business news in context, analysis with attitude

Published on: April 10, 2012

by Michael Sansolo

Think about a really good or bad customer experience you have had recently and I bet there was a single reason for it: a front-line employee. Like it or not, most companies build their reputations one experience at a time, and frequently those moments are in the hands of the least experienced and lowest paid employees in the company.

Just ponder that for a second. If you had a great stay at a hotel, it probably had a lot to do with the quality of the reception you got on checking in and the invisible work done when your room was cleaned. A great restaurant meal certainly drew on the skills of the chef, but just as likely the server was a big part of the moment. And in the supermarket, most people might cite the quality of their experience in how they were treated by a checkout worker or a stock clerk.

Whether we like it or not, those gaudy or paltry ratings for supermarkets in Consumer Reports that Kevin wrote about last week were largely based on pricing, quality of some key perishables and the overall interactions with staff. And usually that staff is the lowest paid, least trained in the company because except in one-store operations, the CEO rarely comes by to help sack groceries.

I got thinking about this last week thanks to a very insightful e-mail from an MNB reader about my last column. You may recall that I wrote about a distasteful announcement made on a United Airlines flight mocking the recent meltdown by a Jet Blue pilot. The reader asked if I was going to boycott United. Sadly, the answer is no - because I live in a market where United is the largest carrier by far and a boycott would only serve to make my life incredibly difficult.

Supermarkets should only be so lucky. Had the same experience occurred in one of my local stores a boycott could be possible. Sure, it might be difficult for countless reasons - from price to quality to convenience - but my choices would certainly allow me to express my anger far easier than I can at United.

Yet, as always, there’s more to this. An article Monday in the daily update from Advertising Age asked if we are ready for a world without menial jobs. As Ad Age pointed out the new era of commentary, blogging, reviewing and simple connectedness means no business interaction is unimportant. Every consumer is now able to complain or compliment with power and that means that every front-line employee is now truly on the front line.

That in turn puts new pressure on everyone behind the front line. It means that those customer-facing employees cannot be treated as disposable resources or cost centers as, sadly, many companies have done in the past. More than ever they need ample training to ensure that they are equipped as best as possible to handle what will come their way. More than ever they need the respect of the entire organization because customers never complain about the supply chain, the marketing staff, the site selectors or even the CEO because they don’t know those people and don’t really care how they affect the shopping experience. What they care about are the tomatoes that got crushed in their shopping bag or the clerk who sent them to aisle 11 for an item that wasn’t there.

Michael Sansolo can be reached via email at msansolo@mnb.grocerywebsite.com . His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available by clicking here .

Published on: April 10, 2012

by Kevin Coupe

We all have preconceptions about a wide range of issues, but Salon.com has a great piece about how some stereotypes are simply wrong ... and it is eye-opening.

For example, the story suggests, most people think of Los Angeles as a place populated by “Sun-baked idiots who care more about Beemers and boob jobs than culture and current events.” However, “Los Angeles doesn’t deserve its superficial rep any more than lots of other cities. Washingtonians blow more money on clothes. Atlanta gets more hair transplants. New Orleans watches more TV. And of the 50 biggest cities, L.A. has the 11th most college degrees per square mile.”

In fact, some of the attributes that one ordinarily would ascribe to Los Angeles actually might be a better fit for - go figure - Salt Lake City, “which has the most plastic surgeons per capita, Googles the phrase ‘breast implants’ with alarming frequency, and spends more money on both cars and cosmetic procedures than any other city in the nation.”

Furthermore, Salt Lake City is “not the holy land it used to be; less than half the city follows the Church of Latter-day Saints, and Utah as a whole is only around 60 percent Mormon these days. Statewide, the percentage of Mormons has been declining for years, according to secret church membership counts obtained by the Salt Lake City Tribune in 2005. Experts attribute the drop to Hispanic immigrants moving to Utah for jobs, not religion. If current trends continue, Utah will lose its Mormon majority by 2030.”

Another example: “New Yorkers have a reputation for driving like they’re being chased by a tidal wave. But by the numbers, New York motorists appear to be less dangerous than those in several other cities. According to Allstate Insurance, drivers in Philadelphia, Washington and Los Angeles suffer more collisions per capita. And Orlando, Fla., drivers kill far more pedestrians (though pedestrian-unfriendly infrastructure surely plays a part in this).”

