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    Published on: October 10, 2012

    Walmart said yesterday that it has begun testing a same-day delivery business model for products sold online in several markets around the country, hoping that it can beat Amazon.com at its own game.

    The move highlights the ongoing battle for retail supremacy between Walmart and Amazon, a battle with enormous stakes given that it is generally accepted that Amazon is likely to be roughly the same size as Walmart by the end of the decade. Indeed, offering same-day delivery is seen as being one way to encourage online shoppers to buy groceries," which could lead to more traffic, sales and market share.

    According to the New York Times analysis, "The first retailer to master same-day delivery on a wide scale could attract customers who have avoided online purchases because they wanted items immediately, and encourage current shoppers to add products that they usually buy from supermarkets or drugstores, including celery and toothpaste."

    Walmart will be able to do same-day delivery because it will be picking the products from its own stores - the ubiquity of which the Times suggests could give it an advantage in the marketplace.

    "If Wal-Mart expanded its same-day shipping across the country, it would essentially transform local Walmart stores into 4,000 distribution centers," the Times writes. "Amazon, by contrast, had fewer than 40 distribution centers in the United States at the end of last year and has plans to add about 20 worldwide this year."

    The Times notes that "Wal-Mart has been testing same-day grocery delivery for more than two years in San Jose, Calif., and now offers it in San Francisco." This new program "is already running in Northern Virginia and Philadelphia. It was introduced Tuesday in Minneapolis, and the San Jose and San Francisco areas that are already part of the grocery test will join the toys-and-gifts test this fall."

    The pitched battle between the two retailers has been illustrated lately by moves they've made to gain the upper hand. Just recently, Walmart said that it would no longer sell Amazon-crated products such as its Kindle line; last year, Amazon threw down a challenge to Walmart and virtually every bricks-and-mortar retailer by encouraging shoppers to engage in "showrooming" - the act of checking out products in stores and then using their smartphones to order those items from Amazon.
    KC's View:
    As these two giants battle it out, there could be a lot of collateral damage; I think that retailers trying to compete with Amazon and Walmart are going to have to up their games, because there is going to be ratcheted up pressure to demonstrate and sustain their own differential advantages.

    It is very smart for Walmart to test same-day delivery at a time when speculation is rampant that Amazon is expanding its fleet of distribution centers just so it can quicken its delivery times, and that it will use those warehouses to deepen its presence in the grocery business.

    I think that Amazon - which I've discovered over the years is very good at under-promising and over-delivering - has set the bar pretty high for Walmart, so it'll be interesting to see how effectively the Bentonville Behemoth is able to develop a delivery infrastructure. And the Times makes the point that this can be an expensive business ... and traditionally, it seems to me, Amazon has been more willing than Walmart to invest in such initiatives and not worry about how it is viewed by Wall Street.

    The games have begun.

    Published on: October 10, 2012

    by Kate McMahon

    For the folks at Kashi, it seems no good deed goes unpunished.

    That’s the way it plays out on Kashi’s Facebook page, where these days, every positive post about healthy nutrition or community outreach unleashes a torrent of angry comments.

    So it goes for Cascadian Farms, where even a free coupon for Facebook users was greeted with calls for a boycott and “Just say no to GMO.” And the prevailing taste on the Horizon Organics Facebook page can be simply summed up as sour milk.

    The hot button issue is California’s Proposition 37, the hotly debated ballot initiative aimed at requiring the labeling of genetically modified foods. While Kashi, Cascadian Farms and Horizon are proudly organic, their parent companies – Kellogg, General Mills and Dean Foods respectively -- are among the corporations bankrolling efforts to defeat Proposition 37.

    Much has been written, and millions of dollars spent, on this battle over labeling. (We've even had our own debate going here on MNB.) Proponents are passionate about the consumer’s right to know what is in a product, and opponents are equally adamant that a state-mandated labeling law would be a costly, litigious nightmare for retailers and producers.

    It also illustrates the unpredictable challenges of managing social media. Take Kashi, for example, which stated on Facebook it had not made any contributions to oppose GMO labeling. Even its laudable efforts to support fresh food initiatives in New York City and healthier lunch options for California school children were drowned out by angry posts directed at Kelloggs. For example:

    “How stupid do you think your (former) customers are? Do you think we can't grasp who owns you? Your attempts at greenwashing are pathetic.”

    Cascadian Farms, meanwhile, has addressed the Proposition 37 brouhaha head on in a statement saying “we hear your passion and concern” about labeling but parent company General Mills is not in favor of state-based labeling laws.

    That isn’t cutting it with the overwhelming majority of consumers commenting, including this one: “I'll go buy some other real organic food from a company that has morals.”

    Horizon issued a similar statement, saying it supported efforts such as Proposition 37 but on a national level, not on a state-by-state basis. “Sorry I don’t buy it, nor will I buy your products” was a typical response.

    Horizon even tried answering some of the posts more personally, using the person’s first name, such as “Hey, Karen, Thanks for reaching out. To be clear though, we haven't donated any money toward Prop. 37, nor are we opposed to the initiative.” Not cutting it, either.

    Clearly this Nov. 6 California ballot initiative is an early round in GMO labeling battle. Retailers, marketers, and social media response teams will be closely watching how this plays out in the media and the marketplace.

    It seems to me that in the long run, even with all the criticism, this will end up being a positive for the manufacturers caught betwixt and between. It can be tough to deal with this level of philosophical assault, much less enable it. But in the new social media order, being part of the conversation is critical, and a far better strategy than pretending it is not happening.

    The importance of being part of the debate can be seen in this Facebook comment, which streamlines the whole issue and the approach that savvy manufacturers must take:

    “Hmmm. After reading all the comments, it would appear that consumers are not only critical thinkers, but that we are willing to take the time to research these issues. The marketplace is changing ... better wake up.”

    That sound you hear is an alarm bell...

    Comments? Send me an email at kate@morningnewsbeat.com .
    KC's View:

    Published on: October 10, 2012

    by Kevin Coupe

    Talk about a demographic shift ...and one that challenges assumptions about the US population that have been held since the birth of the republic.

    The Associated Press reports that on a new study from the Pew Forum on Religion & Public Life, which says that "for the first time in its history, the U.S. doesn't have a Protestant majority."

    According to the story, "The percentage of Protestant adults in the U.S. has reached a low of 48%, the first time that the Pew Forum on Religion & Public Life has reported with certainty that the number has fallen to less than 50%. The drop has long been anticipated and comes at a time when no Protestants are on the U.S. Supreme Court and Republicans have their first presidential ticket with no Protestant nominees."

    The reason for the demographic shift, in part, is the growing number of Americans who say they have no religious affiliation - one in five, as compared to just 15 percent five years ago.

    While this change may be jarring to some, the story notes that "not religious" is not necessarily the same thing as "secular" or "not spiritual."

    " While the category as defined by Pew researchers includes atheists, it also encompasses majorities of people who say they believe in God, and a notable minority who pray daily or consider themselves 'spiritual' but not 'religious'," the story says. "Still, Pew found overall that most of the unaffiliated aren't actively seeking another religious home, indicating that their ties with organized religion are broken."

    This has nothing to do specifically with retailing. On the other hand, I think it is always a good thing to pay attention when long-held assumptions are challenged.

    It's funny. I got an email just a little while ago from a reader who I clearly have upset, and who said that "twice in the past 3 months you have denigrated Christians." (I don't think I have.) And he added that he felt that my "metrosexual 'coexist' east coast liberal views just get old after a while."

    Put aside the fact that I don't think a guy my age who buys most of his clothes from LL Bean can be described as a metrosexual. It seems pretty clear to me that, like it or not, co-existence with people who do not share our views is pretty much going to be required as the months and years pass. This Pew study is just one indication of how dramatically the world is changing...

    Can I get an Amen?
    KC's View:

    Published on: October 10, 2012

    The Chicago Sun Times tells the tail...er, tale...of a boarding facility for dogs that the owner, Andrea McCarthy-Grzybek, thought was pretty clever.

    Starbarks Dog Daycare.

    Starbucks was not amused. It has sent a legal notification to the company saying that it has to change its name, or else.

    Negotiations are ongoing, though McCarthy-Grzybek concedes that she does no have the wherewithal to do legal battle with Starbucks.

    The story notes that while it seems unlikely that anyone would confuse the doggie boarding facility with an upscale coffee shop, experts do say that Starbucks has to protect its trademark consistently, or risk losing its rights over the long term.
    KC's View:
    I get the whole trademark protection argument.

    But I have to admit that I find it ironic, considering that somewhere the descendants of Herman Melville probably would like to have a little Starbucks profit participation, considering that the coffee behemoth appropriated the name of one of the major characters in his novel, "Moby-Dick."

    Maybe that should be McCarthy-Grzybek's defense - that she's making a literary allusion, not trying to trade on another company's commercial success.

    By the way, Nation's Restaurant News reports in other Starbucks-related developments that it will roll out the Square mobile payments system in the US beginning in November, at the same time as it begins integrating Apple's new Passbook application ... it has two more Evolution Fresh juice bars slated to be opened before the end of the year, in San Francisco and Seattle ... and it will start selling La Boulange products in its US stores, beginning in San Francisco area, in late spring 2013. (It acquired the company that owns the La Boulange bakery brand for $100 million earlier this year.)

    Published on: October 10, 2012

    • The Sacramento Bee reports that "the United Food and Commercial Workers union said several workers from a Wal-Mart store in Sacramento walked off the job early today and are now in Bentonville, Ark., to join a protest of the retailer's worker policies" that has been instigated by employees from stores in Los Angeles, San Francisco, Miami, Seattle, Orlando and Dallas.

    Indeed, the New York Times reports that the UFCW says that the protests against Walmart have spread "to 28 stores in 12 states," and union organizers are warning that "disgruntled Wal-Mart employees, joined by labor unions and community groups, might stage a combined protest and educational campaign the Friday after Thanksgiving, the traditional start of the holiday shopping season."

    According to the Bee story, "Protest organizers say Wednesday's gathering also advocates change on a broad range of issues, including scheduling hours, staffing and pay."

    Reuters reports that a South African court has ordered Walmart-controlled Massmart Holdings "to double a planned fund for small suppliers to $23 million, ending more than a year of legal wrangling over (Walmart's) entry into Africa."
    KC's View:

    Published on: October 10, 2012

    • MyWebGrocer and FGI Research, a market research firm serving the CPG and grocery industries, are launching a new online research panel of digitally active grocery shoppers. Called  “Grocery Voice,” the panel is designed to offer "significant new insights and research solutions for Consumer Packaged Goods (CPG) companies that are trying to better understand today’s digital consumers."

    According to the announcement, "The Grocery Voice Panel is comprised of highly qualified respondents who have agreed to participate in market research studies and shed light on why they research, plan, and shop the way they do. The core goal of the panel is to help advertisers  understand the opinions and behaviors of shoppers and measure the impact of digital advertising campaigns on these consumers.  Studies can measure key metrics such as brand awareness, creative appeal, brand favorability and intent to purchase."

    Full disclosure: MyWebGrocer is a longtime and valued MNB sponsor, making it possible for you to get MNB each day free of charge.
    KC's View:

    Published on: October 10, 2012

    CNBC, citing as examples the ways in which companies like Whole Foods and Wegmans are selling sustainable and often local products, reports that "love them or hate them, locavores have gone mainstream, shedding their elitist, niche image. Health advocates, doctors, and First Lady Michelle Obama are convincing Americans across income groups to eat more fresh fruit and vegetables. And fresh is increasingly interpreted to mean locally grown.

    "As a result, local foods sales are booming. They grew from $4 billion in 2002 to $5 billion in 2007 to $11 billion in 2011, according John Ikerd, University of Missouri agriculture economics professor emeritus. Three-quarters of specialty food retailers say that 'local' is the most influential product claim in 2012, according to the National Association of the Specialty Food Trade."

    Indeed the US Department of Agriculture (USDA) confirms this: "Retail sales of fresh produce averaged growth of 15 percent a year between 1997 and 2007, while sales of organic fruits and vegetables increased over fourfold from 1997 to 2008, to $21.1 billion in 2008. (Not all organic food is local.)

    "Why go local? Produce you buy at the grocery store typically travels more than 1,500 miles from farm to table, says Harvard Medical School’s Center for Health and the Global Environment. But a road less travelled could mean better nutrition."
    KC's View:

    Published on: October 10, 2012

    The New York Times reports that "Costco has begun selling fine art again after quitting the business six years ago when questions were raised about the authenticity of two Picasso drawings it had sold online."

    According to the story, "In the two or so weeks since Costco, a warehouse club store, began listing “Fine Art” in the Home & Décor section of its Web site, it has sold 8 of the 10 works it initially listed, including two framed lithographs by Henri Matisse, one for $1,000, and the other for $800; a framed lithograph by Georges Braque for $1,400; a framed screen print by Andy Warhol for $1,450; and a framed textile-and-paint collage by Heather Robinson for $1,699.99, said Greg Moors, the San Francisco dealer supplying the art to Costco."

    Unlike traditional art retailers, which often put "sizable markups" on the items they sell, Costco is marking up its fine art products 14 percent.
    KC's View:
    Costco sells caskets. Wedding dresses. Why not a nice Picasso print?

    Published on: October 10, 2012

    • Michigan-based Spartan Stores said yesterday "the ratification of a three-year labor agreement with the warehouse, transportation and maintenance bargaining unit associates at its Grand Rapids distribution center. The local bargaining unit associates were previously working under an approved one-year contract extension of a five-year labor agreement which expired in October 2011."

    • The Wisconsin State Journal reports that Green Bay-based ShopKo is "no longer building 85,000- to 100,000-square-foot stores in urban areas. Instead, its new Shopko Hometown strategy involves the construction of stores of about 35,000 square feet."

    The goal is to follow in the footsteps of companies like Walmart, which have begun testing small stores as a way of broadening their portfolios, entering different markets and attracting new customers.

    "Shopko, with 134 larger stores that account for $2 billion in revenues, is eyeing 400 communities in 23 states for the construction of Hometown stores," the Journal writes.
    KC's View:

    Published on: October 10, 2012

    ...will return.
    KC's View:

    Published on: October 10, 2012

    • In the National League Divisional Series, the San Francisco Giants defeated the Cincinnati Red 2-1. The Reds now hold a 2-1 advantage in the best of five series.

    • In the American League Divisional Series, the Oakland Athletics defeated the Detroit Tigers 2-0. The Tigers have a 2-1 lead in the best-of-five series.
    KC's View: