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    Published on: October 19, 2012

    by Kevin Coupe

    Internet Retailer reports that "the U.S. Postal Service will test same-delivery of products from selected e-retailers, according to a recent filing with the Postal Regulatory Commission. The test of the Metro Post will take place in San Francisco, start around Nov. 12 and could last a year or more."

    According to the story, "To receive same-day deliveries, consumers would have to make purchases from participating online retailers between 2 p.m. and 3 p.m., with USPS personnel picking up the packages after 3 p.m., the filing says. Delivery to consumers will take place between 4 p.m. and 8 p.m."

    No word yet about what retailers will participate.

    But this is the first sign that I've seen that in addition to cutting things, the USPS is trying to figure out how to be relevant in a digital economy. Walmart is testing same-day delivery, Amazon is moving in that direction, and this USPS move could help either of those companies ... or other marketers looking to compete.

    Beyond that, it tells you where the retail world is going. And what consumers may well demand at a bare minimum.
    KC's View:

    Published on: October 19, 2012

    The New York Times reports that Indian regulators have launched an informal probe - emphasizing that it is not yet a "formal inquiry" - into Walmart's $100 million investment "in an Indian company, Bharti Retail, which operates more than 200 supermarkets across India, at a time when India restricted foreign investments in retailing. The investment took the form of debt securities that paid no interest to Wal-Mart but could be converted into a 49 percent ownership stake in Bharti ... Officials want to determine if the loan from Wal-Mart to Bharti was intended to skirt the letter or the spirit of the foreign investment rules."

    According to the Times, "The investigation into Wal-Mart’s relationship with Bharti was prompted by a letter last month to Prime Minister Manmohan Singh from a lawmaker representing the Communist Party of India (Marxist), which opposes foreign investment in retailing and many other sectors."

    Both Walmart and Bharti deny that they have done anything illegal.
    KC's View:
    This just feels like a nuisance probe that is politically motivated, as opposed to the investigation into widespread bribery by Walmart in Mexico, which seems like a much bigger deal.

    But you never know.

    Published on: October 19, 2012

    The Charlotte Observer reports that Harris Teeter has opened two new 201central stores, in North Carolina that have been "renovated to feature more than 3,100 varieties of wine and almost 700 varieties of craft beer ... The stores offer a smaller grocery selection, with only a few aisles of food and a reduced frozen and cooler section. But they also offer an on-site event-planning service, complete with rentals for large parties, a cedar-walled humidor with more than 190 types of cigars, a temperature-controlled wine room, cooking classes and a cafe with sandwiches from Something Classic."

    “There was no blueprint for this,” Chuck Thompson, Harris Teeter’s director of private label goods, tells the paper. The story says that "201central carries H.T. Traders private label foods, and Thompson said the pricing is the same as mainline Harris Teeter stores."
    KC's View:
    According to the Observer, at least part of the impetus for the new format may be heightened competition in Harris Teeter's backyard - from Whole Foods, Publix and Walmart, all of which have the potential to nibble away at share of stomach from different directions.

    Harris Teeter has always struck me as the kind of company that does not need competition to think and act in innovative ways, but whatever the motivation, I think that concepts like 201central make a lot of sense. Test the boundaries, try new things, see what happens, and then do it again and again and again.

    Published on: October 19, 2012

    The Boston Globe reports that independent, family-run food retailer Roche Bros., in concert with its seafood supplier, "is launching a seafood traceability program ... Customers will be able to scan the QR (Quick Response) codes for select species to see a photo of the fishing boat, the location fished, and a description of the fishing gear used.

    "The new 'Sea Trace' program is intended to provide shoppers with more transparency about the seafood supply chain ... Foley Fish, a fourth generation seafood processor based in Boston and New Bedford, is also providing educational materials that will list the fishery management programs associated with each species offered."
    KC's View:
    Smart. In the end, transparency is going to be a minimal requirement of manufacturers and retailers ... and Roche Bros. is smart to be launching such a program, which will give it a competitive advantage against retailers who are not as transparent.

    Published on: October 19, 2012

    The New York Times this morning reports that since the US Department of Commerce is considering :whether to end a 16-year-old agreement between the United States and some Mexican growers that American tomato farmers say keeps the price of Mexican tomatoes so low that they can barely compete," Mexican tomato growers have said "they would agree to significant increases in the minimum price at which their products can enter the United States and to establish a system to bolster compliance and enforcement."

    According to the Times, "To keep the agreement in place, the Mexican growers have proposed raising the minimum price at which they can sell a pound of tomatoes in the United States by 18 percent to 25 percent, depending on the type of tomato. And they pledged to extend the agreement to all growers in Mexico who export to the United States from the roughly 85 percent who are covered by it now."

    However, the story also notes that not everyone in the US is enthused about keeping the US-Mexico agreement in place, and that Florida tomato growers, for example, would seem to think that this is not enough to raise the price of tomatoes sufficiently.

    The writes about what could happen if an agreement is not reached: "Mexico has threatened to retaliate if the agreement ends, and more than 370 United States businesses and trade groups have sent letters to the Commerce Department warning of the costs of a trade war. Producers of things as diverse as potatoes and pork remember well the price of the last trade war with Mexico over trucking, when stiff tariffs ate into revenue and profits."
    KC's View:

    Published on: October 19, 2012

    Bloomberg BusinessWeek reports that Tesco is closing some of its stores in China and pursuing a slower expansion program there - in part because China continues to experience the same kinds of economic problems afflicting the rest of the world over the past three or four years, and in part because there is a segment of the Chinese population that still prefers local markets and fresh food purveyors.

    According to the story, "Tesco’s China pullback reflects the hurdles global big box retail chains face in Asia, where the realities of complex local markets and slowing economies are damping dreams of easy expansion. The world’s largest retailer, Wal-Mart Stores Inc., is also adding outlets more gradually than it had planned in China’s 3.5 trillion yuan ($560 billion) grocery industry.
    Carrefour SA is closing shops in Singapore after failing to overtake domestic competitors."

    Vivian Liu, an analyst at Sinopac Securities Asia Ltd., tells Bloomberg that regional chains “know local practice better and that allows them to be more nimble and pragmatic in areas such as supply-chain management,” and that the cities where most of the global chains opened stores “quite saturated and competition is fierce."
    KC's View:

    Published on: October 19, 2012

    ...with brief, occasional, italicized and sometimes gratuitous commentary...

    Drug Store News reports that Hy-Vee has opened two new convenience stores - one in Waukee, Iowa, and one in Liberty, Missouri. Both are on the sites of Hy-Vee units (the Iowa store is under construction).

    Reuters reports that "Best Buy Co Inc is planning to sell its own tablet, the Android-based 'Insignia Flex,' for $239 to $259, a source familiar with the matter told Reuters, pitting the world's largest consumer electronics chain against the likes of Apple and Inc.

    This isn't entirely fair, but when I read this story, all I could think about is the time I was sitting at an industry luncheon with a bunch of women, one of whom said that she wanted to buy a tablet computer for her child, but wasn't sure whether she should get the child an iPad or something else. Another woman responded that she should think about the choice this way: 'Get her an iPad, or get her the tablet computer that no kid wants."

    Which is sort of what I think about the Best Buy entry.

    KC's View:

    Published on: October 19, 2012

    Got the following email in response to our piece earlier this week about how people now use mobile technology to decide what movie to go see, where and when to see it, and even to buy tickets - making newspaper movie ads almost totally obsolete:

    It’s amazing how quickly we adapt to new technology and take it for granted.  I pull up Rotten Tomatoes to decide which movie, where and when.  It’s second nature and until you mentioned newspapers, I had forgotten that former resource even existed. Convenience that meets your needs is all it takes to make you a former customer.

    MNB user Mark Boyer wrote:

    I typically use Flixster to help me decide what to go see. And I am way more interested in how much the Audiences liked a movie than I am with what the Critics thought.
    Are traditional movie critics relevant anymore? When was the last time you saw a movie because of what a critic said?

    I actually read Roger Ebert with regularity. I like the way he thinks about movies, and I admire his personal journey. But you're right ... consumer reviews tend to mean more than critic reviews. (Am I a "consumer" or a "critic" or some sort of hybrid when I write about movies?)

    From another reader:

    You left out the best part of online movie selection – at the Landmark Theaters and many others you can select your seats on line.  So  you never have to fight to find 2 seats together or sit in the front rows if those are the only seats available.
    Along the same lines, an MNB user wrote:

    A friend of mine in New Hampshire just posted this on his Facebook page:

    Small biz use of technology: The chimney cleaning company shows up today, does their thing and the guy pulls out an iPad. It has an app that itemizes the work, which I can sign, and I get the receipt in my email a couple minutes later. I didn't think to ask if he used Square for people paying with a card, because I just wrote a check as I always have, but I suspect he could take a card, too.

    The chimney-sweep, for pete's sake

    Mobile is definitely changing how we do business!

    Think about how the chimney sweep dance from Mary Poppins would have been different if Dick Van Dyke and all the other sweeps had been carrying iPads...

    Got the following email from reader Michael Freese after I wrote about how much my 18-year-old daughter likes Kroger stores she has visited:

    My wife and I were visiting our daughter in Seattle last week and stopped into a Fred Meyer to pick up a few things.

    When we left I mentioned to my wife how much I loved the store and she said "You would swear they had just staged that store for a grand opening it was so perfect"

    Every shelf full, clean everywhere, huge selection in all areas.

    Man……what a store!

    MNB user Lisa Bosshard wrote:

    Good article and comments regarding the Kroger expansion today.  My take on this comes from living in an area where I have access to multiple store formats across retailers.  With in 3 miles from my home, we have a Walmart supercenter, Albertson's and Kroger market place stores to choose from.   My family's personal take and weekly decision goes something like this; what do we need - if large bulk items, paper products or dog food, we head to Walmart and buy grocery items along the way.   If just food items, we head to Kroger - much fresher, local produce selection and good meats.  With weekly ad specials, pricing runs comparable to Walmart plus they have fresh sushi and a great alcohol selection with specialty beers.   As for Albertson's, can't recall the last time we went there, likely 10 years ago when the Walmart opened....   Go a few miles further and we also have a Sprout's to visit, several more Walmarts, Central Market, Tom Thumb and a few other stores that I could name.

    The point is, our grocery needs determine which store.  Frankly, if Kroger was priced more competitively on paper products, we would choose to shop Walmart less frequently.   If you ask why - it's simple, I hate the shopping experience and dealing with the people shopping at Walmart.   When I do go there, I put headphones in to get in and out as quickly as possible.  It's pretty miserable and not something I'm sure they can fix.

    An MNB user wrote in the other day to suggest that people do not have a constitutional right to drink jumbo sugared sodas, which led MNB user Terry Pyles to write:

    No right to a super-sized soda?

    I beg to differ with the constitutional scholar who wrote this.  It is a right.  In fact it's more than a right.  Not just any right.  It's an inalienable right.  The constitution says we all have the inalienable rights of "life, liberty and the pursuit of happiness".  If a 24 oz. soda makes me happy then I assert it as my constitutional right.

    Silly?  You bet it is.  As silly as the law and as silly as many of the other assertions I have read on this issue.

    First of all, I don't think this is a silly example. I think you need to get out more, but it isn't silly.

    But I also think of a whole bunch of things that might make me happy, but to which I do not have the inalienable right.

    On the subject of online shopping and price-matching, an MNB user wrote:

    For the last many years, Christmas has come in Amazon boxes delivered to my home, shipping free and tax free.

    Even if Target matches the price, I have spent at least $20 in gas to drive there (we live in the boonies), fought the crowds and paid 9% in sales tax.

    How does that matching price help me?

    But then I’m cynical.  Don’t get me wrong, I shop year around in our bricks and mortar stores.  But I am not about to fight the crowds at Christmas and get trampled for a Lego!

    We wrote yesterday about two intertwined stories - one about a college professor who objects to the idea that the US Department of Education is pushing the idea that e-books should replace traditional textbooks, and another about how is shifting to an all-digital distribution strategy.

    Which led MNB user Dennis Barthuly to write:

    Tying your Eye-opener and FaceTime pieces together today...

    Perhaps it’s a good thing that Prof. Hollander had his article “printed” in the times – if he had waited to have it published in Newsweek in a couple of months, it would have proved embarrassing for him, “digitally” speaking of course...

    Another MNB user wrote:

    You overlooked the possibility that the good professor could also experience a financial loss if his text book(s) are available on e-readers.  My youngest son just graduated and we’re enjoying not having to pay $500 for books each semester. One course my son had used a “textbook” that was a compilation of articles, essays and other writings that was edited by his professor – bound with plastic spine and a paperback cover – something you’d create at Kinko’s. cost of this “book” was $125 – and the prof “updated” it each semester he taught the course, so there was no way to sell it back to the bookstore or to other students at the end of the semester.

    Boy, do I agree with you. My daughter is dealing with the same nonsense right now.

    I'm so sensitive to this issue that when I taught at Portland State University last summer, I donated a couple of cases of books and handed them out to the students in my class. (I actually used the moment to tell the students that I would trade them a book for one piece of information about themselves that made them special ... I ended up learning a lot about them in a very short time.)

    From reader Brian Blank:

    I think you hit the nail squarely on the head with your Face Time commentary today.  The advantage of e-texts’ ability to be instantly and continuously updated and corrected is incredible.  Who among us didn’t go through school using a hodgepodge of dated and outdated text books?  No school system could hope to have the most up-to-date text books for every subject and every student—besides the incredible expense, a print text book has the same problem as a phone book:  it is out of date as soon as it is committed to paper.  (In all my time in grade school and high school, I can only remember one subject in which I had new text books:  German.  That was in the mid-80’s, and we were taught about the BRD and the DDR [West Germany and East Germany]…I’d love to know how long after the Berlin Wall fell that my alma mater was still using those books!)  In college, when we students had to buy our own text books, we were very resentful of the professors who demanded the most current version of a text each year, preventing us from saving money with used text books.

    Beyond that, putting “printed” information into a highly portable, highly user-friendly format such as iPad or Kindle, definitely makes the material more accessible, which is “what we’re seeking”, as you suggest.  For myself, since getting my Kindle, I have increased my book reading tremendously because I can do it nearly anywhere, anytime.  Now then, I will also admit to some dinosaur-ish  tendencies as well:  I will NOT give up my print edition newspaper, for instance.  Among the reasons why I find the print edition better: it doesn’t require Wi-Fi or a good 4G signal to operate (neither of which I have in the break room at work), nor does the online version have a comic section or crossword puzzle or the other features I enjoy.  The stories in the paper may have already been on the TV news, but usually without as much detail.  (And I can get breaking news as text messages or Facebook posts if I want to supplement.)  Also, every now and then there will come a book that I deem to be something I want to have on my bookshelf in physical form for one reason or another.  Amazon, if you’re listening…how about offering a Kindle version downloadable when buying the physical book, like some of the studios do with DVD/Blu-Ray/Digital Copy combo packs of movies?

    By the way, Kevin, you should check out the Penny Marshall bio.  I recently finished it (Kindle!), and I think you would appreciate her insights and behind-the-scenes peeks into the making of her movies, and would probably be entertained by the rest of the book as well.  I’m confident you could even glean some business lessons!

    MNB user Steve Deveau wrote:

    So, in about 5 years I can expect to go into my Doctor or Dentist’s office and in the waiting room I will find a couple of first edition Kindles with the 2013 Newsweek issues loaded?

    I get your point.

    But you'll bring your own e-reader. All you'll need in the office is free WiFi.

    And finally, my favorite kind of email:

    I wanted to let you now during my upcoming trip to the Orlando, Florida, area next week I am planning on visiting the Ravenous Pig.  I would not have known about this restaurant had it not been for Morning News Beat. I have been a loyal reader for many years, and really appreciate all the great information you report on.

    Eat well. Drink well. Have a great time.
    KC's View:

    Published on: October 19, 2012

    • In Major League Baseball, the Detroit Tigers defeated the moribund New York Yankees 8-1, sweeping the best-of-seven American League Championship Series in four games and sending the Tigers to the World Series.

    And in the National League Championship Series, the St. Louis Cardinals defeated the San Francisco Giants 8-3, taking a 3-1 game lead in the best-of-seven series.

    • In Thursday Night Football action, the San Francisco 49ers defeated the Seattle Seahawks 13-6.
    KC's View:

    Published on: October 19, 2012

    There is a wonderful independent documentary out right now entitled Knuckleball, which is a fascinating look at the unpredictable and idiosyncratic pitch that few major league pitchers have been able to throw with any degree of authority.

    Knuckleball looks at four of them - the now-retired Charley Hough and Phil Niekro; Tim Wakefield of the Boston Red Sox, who (spoiler alert!) was experiencing his last season as an active pitcher in 2011, seeking his 200th win; and R.A. Dickey of the New York Mets, who was in his ascendancy as a knuckleballer in 2011 (and who may have hit his apex in 2012, when he won 20 games and is in contention to win the Cy Young Award).

    The entire movie takes place during the 2011 season, and shows the unusual brotherhood that knuckleball pitchers share ... willing to help each other, and offering stories and lessons about how to use the pitch successfully.

    Robert B. Parker used to say that "baseball is the most important thing that doesn't matter," and Knuckleball is a perfect example of getting the tone absolutely right - it is just light enough, just serious enough, and utterly fascinating. It is about mechanics, but more importantly, it gives us a good and sympathetic look at the men who are lucky enough to play the game.

    There is, of course, a business lesson in the movie. One of the things that frustrates Dickey is the fact that people don't take the knuckleball seriously - it is viewed by some as an oddity, a trick pitch, rather than as a legitimate part of any good pitcher's repertoire. He's right about that, and it is a good lesson for any marketer.

    These days, when so much competition is hardball, companies have to use every pitch at their command ... and have to command every pitch that they can. And it is important to have pitches (known in the business world as strategies and tactics) that other people have trouble understanding, that other people can't hit.

    And another business lesson ... Like Arbitrage, which I wrote about a few weeks ago, Knuckleball has gotten a limited release in theaters, but also has been simultaneously released on the internet, via iTunes and Amazon and YouTube and other places, as well as on-demand on a wide range of cable systems. This release pattern - untraditional in terms of how movie companies have acted in the past, but becoming more common for small movies seeking an audience - demonstrates how smart companies are willing to re-examine how they do things and reconsider how they connect with customers. We're living in a new world, and old ways of doing business, of attracting and keeping customers, simply isn't enough. And to go back to a line we've tossed around before, in a time of fundamental change, incremental business shifts simply aren't enough.

    About six months ago, I raved in this space about a book by political analyst Jeff Greenfield entitled “Then Everything Changed: Stunning Alternate Histories of American Politics.” The book was a fascinating look at what would have happened if JFK had been assassinated before he was even inaugurated (which actually did almost happen), or if RFK had not been killed by Sirhan Sirhan, or if Gerald Ford had recovered from a flub he made during a debate with Jimmy Carter. In each case, Greenfield used historical realities, offered minor twists, and spun some unexpected and compelling yarns.

    During his publicity tour for the book, Greenfield says, he was asked consistently and persistently why he had not written about the Bush-Gore election, and what would have happened if Gore had won.

    So he did.

    "43*: When Gore Beat Bush - A Political Fable" is a short but intriguing look at what would have happened had history unfolded differently in the 2000 elections ... and there is a lot there for both Democrats and Republicans to chew on, as Greenfield gives the various scenarios an enormous degree of veracity. It is really worth reading, if you enjoy this kind of stuff.

    And, another business lesson, along the same lines as Knuckleball - "43*" is only being released as an e-book, on Kindle and iPad and Nook, among others. It costs less than two bucks. And it is a great example of how content providers are finding new ways to reaching audiences, developing new economic models ... something that all marketers have to think about and act upon.

    I have five wines to recommend this week. Some of them may be a little hard to find, because I got them from my basement wine racks. (I asked my sons to do a little inventory of what I had sitting in the basement, promising to pay them a buck a bottle when the spreadsheet got delivered ... it ended up being more than 150 bottles of wine, so I've had to promise Mrs. Content Guy that other than the wine clubs to which we belong, I won;t buy any wine until we've gone through the stuff we have in stock.)

    We had a little dinner party last Saturday night - I made shrimp and lobster risotto - and here are the wines that everybody seemed to like...

    • 2011 Casa Julia Sauvignon Blanc, from Chile
    • 2005 Mosaic Cabernet Sauvignon, from California
    • 2005 Mosaic Malbec, from California
    • 2005 Francis Coppola Reserve Sonoma Pinot Noir, from California
    • 2007 Blue Pirate Pinot Noir from Oregon

    All were wonderful ... but I have to say that real surprise of the lot was the Blue Pirate ... I knew the other vineyards, but this one was a complete unknown. (I don't even know how it ended up in my wine rack.) But Mrs. Content Guy and several of our friends just loved it ... so go figure.

    Enjoy them all. Thank me later.

    That's it for this week. Have a great weekend, and I'll see you Monday.

    KC's View: