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    Published on: October 17, 2012

    by Kevin Coupe

    Yet another way in which the mobile revolution is changing the ways in which people buy things...

    Emarketer.com reports that about two-thirds of regular moviegoers are using their mobile devices - smartphones and tablet computers - to make decisions about what movies to see and where to see them.

    These decisions are informed by reviews, location information, and, to a great extent, the availability of preview trailers that they can watch on their devices. And, the story says, "Regular moviegoers were also significantly more likely to use their smartphones to purchase tickets, check in to a social network, or write a comment about or review a film online."

    Now, to be fair, this isn't everybody. Men are more likely to do so than women. However, to a surprising extent, there does not seem to be a difference between how young people and older people use this technology.

    But I can tell you this. About eight out of ten times I go to the movies (and I go a lot more than most people), I use my iPhone or iPad to decide what movie to see, where and when to see it, and even buy my tickets using Fandango. When I'm going to the giant AMC/Loews theater in Port Chester, New York, which I often do, I'm able to use my membership in the Stubs frequent viewer program to avoid paying the online purchase fee. (I also get free tickets after I've spent $100, which doesn't take that long.) I cannot even remember the last time I went to a newspaper to check out the movie ads or times.

    But this is a great example of how technology is affecting consumer behavior, and changing longtime shopping/research patterns in fundamental ways. It is an Eye-Opener ... and people in all marketing venues need to pay attention.
    KC's View:

    Published on: October 17, 2012

    Fox Business reports that Kroger "is preparing to go head-to-head with Wal-Mart Stores Inc., as the supermarket operator plans to invest $200 million more each year on expansion in existing and new markets, with a focus on building a different type of grocery store that will sell everything from asparagus to sweaters."

    Excerpts from the story:

    • "Kroger, one of the nation's largest grocery store networks, has outpaced competitors, such as Safeway Inc. and Supervalu Inc., by marking down its prices to become value-oriented, even before the recession started, and expanding its store-branded line of products to lure budget shoppers."

    • "Like its peers, Kroger is grappling with intense competition, as dollar stores, drugstores and mass-market retailers like Wal-Mart expand their grocery departments, while specialty and organic shops like Whole Foods Market Inc. gain traction."

    • "The changing landscape has called into question the future of America's largest grocery chains. Kroger said its efforts to evolve with the changing marketplace - such as its new store designs, mobile phone application and loyalty program - will help it stay relevant and steal market share from its conventional competitors."

    • "Kroger said throughout the next two to three years, it will mainly be filling in its presence in markets where it already operates, but will likely enter one or two new ones with the broader Marketplace format."
    KC's View:
    I have an 18-year-old daughter who likes to shop. She likes online shopping, but also likes self-checkout in stores. And all I could think about when reading this story was how, when we would go to Ohio to visit her older brother, who was attending college there, she used to love going to the nearby Kroger Marketplace. Just loved it. Somehow, it spoke to her. Made her want to go back. Made her wonder how come we didn't have one back in Connecticut. (A potential new market for the company?)

    I think that is an important attribute. And I think about it whenever I think about Kroger's competitive advantages.

    Published on: October 17, 2012

    Target CEO Gregg Steinhafel said yesterday that his stores will, between November 1 and December 16, match the prices offered on identical items with a number of online retailers, including Amazon.com, Walmart.com, Bestbuy.com, ToysRUs.com and BabiesRUs.com.

    ‘‘We’re proud of our prices,’’ Steinhafel said. ‘‘We believe this plays into our strength. But we also wanted to ensure our (customers) that they can shop with confidence.’’

    The announcement is the latest in a series of price matching declarations made by various retailers. Toys R Us has said it will match prices with bricks-and-mortar competitors, but not with online competitors, though it also said it will match the prices offered by its own website.

    Best Buy plans to match the prices offered by online competitors - including Amazon.com - and will offer free delivery of items that are out of stock in its bricks-and-mortar units but available at BestBuy.com.

    As the Associated Press reports, Walmart "said last week it will keep hammering its low-price message but has stopped short in matching prices with online rivals. The Bentonville, Ark., retailer told investors that it now can monitor prices across the Web every 20 minutes. That knowledge will help the discounter better react to price changes of its competitors."
    KC's View:
    The funny thing here is that, to the best of my knowledge, Amazon has not made any grand pronouncements about matching or monitoring prices ... because it doesn't have to.

    Amazon is the car that all the other dogs seem to be chasing here. Even the big dog (Walmart).

    Published on: October 17, 2012

    The Wall Street Journal reports that Walmart has hired Daniel Trujillo to be its head of international legal compliance, with the official title of senior vice president and chief compliance officer for Walmart International.

    The appointment comes "amid a federal investigation into bribery allegations at the retail giant’s Mexico unit," the Journal writes, noting that "the position is a newly created one and represents the company’s efforts to centralize compliance for its international operations in 26 different countries."

    Trujillo is currently deputy general counsel and director of compliance at Schlumberger, the oil field services company.

    The Journal reports that "Among Trujillo’s responsibilities will be overseeing compliance at Wal-Mart de México S.A.B. de C.V, or Walmex,  which has been wracked by corruption allegations. Wal-Mart disclosed in September that it has spent $51 million so far on an internal investigation into whether Walmex violated the U.S. Foreign Corrupt Practices Act."

    Those alleged violations are related to the systemic and systematic bribery of local Mexican officials by division executives, as reported earlier this year by the New York Times, as they tried to grease the wheels of expansion.
    KC's View:
    This investigation seems to have gone quiet, but my sense is that at some point in the near future there is going to be some news. And I'm not sure it is going to be good news for Walmart.

    Published on: October 17, 2012

    The New York Times that when the recent Stanford University study came out suggesting that organic foods are no more nutritious than conventionally grown foods, thoroughly enraging people emotionally and financially invested in the consumption of organics, it was in fact the second such study reaching the same basic conclusions.

    An earlier report along the same lines had been released by scientists at Newcastle University in England in April 2011 - though it it did not ignite the firestorm that the Stanford study did.

    The Times notes that there were methodology differences between the two studies: "Neither the Stanford nor the Newcastle researchers conducted new field or laboratory work; rather, both groups performed a meta-analysis, a statistical compilation of earlier work by others ... Such analyses seek out robust nuggets in studies of disparate designs and quality that offer confounding and often conflicting findings, especially in nutrition and medicine. The way the data from various studies is divvied up or combined in a meta-analysis can make a big difference in the conclusions. In the organic food research, some studies reported many measurements, some only a few. Some included several crops grown over multiple years, while others looked at only a few samples."
    KC's View:
    In the end, however, both studies ignored what organic enthusiasts say is thew real point - that they buy organics "to avoid pesticides, for the health of farm workers and for environmental considerations," as the Times put it.

    Published on: October 17, 2012

    In the UK, the Telegraph reports that Starbucks has "come under the spotlight for its negligible contribution to Her Majesty’s Revenues & Customs." In other words, not paying taxes.

    The story says that Starbucks has been doing business in the UK for almost a decade, but consistently shows a loss; last year, the company says it lost the equivalent of $50 million in the UK, which meant it was not liable for taxes. Part of the reason, the story says, is that Starbucks has "administrative expenses" that are set against its sales, and also pays licensing fees back to its Seattle parent company.

    For its part, Starbucks says that it has “paid and will continue to pay [its] fair share of taxes in full compliance with all UK tax laws, as [it] always has.” The Telegraph writes that Starbucks maintains that, in the eyes of regulators, it is a “good tax payer” which "behaved in a moral way that balanced profit with a social conscience."
    KC's View:
    All I could think about when reading this piece is the way movie companies have long been accused of juggling the books so that big hits don't make money (they have all sorts of things charged back to them), and talent with a piece of the action won't get paid. It is in the movie business that I learned the difference between "a piece of the net" and "a piece of the gross."

    Always go for the gross.

    Published on: October 17, 2012

    • Amazon.com has said that it plans to hire 50,000 seasonal workers in the US for the upcoming end-of-year holiday season. Those workers will be in addition to the current workforce of 40,000 employees employed in its 40 US fulfillment centers.
    KC's View:

    Published on: October 17, 2012

    • The Orlando Sentinel reports that Publix is now offering free Wi-Fi to its shoppers, saying that "the free service will help customers access the Internet to find products, ingredients, prices and more while grocery shopping."

    My personal opinion is that any retailer that does not offer free WiFi to customers is guilty of malpractice. These days, WiFi is almost as important as electricity and clean bathrooms.

    • The Associated Press reports that "the families of a 10-day-old Missouri baby who died and two others sickened by meningitis caused by the chronobacter sakazakii bacteria have filed a lawsuit against the manufacturer of the powdered baby formula believed responsible ... The lawsuit accuses manufacturer, Illinois-based Mead Johnson Nutrition Co., of negligence. It contends that since 2000, environmental sampling from Mead Johnson's facilities has 'revealed harmful bacteriain (in) raw ingredients, premix product and finished products'."

    BusinessFirst reports that in Louisville, Kentucky, "food inspectors will begin enforcing a new ordinance today that requires restaurants to make calorie and nutritional information available on site ... inspectors will be looking to restaurants to either post the information on menus, menu boards or other means available at the establishment. Restaurants not in compliance will have 14 days to correct the violation and are subject to a fine of $25 per day thereafter."

    • Upstate New York-based Tops Friendly Markets announced that on Sunday, October 14, the company will launch its 50th Anniversary Free For All Gigantic Grocery Giveaway: "In honor of Tops’ 50th anniversary and as a way to thank customers for their loyalty to Tops, for the next three months (October 14, 2012 through January 5, 2013), Tops is giving away millions of dollars in FREE groceries to customers in the Tops 'Free For All Gigantic Grocery Giveaway.'

    "Customers can earn Gold Anniversary Points and redeem them for a variety of free products ranging from Tops brand products like bread, eggs, sugar and butter to brand name favorites such as Tide laundry detergent, General Mills cereal and Birds Eye vegetables.  Shoppers can even accumulate Gold Anniversary Points to redeem a free Tops frozen turkey in time for the holiday season."
    KC's View:

    Published on: October 17, 2012

    Yesterday, on MNB, we reported on Pizza Hut's recent promotional effort - saying that anyone attending last night's Town Hall-style presidential debate between Barack Obama and Mitt Romney would get free pizza for life if they ask the candidates if they prefer sausage or pepperoni on their pies.

    Stephen Colbert of "The Colbert Report" responded this way: "What could be more American than using our electoral process for product placement?"

    Here's what I wrote, in part:

    There is a huge difference between the promotions being featured by some companies (choose one cup for your coffee if you prefer Romney, another one if you prefer Obama) and the stupidity of what Pizza Hut has done, which threatens to mock what should be a very serious democratic exercise.

    I've long said that every company should have someone on staff who has as his or her sole responsibility to be at every meeting and say, when appropriate, "What the hell are you thinking?" It should be that person's job not to drink the Kool-Aid, not to breathe the company's exhaust, not to buy into the notion that the company (and its executive leadership) can do no wrong.

    That's exactly what Pizza Hut needed. Instead, it dropped the ball (and the pizza) by indulging in a promotion that shows contempt for our political system.

    This was a dumb idea, poorly executed, conceived and approved by people of questionable judgement.

    What morons.


    One MNB user wrote:

    Gosh, I thought the Pizza Hut pepperoni/sausage question might be the only question in which both candidates would answer honestly and without equivocation.

    Another MNB user wrote:

    I couldn't agree with you more on the whole Pizza Hut/debate topic. Pizza Hut's promotion does show contempt for our political system, as you said.

    But what surprises me most in this is that people are shocked by it. Really? Maybe I'm remembering it wrong, but wasn't it in a town hall meeting that President Clinton was asked if he wore boxers or briefs? By that standard, sausage or pepperoni seems fairly tame. Maybe the fact that a for-profit corporation was pushing it is what makes it distasteful to so many, but I wouldn't be surprised if someone does ask the question.

    If, however, no one asks about topping preferences, it will only be because of all the bad press, or that the question isn't edgy enough. I expect that there will be other more-eyebrow-raising questions than sausage or pepperoni.


    And another MNB user chimed in:

    Why are you soft pedaling your opinion on this? C'mon tell us what you REALLY think.




    Got the following email responding to our piece about Nordstrom endorsing the rights of gay citizens to marry:

    I totally agree with you that if you take a public stand, corporately or individually, you must be prepared for backlash as well as support.

    I also believe that it is a wonderful thing that corporations are willing to take a public position on potentially controversial issues.  I may argue against their position or support them, but it's only through intelligent discussion / debate that we can understand both sides of an issue.





    On another subject, I got the following email:

    My good deed for the day was helping an 85 year old lady replace her 30+ year old tube set that finally died.  I took her to a Walmart nearby that I had shopped a few days ago.  Our first choice, a 42" LG LED model was out of stock.  They called another store and also out of stock.  Then we selected an alternative, a 40"  Samsung LED.  It was also out of stock.  Each time it took them about ten minutes to go to the stock room to check the inventory.  Her first choice in a stand to put it on was also out of stock.  And Walmart management wonders why sales aren't higher?




    Regarding the lawsuit against NYC challenging the jumbo soft drink ban, one MNB user wrote:

    There is no right to a super-sized soda.  As for city charters, cities can protect the health, safety and welfare of its inhabitants.  There is no freedom of self-destructive choices.  Even if there were, individual obesity certainly contributes to the general population’s cost of healthcare.

    The truth is, I’m not that strongly in favor of the ban.  I believe fighting obesity is worth some out of the box thinking and feel this will provide an interesting case study as to effectiveness. Alternatively, I’m not sure it isn’t too extreme and it doesn’t prevent other alternatives that are equally unhealthy.

    Reaction is being framed as a right instead of simply being on the opposite side of an issue.  Let’s move the talk of rights away from twenty-four ounce sodas and towards real issues of infringement, like the right to marry.

    KC's View:

    Published on: October 17, 2012

    In the third game of the American League Championship Series, the Detroit Tigers defeated the New York Yankees 2-1, to take a 3-0 lead in the best-of-seven series.
    KC's View:
    I'm not a Yankee fan, but I will say that manager Joe Girardi has gone way up in my estimation during the playoffs, while offering an important business lesson - the need sometimes to make the unorthodox move as one searches for a win. In this case, that has meant benching Alex Rodriguez, one of the team's major stars, for non-performance. It's tough to bench a guy who the team is spending more than $25 million a year on, though it may be a little easier since A-Rod is a) getting older and b) has admitted doing steroids in the past.

    But that's what Girardi has done, showing what Tony Kornheiser calls "onions the size of pumpkins."

    Today's game has to be won with today's team. Not yesterday's. Or, as my friend Norman Mayne likes to say, "A legend is what you were yesterday. Today you have to earn it all over again."