However, there is one stereotype that apparently is true - Boston has the nation’s most passionate sports fans. According to the story, one third of all the city’s residents attend at least one major sporting event there each year, and two thirds of them are defined in marketing terms as “avid” sports fans.

But the point is a good one - that in all things, it is important to get beyond stereotypes and preconceptions, because the truth inevitably will be more complex, more nuanced, and potentially even more rewarding.

It is the very definition of an Eye-Opener.

Published on: April 10, 2012

Safeway Inc. announced yesterday that current Executive VP/CFO Robert Edwards, who has served in those positions since 2004, is being promoted to the company presidency.

Edwards will continue to do the CFO job as the company seeks a successor.

"Robert is one of those unusual executives with a strong command of both the financial and operational sides of our business," said Safeway Chairman and Chief Executive Officer, Steve Burd. "His deep engagement with our operations and marketing units while he has been CFO will make for a seamless transition to Robert's new role. His assumption of these new duties provides me an opportunity to concentrate more of my time on innovation and a range of strategic initiatives that will drive core and non-core business growth in the long term."

Safeway also announced that Larree Renda, Executive Vice President, will assume additional responsibilities for real estate (including Property Development Centers) and information technology, which adds to her current duties managing human resources and labor relations, strategic initiatives, corporate social responsibility, government relations, public affairs and Safeway Health.

"We are taking one of our most productive and talented executives and broadening her duties to include oversight of two key functions," said Burd. "Both of these changes to our management structure will further strengthen our senior team and our ability to deliver sustainable growth."

Published on: April 10, 2012

Advertising Age reports on a new study commissioned by Time Inc. and conducted by Innerscope Research indicating that “consumers in their 20s ... switch media venues about 27 times per nonworking hour - the equivalent of more than 13 times during a standard half-hour TV show.”

As the story notes, “The study offers at least directional insight into a generation that always has a smartphone at arm's length and flips from a big TV set to a smaller tablet screen and back again at a moment's notice.”

Published on: April 10, 2012

VentureBeat.com reports that Starbucks has said that “more than 42 million mobile payments since the U.S. launch of its mobile pay program less than 15 months ago.” Last December, about a year after the program was launched, Starbucks said that 26 million payments had been processed; the new update suggests that acceptance and usage of the mobile program is growing exponentially.

As the story describes it, “customers use the mobile app to load money on to a digital Starbucks Card and then present a 2D barcode to pay-by-scan at the register. Mobile pay first launched in the U.S., but has since migrated to Canada and the U.K., and was recently made available to customers ordering from drive-thru windows.”

Published on: April 10, 2012

Advertising Age reports on a new statistic generated by marketing research firm ComScore about people who use their smart phones and/or tablet computers to get health-related content.

According to the story, “44% have a health-related app ... (and ) seventeen million people accessed health information on their phone in late 2011, up 125% from the year prior.”

Published on: April 10, 2012

Yesterday, MNB took note of a Reuters report that “the Canadian government has ordered a review of U.S. retail giant Target Corp's plan to move into Canada, examining whether it would be of net cultural benefit to Canada.” According to the story, the “cabinet ordered the review under the Investment Canada Act on the recommendation of Heritage Minister James Moore.

“The review would involve looking at whether the store's ‘cultural’ sales, for example books, will contain enough Canadian content.”

While we conceded that this seems to be standard operating procedure in Canada, we had no idea how standard ... because an MNB user passed along a recent new story from the Financial Post about how a coalition of Canadian dairy companies is trying to prevent Chobani greek yogurt from being as successful there as it has been in the US by filing “court applications to have Chobani’s one-year test market import permit from Canada’s Minister of International Trade struck down. The legal actions coupled with recent changes from the provincial marketing body controlling the milk supply in Ontario suggests that if the Greek yogourt sensation does make it into Canada permanently, it would come after a hard-won fight fraught with regulatory and legal obstacles.”

The paper writes:

“‘Allowing the quota-free and duty-free importation of Chobani brand yogourt will destroy the delicate balance created by the Canadian supply-management system,’ reads a motion from Danone Inc., which argues granting the import permit to Chobani will cause irreparable harm to Danone in the form of a financial loss of $6.7-million in 2012, lost sales and profits and an inability to ‘increase the goodwill’ associated with Danone’s competing Greek yogourt brand, Oikos.”

Published on: April 10, 2012

• Walmart announced yesterday that it is working with The Band Perry, actress kimberly Williams-Paisley and four major food manufacturers - General Mills, ConAgra, Kraft and Kellogg - to launch “a campaign that will enable millions of Americans the opportunity to get involved by shopping at Walmart or visiting the company's Facebook page today through April 30 ... Walmart is inviting customers to visit one of its 3,854 Walmart stores and Neighborhood Markets nationwide and purchase products from participating suppliers that will help provide meals to families struggling with hunger. In-store signs will help direct customers to participating products and on-package labels will advise customers how to generate meals by entering product codes online, sharing a hashtag on Twitter or scanning a QR code.”

According to the announcement, “Customers can also visit Walmart's Facebook page to vote for one of 200 communities hardest hit by unemployment. The community with the most votes will receive $1 million to help fight hunger. The next 20 communities will each receive $50,000 for hunger relief. The Facebook campaign will also provide information on how users can donate or volunteer with hunger fighting organizations in their local communities.”

Published on: April 10, 2012

• The BBC reports that Tesco is replacing its venerable Tesco Value private brand with ”a younger, brighter model with only a slightly different name, Everyday Value” that is “a step up in quality - none of the products will contain MSG, hydrogenated fats, artificial flavours or colours, or genetically modified ingredients - at no extra cost.”

Published on: April 10, 2012

...with brief, occasional, italicized and sometimes gratuitous commentary...

• The New York Times reports on how Toys R Us “is facing management defections, a decline in same-store sales and relentless competition from Walmart and Amazon ... With more than 1,500 stores worldwide, Toys R Us is part of a group of big, lumbering retailers trying to reinvent their businesses for a new era.”

One of the things that has been said a lot around here is how many of us won’t be surprised if Best Buy does not exist - at least in its current incarnation - in five or 10 years. I think we can add Toys R Us to that list...

Published on: April 10, 2012

• The California Grocers Association (CGA) has promoted Doug Scholz, its Senior Director of Business Development and Strategic Partnerships, to the position of Vice President of Business Development and Marketing, effective immediately.

Published on: April 10, 2012

• James S. Herr, founder of Herr Foods Inc., maker of Herr’s line of snacks, passed away of complications from pneumonia on April 5. He was 87.

Published on: April 10, 2012

On the subject of young people having trouble getting started in their careers, one MNB user wrote:

For the younger generation that’s struggling to find careers one has to ask – what have they done to EARN a career or even a good job?

Are they aggressive in their pursuit of knowledge? Did they learn the content of their major field of studies or did they just pass the test and move on?

Do they network aggressively in the areas they can control? Are they offering something unique and different and BETTER than others seeking the same position?

Sure, everyone wants you to come with experience…but how many job applications have you filled out and indicated your starting salary should be in excess of $50K?

I have endless respect for younger workers..but only the ones willing to make some sacrifice or bring some special talent to the party!!

It’s a global job market. What have YOU done to be the best available candidate – in the world – for the career you desire?

Well, an honest assessment of that may clue you in to some opportunities to compete better and get the position you feel you deserve.

And yes just like NAFTA generated U.S. wage depression so has the recession depressed job opportunity for younger people as older workers want (maybe have) to work longer and are willing to do so for less than ever

… and they already have experience. Offering a better product (you) at a better value is the only way to get the job…it’s the free market at work.




MNB offered what I thought was a pretty good idea yesterday - “Imagine what it might do for traffic and sales if a retailer chose a usually slow night of the week and said that for 3-4 hours, anyone with a driver’s license clearly establishing that they are under 30 is eligible for q 5-10 percent discount on all food products (excluding alcohol).” As opposed to - or in addition to - offering discounts to senior citizens one morning a week.

“Think that might generate some traffic and sales? And then, if the retailer is smart, it would then create programs that would build on this burgeoning traffic, with samples and meal selections that are seen as relevant to this generation.”

MNB user Neil Brown responded:

This is a splendid idea.  I turn 60 in two weeks, and cannot comprehend why that should automatically qualify me to pay less than normal prices.  My generation owes it to the next one (or two) to pass along at least as good of an opportunity as we were given, and we are failing miserably in that respect.  Plus, I have many fewer years of spending ahead of me than does the bulk of Millennials, so why not try to secure their brand loyalty instead of mine?

This last point is absolutely correct. Give a senior citizen a discount, and you maybe earn loyalty for a few years of declining transaction sizes before they die.

Give a Millennial a discount, and maybe you earn loyalty for 20-30 years, during which they’ll be feeding families.

MNB user Bev Bennett wrote:

As a parent to a Millennial, I think the discounts are a great idea. We live in Evanston, IL, home to Northwestern University. Several businesses near campus offer 15 percent discounts to students with NU IDs.

MNB user Deborah Feld wrote:

Just wanted to let you know that J.Crew offers a 15% College Discount. You just need to present your college id and have a valid .edu email address. Some complaints about the discount- it's not advertised and you can't apply it to your purchase online. Some perks is that they accept it at all J.Crews including factory and outlet stores, and I haven't really been questioned on my college id that is starting to look very dated since I've been a "senior" for a couple years now. Overall, it's a word of mouth discount that seems to circulate around interview season and has caused most of my work wardrobe to be exclusively J.Crew and will probably remain that way.

I think college student discounts are great. But I’m talking about a bigger idea here - which is to incentivize and motivate people out of college but just starting out.

MNB user Ron Pizur had some issues with the idea, though:

I'm sort of in the middle of the pack, chronologically speaking, with regards to this topic. When I was in my early 20s I would have loved to have received a discount like the senior citizens were getting. I was scrimping and saving to make ends meet like they were yet I had to pay full price and sort of resented it. I'm not sure if it would have made me more loyal to any one retailer, but I'm sure I would have patronized them as long as I was getting a discount. However, now that I'm getting older and more financially secure I'm not sure that receiving a discount once I become a senior will make me any more loyal to a retailer. As a savings fanatic I'm sure I will take advantage of the discount, but if everyone is offering it to me then what do I care where I shop.




Regarding what we here viewed as the ludicrous idea of bankrupt Kodak paying retention bonuses to the very executives who helped drive it into a ditch, one MNB user wrote:

These "valuable" executives would not be difficult to replace.  I teach college sophomores who have more intelligence and foresight, and who have a better perspective on their own value to the world.

And from MNB user Bob McCaffrey:

I agree with you that the people should go who drove the company into bankruptcy.  Where does the bonus money come from?  If the company doesn't need it to revitalize itself then it should be paid out to shareholders.




On the subject of Canada’s cultural protectionism, one MNB user wrote:

Canada has for many years with the support of the electorate taken measures to prevent the Canadian culture from being overwhelmed by our neighbours (see we even spell differently)  to the south.

Radio stations as an example have to play 38% CDN music, there a variety of factors that define it as Canadian such as writer, producer, band, etc. Bryan Adams often does not qualify. That said a few years back Canada probably had 6 of the biggest female stars in the world if you include, Celine, Alanis, Shania, Avril Lavigne, Diana Krall, and the incomparable Sarah Maclachlan. One of the worlds current male stars Drake came from a Canadian TV show.

Finally, I just finished reading the second Joseph Boyle book called Through Black Spruce. Start with Three Day Road, it’s a fictional story based on the story of Native Canadians and their role in World War 1 as snipers in the trenches. Tremendous is a word that comes to mind.

To me, you sink your whole argument with the radio station reference.

Sure, the government can require that a certain percentage of songs played by radio stations be Canadian, or feature a Canadian artist.

Precisely how is that relevant to a young population that gets most of their music via the internet, which does not have any such restrictions?

We live in a global world. I don’t care how you spell “neighbours.” Or, in the case of the story above, “yogourt.”

It just strikes me that such protectionism is an outmoded approach to culture and business that has little use in a global environment.




Finally, from another MNB user:

Mike Wallace was a great journalist. Harry Reasoner and Mike set the bar high for “60 Minutes” – a bar that is still in place today.

One of the best interviews I recall was the one he did with Roger Clemens, who at the time was being pretty animated about the betrayal from his trainer over steroid abuse. Wallace did an excellent job using the Mitchell Report facts to keep Clemens focused on the questions.

Wallace believed his job was to find the truth. He pushed the envelope in asking questions. I always wondered if it was because he had to ask himself some pretty tough questions when he considered suicide in his personal life.

Here’s the remarkable thing about the Clemens interview.

It was Mike Wallace’s last appearance on “60 Minutes.” It aired in January 2008...at which point Wallace was 89 years old.

And he threw fastballs and curves that Clemens could not handle.

That’s how I want to be when I grow up.