retail news in context, analysis with attitude

MNB Archive Search

Please Note: Some MNB articles contain special formatting characters, and may cause your search to produce fewer results than expected.

    Published on: August 13, 2012

    by Kevin Coupe

    Fast Company has an interesting story about the importance of a company "mantra," which is defined as "a Sanskrit term, meaning 'sacred utterance' or 'sacred thought,' depending on the dictionary. Traditionally concentration aids given by Hindu gurus to devotees, mantras are words or phrases repeated to facilitate transformation. In business, a mantra is akin to a motto, albeit more fundamental to a company's internal purpose than simply a marketing slogan. It's concise, repeatable, and core to a company's existence ... Unlike mission statements, mantras are pivot-proof. They transcend current target markets and quarterly quotas."

    Or, to put it another way: "Make it short, sweet, and swallowable," says author Guy Kawasaki.

    Examples cited in the story, which can be read here:

    "Think different." (Apple)

    "Don't be evil." (Google)

    "Make something you love." (Huge, a digital agency)

    "Style to the people." (Stylecaster, a fashion website)

    A mantra, the story suggests, is necessary because it is "the guiding star, not the operating manual." And every company needs a guiding star.

    This has me thinking. While MNB always has been built around the phrase, "news in context, analysis with attitude," it sounds like the folks at Fast Company would define that as a mission statement. Not a mantra.

    Which makes me think it is time for a contest...

    Come up with an original mantra for MNB, and if you create the winner, you get an MNB goodie box, which includes a t-shirt with that mantra printed on it, an autographed copy of "The Big Picture: Essential Business Lessons from the Movies," and an MNB canvas shopping bag and an MNB canvas wine bag.

    Let the games begin...
    KC's View:

    Published on: August 13, 2012

    The New York Times reports on why the phrase "Big Data" has become such a sig deal.

    Now, to begin with, you have to understand what "Big Data" is. It is, the Times writes, "a shorthand label that typically means applying the tools of artificial intelligence, like machine learning, to vast new troves of data beyond that captured in standard databases. The new data sources include Web-browsing data trails, social network communications, sensor data and surveillance data ... In theory, Big Data could improve decision-making in fields from business to medicine, allowing decisions to be based increasingly on data and analysis rather than intuition and experience."

    There are, according to the story, two reasons that the term has gotten traction: "The first is that the term itself is not too technical, yet is catchy and vaguely evocative. The second is that behind the term is an evolving set of technologies with great promise, and some pitfalls."
    KC's View:
    Back during the Food Marketing Institute (FMI) Show in Dallas last May, during a session about e-commerce, Tom Furphy (who launched the CPG business at Amazon.com and who now is founder/CEO of Consumer Equity Partners) and I had a discussion about the notion of "Big Data." You can see the segment here.

    The real point about "Big Data," it seems to me, is not to use it as a replacement for experience, intuition and judgment as one makes business decisions, but to use it as a measurement tool both before and after the decision is made, helping to understand what works and, maybe even more importantly, why. It can justify a decision, though it is important to (sometimes) go against the data when such a decision seems warranted.

    The thing that smaller retailers have to remember is that the big guys - the Amazons and Walmarts of the world - are going to be using these tools to make ever more efficient and effective decisions. They want to as much as is humanly (and, occasionally, inhumanly) possible about their customers' buying decisions. Which makes it critical for smaller regionals and independents to do everything possible to find ways to know more about their shoppers and to put that knowledge to work.

    Published on: August 13, 2012

    In the UK, The Grocer reports that Tesco has introduced into two stores a fixture that allows customers to burn their own CDs and DVDs in minutes, allowing these units to virtually carry a much broader selection of movies and music than space ordinarily would allow.

    If successful, the story says, Tesco will roll out the program to other stores, hoping that it will "help to stem the decline in sales of physical media."
    KC's View:
    It is like Tesco believes it has come up with a decade-defining idea. The problem is that the decade may be the nineties.

    I cannot remember the first time I heard about in-store machines that burned CDs and DVDs, but I'm pretty sure I was in my forties. (I'm not anymore.)

    This may be a good idea for some people in Tesco's target demographic, but I hope the retailer isn't spending a lot of time, space and money on it. Because there are these technologies called "streaming" and "downloading" that are all the rage with the kids, and there's a reasonably good shot, I think, that they could become a real factor.

    Next thing you know, Tesco will be promoting a machine that prints newspapers and magazines, hoping that it will get people reading the physical versions of such media properties again.

    The reason physical media properties are suffering from declining sales isn't because of lack of selection. It is because an enormous percentage of the population moved on to acquiring such things in other ways.

    Published on: August 13, 2012

    • The Wall Street Journal this morning notes that when Walmart reports its Q2 results tomorrow, it will offer two indicators - one is how the retailer's recovery is faring (including its investment in smaller store formats), and the other is how the broader US consumer recovery is doing.

    The Journal writes that while most analysts are expecting a positive quarterly report, "there may be a cap on just what Wal-Mart can do - not because of any troubles it may run into internally, but because of the iffy economy. Many of Wal-Mart's customers live paycheck-to-paycheck, part of the lower-income strata that is still struggling."
    KC's View:

    Published on: August 13, 2012

    The Sacramento Bee reports that in the wake of last week's decision by one of two United Food and Commercial Workers (UFCW) groups to reject a contract offer tendered by Save Mart Supermarkets and recommended by the UFCW negotiating team, both sides "are back where they were when negotiations began 10 months ago," and are likely to return to the bargaining table.

    "There's no contract – but no strike either," the Bee writes. "Save Mart and its employees, along with workers at Raley's and Safeway, will remain in contract limbo for some time to come. Some of the most painstaking labor negotiations Northern California has seen in years appear no closer to resolution."

    All three chains had been pushing for labor concessions, but Save Mart had been the only one to get as far as a tentative deal; the UFCW had said it was persuaded that many of the chain's stores were unprofitable and would not survive without concessions.
    KC's View:

    Published on: August 13, 2012

    JC Penney CEO Ron Johnson told analysts on Friday that despite dismal quarterly numbers reported by the chain, "I’m completely convinced that our transformation is on track. It is very clear that withdrawing from our promotional model to a more everyday model has been harder than we anticipated. But it doesn’t change our conviction that the promotional model had run its course and that we have a far better path forward.”

    Johnson, MarketWatch reports, is in the process of eliminating the promotion, coupon and constant sale-driven culture of the chain into more of an EDLP model, and "he outlined his plan to make the retailer a 'mall within a mall' — a specialty department store outfitted with such in-store shops as Levi’s, Liz Claiborne, and Martha Stewart and a central 'town square' area where, say, kids could have their pictures taken with Santa during the holiday season."

    Despite the short-term numbers, some analysts seem to be buying in.

    “J.C. Penney was well on its way to become a zombie retailer,” Newedge retail strategist Bill Dreher tells MarketWatch. “He’s taking some proactive and meaningful steps on how to evolve into a more active-traffic retailer. It’s a huge undertaking which has had, and will continue to have, some challenges. But it looks like with time, it really could begin to work.”
    KC's View:
    I'm not always a big fan of Wall Street-oriented retail analysts, but I have to admit I love that "zombie retailer" line.

    Published on: August 13, 2012

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

    • The Chicago Tribune reports that "McDonald's has declassified the Big Mac's special sauce" in a YouTube video featuring the chain's executive chef, Dan Coudreaut in which he answers a question about how to make a Big Mac at home - including what is in the special sauce immortalized in the 1974 ad campaign about how the Big Mac consists of "two all-beef patties, special sauce, lettuce, cheese, pickles, onions on a sesame seed bun."

    "The answer," the Tribune writes, "comes just 36 seconds into the 2-1/2 minute video.  The chef pulls out a mixing bowl with mayonnaise, relish and yellow mustard. To it he adds a little white wine vinegar, garlic powder, onion powder and paprika 'to enhance the color.'  A little whisking and voila -- special sauce." The percentages are not specified, but not hard to estimate - and the video has been viewed some two million times.


    "This is taking transparency and openness to a new place," says a company spokesman. "We've got some really engaged customers that have valid questions about ingredients and the way we produce our food."

    Next up ... Coca-Cola will unveil the recipe for its flagship drink. Yeah, right...

    • The San Francisco Chronicle reports that Campbell Soup will try to lure young consumers to the soup aisle with a spicier variety called "Go! Soup," described as "a ready-to-eat meals line coming this month in varieties that include chorizo, pulled chicken with black beans, and golden lentils with Madras curry. To provide fresher ingredients and speed preparation time, the new soup line eschews the traditional cans in favor of plastic pouches in colors such as fuchsia. Campbell is using similar pouches in its skillet sauces, another new line that includes flavors such as creamy chipotle."

    • The New York Times reported over the weekend on how supermarket perimeter departments is the sexy heart of the modern food store, offering fresh foods that give savvy retailers a differential advantage over competitors - and therefore more and more retailers are putting a great emphasis on it.

    Gee? Y'think?

    It is when reading stories like this that I feel old. Because I think I wrote my first story about the supermarket business in late 1984, and I think it is a pretty good bet and that I used the phrase "perishables around the perimeter, packaged grocery in the core," making the point that it is the perimeter of the store that usually defines a store's narrative.

    Some things have changed since then. For one thing, I try to avoid the word "perishables," preferring "fresh foods." As one retailer once told me, "Fresh foods taste great and look great. Perishables rot." I thought that was really smart.

    Every once in a while, I hear a retailer refer to the perimeter as the "periphery." Note to retailers ... you don't want your fresh foods to be on the periphery. They may be on the perimeter, but in most cases, they serve as the core of your heart and soul.

    KC's View:

    Published on: August 13, 2012

    • Price Chopper Supermarkets/Golub Corporation announced today that Jay Mandrillo has been hired as Director of Bakery Merchandising. He comes to Price Chopper from Wakefern/ShopRite in NJ working in the bakery and produce areas. He has also worked previously for Pathmark, Kings Supermarkets and Stop and Shop.
    KC's View:

    Published on: August 13, 2012

    I got the following email from MNB user John Rand in response to my Eye-Opener on Friday about a great experience I had being hired to give a speech to Supervalu's Eastern Region, and how impressed I was with the people working for embattled company:

    In Friday’s column you pointed out you had a positive experience with Supervalu as a client, and it moved me to weigh in on the long running conversation about Supervalu here in MNB.

    My experience is exactly the same as yours. As you know, Kevin, you and I do some of the same things. (I am just not smart enough to have started my own website and not clever enough to keep up with you about everything else from movies to wine, however much I enjoy it! Besides, I’m a Red Sox fan!)  

    But I was privileged to speak to a large number of the Supervalu store manager community at their Store Directors conference in Minneapolis a few months ago, just a few weeks before the Board made their recent announcements, and I will be meeting with another group of their managers shortly in Chicago, and I have found the personnel at Supervalu to be unfailingly polite, generous as individuals, highly motivated, and professional.  The ones I have spoken to individually have been anxious to find a positive path forward, realistic about the issues involved, and eager to gain and apply new skills and ideas.

    In a larger sense, it is not entirely Supervalu’s fault that the Albertson acquisition occurred just before the biggest downturn in economic and financial performance of the American economy in two generations. They took on a big mortgage and knew it was a big job – and discovered that a lot of planning assumptions were suddenly ‘way out of date. It may have taken too long a time to find a way to cope, but it has not been for lack of trying at the store level.

    I too hope for the best and wish everyone in the Supervalu community well. It is not healthy for the industry to lose such a large and complex contributor to the business, and not fair to the many thousands of associates and their efforts to write them off too soon.

    There’s work to be done and problems to fix. I am encouraged that they are rolling up sleeves and working on it.


    And MNB user Randall Onstead added:

    Your Open Eyes, Ears and Mind piece was both classy and transparent on your part.  A wonderful reminder that we work in an industry filled with gracious and genuine people who want to feel proud of the company where they work.

    Thanks.




    I love it that all I really have to do is use the words "US Postal Service," and people start sending me emails.

    MNB user Roy St. Clair wrote:

    This whole situation with the Postal Service has also produced a significant “ripple-effect”.

    I saw an NBC news story last evening pertaining to post-Gulf War veteran’s unemployment rates…something like 4 or 5 times the national average.

    In the past, the Postal Service provided many of these folks with jobs. Veterans were given preferential status (well-deserved) and got to use their time spent in the military towards retirement and benefits.

    Now these jobs are gone and a key employment option for veterans has been lost.

    I love the ideas that have been discussed in your column about partnering with Amazon, etc.

    You would think that someone high up in the Postal Service would find a way to make it happen…and possibly save this institution and the jobs that go with it.


    You'd think.

    MNB user Gail Graham wrote:

    I know it may sound crazy, but when I was in the Yukon a few weeks ago I willingly paid $1.00 per stamp so I could send postcards back home to the grandkids. In the states  I only pay 44 cents for a first class letter. And the last time I had an “overnight” piece to mail I paid about $6.00 less at the Post Office than I would have at Fed Ex.

    I use email as much as anyone, but now and then snail mail is useful.  Perhaps the Post Office needs to review their pricing structure in addition to scrutinizing all of the other aspects of the business. But then the problem may be that they don’t think of themselves as a business.


    Another MNB user wrote:

    We had a little chuckle the other day in our office about the USPS.  My husband is a rural route mail carrier.

    I posed the question "who stops at every single residence in the United States once a day, 6 days a week?" Seems like an expensive task.  At some point they had it figured out, back when there was enough mail to cover the costs.

    So I said to my cube mates (we are a sales office) what would you like to see show up in your mailbox.  Someone said "a salad", "fresh locally grown fruit/veggies", "cigarettes", "lottery tickets".  All really good ideas.  Now I'm not a smoker, but I'm pretty sure smokers need a new pack or two by Monday when their mail comes.  How about 2 packs every Monday?

    How about if we let all the post offices in the country be their own individual delivery hubs with their own P&L statements?

    The post office essentially is a local delivery company.  They can deliver anything that can fit in the box.  So . . . 45 cents for a letter from anywhere in the US, and then supplement the cash flow with $.10 for a pack of cigs or $.10 per lottery ticket (plus the profit in those two items!).  They could inventory and deliver these items.  There would be some sort of order process (smart phone, computer, or good ole' paper), and a delivery process with a lock box.  OK, maybe not salads, and I know the idea is "really out there", but I think that is the kind of thinking they need.  Business as is, is not working.

    The next idea is to create some sort of self mailer vending machine in all the Walmarts.  Set the package on a scale, it weighs and measures the size, you put the address in and either cash or credit and it pops out the right size box, with a mini roll of tape and your printed address label - then you drop it in a (big) mailbox.  The mailman comes once a day to pick it up.  Yep, even on Saturdays.  It could even be computerized where it would remember you, and offer you frequent shopper discounts.  Can you imagine December.  And how nice at the 24 hour Walmarts!


    I have no idea if what you are proposing would work, but this is the kind of thinking that the USPS needs if it is going to survive.

    Another MNB user wrote:

    While I certainly agree the USPS needs to re-define its value proposition for the future, there are certain things in which its indispensable.

    In business, i am a strong proponent of the hand-written note. While Thank You emails are politely read, then instantly deleted and forgotten, an honestly written note received in the mail takes on special meaning. I have been reminded of notes I've written to clients YEARS after the fact, while emails received yesterday cannot be recalled.

    On the personal front, I sent a sympathy card off to friend of the family who recently lost a loved one. Somehow, an e-card sent for the same purpose seems almost inconsiderate.

    To me, people are beginning to wake-up & recognize the value of time & effort in a different way. When you think of it, there isn't a lot of difference between taking the time and effort to cook a family meal and writing a hand-written note. It's a matter of taking time to do something worth - while and meaningful. Folks inherently recognize and appreciate that effort.


    While I agree with many of your sentiments, the fact is that this is not a path for success for the USPS. Appealing to people to write thank you notes as a way of saving the system strikes me as too little way too late.

    And finally, from another MNB user:

    Seriously??? Our government should not be running anything...no program they touch works. The private sector should be handling everything from postal service to school lunches...

    This strikes me as the kind of hyperbole that does not get us anywhere. It draws the line in a way that makes serious discussion and compromise impossible.

    The government should not be running anything? Really?

    And finally, a great line from MNB user Kerley LeBoeuf:

    Ya think the USPS should rethink that "forever" stamp?

    Boom!

    Wish I'd thought of that line...
    KC's View:

    Published on: August 13, 2012

    • Rory McIlroy yesterday won the PGA Championship with what is being referred to as a dominating performance - a13-under-par total - that reminded some of the young Tiger Woods. The 23-year-old golfer won his second major championship at an age where he is actually a few months younger than Woods was when he won his second major.

    • The London Olympics came to a close last night, and the United States led the gold medal total with 46 (104 total). China was second with 38 gold medals (87 total), and Great Britain was third with 29 gold medals (65 total).
    KC's View:
    Can we please give an honorary gold medal to Eric Idle, for leading the entire stadium of people attending the closing ceremonies in "Always Look on the Bright Side of Life"? (And banish to some distant frontier whoever thought up the grandiose production built around it?)