business news in context, analysis with attitude

Published on: May 10, 2012

This is FaceTime with the Content Guy. I'm Kevin Coupe.

Today, I'd like to follow up on the column that Michael Sansolo wrote on Tuesday, and even disagree with it a little bit.

In his piece, Michael wrote about the importance of getting back to merchandising basics and the need for creative retailer-manufacturer cooperation that can lead to greater sales and profits. And one of the things that Michael said was that a workshop at the recent Food Marketing Institute (FMI) Show on this subject was as important as one that he did on social media or that I did on e-commerce.

I agree with all of that, except...

I really hate the phrase "back to basics." About as much as I hate the phrase, "get back to fundamentals." I've been writing about this industry for a long time, and I can't tell you how many times I've heard that phrase uttered from lecterns or used in articles - usually during tough times when companies are looking for a solution to their problems.

Here's the thing. If you're not already doing the fundamentals, if you're not doing the basics, then it may well be too late. You're dead.

There are plenty of companies that are, and that are building on the fundamentals with initiatives in e-commerce, social media or in other areas.

The fundamentals are a prerequisite just for getting into the game and staying in the game.

Sure, it is important to continue to improve your basic marketing and merchandising efforts. These things are never "done," and you have to get both more efficient and effective each and every day. But if you've lost track of the basics, if you don't think you are fundamentally sound in your basic business model, then maybe it is time to consider another line of work.

One other thing. Very quickly, being good at things like social media and e-commerce are going to become fundamental to a lot of businesses. To some extent or another, they are going to be prerequisites just to get in the game. And people will be building new initiatives - which we may not even be able to conceive of right now - on top of them.

The game keeps moving forward. Every day that you don't embrace this movement, every day that you resist change instead of actively pursuing it, is a day that your business may be getting closer to irrelevance.

At least, that's what I'm thinking this Thursday morning. As always, I want to hear what you're thinking.

Published on: May 10, 2012

by Kevin Coupe

There is a terrific little story from the Associated Press about a pair of eight-year-old twins in Miami that have taken to the iPad with enormous facility, drawing, playing games, and even expanding their vocabulary. The teens in the same household are the same way, but the older folks - not so much.
The kicker in the story is that these are all orangutans, they live in Miami's Jungle Island, and they "apparently are just like people when it comes to technology."

The trainers in the zoo say that orangutans are extremely intelligent, but limited mostly by the fact that they do not have vocal cords - they cannot speak. While they do speak using sign language, the iPads allow them to communicate with human beings who do not, as well as providing stimulating enrichment activities to keep them from getting bored.

The biggest problem these days is that iPads are too fragile for the orangutans to hold themselves, so the trainers have to hold them. But it is hoped that a larger, more robust screen can be developed so that they can have constant access to the technology and the ability to manipulate it on their own terms. (Just don't give them an Amazon password...)

Of course, we've all seen this movie before. First you give them an iPad, next thing you know they're taking over San Francisco, and Charlton Heston is finding the Statue of Liberty buried in the sand.

(Tell me if this sentence from the story doesn't scare you a little bit: They're hoping to use a video-conferencing program to reconnect orangutans with friends and family members who have been transferred to other zoos...)

Still, the whole thing speaks to the power of technology to enable communication. It is, in fact, the very definition of an Eye-Opener.

Published on: May 10, 2012

More online retailers than ever are achieving a "threshold for excellence," according to an annual report released by ForeSee, the customer experience analytics firm. The study says that 36 of the top online retailers have achieved this measure of success - a minimum of 80 on a scale of 100 - compared to 28 that hit the mark in 2011 and 2010, and six that achieved it in 2009.

According to the report, "E-commerce stalwart Amazon continues to set the bar higher, climbing three points to 89, and four points higher than the second highest scoring websites, Apple.com (85) and QVC.com (85). Apple is also one of the most improved sites from last year, surging five points as did RueLaLa.com. Foot Locker (79) and JCrew.com (78) each jump four points, and 11 e-retailers improved three points. Netflix is four points down from a year ago, but it regained two points from the Index’s holiday season measure."

The study measures not just individual satisfaction scores, but also "the likely future behaviors of website visitors, including their likelihood to purchase online or offline and proxies for loyalty such as likelihood to return to the site or recommend."

Published on: May 10, 2012

CBS News has a fascinating story about a 2010 norovirus outbreak, and how researchers have traced it specifically to a reusable grocery bag.

CBS says that the study "shows that seven out of the 17 girls who were at the out-of state tournament were able to contract the virus without even being in direct contact with the first person to be infected. In total, nine people out of the 21 person group came down with the disease ... in the case of the 2010 outbreak, the disease spread without direct contact.

"According to the researchers, the culprit turned out to be a reusable grocery bag and some tainted cookies. The bag, which contained the cookies and other snacks, was placed on the hotel bathroom floor when the index case started vomiting. Though she never touched the bag, viral particles floated from the toilet to the bag then to the cookies that the team ate. Even though she went home soon after and did not see the other people, the damage had been done."

The story goes on to say that "according to the Centers for Disease Control and Prevention (CDC), norovirus is the most common cause of gastroenteritis in the U.S., infecting 21 million people and requiring 70,000 hospitalizations a year. About 800 people die from the disease annually.

"What makes the norovirus so dangerous (and common in close quarters like cruise ships) is that it is easily passed along from infected people, contaminated food or water or by touching contaminated surfaces. Symptoms include diarrhea, throwing up, nausea and stomach cramping and may include a low fever, chills, headache, muscle aches and a sense of fatigue

Published on: May 10, 2012

Having any doubts about the pervasive power of mobile technologies, and how people are migrating their online behavior to smart phones, tablet computers and the like?

Well, Advertising Age reports on a new study from ComScore saying that "US smartphone users are as addicted to Facebook on their phones as they are online. In March, 78 million adults visited Facebook's app or website on their smartphones." In addition, the study says, "US users spend more mobile time on Facebook than on any other property -- that's 12% of all time spent on their phones, for an average of more than seven hours a month."

Published on: May 10, 2012

The US Postal Service (USPS), facing billions of dollars in shortfalls and facing the real possibility of a financial default, said yesterday that "it would keep hundreds of small post offices open by reducing business hours or offering stamps and packaging in grocery stores, whittling down its ambitious plan to streamline its services and balance its books by closing thousands of post offices," the New York Times reports.

This plan will take two years to implement and will save $500 million, according to the story, and has as its chief advantage the ability to reduce some of the political pressure coming from constituencies that do not want to lose their local post offices.

The Times notes that USPS executives remain hopeful that the US Congress will act to overhaul the agency's finances, which is what is really needed if the USPS is to become financially viable.

Published on: May 10, 2012

Reuters reports that the federal Institute of Medicine is out with a series of recommendations for how the US can best address the nation's continuing obesity crisis, embracing policy suggestions that it says can "make the U.S. environment less 'obesogenic'."

Among the recommendations:

• Taxing sugar-sweetened beverages.

• Changing farm policy so that farmers that produce enough fresh produce to satisfy the nation's population. (Current price support policies actually prevent this at the present time.)

• "Tax incentives for developers to build sidewalks and trails in new housing developments, zoning changes to require pedestrian access and policies to promote bicycle commuting."

• Making healthy food "easily available everywhere Americans eat, from shopping centers to sports facilities and chain restaurants."

While the report acknowledges that popular opinion is that personal habits and choices are actually to blame for obesity - not a lack of targeted social policy - it says that this is not accurate, since in many places, people don't actually have a choice.

Published on: May 10, 2012

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

• The Bergen Record reports that Sam Martin, A&P's president/CEO, will begin serving as the chain's on-camera spokesman in a series of commercials scheduled to begin airing in the New York and Philadelphia metro areas this week. Martin will be shown in A&P's various banners, interacting with customers, and saying, "If you haven't been in our stores for awhile, we welcome you back."

A&P emerged from bankruptcy protection two months ago. Not only is this the first time that A&P has used its CEO as a spokesman, it also is the first time that it has advertised all of its banners in the same campaign.

I think that it is admirable that Martin is doing this, and it certainly cannot hurt for the severely damaged chain to have a face and a personality attached to it. The problem is that it may be too late ... the brand may be so compromised that nothing will help. But they have to try something...

• Delhaize America and Food Lion announced yesterday the re-opening of its distribution center in Dunn, N.C.  The facility was severely damaged on April 16, 2011 by a tornado, and the company recently completed construction and expansion activities at the center.

According to the company, "The distribution center in Dunn, N.C., services 270 Food Lion stores in North Carolina. With today’s grand re-opening, the facility includes an expanded refrigerated and frozen section of an additional 54,000 square feet that provides added storage for more than 4,000 dairy, meat and frozen food products.  On average, the distribution facility ships more than 1.4 million cases of products each week and houses 12,800 items."

Published on: May 10, 2012

• Reuters reports that Carrefour's incoming CEO, Georges Plassat, is already making changes, dismissing Chief Commercial Officer Jose Carlos Gonzales-Hurtado and Marketing Director Patrick Rouvillois as he looks to put his own stamp on the company.

According to the story, Plassat "has a record of company restructuring and a reputation as a ruthless cost-cutter," and his challenge "is to reverse years of underperformance in Carrefour's European markets, notably in France, at a time of muted wage growth, government austerity measures and rising prices that are squeezing disposable incomes."

Published on: May 10, 2012

Yesterday, commenting on a story about all the companies ensnared in foreign bribery investigations, with many of them complaining that it is not entirely clear what bribery is, I wrote:

I'm reminded of the blind guy back in the seventies who was once appointed to be in charge of censorship for a local town. (A quaint notion, huh?) Asked how he would be able to tell if something was pornographic, he responded, "I know porn when I feel it."

This story may be apocryphal. But I thought of it when people say that they don't know what is bribery and what isn't. Really?

Ultimately, Walmart's biggest problem is going to be the cover-up, not the actual bribery. It is going to be executives who allowed people to investigate their own divisions, who prevented investigations from going forward, and who covered up results when they came to light.

At a personal level, I just get tired of companies and people who are holier-than-thou, and then engage in illegal activities. That kind of selective ethics - whether practiced by business executives, politicians or religious leaders - represent the worst kind of hypocrisy and arrogance. At least IMHO.

One MNB user responded:

I thought of slotting allowances!

From another MNB user:

While the charges against Walmart in Mexico, and now many other companies, are disturbing, they are not surprising.

I have personal knowledge that similar bribes need to be paid in China. Only one manufacturer (a naturalized Chinese person) ever revealed this to me, yet I assume it’s true on a broad scale. It’s the “when in Rome” syndrome, and it doesn’t make these countries very appetizing. Just an observation; I have no solutions!

MNB user Keith Green wrote:

Two of your pieces Wednesday had a common denominator that resonated with me. In your …Bribery Prosecution Net story you said, “This story may be apocryphal. But I thought of it when people say that they don't know what is bribery and what isn't. Really?”. Then, In your Totally Predictable Story of the Day you talked about the gift cards that Wal-Mart gave to the Democratic National Convention Committee.

Is there really a difference between paying government officials in Mexico a bribe for some very specific help you need with a license or a permit and paying U.S. government officials a bribe to have a generally helpful attitude towards you when federal laws are being penned and voted on? If the DNCC can’t be considered “government officials”, I would say they are at least playing the role of “gestores”. To quote you again, “…I thought of it when people say that they don't know what is bribery and what isn't. Really?”.

MNB user Brian Sullenger wrote:

What is the difference between what Wal-Mart is doing in Mexico and any other company is going here in the United States.  When Wal-Mart or Target wants to grow into the inner cities of New York, Los Angeles, Minneapolis or Las Vegas, the cities block them from moving in.  Eventually, they "contribute" money to the right persons re-election campaign or build a park or what ever and the "City" has a change of heart.  Every company that tries to grow/stay in business and every city/government organization would be guilty of "Bribery."  We need to clean our own house before we try to clean up the outside.  That is the worst kind of hypocrisy and arrogance, IMHO.

We also had a story yesterday about how, since the “state of California agreed to allow it to delay collecting state sales taxes for one year, Amazon.com has announced that it will build some two million square feet of warehouse space in the state, with one in San Bernardino and another in Patterson."

Which led one reader to write:

Is that a bribe?  Happens all the time, but basically it’s offering a financial incentive which gets favorable treatment in return...

And another wrote:

So what's the difference between bribery and an agreement to delay collecting state taxes for one year?

Another MNB user wrote:

I agree, the actual cover-up to me is more disturbing. Fess-up, you got caught, by your own people. Admit you screwed up, fix the issue and move on. If all American companies would follow the law, wouldn’t that put pressure on Mexican authorities to find a different way of doing business. Probably naive on my part and the reason I am not in charge of figuring out how to do business in Mexico.

If the point here is that people and companies use money in a lot of different ways to influence how other people act and vote and govern, then you won't get an argument from me. Sure, money can be an utterly corrupting influence ... at home and abroad.

Was "donating" $50,000 in gift cards to the Democratic convention a kind of bribery? I'm not sure if it meets the technical definition, but it certainly was designed to buy positive feelings, access, and maybe even a few votes down the road. No surprise here that the Democrats decided to turn them down, though I suspect a much bigger headache for the party will be holding a convention in a state that has voted to ban same-sex marriage on the same week that the head of the Democratic party came out in support of it.

Was the California tax situation a bribe? Sure, money was involved, so maybe it meets the standard ... though some might argue that the new warehouses will create a lot of jobs, so it really was a quid pro quo.

Look, I was schooled by Jesuits. The word "ought" was very important in the ethics classes that I took ... as in, we do what we ought to do, and we try to make things as they ought to be. It isn't that hard to know the difference between what is right and wrong. Doing it sometimes is hard, but knowing it? That's the easy part.




Thanks to all of you who thought that my idea for a "Mannix"-themed commercial for the new Dodge Dart was a good idea. (If anyone knows anybody at Dodge or its ad agency, feel free to pass the idea along.)

I'm also thrilled that so many of you remember "Mannix," which was my favorite TV series growing up. (BTW...if you were going to cast the movie, wouldn't George Clooney be a terrific Joe Mannix?)