dynamic relationship between the shopper and the store. Things are going to be changing constantly - every consumer is going to be in play all the time, and every retailer is going to have to find new ways of being relevant to those shoppers.

    Published on: February 23, 2012

    Supervalu announced yesterday a series of imminent Save-A-Lot openings, saying that it plans to open three of them in New York (in Auburn, Holley and Hamburg), bringing the total there to 52; three in Ohio (in Wadsworth, Cincinnati, and Columbus), bringing the total there to 128; four in Pennsylvania (in Tyrone, Meadville, Erie, and Peckville), bringing the total there to 76; and three in Tennessee (in Woodbury, Nashville, and Chattanooga), bringing the total there to 108.
    KC's View:

    Published on: February 23, 2012

    Marketing Daily reports that Cabela’s, the outdoors clothing and equipment retailer, has developed a new, 40,000 square foot format called Cabela’s Outpost, which will be opened in “towns with populations of less than 250,000 people -- too small to support a full-sized store, but likely to have plenty of people avid about hunting, fishing and camping.”

    The story says the “Outposts will still have the chain’s signature rugged outdoor look and theme, but will feature seasonal product assortments in a more flexible floor plan, which can create very different looks throughout the year. Digital signage will also be an important part of the interior layout.”

    Perhaps most important - the stores will feature ordering kiosks that will connect the stores to the Cabela’s online catalog; people can order products for free-pickup at their local Outpost unit.

    "This is an entirely new concept for us, and that is what is so exciting," CEO Tommy Millner says in a prepared statement. "They will extend our footprint into smaller markets and increase the range in which the Cabela's retail experience reaches our loyal customers."
    KC's View:
    This is the future. Small stores. Virtual stores. Changing expectations. Changing benchmarks. Looking for relevance at every turn and in every transaction.

    Published on: February 23, 2012

    • In the UK, has a piece about how public relations issues with which Tesco has been grappling.

    For one thing, it continues to deal with criticism of its decision to abandon its plan to label every product in the store with information about its carbon footprint, a move that Tesco said was prompted by the fact that it was too expensive and time-consuming to accomplish.

    At the same time, the site says, Tesco set up a not-for-profit group to raise money for women’s health charities, but then got criticized because it promote the effort with a “cheeky marketing campaign” that some saw as anti-feminist. And it also has taken fire from some about its participation in a government-sponsored youth work program that gave kids apprenticeship-style jobs at no pay, which some described as a “slave labor” scheme. (In fairness, Tesco does promise young people the chance to interview for a full-time job when their apprenticeships have been completed.)
    KC's View:
    Tesco seems to be in one of those “if it can go wrong, it will go wrong” loops. And, like in Groundhog Day, it probably seems like it’ll never end.

    Published on: February 23, 2012

    • The San Francisco Chronicle reports on a company called that “recently introduced a new webpage dedicated to Walmart coupon codes. The Walmart shopping deals and coupons featured on the site ... go across consumers shopping across multiple categories like electronics, clothing and shoes, home furnishings and decor, and more. The deals available on the site range from two-day free shipping codes, to discounts on furniture and up to 20% discounts on women's apparel, kids items, in addition to home & garden items.”
    KC's View:

    Published on: February 23, 2012

    • The Chicago Tribune reports that Amazon has removed some 5,000 titles from its Kindle e-book selection, saying that it was not able to come to an agreement with Chicago-based Independent Publishers Group (IPG), which said that the e-tailer was putting pressure on it to reduce already narrow margins.
    KC's View:

    Published on: February 23, 2012

    WHEC News reports that Wegmans plans to open up a second Next Door Bar & Grill, adjacent to its new King of Prussia, Pennsylvania, store that is scheduled to open this May.

    The first Next Door Bar & Grill opened in 2009 next to the Wegmans store in Pittsford, New York.

    Advertising Age reports that Post cereals have had a tradition of being “tossed from one conglomerate to the next and without a cohesive strategy.” But now that Post has become a stand-alone company after a spinoff from Ralcorp (which acquired it from Kraft four years ago), it is “striking out on its own, charting a fresh course as a stand-alone company with new marketing and retail plans with the aim of breaking through in the competitive $6.4 billion ready-to-eat cereal category ... The company's new management says the brands will benefit from more focus and is planning a multi-pronged attack to correct what it says Ralcorp did wrong. Plans include more-aggressive marketing and promotional spending, increasing social and digital efforts, beefing up sales staffing and putting more emphasis on PR, according to regulatory filings.”

    • The Associated Press reports that Walgreen and a number of independent drugstores “are investing in a nationwide push to give pharmacists a chance to work more with patients to improve care and cut costs.

    “The drugstores have invested in RxAlly, a Leesburg, Va., private company that is launching a network involving 20,000 pharmacies focused on better care coordination. The network aims to help pharmacists work more with patients in several ways. That includes coordinating prescription refills, making sure the drugs a patient takes don't conflict or talking to a patient about the importance of taking medicines correctly, according to a statement from RxAlly.”
    KC's View:

    Published on: February 23, 2012

    No surprise here...we continue to get email about the state of affairs at Supervalu.

    One MNB user wrote:

    Just a comment on the most recent response to the Supervalu situation.    A reader responded "I would like to take offense at your statement that those of us who have left "did not seem to be able to do the work to fix it (issues, sales, downward slide, etc.) either’.  And also in the statement that Supervalu has done ‘a good job of ensuring the top talent was retained.

    I am one of the 800+.  The writer of the original response is welcome to listen to my phone calls from younger, inexperienced "Team Members' who are now being asked to perform tasks they are not experienced in or have never been exposed to.

    Someone referred to Craig Herkert as "trying to do all that he can to turn it around, trying to be the merchandiser coach (caught in the weeds) and being the visionary leader (in the air)."

    A better description of Craig Herkert would be that, as his competitors merchandise, operate their stores and service there customers providing a shopping experience which compels the consumer to return, CH is out in the parking lot rounding up shopping carts.

    Prime example would be, as I toured our stores this week (not the stores in Great Britain), our main competitor .2 miles down the road had 18 ounce private label Peanut Butter at 2/$4 (every day price).  Our price on the same item--$2.99 (every day price).  Now, as a consumer I would ask, what makes our product 50% better?  And this is the industry leading programs/processes that CH and his 17 VP's have put into practice.

    Yes, that Kool Aid better taste good.  "Eight Great Plays To Win" should include being competitively priced.   And please, I get into the stores on a daily basis and this is just one of the MANY examples I can provide.

    But then, what do I know, I am only a 46 year experienced industry professional who had his "position eliminated" two weeks ago.

    Another MNB user wrote:

    I enjoyed the thoughtful post on Supervalu yesterday.   While I am not, nor have every been an employee of Supervalu, I would like to make a comment on the last paragraph of that post:  “I too hope that what made Supervalu (and Albertsons and American Stores) great can be unearthed and change the game.”

    I believe the truth is that the game has changed and the successful practices of the past for American Stores, Albertsons, and Supervalu, in my view are more likely to be part of the problem than the solution.    The game changes are in all likelihood what created the environment that made these acquisitions and mergers necessary.    In my eyes, the Supervalu experience is very similar to that of many other food retailers, which is symptomatic of the structural changes in the industry.

    On the subject of a new “virtual supermarket” test in Australia, MNB user Gail Nickel-Kailing wrote:

    This is the third example of this kind of "virtual supermarket" that I've seen in the last few months. The first was in Korea - in the subway.

    It's really critical for people using mobile applications like this to make sure that you really CAN get a good cell connection where you're expected to scan codes. There's nothing more frustrating than to try to get a connection in a building like the Javits Center or a subway - bad connection = bad customer experience.

    That said - I absolutely adore the idea of instant communication and "impulse" opportunities. I've got Amazon Prime because I really like getting my items in 2 days without paying extra shipping. So I admit it - I'm into instant gratification.

    BTW - I'm a 62 year old female with an iPhone, an iPad and 2 laptops - call me connected!

    Take care, eat well, be well!

    You’re absolutely right about the opportunity that impulse marketing offers.

    Case in point. I’ve promised my daughter and her boyfriend that before they go off to college, I’m going to give them a private course in classic movies. (Unlike my sons, she never seemed interested in sitting down and watching great old movies with me, or maybe she just had better things to do. But now, maybe because her boyfriend is interested, she is.)

    One of the first things I am going to show them is the first two Godfather movies. Now, I have a boxed set, but yesterday I got a special one-day only offer from Amazon - $25 for a Blu-Ray high-def version of the movies for just $25. Which I leapt at, just because I think the better the quality, the better the experience.

    I’m into instant gratification, too.

    Regarding Wawa’s planned Florida invasion, MNB user Chris Utz wrote:

    I hope Florida works out for Wawa.  They should be popular with snowbirds from the northeast.  Too often, a hometown retail hero stubs their corporate toe trying to compete in different marketing area.  Food Lion's Texas entry comes to mind…

    MNB user Steven Ritchey disagreed with my assessment yesterday of Pete Rose - I said that while he deserves to be lauded for his on-the-field achievements, he ought not be elected to the Hall of Fame because he broke baseball’s sacrosanct “no gambling on baseball” rule.

    Yes, he  bet on baseball, he lied about his gambling.  But if morals were part of the criteria for being in the Hall of Fame, many of those who are there, would never have gotten within sniffing distance.  Besides, what is moral to some, is repugnant to others so morality is too subjective.  No, it should be about what you did on the field, and  because of that, I think Rose belongs in the Hall of Fame.  You can respectfully disagree with me, that is your right.


    I’m not talking about morality here. I am talking about the integrity of the game, and the importance that it not be undermined by people in the game who gamble on it.

    That, to me, is disqualifying. Pure and simple.

    But, of course, you can disagree with me, too.
    KC's View: