retail news in context, analysis with attitude

Published on: September 26, 2012

by Kate McMahon

Consumer relationships with brand Facebook pages are reminiscent of pre-teen romances – quick to like, influenced by peers, flattered by attention and tokens of affection – and quick to dislike as well.

Those anecdotal observations are reinforced by a new study that found 50% of respondents think a brand’s Facebook page is more useful than a brand’s website, and 82% believe Facebook is a good place to interact with a brand.

The survey of 1,000 social media users by Lab42, a market research company, reported that 87% of people “like” brands on Facebook while 13% do not. And the top reason for “liking” a brand is the ability to access or print out coupons and discounts. In fact, 77% of those who “like” a brand on Facebook have saved money as a result. Of those, 66% had saved $20 or more in the past year, and 17% have saved more than $100.

Those findings were echoed in a report from the online research firm GutCheck earlier this month, which said both Baby Boomers (born from 1946-1964) and Millennials (1980-1994) cite a brand offer or promotion as their primary motivator for hitting the “like” button. (The Gen X-ers in between were not surveyed.) Not surprisingly, 41% of Millennials “like” more than 10 brands compared to 17% of Boomers.

But the same consumers can be fickle. Almost three-quarters admit they have “liked” a brand just because a friend did. However, Lab42 found 73% of respondents have “unliked” a brand because it posted too frequently, thus cluttering up their news feed, or they stopped liking the brand or had a bad customer experience.

When “non-likers” were asked the top three ways brands could get them to sign on, the responses were:

• More giveaways
• Post less often
• Let me hide that I like the brand.

And that, folks, is why connecting with consumers on Facebook is challenging. A brand, marketer or service provider can’t just bask in the number of “likes” listed – because if those “likes” don’t translate into purchases or dialogue with the consumer, the numbers are meaningless. Clearly an avalanche of posts (we’ve all gotten those) will drive that consumer away, and quite possibly straight to a competitor.

Succeeding requires a skilled combination of promotions, meaningful content, opportunity for consumers to interact with the brand and feel a part of the site’s “community.” All of which requires a commitment involving personnel, time and money.

So who succeeds? Business Insider last month reported on the top 20 most-liked brand/product Facebook pages (excluding entertainment companies, celebrities and brands like YouTube and Facebook itself).

Holding strong at No. 1: Coca Cola, with 47.6 million “likes” on a page that was begun by two fans four years ago and built out by the company. (Since the article came out in August, Coca-Cola’s “like” number has hit 51.7 million).

Rounding out the Top Ten: Disney (37.8 million “likes”), Converse (32.7 million), Starbucks (31.3 million), Red Bull (29.6 million), Oreo (27.6 million), Skittles (22.7 million) McDonald’s (21.7 million), Pringles (20.1 million) and Victoria’s Secret (19.3 million).

Wal-Mart clocks in at the No. 11 ranking with 19 million “likes” and Targets is two spots behind at No. 13 (17.5 million).

When I started writing this column back in 2009, consumers were “fans” of pages until the following year when Facebook changed the nomenclature to “likes.” I led a November 2009 column with a post from Starbucks stating: “We just passed 5 million fans on Facebook. We just want to take a moment to say thank you. We're honored and humbled.”

From 5 million to 32 million in less than three years. Clearly these “likes” can last a lot longer than a pre-teen romance.

Comments? Send me an email at kate@morningnewsbeat.com .

Published on: September 26, 2012

by Kevin Coupe

The Wall Street Journal has an interesting story, noting that General Electric CEO Jeffrey Immelt recently began tweeting, but that he remains "a rarity among chief executives, who have generally steered clear of social media even as their companies have embraced it to commune with customers and pursue new business." According to the story, "Seven in 10 Fortune 500 CEOs have no presence on major social media networks such as Twitter, Facebook, LinkedIn, Pinterest and Google+, according to a recent report by CEO.com and analytics company Domo."

These executives, the story says, avoid Twitter and other forms of social media - "with its demands for quick, unscripted updates that can quickly go viral" - because they are afraid of making mistakes in public forums. However, there is increasing pressure on many of them to be accessible and "authentic," and these days, social media participation can be an important part of that equation.

One anecdote in the story illustrates the risks:

"Ocean Spray Cranberries Inc. is pushing CEO Randy Papadellis to start tweeting. But when Mr. Papadellis said in a recent interview that one of his first tweets would mention drinking cranberry juice before eating sushi to prevent food poisoning, his director of communications, Cindy Taccini, quickly nixed the plan, noting that the claim hadn't been clinically proven."

And executives also would appear to have a pretty good excuse for not tweeting: they say they generally are too busy running their companies to engage in such forms of potentially risky and frivolous forms of communication.

At some level, I wonder if this really is about how people define leadership. Some will be comfortable with accessibility and being open to comments from both employees and customers, and others will prefer a more insulated stance.

It seems to me, though, that leaders have to define themselves within the context of what their constituencies demand. More and more, those constituencies are going to be demanding more open and engaged leaders.

Published on: September 26, 2012

The Wall Street Journal has an interview with Netflix CEO Reed Hastings, in which, among other things, he talks about how Netflix competes with the likes of Amazon and Hulu, each of which would like to take away some of his online video business. There are parallels here to how anyone can and should deal with such competition, and therefore instructive.

An excerpt:

"The three key things are: how much content you have, brand clarity and user experience.

"In the U.S., our content budget is about three times [Amazon's], and we've got about three times more content. And what our customers tell us is they want Netflix to have more content, not to have two-thirds less at a lower price. That's not that interesting a proposition for them. [Amazon has its Prime membership service] and it's really about low-cost shipping, but why is video in there? It's kind of a confusing mess.

"We can do a better user experience on video because it's our only business. The way we do algorithms to choose which content is shown to you is much better than Amazon's, much better than Hulu's. They've got talented teams, but they're doing a lot of other things and we're focused on this one area."

Hastings also says he tries to keep Netflix's pricing proposition simple. And low. "Our fundamental view is we grow revenue by expanding the number of members, rather than increasing the pricing," he says. "We want Netflix to be a very simple experience: one price, a clean proposition. That's why we don't have pay-per-view video and we don't have ad-supported video. We've never changed the prices on streaming. Fundamentally we're focused on low price."

Published on: September 26, 2012

Reuters reports that a gender discrimination class action suit against Costco has been certified by a US district court judge, and will be allowed to proceed.

The story says that "three women plaintiffs say Costco's promotion system has a disparate impact on women employees who seek advancement to general manager and assistant general manager," and they sought to have the class action expanded to represent 700 people.

One of the reasons that the judge said that the Costco suit is different from a gender discrimination suit against Walmart, which did not get class action certification, is that the Walmart suit was much broader, seeking to represent a whopping 1.5 million people.

Published on: September 26, 2012

Staples said yesterday that it plans to close stores in the US and abroad, reduce or relocate other stores, and shake things up internally as a way of turning around its retail business.

According to the Boston Globe, Staples plans "to trim its retail square footage in North America by about 15 percent by the end of 2015; that plan includes shutting 30 stores and downsizing or relocating another 30 locations during fiscal year 2012. (Staples has about 1,900 stores in North America.)

"The company is also consolidating its retail and online operations, closing 45 stores and delivery businesses in Europe, pursuing the sale of its European printing systems business, and appointing a new president of Staples Europe."

The Globe story also notes that this strategic plan "was unveiled several weeks after Staples disclosed quarterly earnings that plunged 32 percent; reports then surfaced that private equity firms, including Boston’s Bain Capital and Thomas H. Lee Partners, are considering making bids for the company."

Published on: September 26, 2012

Crain's New York Business reports that pure play e-grocer FreshDirect.com "will begin delivering groceries to residents of Philadelphia next week, taking the first big step towards serving another major metropolitan area outside New York City."

The company has leased warehouse space in Philadelphia to serve as a base for its operations there.

Currently, FreshDirect serves New York City, New York's Westchester County, parts of Fairfield County in Connecticut, and parts of New Jersey.

At the same time, the New York Times reports that FreshDirect "is preparing a new advertising approach as it seeks to, er, um, freshen its brand image.

"A campaign scheduled to begin this week is to introduce a theme, 'Grocery shopping perfected,' that is intended as a more engaging way to express the company’s philosophy than current lines like 'A new standard for grocery shopping'."

According to the story, "The new theme is part of a revamped pitch aimed at busy consumers - primarily working mothers - who care enough about the quality and provenance of the food they buy to pay FreshDirect’s prices."

Published on: September 26, 2012

The Financial Times reports that Tesco plans to expand its e-grocery capacity and will "open more 'dark stores' - effectively stores without customers that fulfill grocery orders placed online."

The story says that while Tesco has four such stores now, it could have dozens of them in the near future, and that each "dark store" takes the pressure off 10 actual Tesco units, allowing them to be more responsive to traditional shoppers.

FT also notes that Tesco believes that "demand for online groceries would at least double from the current 5.5 per cent of Tesco’s total sales."

The story goes on to say that "the expansion of Tesco’s online food capabilities throws down a gauntlet to J Sainsbury, Asda, and Waitrose, which are also expanding their online businesses, and to Ocado, which last week reported lower-than-expected sales growth. The move could potentially make it more difficult for Wm Morrison to break into online food retailing."

Published on: September 26, 2012

Dunkin' Donuts and CareerBuilder.com are out with a survey about who drinks the most coffee in this country, and the list looks like this:

1) Food Preparation/Service Workers
2) Scientists
3) Sales Representatives
4) Marketing/Public Relations Professionals
5) Nurses (Nurse, Nurse Practitioner or Physician Assistant)
6) Editors/Writers/Media Workers
7) Business Executives
8) Teachers/ Instructors (K-12)
9) Engineering Technicians/Support
10) IT Managers/Network Administrators

Published on: September 26, 2012

USA Today reports that US consumer confidence is at its highest levels since February, as the Conference Board said that "its Consumer Confidence Index rose to 70.3. That's up from 61.3 in August, which was revised higher. And it's the highest reading since February, when the economy added 259,000 jobs.

"The indicator is watched closely because consumer spending drives nearly 70% of economic activity. The reading is still below 90, a level that indicates a healthy economy."

Published on: September 26, 2012

• Supervalu said yesterday that it has "received multiple national honors for its cutting-edge sustainability efforts. First, the company is featured in the Carbon Disclosure Project’s (CDP) 2012 “Carbon Disclosure Leadership Index”, which honors companies for both environmental performance as well as transparency in this area. Supervalu received the highest score among national grocery retailers in this report. This honor comes on the heels of Supervalu also receiving two major honors as part of the Environmental Protection Agency’s (EPA) 2012 GreenChill Environmental Achievement Awards."

• Safeway announced that it has been informed by Interstate Meat Distributors "that some of the ground beef products produced for Safeway included trimmings that were subject to XL Foods Inc.'s expanded recall. In cooperation with the USDA Food Safety Information Service's expanded public health alert on raw boneless beef trim products imported from Canada by XL Foods Inc. that may be contaminated with E. coli O157:H7, Safeway is voluntarily expanding its September 22, 2012* recall of ground beef items to include additional dates and states.

"Safeway stores in Idaho, Montana, Oregon and Washington (State) are included in this recall of all fresh ground beef sold from the self-service meat cooler and the full-service meat counter with Sell By dates of 08-28-12 to 09-23-12.  This includes all items that use fresh ground beef as an ingredient, including but not limited to meatballs, sliders and gourmet burgers."

• The National Retail Federation (NRF) is out with its annual Halloween spending study, saying that a "record 170 million people plan to celebrate Halloween this year ... Seven in 10 Americans (71.5%) will get into the haunting Halloween mood, up from 68.6 percent last year and the most in NRF’s 10-year survey history. Consumers are expecting to spend more too; the average person will spend $79.82 on decorations, costumes and candy, up from $72.31 last year, with total Halloween spending expected to reach $8.0 billion."

Published on: September 26, 2012

Yesterday, in a commentary bemoaning some of the officiating in the National Football league by replacement referees, I drew a business metaphor:

I have to wonder what kind of damage the NFL is willing to see done to its brand as it allows the questionable calls made by replacement referees to shape the outcome of games and maybe even the season. I'm sure the NFL isn't worried as long as people keep going to games and watching them on TV, and advertisers don't complain. But that could be a short-term attitude about a long-term branding problem.

MNB user Brian Carpentier wrote:

I do feel bad for the officials that are in way over their head trying to make the split second calls on some of the best athletes in the world. We as fans are seeing a completely different game of football, and the players are starting to take advantage of the situation as well as intimidating the officials. This will get worse each week.

You are correct Kevin, the brand is what it is about, and the commissioner does not seem to be concerned enough. Apparently the talks Sunday got nowhere again. When do fans start tuning out, commercials become worth less, ticket sales slide, TV contracts slip; it will take a while, but never take your brand or fans for granted. The NFL is such a huge money maker, I am amazed they have let this go into the regular season. Perhaps it is time to start broadcasting the CFL? It could be a long season!

MNB user Mark Raddant wrote:

On Sunday I watched the KC Chiefs’ win over New Orleans.  There were at least five reviews of officials’ calls.  The game went on for well over three hours—BEFORE going into overtime.

This came just two weeks after my family went to a Chiefs’ game.  With our kids having played soccer and having had the opportunity to see some Sporting KC games, the contrast was amazing.  Football is about 90% downtime between plays and hokey pseudo-entertainment to fill the gaps (including the least funky “drumline” in history, I might add).

Football has some serious competition coming at it, and the referees’ slowing an already lengthy game is not going to help.  When I watch or go to a soccer match, I can schedule a dinner or other activity around it - and the game doesn’t take up an entire day if I don’t want it to.

MNB user Chris O'Brien wrote:

As a lifelong Packers fan, I’m far from being unbiased on this one. Still, from what I’ve read, the vast majority of football fans agree with your take on the disgraceful end to Monday night’s game. Anyway, there seems to be a recurring theme these days that when an organization’s executives take sides against those on the front lines, the end product always suffers. Sadly, a poor product doesn’t always mean an unprofitable one—at least not in the short term.

MNB user Jim Knudsen wrote:

You hit this one right on the head.  I am a fanatical Chicago Bears fan, and as such, I hate the Packers (required).   But, I love professional football much more than I want to see the Packers lose.  This situation with the officials is damaging the game and the NFL brand.   It reminds of when the ownership/management of the Chicago Bulls seemed to decide that there contribution to the team was just as important as Michael Jordan, Scotty Pippen, and the rest of that great team.   They may never recover the lost value of that brand.

Another MNB user chimed in:

I agree the officiating is pretty bad at times. Clearly, this is a result of inexperience. I disagree that the NFL is taking a short term attitude to a long term problem though. The only difference between the replacement refs and the striking refs is experience. The longer the lockout continues, the more experience the replacements gain and the further removed the striking refs become. This could become a long term advantage for the NFL, as the replacements become the ones with the more relevant experience.

And from another reader:

Just a quick correction ...

You said "the replacement referees who are standing in for striking regular officials"

The regular officials are not striking ... they have been locked out.  I think this is a HUGE
distinction.

And for those of us that love the game (and, btw, I'm a high school and college sports official, including football) it's time the NFL give in the regular officials.

The NFL had to go down several layers to find officials (these guys are low level D2 or D3 officials ... or Arena League officials).  The big conference D1 officials have aspirations of getting to the NFL at some point, so are unwilling to cut in line to get there.

BTW ... isn't it interesting, the only ownerless team in the NFL just got jobbed due to the greediness of all the team owners?

And from still another reader:

There may be a business lesson for everyone with the NFL Referee Strike.

Generally speaking, you'll not find a more ardent anti-union guy than myself, but in the case of the NFL vs NFL refs, i find myself siding w/ the Refs. Not for philosophical reasons, but for business reasons. Here you have a multi billion dollar business that has spent decades building up integrity of the game and spouting its new-found religion for player safety being undermined on a weekly basis by well-intended, but over-matched replacement refs. Game results are questioned, player safety in jeopardy. Games are now widely seen as barely managed chaos.

The reason: Pride, Arrogance, and yes, Greed.

In the whole scope of things, Refs work for chump change in this billion dollar cash machine yet they are the glue that holds this product together. Seems to me 2x chump change is a small price to pay for a harmonious and productive workplace. With credibility restored to the NFL can keep doing what it does best....creating a compelling product.

To me this is a perfect example of how the "little people" can make or break (at least in public opinion) an otherwise very successful enterprise.

And from MNB user John White:

Didn’t watch the game but if you score a whopping 12 points in a football game the replacement refs did not lose you the game. You have other issues.
 



Got a number of emails responding to Michael Sansolo's column yesterday about the enormous food catalog that he got from Staples, and some of the comparisons he drew.

MNB user Terry Pyles wrote:

Let me start by saying I love what Mr. Sansolo has brought to MNB.  His knowledge and experiences have contributed greatly to the MNB experience.

Having said that, in today’s column he wrote “But for the moment, I am just kind of stunned. Because while the blurring of lines in retail is really old hat, I still find it kind of amazing that a company I know for a specific type of products is so aggressively merchandising in a whole new area.”

I thought to myself “Really?  When was the last time Michael was actually in a Staples store?”  This is not a new concept for them by any stretch of the imagination.
 
I think Mr. Sansolo had himself a George H. W. Bush moment.  Might be time to get a little more often.

I asked Michael about this, and he said he knew that Staples carries food ... it was the extent of the selection in the enormous catalog that struck him as new.

Another MNB user wrote:

I was entranced by Michael’s listing of Donald Rumsfeld’s comments on what we know/don’t know.  I say this because my boss of 32 years has been saying this to all of us at work since day one.  We manufacture/sell product in the retail world and the food service world.  One of his favorite statements has always been, “It’s not what you know that will hurt you, it’s not what you know you don’t know that will hurt you, it’s what you don’t know you don’t know that will kill you”.  In other words, we always need to be considering the unfathomable in order to stay ahead of the competition.

MNB user Michael Core wrote:

Since it is “Gangnam Style” not “Gangham Style”, would that make that a unknown known?




MNB reported yesterday that Walmart says that it plans to hire 50,000 people to help in stores during the upcoming end-of-year holiday shopping season, its busiest time of the year.

I commented:

That works out to about 11 people a store. Or 11 more people per store who won't know much about the products on the shelves.

There was an interesting mix of responses...

MNB user Bob Vereen wrote:

When I've been in Walmart and cannot find what I'm looking for, I've always found that employees are very willing to take me to the right product in the right department.   You must just have had bad experiences.   I have not asked a non-departmental employee to give me product knowledge about a specific item.

From another reader:

I’m probably just a cynical person, but I can honestly say I have never gone into a Walmart with the expectation that anyone there will know anything at all. I’m not saying that I am discounting their intelligence, but rather their commitment to the job and not just the paycheck. When I go there, which isn’t often, I know already what I want to buy, I try to get it and get out of the store as fast as humanly possible, and I expect them to have what I want on the shelf for the previously stated everyday low price. Now that I think about it, the only question I can ever remember asking a Walmart employee is “pardon me, but you seem to be out of this product on the shelf. Can you tell me if you have any more in the back?” Pretty sad.

MNB user Lyle Walker wrote:

Sometimes you make me laugh out loud.  This comment from you on the news of Walmart hiring 50,000 seasonal workers, did the trick this morning...Concise, True, and to the point.
Keep it up!

But MNB user Mark Wright disagreed:

You need to turn down your Wal-Mart negativity filter a notch.  How can 50,000 new jobs can ever be a bad thing (unless they are Representatives or Senators)?

A few of those 50,000 might actually be people who currently shop in their local Wal-Mart and as a result have some idea of where things are.  Some might be unemployed casualties of recent retail turmoil who know what the products are and can do.  Others might be recent high school or college graduates looking to make a little money while they look for their “real” jobs.  Who knows, and who cares? 

The scary thought – a few might actually enjoy retail, and one of them might grow up to be the 2040 model of Kevin Coupe…

That is scary.

But for the record ... I plan to be the 2040 version of Kevin Coupe.

Hell, I'll only be 86. I hope I'll still be writing (though maybe not every morning, or maybe a little later in the day), will have been to the four states and one continent I have not yet visited, and still will be out there giving speeches, eating interesting foods and drinking new wines and beers.