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    Published on: March 21, 2012

    by Kevin Coupe

    It is tough to sell stuff to people who don’t have much money to spend.

    The Chicago Tribune reports on a new survey finding that people in their twenties are carrying average debt loads of $45,000, including educational loans, credit cards, car loans and mortgages.

    According to the first PNC Financial Independence Survey, “at different stages in their 20s, individuals might owe from $12,000 to $78,000 ... The debt burden could soon get heavier. The interest rate for the U.S. government's subsidized Stafford loan program, which covers more than 7 million students, is scheduled to increase to 6.8 percent from 3.4 percent July 1.”

    That’s extraordinary debt with which, in essence, to begin one’s adult life. And it certainly presents enormous challenges to marketers.

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

    Published on: March 21, 2012

    Bloomberg reports that Walmart is under mounting pressure “to fix its lagging e-commerce operation” because its traditional customers increasingly are “trolling for deals” on Amazon.com.

    According to the story, “Five years ago, the world’s largest retail chain didn’t have to worry much about the world’s largest online mall. After all, only about a quarter of Wal-Mart customers shopped at Amazon, according to data from the research firm Kantar Retail. Now half say they do.

    “That’s changing as two trends converge: Wal-Mart’s traditional customers - bargain hunters making less than $50,000 a year - are getting more tech savvy, and less-strapped shoppers who began frequenting Wal-Mart during the recession are now rediscovering Amazon ... The changing habits of Wal-Mart’s customers and Amazon’s growing clout have Wal-Mart executives and e-commerce managers focusing on the Seattle-based giant as never before.”

    One of the things that Walmart is trying to combat is”showrooming,” which has people going into stores to see products and then ordering them online at lower prices. The story notes that “to battle the scan and scram phenomenon, Wal-Mart is working on a pilot concept called ‘Endless Aisle.’ If consumers locate an item in the apparel department, say, and the store doesn’t have the desired size or color, they can order it when they want on a smart phone.”
    KC's View:
    I can’t say this enough. Projections I’ve seen suggest that in less than eight years, Walmart and Amazon will be about the same size, setting up a clash of the titans that could lay waste to much of the retailing universe; the potential for collateral damage is enormous.

    Surviving this battle will be possible - but it will require retailers to be highly specific and focused about their own differential advantages. Sure, they’ll need to compete on price and have their own online accessibility ... but they’ll also have to have competitive strategies that will offer shoppers products and services they cannot get from either Walmart or Amazon.

    BTW...this may be a little self-serving, but it is relevant. on Wednesday, May 2, I’ll be involved in a presentation at the FMI 2012 show that will focus on this issue. Here is how it is described by FMI...

    “From Amazon to Zipcar: Innovations from the E-Revolution"
    Twenty-first century change often has the effect of giving even the most forward-looking business leaders a kind of whiplash. Just when you think you've figured out where things are going, something happens to challenge your thinking and threatens your way of doing business - a new competitor, a new business concept, a new distribution model, or some other out-of-the-box idea that nobody saw coming.

    In this interactive and engaging presentation, Tom Furphy - formerly of Wegmans and Amazon.com (where he developed the CPG business) and now the founder and CEO of Seattle-based Consumer Equity Partners, and Kevin Coupe, "Content Guy" for MorningNewsBeat.com and co-author of “THE BIG PICTURE: Essential Business Lessons from the Movies,” engage in a far-reaching and provocative dialogue about where traditional retailing is heading, what can be learned from e-commerce successes, how to compete in the new environment, and how to understand the new consumer.


    Mark it down. I hope you’ll join us.

    Published on: March 21, 2012

    In Pittsburgh, KDKA-TV News reports that Giant Eagle plans to launch its “Curbside Express” service early next month, allowing “shoppers to go online, check off whatever they want and have a personal shopper gather the items, bag them and load them into your car when you drive up.”

    According to the story, Giant Eagle’s Robinson Market District store “will be the first to offer Curbside Express. The first use is free, but will cost you about $5 an order after.”

    Expansion, the story suggests, will depend on how Curbside Express is received.

    Full disclosure: Giant Eagle’s Curbside Express service is powered by MyWebGrocer, which is a longtime and valued MNB sponsor.
    KC's View:
    To compete in this environment, retailers simply have to begin testing and offering services like these.

    Published on: March 21, 2012

    The Dallas Morning News reports that The Container Store has been testing an At Home service that brings its organizational and storage expertise into customers’ homes, and a Dallas test has gone so well that “ it plans to expand the service to all seven Dallas-area stores and later to other markets starting with the Northeast.”

    According to the story, “The fee for the initial assessment is $100 and that amount is applied to product purchases on the design plan. The fee to sort, stage or style is $75 an hour. That extra time is billed and agreed to in advance. The specialist will develop a design, have products installed and place items back into the space. The service covers any part of the house, from closets and pantries to kids’ rooms and garages.”

    At the same time, The Container Store seems to be planning to aggressively expand its footprint in the US. The News says that the company, which currently has 54 stores, “expects to eventually open 100 additional locations based on the reception its newest stores are getting in smaller markets such as Indianapolis; Nashville, Tenn.; and Charlotte and Raleigh, N.C.”
    KC's View:
    This is right in line with a longtime argument made here on MNB - that retailers, to be effective in an increasingly competitive environment, need to become a resource for information as well as a source of product. This like Apple’s Genius Bar ... and it does a lot to connect the retailer with the shopper in fundamental, almost intimate ways.

    Published on: March 21, 2012

    • Tesco-owned Fresh & Easy Neighborhood Markets announced yesterday a new video context for shoppers, “inviting customers to submit original easy meal idea videos through the Fresh & Easy Facebook page through April 30th for a chance to win $1,000 worth of groceries.”

    The contest builds on an initiative launched earlier this month, when Fresh & Easy introduced a series of weekly videos showing customers how to create easy meals - using the company’s weekly promotions - that feed a family of four for less than $4 per person.

    “In the busy world we live in, people are increasingly looking for easy and delicious meal ideas,” said John Burry, Fresh & Easy Chief Customer Officer.  “Fresh & Easy offers solutions through not only our chefs who prepare different, affordable meal ideas every week, but we’re also looking to our customers to come up with their own unique combinations to help make everyone’s lives a little easier.”

    TalkingRetail reports that Tesco will this week become the first UK retailer to offer a “comprehensive” chilled range of dairy-free foods including soya milks, spreads, yogurt and desserts.
    KC's View:

    Published on: March 21, 2012

    Time reports on the “crowning of the best pizza in the world” at the annual International Pizza Expo in Las Vegas last week - and the winner, from Staten Island’s Goodfella’s Brick Oven Pizza, “combined asiago and mozzarella cheeses, shrimp, mango, and limes on a bed of Patron-infused pineapple cream sauce.”

    Other notable entries, Time notes, “included a Japanese chef’s sushi-grade raw fish pizza on rice crust and a duck pizza topped with fermented garlic.”
    KC's View:
    I probably would be more likely to try the duck pizza. (I once had kangaroo pizza in Australia, which was wonderful.) But I love all the innovation and inspiration ... it is what drives the food industry in new directions that can generate incremental sales.

    Published on: March 21, 2012

    The Food Marketing Institute (FMI) and Global Market Development Center (GMDC) announced plans yesterday for the two associations to partner in offering a comprehensive conference in 2013, focused on health, beauty and wellness.   The FMI and GMDC event will take place May 31 through June 4, 2013, at the JW Marriott Hill Country in San Antonio, Texas, and is designed for retailers, wholesalers, health and beauty suppliers, pharmacists, dietitians and other health related professionals to “come together to explore solutions to meet the broad spectrum of health and wellness needs of consumers.”
    KC's View:

    Published on: March 21, 2012

    • The Bergen Record reports that “Stop & Shop and ShopRite employees in New Jersey and New York, represented by United Food and Commercial Workers Local 1262 in Clifton, have voted overwhelmingly to accept a new labor agreement, the union said Tuesday ... The new contract covers nearly 24,000 Local 1262 members at about 160 stores.”

    The wage and benefits changes are retroactive to October 16, 2011, when the previous contract expired.

    • The Sacramento Bee reports that in the Washington-Baltimore market, Safeway employees who are members of the United Food and Commercial Workers (UFCW) protested “in front of three pop-up storefront hiring halls set up next to company stores to recruit and train so-called ‘replacement workers’ to staff the supermarkets in the event of a work stoppage.”

    The current contract ends on March 31.
    KC's View:

    Published on: March 21, 2012

    • Safeway announced that it “is joining forces with the U.S. Department of Agriculture's (USDA) Center for Nutrition Policy and Promotion (CNPP), to improve the health and well-being of Americans. As a member of the USDA CNPP Nutrition Communicators Network, Safeway will work with a broad range of companies and industry organizations to develop and promote dietary guidance that links scientific research to the nutrition needs of consumers ... As the largest national grocery chain to become a National Strategic Partner in the Nutrition Communicators Network, Safeway is well positioned to help drive the group's food retail-based effort.”

    Bloomberg reports that Wendy’s has done something that has been expected since late last year - surpassed Burger King to become the nation’s second-largest hamburger chain.

    According to the story, Technomic Inc. says that Wendy’s U.S. locations generated $8.5 billion in sales last year, while Miami-based Burger King’s sales were $8.4 billion.

    McDonald’s remains securely on top with $34.2 billion in sales at all of its U.S. stores in 2011.

    Natural Products Insider reports that Jamba Juice is being sued in the Northern District of California by a consumer charging that claims that its at-home smoothie kits are all-natural are inaccurate because “they contain processed, synthetic and/or non-natural ingredients, such as ascorbic acid, citric acid, xanthan gum and steviol glycosides.”

    Plaintiff’s lawyers reportedly are seeking class action status for the case.

    Marketing Week reports that in the US, Sainsbury has shut down a Fresh Kitchen take-out store it was testing on London’s Fleet Street, but “has not ruled out opening further Fresh Kitchen stores with a different offer, in different kinds of locations.”

    According to the story, “Sainsbury’s opened the standalone store in February last year to trial a possible extension for Sainsbury’s into the lucrative food on the go market. It was one of a number of efforts Sainsbury’s is making to diversify its core supermarket business and boost revenue.”

    The piece suggests that after a year of testing, Sainsbury learned that the footprint of the Fresh Kitchen format was not optimal for quality or service.
    KC's View:

    Published on: March 21, 2012

    ...will return.
    KC's View: