retail news in context, analysis with attitude

Published on: August 14, 2012

by Kevin Coupe

eMarketer.com is out with a new study suggesting that while baby boomers are becoming increasingly engaged with the internet and social networking, they still lag behind younger people. “Marketers can safely assume they’ll find most 20-somethings online on a typical day. They shouldn’t have the same assurance about boomers,” the report says.

The report builds on a study from the Pew Internet & American Life Project saying that while 84.4 percent of Americans between the ages of 18-29 go online in a typical day, and 78.3 percent between the ages of 30-49 are online daily, just 58.5 percent between the ages of 50-64 go online in a typical day.

"The mobile internet is another area where boomers trail younger age groups. eMarketer estimates that 42.6% of boomers who have mobile phones are mobile internet users. Among Generation X (now ages 32 to 47), six in 10 are in that category. More boomers will buy smartphones and above-average growth in mobile internet penetration among boomers will narrow but not close the gap during the next several years, according to eMarketer projections."

The one place where boomers catch up with younger people - email. (Which, as we all know, is an old person's technology.)

"Marketers who approach boomers online shouldn’t mislead themselves with the illusion that boomers are as immersed in the digital life as younger people are," eMarketer.com writes. "Boomers are the desktop, Web 1.0 generation. They don’t shun digital technology, but neither should marketers expect to find them adopting every new twist in it."



I have to admit that I am a little surprised by these numbers. Maybe it is just the people I hang with, but I am trying to think if I know anybody - anybody - in any age group that does not go online on any given day. (Other than, let's say, people my dad's age. But even that is becoming harder to find.)

I know some people my age who don't use social networks, and even a few people who don't like to shop online. But not spending anytime online for at least a little bit each day? Hard to imagine.

Maybe it is like toilet paper. Isn't there a statistic out there saying that something like 95 percent of Americans use toilet paper? Which has always made me wonder who is part of that other five percent, and can they wear a sign so I don't have to shake hands with them?

But I digress...

Published on: August 14, 2012

Lubbock, Texas-based United Supermarkets said yesterday that it has "reconfigured" its online presence "with the launch of brand new websites for each of its major store banners: United Supermarkets (at www.unitedsupermarkets.com), Market Street (www.marketstreetunited.com), Amigos (www.amigosunited.com), as well as a corporate website (www.unitedtexas.com).

According to the announcement, "In addition to improved navigation and a more user-friendly layout, the new formats feature larger, easier-to-read weekly ads, a simplified store locator, an expanded selection of recipes and in-store menus, as well as the ability to schedule and pay for cooking school classes and dietitian store tours. As part of its ongoing commitment to the health and wellness of its guests, United also offers new meal plans focusing on heart health, diabetes management, gluten-free diet and weight loss."

And, the company said, "Each website speaks to guests in a way that identifies what is unique to each store brand. For example, the Amigos website highlights authentic ethnic food items available in the store, and the Market Street website contains features appealing to foodies and cooking enthusiasts." The websites also feature online coupons and the ability to build shopping lists.

Published on: August 14, 2012

The Detroit News has a piece in which several local retailers say that they have no plans to charge extra when customers use credit cards, a practice that could be legal if the tentative settlement of a class action suit filed by retail interests again MasterCard and Visa is approved by the retailers and the courts.

One retailer responds, "We can't get away with charging for shipping anymore, let alone adding something like that."

And another says, "What would be better for me, as a small merchant, would be to be able to negotiate those fees with my provider."

The odds of the proposed settlement actually going through have gone down in recent weeks, as a number of retailers and trade associations - including Walmart, Target, the National Association of Convenience Stores (NACS) and the National Grocers Association (NGA) - have come out in opposition to the deal, saying it only provides short term and illusory relief, rather than the structural changes needed to make interchange fee reform meaningful and sustainable.

Indeed, Bloomberg BusinessWeek reports that the office of Sen. Richard Durbin (D-Illinois) said yesterday that if retailers support the proposed settlement, it will make it harder to get the Congress to pass legislation that would tighten swipe fee regulation. Durbin has previously called the proposed settlement a "stunning giveaway" to Visa and MasterCard.

The comments by Durbin's office reportedly were made to the Food Marketing Institute (FMI) and the National Retail Federation (NRF).

Published on: August 14, 2012

• The Wall Street Journal reports that the Chinese government has approved Walmart's purchase of a majority stake in Yihaodian, a Chinese e-commerce company. Walmart previously had an 18 percent stake in the firm, but now has 51 percent.

Terms of the deal were not disclosed.

Published on: August 14, 2012

• CNET has a story saying that a new report from market firm Monetate suggests that while "social media's traffic contribution to online shopping sites increased 77 percent in one year," the fact remains that "few users actually buy anything."

The story goes on to say that "the firm's study shows that search engine and e-mail referrals are more than holding their own against social media sites when it comes to generating sales in the second quarter of 2012. Social media sites only contributed to 2.85 percent of online shopping traffic in the second quarter, but the figure did grow a substantial 77 percent from the beginning of 2011 to the beginning of 2012."

In addition, the study says that "the use of mobile devices, like smartphones and tablets, to browse online shopping has increased from to 5.89 percent to 11.6 percent," and that "smartphones are more often used for browsing and looking at single items, but not for purchasing. Tablets and desktops had higher conversion rates."

Published on: August 14, 2012

• The Lakeland Ledger reports that Publix is testing a new system that "allows customers to choose coupons from a Publix website and save them to an account. Shoppers then redeem the paperless coupons at checkout by entering their 10-digit phone number."

Currently, the story says, "Currently, Publix is testing only the system at stores in Ocala, as well as in the Birmingham and Huntsville, Ala. markets. A Publix spokeswoman said the chain is collecting feedback on the program before taking any additional steps."

• Over on Supermarket Guru.com, Phil Lempert writes that "the Centers for Disease Control and Prevention (CDC) are warning fairgoers and the general population that there's been a five-fold increase of cases of a new strain of swine flu – that’s spreading from pigs to people. The case count jumped from 29 several weeks ago to 162 last week, and rising, thanks to a wave of new cases confirmed in Indiana and Ohio, many of them attributed to contact at fairs. "The flu does not seem to be unusually dangerous, like the strain in 2009. Most or all of the cases appear to have spread from pigs to humans, meaning it's not very contagious."

And why are swine flu cases increasing so rapidly? Lempert writes, "Diagnosis of cases has become quicker because the CDC no longer must confirm a case with its own lab; states are now using CDC test kits to confirm cases on their own on, speeding the process along."

• The Wall Street Journal reports that Google is acquiring the Frommer travel guides series. Terms of the deal were not disclosed.

The move comes less than a year after Google acquired the Zagat review guides for $125 million.

Which suggests that Google has big plans for how these kinds of services can be integrated and turned into a profitable online property.

• Slate.com reports that a new study published in Pediatrics suggests that "laws strictly cracking down on the sale of junk food and sugary drinks in schools may help slow childhood obesity." However, the study also says that while there is a correlation between less weight gain and tough regulations, a specific cause-and-effect relationship has not been established.

According to the story, "Researchers followed 6,300 students in 40 states for a three-year period ending in 2007, during which they tracked their weight changes as they moved from fifth to eighth grade. On average, those students in states with strong laws regulating their access to junk food gained less weight than those in states with no such laws. Moreover, the study found that overweight students were more likely to reach a healthy weight in more heavily regulated states."

• The Associated Press reports that BP is selling its its refinery in Carson, California and other West Coast assets - including Arco-branded retail outlets in southern California, Arizona and Nevada - to Tesoro Corp. for $2.5 billion.

According to the story, "BP says it has now sold or agreed to sell assets worth $26.5 billion since 2010. The company has a target of $38 billion in disposals by the end of next year to help pay the costs of the Macondo well blowout in the Gulf of Mexico."

In all likelihood, some senior exec at BP is wandering around saying, "Can I have my life back now? Please?"

Published on: August 14, 2012

• Gregg Kaplan, who founded the Redbox DVD rental business in 2002 and sold it to Coinstar in 2009, will be giving up his COO role at the company in March 2013, the company announced.

Coinstar has named Anne Saunders, most recently executive vice president and chief marketing officer at Knowledge Universe Education, as president of the Redbox Automated Retail business, effective Aug. 27. In addition, Carole McCluskey has been promoted to be the Coinstar's new chief technology officer; McCluskey has been with Coinstar since October 2010 and most recently served as its corporate technology leader.

Published on: August 14, 2012

• Helen Gurley Brown, who parlayed her 1962 book "Sex and the Single Girl" into a longtime gig as publisher of Cosmopolitan, and who once said, "Good girls go to heaven, but bad girls go everywhere," died yesterday at age 90.

Despite the genre in which she worked, Brown was married for 51 years to film producer David Brown, who once co-produced a little film called Jaws.

• Johnny Pesky, a sturdy and dependable shortstop for the Boston Red Sox during Ted William's heyday who later worked for the team as a manager, coach and front office executive - as well as being perhaps the only former player with a major league foul pole named after him, for his perceived ability to wrap short-porch home runs around it in Fenway Park - passed away yesterday. He was 92.

Asked once what it felt like when the team he was managing won, Pesky famously replied, "The sky is a little bluer, the beer tastes a little better, and my wife looks like Gina Lollobrigida." And when the team loses, he said his wife looks like "Bela Lugosi.”

Published on: August 14, 2012

Fast Company had an interesting story the other day 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:

"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.

We've already gotten close to 100 entries, but the contest will remain open for a couple of weeks. One suggestion ... remember that the mantra is for MNB, which is not a retailer. (Some of the suggestions received to this point would be wonderful retail mantras, but are not really about what MNB does.)

Let the games continue...

Published on: August 14, 2012

Michael Sansolo is off this week, and "Sansolo Speaks" will return next week. (We're hoping he brings back some business lessons from the Olympics...)

Published on: August 14, 2012

Responding to my piece yesterday about Tesco testing CD/DVD burning kiosks in some of its UK stores, which I suggested sounded like an outdated approach for a world in which streaming and downloading are preferred technologies, MNB user Joe Guthner wrote:

I agree with you Kevin that this seems like a solution to address an outdated problem.  However, I wonder if the ability to purchase individual songs or movies at a brick and mortar location and to have them placed onto your digital storage device isn’t such a bad idea.  Oh sure, online purchasing and streaming is how a lot of the media is purchased today and will continue to grow and physical media sources will continue to decline.  However, for some reason I see this taking longer than some people think it will take.  If someone would have proposed to me in the early to mid-2000s a business model where you mailed DVDs for rent or a business model where you rented DVDs at kiosks located in thousands of locations, I would have thrown the business model in the trash and looked for ways to invest in streaming media.  The folks at Netflix and Redbox sure knew a lot more than me about this industry and how consumers relate to it.

Also, have you ever watched shoppers at Wal-Mart rummage through those DVD and CD dump bins?  Most of those items are $5 each and you see people up to their elbows in those, digging for treasures.  Rarely does one sit unshopped for more than a few minutes until a new shopper walks up and starts digging through it.  What if, for $5, you could just select the movie you want and burn it right there for $5.  Make the selections random so that there is a new group to choose from each week, to preserve the treasure hunt excitement.

And MNB user Ron Bartlett wrote: 

As a UK retail watcher and blogger, the Tesco story does initially seem like an ‘old-hat’ idea.
 
But it does have a kind of sense about it in a perverse way.
 
As younger and older affluent consumers increasingly seek to download or stream music, and as music servers are becoming more commonplace in the home, there remains a rump of consumers who:
 
• Do not have high bandwidth from their internet supplier
• Are not computer literate enough to download / stream music anyway
• Prefer a physical entity to data on a computer
 
The Tesco offer includes many ‘classic’ albums which would appeal to this older consumer, plus classic movies, etc.

And most importantly for Tesco, if the idea catches on, they can serve this remaining legacy market AND free up several feet of fixtures which can be used for new exciting products. Taking HMV in the UK as an example, they are reducing the amount of space given over to CD’s and DVD’s which were once their core market, and using that space for technology equipment to play, stream, and listen to music… Beats headphones for example.
 
So it does in the end make sense if it works… maybe.

When I wrote my piece yesterday, for the record, one of the things I said was that"while this may be a good idea for some people in Tesco's target demographic, ... hope the retailer isn't spending a lot of time, space and money on it."

So I get the demographic arguments.

However, I would suggest two things.

One is that rather than technologies such as streaming and downloading taking longer to become dominant than most people expect, I think recent history suggests that these changes happen faster than people anticipate.

And the folks at Netflix are working hard to shift their entire business model online, understanding that this is where the business is going. (Granted, they've actually been too far ahead of the wave on this. But the wave is coming.)

All I am saying is that I think it is more important to be investing in the future rather than in technologies and marketing programs that are going to be obsolete before you know it.




Another email, on another subject, from MNB user Dan Jones:

I think you need to think more broadly about Big Data – it is not just a measurement tool.
 
Retailers (both grocers and Amazon) have great insight about how consumers behave in their store/on their sites.  But this information defines only a fraction of a consumer’s life.  Big Data helps companies to round out the individual consumer profile.  Truth be told, I have a lot of life interests beyond grocery prices and Kindle books.  Big Data can help retailers understand consumers better beyond the store, and then help the retailers to reach these consumers more effectively.




About JC Penney's move to a kind of EDLP model, one MNB user wrote:

Maybe the real question is, “is EDLP dead”?  The only retailer that ever made it work after years of strict enforcement of the policy was Wal-Mart, right up till the point that their ex Vice Chairman took it out of the business plan. Even Wal-Mart today, whose CEO is saying they gone back to the policy (not really seeing it, in fact see may price increase and other non EDLP programs) can get the customer re-engaged back to this. Maybe the high low sale needle has got them…

MNB user Jennifer Hougham wrote:

Have you noticed the new Kohl’s commercials on TV this month?  They all promote how you can always “find a great sale at Kohl’s”.  Definitely trying to play up the poor response from JC Penney.




Reader Jim Nolan had some thoughts about the post office:

I agree with you on the Post Office being out of date. I mailed a letter to the Postmaster General regarding a customer service issue I experienced.  The fact that they replied at all surprised me.  The fact the the reply came via email stunned me.  They are their own enemy.




I criticized the Olympics closing ceremony for being needlessly way over the top, which prompted MNB user Gary Loehr to write:

The whole closing ceremony should have been lead off by John Cleese saying "and now for something completely different".

It certainly was that...different.

And another MNB user wrote:

Watching the closing event made me very sad.  So much effort, creativity and money spent on something with little meaning or real value.  All I could think about was how much more effective that money and talent could have been used in London.

Maybe they could have done Lennon's Imagine followed by Idle's Bright Side of life and then had the athletes dance and sing... and donated the rest of the money to food banks...