business news in context, analysis with attitude

Published on: June 7, 2012

This commentary is available as text or video. Enjoy both, or either.

Hi, I'm Kevin Coupe, and it is good to be back with an all-new edition of FaceTime with the Content Guy.

Some of you may remember that more than a year ago, I mentioned the fact that a new barber shop was opening in my town, and that I was intrigued by the fact that it had an interesting value proposition. For a set fee, you could get as many haircuts a month as you like.

Now, I was intrigued by this because every once in a while, I'll be going off to give a speech and while I don;t really need a haircut, it'd be nice to get a little trim. But I don't really feel like spending the money on a haircut I don't need ... and besides, I've had the same guy cutting my hair for 20 years, and he only works on Thursday, Friday and Saturday mornings. I'm pretty loyal this way - and I somehow had become convinced that he was the only guy who could cut my hair.

I mentioned it here, however, for a different reason. When I asked the guy who cut my hair if he was worried about new competition, he didn't even know the new place was opening. When I explained the whole monthly fee thing to him, he shrugged. He just wasn't worried about it.

Well, a year went by. I kept going to the same guy. But then, two things happened simultaneously.

One, my schedule got changed, and I really needed a haircut...but I needed it on a Monday.

Two, I got a Groupon ad offering me a big discount at the new place on a haircut.

Well, so much for loyalty. I tried the new place, and got a great haircut. Plus, they did this whole hot towel thing, plus the woman who washed my hair massaged my forehead with this eucalyptus stuff, and it was really, really nice.

Haven't been back to the old guy since. I paid my monthly fee, and now I go to the new place every 12-14 days. And I love it.

Think about it. Twenty years of going to one place, and because of a fluke in my schedule and an email from Groupon, it doesn't matter anymore.

Marketers in all venues have to be on guard at every moment against new competitors with new business models and new angles on both old and new products and services.

We all know that keeping a customer is easier and cheaper than getting a new one.

But the reality is that every customer is in play at one time or another - all it takes is a really compelling offer.

FYI...You can see all of the FaceTime video commentaries done by Kevin Coupe on the MorningNewsBeat Channel on YouTube, by clicking here.

Published on: June 7, 2012

Supervalu-owned Albertsons in Southern California announced yesterday that it "plans to reduce its store-level workforce by an estimated 2,200-2,500 positions. These reductions, which will occur across all 247 Albertsons stores in California and Nevada, will begin the week of June 17 and should be completed near July 1. The change is expected to directly impact a small number of positions at any specific store location."

The company said that the decision is part of the company's focus "on simplifying its organization and reducing expenses to help reinvest in more customer facing initiatives."

In a prepared statement, the company said that in February, it began identifying "ways to de layer and remove costs with a reduction in its Fullerton store support center. While Albertsons' commitment to the neighborhoods it serves remains the same, the need for change at the company is clear. Albertsons has not kept pace with the changing needs of its customers for a number of reasons. At the same time, while the division has experienced a reduction in traffic and an overall decline in sales, it has not made the necessary adjustments to its store-level operations."

"A decision of this nature is never easy, but it is the necessary step for us to take to help improve our business and accelerate our turnaround," said Dan Sanders, president, Albertsons Southern California Division. "Our goal is to more effectively serve the marketplace by scheduling associates more appropriately to serve customers at the times they shop. I am confident our team will embrace these changes and help us to compete more effectively in a rapidly changing marketplace."

Published on: June 7, 2012

by Kevin Coupe

This just struck me as a disconnect between the promise and the execution, and the kind of thing that marketers want to avoid.

Yesterday, I got an email from Starbucks promoting its new "Refreshers" beverages. Here's how they describe the product:

"A natural boost of energy you can feel good about ... Meet our newest innovation in coffee. It’s a thirst-quenching pick-me-up that packs a boost of natural energy from green coffee extract but looks and tastes nothing like coffee. Combined with real fruit juice, B and C vitamins and ginseng, it’s a sparkling low-calorie boost of natural energy in three delicious flavors. So open a can of thirst-quenching invigoration and rethink how you energize."

And, the email offered a 50 percent off coupon.

I was curious about the nutritional content of the "Refreshers" line, especially the calorie count, so I clicked through to the website...and what I found was the following passage:

We're Sorry.

The nutritional data for this product is not available online. You can find that information at your local store.

Nutrition information is calculated with data provided by the suppliers who manufacture food and beverage items for Starbucks Coffee Company. Variations may exist due to periodic changes in formulations.

Huh?

Starbucks is making a big push on a new product line, and then doesn't have the most basic info online? It wants me to go to the store to find out? And then, uses language that suggests that it isn't even its responsibility to provide such information, but rather that it is up to the manufacturer?

I don't think so.

I may or not try "Refreshers," but for my money, Starbucks dropped the ball on this one - and did so on the easy stuff, in a way that annoyed at least one of its customers.

It is a good lesson for all marketers.

Published on: June 7, 2012

The Sacramento Bee reports that unionized employees at Raley's have voted to authorize a strike.

"With the company's contract with the United and Food and Commercial Workers scheduled to expire tonight," the Bee writes, "the vote brings the two sides closer than ever to a walkout, which would be the first in the company's history.

"Still, a strike doesn't appear to be imminent. Both sides said contract negotiations are set to resume Friday."

Negotiations have been taking place since last fall.

According to the paper, "The company and the union have been negotiating a new contract since last fall. Raley's, like its fellow union chains Save Mart and Safeway, is pushing for concessions on health care and other issues in order to regain market share from a rising tide of nonunion stores. So far, only Raley's has been the target of a strike authorization vote."

Published on: June 7, 2012

United Press International reports on a new study from the Center for Science in the Public Interest (CSPI) about consumer desires in the area of nutritional labeling. Among the findings:

• "Seventy-seven percent of U.S. adults said they want calorie labeling for hot dogs, pizza slices and burritos sold at convenience stores."

• "81 percent favor having supermarkets provide calorie information for their prepared restaurant-type foods, such as rotisserie chicken, sandwiches and soups."

• "70 percent of U.S. adults favor having movie theaters list calories on menu boards and 68 percent favor having chain restaurants list calories for alcoholic beverages."

Americans just want to know what they're eating," Margo G. Wootan, director of nutrition policy at CSPI, said in a statement. "Menu labeling at chain restaurants will be enormously helpful. But it doesn't make sense to create loopholes for certain companies, when that's not what Congress intended and it's not what people want."

Published on: June 7, 2012

"What Americans eat and drink has become such an emotional roller coaster for so many of us that it's utterly changing the way the nation's biggest restaurant chains, foodmakers and grocery chains do business," USA Today writes this morning. "Food used to feed our bodies. Now it also needs to feed our brains. Our egos. Our nostalgic memories. And maybe even our social-media appetites."

Food manufacturers, the story suggests, "know that one of the strongest emotions that many American consumers feel toward the food they eat is fear. One week the fear is over pink slime. Then, it's about chemicals in milk. Or mad cow disease. Or too many calories stuffed into a large, sugary drink. Or even some worker's fingertip getting chopped into an Arby's roast beef sandwich."

And so, the story says, companies are making choices that have emotional appeal, whether it is using words like "honest" in the name, using packaging that resonates with people's memories, or making sure that products have the proper "mouth appeal" when they are eaten.

Published on: June 7, 2012

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

• The Los Angeles Times this morning reports that "as part of President Obama's push to streamline regulations on businesses, the U.S. Department of Agriculture plans to let chicken slaughterhouses run production lines faster and with fewer federal inspectors, angering food safety advocates and poultry plant workers. Under the proposal, production lines would be allowed to move 25% faster, while the government would cut by as much as 75% the number of line inspectors eyeing chicken bodies for defects before the carcasses are packaged for consumption."

The story goes on: "The proposed rules mark a major policy shift. They are based on a 13-year pilot program that tested whether public safety would be improved by giving plant employees a bigger role — and federal inspectors a lesser one — in sorting good chickens from bad." It would also save the USDA an estimated $90 million over three years.

• USA Today reports that Taco Bell is going upscale with its menu, with menu additions that "feature such ingredients as black beans, cilantro rice, citrus- and herb-marinated chicken and cilantro dressing," created by celebrity chef Lorena Garcia.

The goal, the story says, "is to give regular customers more choices and to lure new business."

The other goal is probably to better compete with the likes of Chipotle. But I still think I'll do my best to avoid Taco Bell ... there is just something about it that shouts mediocrity.

• The Times Herald-Record reports that Price Chopper "has received LEED gold certification for its environmental efficiency" for its store on Route 94 in Warwick, NY.

• In Florida, the Sun Sentinel reports that Supervalu-owned Save-A-Lot plans to "open a second Florida distribution center early next year in Pompano Beach that will create more than 30 jobs." Once opened, the new warehouse will supply 26 of Save-A-Lot's 139 Florida stores.

Published on: June 7, 2012

• SymphonyIRI Group, Inc. announced that Andrew Appel, former COO at Aon, has joined the company as president and chief executive officer. Appel, who also joins SymphonyIRI’s board of directors, succeeds John G. Freeland, who moves into a new interim role as executive vice chairman and will remain on the board of directors until his retirement later in 2012.

• Save Mart Supermarkets announced that Brett Wing is the new Vice President of its FoodMaxx Operations. Wing comes from Cub Foods/Supervalu in Hudson, Wisconsin and brings 35 years of grocery store and senior management experience.

Published on: June 7, 2012

• Ray Bradbury, who taught us in "Fahrenheit 451" that book burning is the refuge of cowards, the ignorant, and ideologues, who explored space in "The Martian Chronicles," and who addressed the fatal allure of evil in "Something Wicked This Way Comes," died earlier this week. He was 91.

Bradbury, who authored more than 50 books and countless short stories, articles and screenplays, was the recipient of the 2000 National Book Foundation Medal for Distinguished Contribution to American Letters, the 2004 National Medal of Arts, and the 2007 Pulitzer Prize Special Citation.

Published on: June 7, 2012

Regarding the evolving strategies at JC Penney, MNB user Cathy Sturm wrote:

While I don’t know all the particulars of CEO Ron Johnson’s strategy at JC Penney, personally I am exhausted by all the sales and coupons brought on by the economic downturn.  At several retailers, I now feel I’m going to get ripped off if I don’t have my coupon in hand when I walk in the store.    If Penney’s can convince me that I’m going to get a good value for the merchandise I want without needing to remember a coupon or buy off the sale rack, then I will be going there more often.

Regarding Johnson's management style, MNB user Mike Franklin wrote:

In my experience, very few individuals make the sole difference…it’s usually the team around him/her that takes the vision…modifies the vision through adding/ subtracting appending their experience and expertise and then implements. Usually when you have an individual that takes credit for a success…you have an individual with a large ego. Just sayin’...

In all fairness, I'm not sure that Johnson is depending the attention as much as people like me are giving him all the attention because he was a force behind the Apple Store.

MNB user Katie Whelan wrote:

Kevin,  people will shop at JCP (or any great retailer) when the ASSORTMENT is right.  The price needs to be relevant but first and foremost the product has to be right.  Of course, the product can only be right when the brand message is clear. (H &M.)  I think JCP has the cart and the horse out of order.  That said, I know Ron and he's brilliant.  I'm rooting for JCP!




More about Disney's decision to mandate that all products advertised on its child-focused television channels, radio stations and Web sites must comply with a strict new set of nutritional standards. (The new standards are based on federal guidelines as well as input from recognized national nutrition experts. First Lady Michelle Obama was at Disney's announcement yesterday at a Washington, DC, press conference.)

MNB user Frank Seymour wrote:

I think the most important sentence in the article was the one regarding the implementation date of 2014.  An election, time and the balance sheet may dilute some Disney's ambitious plans.

From another reader:

As a HUGE Disney fan with two little Disney Princesses in the house, I watch a LOT of Disney Channel and Disney JR. I don’t watch Disney XD as it is a little too old for my kids.

For the two channels my girls watch, Disney has ALWAYS placed a focus on nutrition in the “commercials”. There aren’t actual commercials on the channels. Sponsors have a 15 second window to peddle their goods and not before every show. Usually it’s a toy.

They had their Pass the Plate segment which showed Brenda Song showing kids how certain foods like noodles, fish, fruits and veggies are eaten around the world by other kids. Then they had Chef ZeFronk, an animated dog with a French accent which taught how to make healthy alternatives to snack foods kids love to eat. Then 2 years ago they started the Healthy Living campaign with Michelle Obama. A variety of Disney stars discuss foods and how to eat with the First Lady. The segments do not say you can’t have this or that. It is about teaching moderation in foods, including desserts and how you have to be active, regardless of what and how you eat. Teaching how to make good choices and hopefully teaching parents at the same time, something most miss in teaching child nutrition.

One of the sponsors of Disney Jr programming is Chuck E Cheese, which I always found perplexing. However, they never show the pizza. It’s always kids doing some physical activity. The tag line is “committed to keeping kids moving.”

At Disneyland, and I noticed this before I had kids, they have always offered a healthy kids menu. Turkey sandwich, PB&J sandwich, a salad, lightly breaded chicken breast tenders with a side of apple slices or a piece of whole fruit and the only drinks you can get is water, milk or 100% fruit juice. I always found it amazing how many parents would ask for a burger, fries and a soda and get mad when they were told they could not get it for kids. If they wanted it they had to pay for an adult meal. I noticed they no longer offered Mac and Cheese and when I asked about it they told me it no longer fit into Disney’s Child Nutrition Guidelines so it got axed. Will there always be sugar and deep fried treats? Of course. Disney destinations are in fact vacation spots, where treats do abound. They TV channels do not perpetuate sugary and fatty foods.

What Disney is doing now is just taking the next step in a plan they activated years ago.




On a different subject, MNB user Evan Stanley wrote:

Today you stated:

I've been saying this almost since the beginning. No matter how you feel about lean finely textured beef, public opinion has reached the point where it can't be used anymore. It is time to move to the next issue...

In response to the sentiment that “it’s time to move on to the next issue,” I feel such a mentality may be too premature and defeatist regarding the pink slime fiasco. Yes, the public has overwhelmingly opposed the use of pink slime.  However, the public often has stubborn opinions or practices that should still be discouraged. For instance, the American public continues to purchase enormous amounts of plastic water bottles (and recycles little), despite perfectly safe tap water. The environmental impact is immense. Yet despite the public opinion being at the point where overuse of water bottles is inevitable, I still applaud efforts to reduce the waste.

I realize the comparison is not perfect. However, the science seems to suggest that the use of pink slime is perfectly safe (if not healthier, as it is leaner) and we have been happy consuming it before we thought the process sounded gross. And the end result of banning it is waste. We end up paying more and not fully utilizing the cow, which means more cattle will be killed to provide us with the same amount of beef. Perhaps with some education (and not sensationalized news stories) the public would change their opinion. Or maybe not. Regardless, I think it’s too early to call it quits. In some sense, I think you can never call it quits regarding public opinion.