retail news in context, analysis with attitude

Published on: October 18, 2012

This commentary is available as both text and video; enjoy both or either. To see past FaceTime commentaries, go to the MNB Channel on YouTube.

Hi, I'm Kevin Coupe and this is FaceTime with the Content Guy.

There was an op-ed piece in the New York Times the other day that I think represented a fundamental misunderstanding of the digital revolution, and while it was not about retailing or marketing, I think it is worth addressing since some of its misconceptions could be shared by other disciplines.

The piece was by Justin Hollander,identified as assistant professor of urban and environmental policy and planning at Tufts University and the author of “Sunburnt Cities: The Great Recession, Depopulation and Urban Planning in the American Sunbelt.”

Hollander's column objects to a stated objective by the Department of Education to, over the long haul, ged rid of paper textbooks. The argument seems to be that kids will be more open to learning from e-books, which can bring a more diversified experience than just words on paper; it also is argued that e-books will be easier on kids' backs.

Hollander writes: "While e-readers and multimedia may seem appealing, the idea of replacing an effective learning platform with a widely hyped but still unproven one is extremely dangerous."

And then Hollander draws some comparisons, suggesting that cars are a metaphor for e-readers, while the streetcars and mass transit systems them often replaces are a metaphor for physical textbooks; these days, he notes,many cities are bringing back those mass transit options because the wisdom of their original existence has been demonstrated all over again.

And then he makes another comparison that I find to be extraordinary: "The Polaroid is a wonderful device for what it is, but it will and should remain a technological novelty. On the other hand, few higher-tech formats deliver the lush sound quality of the vinyl record, and younger generations have recently returned to the format.

"In other words, we shouldn’t jump at a new technology simply because it has advantages; only time and study will reveal its disadvantages and show the value of what we’ve left behind."

Now, I understand that as a teacher and a writer, Hollander has a desire not to walk away from formats and low-tech options that have served him - and many millions of people - so well. And I'm just the co-writer of a book about the movies and a summer team-teacher at Portland State University, so I won't pretend to match my credentials up against his.

But give me a break.

I'm pretty sure that in education, accessibility is what we're seeking.

And yes, sure, some cities are bringing back mass transit systems. But I think your metaphor breaks down here, because as much as I love cities with great subway and streetcar systems, those lines will only take you where they can go. If you want to go where you want to go, you need to use some other form of transportation. And the whole point of the way that modern education uses technology is that it allows students to think outside traditional lines, to escape from the boundaries that were drawn for us back in the days when these technologies did not exist.

And here's something that Hollander doesn't even address in his Times piece - the fact that digital textbooks can be updated and corrected easily and constantly. Unlike print textbooks which need new editions, which cost money and take time to print and distribute. I'm not surprised he doesn't talk about this e-advantage, because it undermines his whole case.

I get it. Some people - and some industries - are afraid of technology. They yearn for the good old days. They acknowledge that they need to change, but in their hearts they think that they're only going to go down that road kicking and screaming.

I don't know about you, but I'm not ready to turn in my iPad and only read print books. There is a place for both, and each one has its advantages. But I want an education system - and the world wants retailers and marketers - that are adapting to a digital world, and that are able to access products and information without concerns about old world boundaries.

The efficacy of e-books hasn't been proven? Really? On what planet?

That's what is on my mind this morning, and as always I want to know what is on your mind.

Postscript: Coincidentally, after this video commentary was recorded, Amazon announced that it is launching a service that it says will help schools and workplaces centrally manage Kindles used by students and employees — sending out e-books, distribute updated content, or blocking certain types of activities. The service, called Whispercast, is clearly designed to help Amazon expand its footprint in the educational establishment.

Published on: October 18, 2012

by Kevin Coupe

The publishers of Newsweek announced this morning that they are ending the magazine's print edition at the end of 2012, and will subsequently only offer digital editions of the magazine.

In a statement released this morning, the magazine's editor, Tina Brown, said that "Newsweek Global, as the all-digital publication will be named, will be a single, worldwide edition targeted for a highly mobile, opinion-leading audience who want to learn about world events in a sophisticated context. Newsweek Global will be supported by paid subscription and will be available through e-readers for both tablet and the Web, with select content available on The Daily Beast."

Brown acknowledged that over the past several years, the bulk of the growth being seen at Newsweek has been in its various digital offerings, and wrote: "Currently, 39 percent of Americans say they get their news from an online source, according to a Pew Research Center study released last month. In our judgment, we have reached a tipping point at which we can most efficiently and effectively reach our readers in all-digital format. This was not the case just two years ago. It will increasingly be the case in the years ahead." By year’s end, she noted, "tablet users in the United States alone are expected to exceed 70 million, up from 13 million just two years ago."

I'm not entirely sure that whatever problems Newsweek has is entirely the result of the digital revolution; it has been my feeling over the past year or so that Newsweek has offered a depressingly weak editorial product, with articles and cover stories that have seemed irrelevant and sometimes just silly. Time, I think, has done a far better job of maintaining a robust editorial product.

But the realities of the digital revolution cannot be underestimated. They are affecting every business, and every businessperson.

The decision - probably inevitable - by Newsweek is an Eye-Opener ... and it is one that, I have no doubt, will be replicated by many other print publications, a lot of which do not even realize today that they are on the edge of obsolescence.

Published on: October 18, 2012

by Kevin Coupe

Yesterday in this space, we took note of a study indicating 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.

This is a great example of how technology is affecting consumer behavior, and changing longtime shopping/research patterns in fundamental ways ... and I offered the following personal observation:

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.

I'm repeating all this for a reason ... and it is a reason that ought to resonate for anyone in the retail business, trying to figure out how to balance traditional and high-tech marketing efforts.

I got an email yesterday from a senior executive with a move theater chain who confirmed my experience, but from the business side:

"Four years ago," this executive told me, his company's annualized dollars spent with newspapers across America was in the tens of millions.

Today, he said, the total is zero: "Bupkis. $0."

Now, that's an Eye-Opener ... and a concrete example of a bottom line advantage to the mobile revolution.

Published on: October 18, 2012

The Wall Street Journal has an interesting piece about how Amazon is facing some payback for its ambitious and aggressive practices.

In this case, the backlash is a reaction to its decision to not just be a retailer, but also a publisher, going head-to-head with the companies from which it buys books. Amazon recently published a memoir entitled "My Mother Was Nuts," by Penny Marshall, the director of Big and A League of Their Own and the star of "Laverne & Shirley."

The book only sold 7,000 hardcover copies in its first month of release, which is not considered to be very good for a celebrity memoir - and it ends up that at least part of the reason for the poor sales is that a number of other booksellers, including Barnes & Noble, refused to sell it.

It isn't an official "boycott." Some of these retailers say that they will sell books published by Amazon in the future. Just not this one.

The broader issue is how much power Amazon is amassing. "It's panic time," Siva Vaidhyanathan, a professor of media studies and law at the University of Virginia, tells the Journal. "The notion that a company as powerful as Amazon has such a tremendous amount of influence on what we read, how much money authors make, and the formats that books appear in is really scary to the book industry and other industries as well."

For its part, Amazon says the Penny Marshall book has been selling well on Kindle, but it does not break out those sales.

The Journal writes that "Amazon paid about $800,000 for "My Mother Was Nuts," publishing executives say. By traditional metrics it needs to sell about 75,000 hardcover copies and 30,000 to 40,000 e-books to recoup the advance and marketing costs. Alternatively, it would take 100,000 e-books and about 25,000 hardcovers."

Published on: October 18, 2012

The Associated Press reports that "drought, frost and hail have combined to ravage Europe’s wine grape harvest, which in key regions this year will be the smallest in half a century, vintners say.

"Thierry Coste, an expert with the European Union farmers’ union, said Wednesday that France’s grape harvest is expected to slump by almost 20 percent compared with last year. Italy’s grape crop showed a 7 percent drop — on top of a decline in 2011."

The story goes on to note that "the European wine harvest automatically has a global impact since it accounts for some 62 percent of the worldwide wine production. It won’t mean any immediate drought for consumers since retailers typically offer a wide range of vintages. And taste often wins when yields are small."

Published on: October 18, 2012

• MyWebGrocer announced that it is launching new online grocery tools for two chains, representing more than 200 stores in the U.S.  Both of the new retailers, the company says, "will be leveraging MyWebGrocer’s best-in-class digital marketing solutions that have cross platform functionality and will augment the retailers’ in-store shopping experience by providing access to planning tools, digital circulars, online advertising, social media and mobile apps. "

The two chains are the 165-store Grocery Outlet, which will be "offering a full set of digital planning tools to customers that will also be available via mobile web and accessible on the Grocery Outlet Facebook page ... The planning services work seamlessly together to help customers see what is on sale, add items to a shopping list, and save money on their groceries"; and Niemann’s, which "will be bringing digital solutions to 43 stores in the Midwest. Niemann’s will offer digital planning tools, in addition to joining MyWebGrocer’s advertising platform.  The planning solutions are available on multiple platforms and include digital circulars, online recipe builders, coupons and shopping lists."

Full disclosure: MyWebGrocer is a longtime and valued MNB sponsor, helping to bring MNB free-of-charge to 25,000+ subscribers each day.

Published on: October 18, 2012

Consumers Union, the policy and advocacy arm of Consumer Reports, has announced its support today for legislation that would help the Food and Drug Administration better understand how the overuse of antibiotics in food animals is making these drugs less effective for people.

Consumers Union writes: "According to the FDA, an estimated eighty percent of all antibiotics sold in the U.S. are used in food animals, mostly to make them grow faster and to prevent disease in crowded and unsanitary conditions.  The routine use of antibiotics in food animals promotes drug resistant superbugs that flourish on farms and spread to communities.  But little reliable data is currently available on the amount and type of antibiotics that are used for each category of food animal, which has hampered the FDA’s ability to address this issue ... Consumers Union has urged Congress, the FDA, and some state legislatures to ban the routine use of antibiotics in animal feed.  But these efforts have been blocked by the politically powerful pharmaceutical and livestock industries, which profit handsomely from current practices."

The proposed Delivering Antibiotic Transparency in Animals (DATA) Act would a) require "drug manufacturers to disclose to the FDA how their antibiotics are used on the farm by determining which animals the drugs are given to and for what purpose"; and b) limit "this reporting requirement to food-producing animals most frequently consumed in the U.S. and to only those antibiotics that are important for human medicine."

Published on: October 18, 2012

• In the UK, the Guardian reports that Tesco plans to begin selling Fresh & Easy branded products - carrying the label of its US division - in all its UK stores.

According to the story, "Around 10 Fresh & Easy products, including ready-to-cook vegetable kits for casseroles and stews, have already begun appearing in the produce aisle and a spokeswoman confirmed the range, which will expand over time, would reach all stores within weeks. Although the same products are not sold in Fresh & Easy stores, the brand ethos is the same, Tesco said, carrying the promise that recipes do not contain additives or preservatives."

The downside, analysts say, is that Fresh & Easy has little or no brand equity in the UK. But the upside could be that Tesco's UK business will have to pay licensing fees to the US business, which could add some money to the bottom line of an enterprise that has found it difficult to use anything other than red ink.

Published on: October 18, 2012

• The Toronto Star reports that Loblaw Companies plans to cut 700 jobs from its administrative and headquarters staff in Canada, part of an overarching goal of reducing expenses as it seeks greater profitability and better footing as it looks to compete with both Walmart and Target there.
• The Wall Street Journal reports that Whole Foods plans to open two new stores on Manhattan's Upper East Side in New York City.

"One site is on West 125th Street and Lenox Avenue and another is at 87th Street and Third Avenue ... The two new stores will mark the eighth and ninth Manhattan locations for Whole Foods, which also has stores in TriBeCa, Chelsea, Union Square and the Upper West Side. It recently opened a location on 57th Street between Second and Third avenues. Harlem has long suffered from a relative lack of fresh-food options, although more smaller grocery stores and restaurants have opened recently."

• The San Francisco Examiner reports that city officials there are leasing two sites, in the Richmond and Visitacion Valley districts, to discount chain Grocery Outlet. The stores are scheduled to open next summer or fall.

• The Chicago Tribune reports that construction is scheduled to begin today on a new Target store being built on the site of the former Cabrini-Green Housing project on Chicago's North Side.

Published on: October 18, 2012

...will return.

Published on: October 18, 2012

In game three of the National League Championship Series, the St. Louis Cardinals defeated the San Francisco Giants 3-1, taking a 2-1 lead in the best-of-seven series.

Over in the American League, the Yankees did not lose last night ... because their game against the Detroit Tigers was rained out. The series, in which the Tigers have a 3-0 lead, resumes this evening, weather permitting.

Published on: October 18, 2012

Supervalu this morning announced second quarter fiscal 2013 net sales of $8.0 billion compared to $8.4 billion last year. The decrease, the company said, "primarily reflects both a decline in identical store sales and the disposition of a majority of the Company’s retail fuel centers which contributed $158 million in sales in the second quarter of fiscal 2012. Identical store sales were influenced by the stressed consumer, the competitive environment, and continued investment in achieving competitive pricing."

Second quarter Retail Food net sales, Supervalu said, were $5.20 billion compared to $5.61 billion last year.

Supervalu also said that "second quarter Save-A-Lot net sales were $973 million compared to $972 million last year, an increase of 0.1 percent, reflecting the benefit from 47 net new stores being operated at the end of the second quarter of fiscal 2013, offset by the impact from network identical store sales of negative 3.7 percent."

In addition, the company said that it has named Janel Haugarth to lead its independent business organization, replacing Leon Bergmann, who has decided to leave the company. His last day is October 19. Haugarth is a 35-year veteran of the company and returns to the independent business organization, where, the company said, "she brings knowledge and leadership in serving the needs of the more than 2,000 independent grocery retailers Supervalu supplies nationwide. In addition, Haugarth will continue in her role leading Supervalu's business optimization efforts. Her appointment as president of independent business and business optimization is effective immediately."