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    Published on: November 2, 2012

    by Kevin Coupe

    We do a lot of commenting here on MNB about the importance of front line employees, and how they have the primary responsibility for the efficacy of the shopping experience ... and therefore should be treated as assets, rather than as costs and liabilities. (This is an approach foreign to some retail entities, sad to say.)

    So it was with great interest that I happened upon a story in US News and World Report that looked at how Zappos - the Amazon-owned e-tailer that began in shoes and has expanded to a lot of other wardrobe categories - keeps its employees engaged.

    Mig Pascual, a content developer for Zappos Insights, wrote the piece, and stresses in it that by creating a culture that "enables employees to live and work according to their personal values," and hiring people whose values align with those of the company, Zappos is able to "increase productivity, communication, and creativity, while reducing sick time and turnover."

    Key to this approach. Pascual says, is letting employees be "their most authentic selves," which then enables them to create an authentic experience for the customer; letting employees "explore their passions and express creativity" whenever and wherever possible, an approach which is the opposite of creating boxes and putting people into them; and constantly providing employees with "opportunities for continuous learning," which can inspire them by exposing them to different kinds of thinking.

    It is an excellent piece, and can be read in its entirety here.
    KC's View:

    Published on: November 2, 2012

    Ten named plaintiffs yesterday officially filed their objections to a proposed settlement of the interchange fee lawsuit against MasterCard and Visa, saying that the settlement "locks in the broken interchange system rather than imposing meaningful reforms to it."

    The plaintiffs included the National Grocers Association (NGA); three of its members, Coborn's Inc., D'Agostino Supermarkets, and Affiliated Foods Midwest; Jetro Holdings, Inc. and Jetro Cash & Carry Enterprises; and five other national associations on behalf of their members - the National Association of Convenience Stores, National Community Pharmacists Association, National Cooperative Grocers Association, National Restaurant Association, NATSO (travel plazas and truck stops).

    In addition, the plaintiffs said they have been joined in their objections by some 1200 other entities, including the American Booksellers Association, National Association of College Stores, National Retail Federation, and the Retailer Industry Leaders Association.

    The $6 billion settlement proposal is objected to on the grounds that it, as currently constructed, will do little to stop the indiscriminate rise of swipe fees, which hurts both retailers and shoppers, while at the same time preventing future legal challenges to the credit/debit card companies. Those who favor it appear to do so on the grounds that they believe it is the best deal they can get.

    "We were and still are all committed to achieving reform of an anti-competitive interchange fee system and rules in order to provide competition, transparency and fairness in the swipe fee marketplace," says NGA CEO Peter Larkin, adding that NGA is not motivated by monetary damages, but by the need for "reform of the collusive establishment of interchange fees and enforcement of anti-competitive rules by the credit card companies and banks that unfairly restrict merchants' freedom to operate."

    The proposed settlement has been submitted to the US District Court for the Eastern District of New York.
    KC's View:

    Published on: November 2, 2012

    The New York Times reports that the city of San Francisco has asked the Monster Beverage company "to provide evidence that supports the advertising and marketing claims it made to adolescents for its highly caffeinated drinks" - in essence, to justify its claim that "large daily quantities of Monster Energy were safe for adolescents and adults."

    The city said its demand is rooted in a California law "that makes it illegal for a company to make false or misleading advertising claims that purport to be based on fact or clinical data."

    Monster says it can document its claims and will making all requested documents available.

    The move comes after reports emerged that the US Food and Drug Administration (FDA) is investigating allegations that consumption of Monster could be linked to as many as five deaths over the past three years, claims that Monster denies. Two US Senators have urged the FDA to more tightly regulate the energy drink category.
    KC's View:
    Sometimes it seems like San Francisco is in competition with New York to see which one can put the most restrictions on marketers. San Francisco would appear to be winning - it is the city that banned the handing out of free toys in Happy Meals, and the distribution of free plastic shopping bags.

    That said ... I think the energy drink sector does need to be reined in. I wince every time I see a kid drinking that stuff, and I've been convinced for a long time that it is just a marketing nightmare waiting to happen.

    Published on: November 2, 2012

    The Wall Street Journal reports that eBay-owned PayPal has "introduced a program offering customers cash back for any price discrepancies they discover on the products they buy through their PayPal account, including airline travel. PayPal is promising users as much as $1,000 in refunds each from money it has set aside for the promotion, which runs through the end of the year."
    Price-matching, as the story, suggests, is de rigueur this holiday season, with retailers embracing it as a way of combatting so-called "showrooming."

    The Journal notes that the PayPal program could hamper any attempt by Amazon to replicate a program it had last year, when it actively encouraged consumers to use its smart phone application to check its prices on products they were seeing in stores, and then place orders with one click.
    KC's View:
    I've said here before that Amazon appears to be the car that all the other dogs are chasing. But it begins to look like some of the dogs may be catching up...

    However, I continue to believe that some retailers are underestimating the value of an Amazon experience ... price means something, but I don't think it means everything. There's convenience, selection, and the intuitive way in which Amazon seems to anticipate needs and respond to them.

    Match that.

    Published on: November 2, 2012

    There may be some rack space coming available at supermarkets' front ends.

    The New York Times reports that Martha Stewart Living Omnimedia is "scaling back two of its four magazines and laying off about 70 employees, or 12 percent of the nearly 600-person company.

    "Everyday Food, the company’s middle-market cooking digest, will be cut from 10 issues a year to five and will no longer be sold as a stand-alone publication. Instead, it will be delivered as a supplement to subscribers of Martha Stewart Living.

    "Whole Living Magazine, which the company purchased in 2004, is on the market. The magazine, with a circulation of 760,606, has suffered a 24 percent decline in advertising pages in the last year. While company executives say they are already in discussions to sell the magazine, they plan to stop printing it by year-end and fold its content into Martha Stewart Living if a sale is not concluded."

    The company, according to the Times, said that "the decision was driven by declines in magazine advertising and newsstand sales and the potential for greater profits in video. The company’s magazine titles have also attracted more digital subscribers than their competitors.
    KC's View:

    Published on: November 2, 2012

    • NCR Corp. announced that it will be installing 10,000 self-service checkout lanes in more than 1,200 Walmart locations during 2013. Walmart said the goal is to "offer customers the choice in how they want to check out, improving the overall checkout and customer service experience."
    KC's View:

    Published on: November 2, 2012

    Remember ... this weekend marks the end of Daylight Savings Time. On Sunday, November 4, at 2 am, it will be time to turn your clocks back an hour.
    KC's View:

    Published on: November 2, 2012

    • The Seattle Times reports that "the Conference Board said Thursday that its consumer confidence index increased in October to 72.2. That's up from a revised 68.4 in September and the highest reading since February 2008, two months into the Great Recession."

    According to the story, "Consumers were more confident after seeing better job growth, the report noted. Hiring in July and August was stronger than first thought, and employers added a modest 114,000 jobs in September, the government reported last month ... The report noted that consumers are more optimistic about both the economy and job market now and where it is headed in the next six months."

    Chicago Journal reports on how the eighth Mariano's Fresh Market store in Illinois has opened in Chicago's West Loop, with yet another one on the way in the South Loop - despite the fact that these are "areas that are already served by grocery stores — and more are being added all the time."

    Bob Mariano, CEO of parent company Roundy’s, tells the paper that "there’s plenty of demand to justify their new stores. Their research, he said, shows that people are still leaving the neighborhoods to get their grub. Partly, it’s because so many people have moved into the areas around downtown so quickly that infrastructure like stores just didn’t have a chance to keep up ... The new Mariano’s stores, he said, may be siphoning off some business from Jewel, Dominick’s and other traditional stores that exist in the neighborhood, but they’re also drawing more business in by offering a wider range of products. That includes cushy options like a sushi bar, a much larger selection of fresh seafood, a salad bar and a full coffee bar."

    • The Los Angeles Times reports that Starbucks "plans to open 1,300 new stores worldwide in fiscal year 2013 – a 22% surge from this year. Already, the chain has 18,000 stores in 61 countries. About 600 of the new stops will be in the Americas, with most in the U.S. The Seattle coffee giant is also boosting its presence in the Asia Pacific region by 600 stores, with half in China."

    • Publix said that its sales for the third quarter of 2012 were $6.7 billion, a 4.4 percent increase from last year's $6.4 billion, on same-store sales that were up 2.5 percent. Net earnings were 368.4 million, compared to $311.9 million in 2011, an increase of 18.1 percent.

    Publix's sales for the first nine months of 2012 were $20.5 billion, a 3.9 percent increase from last year's $19.7 billion. Comparable-store sales for the first nine months of 2012 increased 2.6 percent. Net earnings for the first nine months of 2012 were $1.2 billion, compared to $1.1 billion in 2011, an increase of 6.1 percent.

    • Kroger announced that "associates working at 80 of the company's Delta Division stores have ratified new labor agreements with UFCW Local 1529 ... The two contracts cover more than 9,040 associates working in 80 stores in West Tennessee, Mississippi, East Arkansas, and Murray, KY." Terms were not disclosed.
    KC's View:

    Published on: November 2, 2012

    • Sears Holdings announced the hiring of Ryan Vero to be senior vice president and president, Grocery, Drug and Pharmacy. Vero most recently was executive vice president and chief merchandising/marketing officer for OfficeMax.
    KC's View:

    Published on: November 2, 2012

    Arnold Greenberg, one of the co-founders of a company called Unadulterated Food Products, which in the 1970s began selling soft drinks flavored only with natural juice, has passed away. He was 80, and had been battling cancer.

    Unadulterated Food Products, by the way, eventually was renamed - and became The Snapple Beverage Corporation.
    KC's View:

    Published on: November 2, 2012

    Responding to our piece the other day about a Hartman Group report on how catering to people who eat alone could be the next great opportunity, MNB user Doug Campbell wrote:

    Good item here. As boomers age, more and more will be eating alone after the death of a spouse. Just might be a huge and overlooked market.  It can be a challenge to cook for one and single service portions, that are edible, or even delicious, can be a profitable line.

    On another subject, MNB user Riley Wells wrote:

    Regarding 2050: A Kitchen Odyssey, any predictions of kitchens of the future based on current points of view should be taken with a grain of salt.  We’ve only got 3 more years till “the future” of 2015 from the movie Back to the Future II and they didn’t even mention the Black and Decker Pizza Hydrator . . .

    Boom! Another movie reference!

    Responding to yesterday "FaceTime" commentary, one MNB user wrote:

    I think it is admirable how you write about your wife and kids' relationships on MNB.
    It leads me to believe that I can and I have to do better with my wife and kids. 
    There are always ways to improve.

    Don't forget….you're only hearing my side.  There are plenty of times when, at the dinner table, one of my kids would turn to me and say, "Dad, this is off the record."  If you asked them, they might say they're tired of being trotted out as business lessons … but on the other hand, I think they enjoy to some extent the notoriety they have in the MNB community.  (They love going to MNB parties and being approached by folks who know all about them…)

    MNB reader Karen M. Alley wrote:

    I just want to say I've been reading MorningNewsBeat for a long time and love it, and many times want to comment but haven't, but I wanted to reply to what you wrote in FaceTime today about a mixed marriage.

    I happen to be in one myself. I'm a Democrat and my husband's a Republican. Many of my friends gasp in shock when they find out I'm married to a Republican. But I'm  here to say it can work. It might help that for us, we're both sort of moderate within our political parties. But also, there are many things that go into a good marriage -- shared values, goals, financial aspirations, parenting styles, etc. So if we differ on a few things such as how the government should allocate defense spending, when we should send troops overseas, how much money should go to social welfare programs and healthcare reform, we agree to disagree.

    And it doesn't really affect our marriage life, because we do agree on things like whether we believe in God, how to raise our kids, and what movies we like to watch on Friday nights! It adds a little spice to our lives to have someone to argue with about a few things. It does get a little complicated once you have kids. I can safely say that I'm a Democrat because my parents are, and I grew up with their political beliefs. Of course I'd love to make my children Democrats too, but I have to realize they're living in a world with parents who have two different views. So hopefully they're learning to hear both sides and made their own opinion, and even better than that, they're learning that it's important to respect other people's opinions, even if they differ from your own.

    MNB user Darren Williams wrote:

    Longtime reader of your column and had to comment on your FaceTime views from this morning.

    I actually GAVE UP my Facebook account recently.....personal choice but one of the reasons I was glad to be rid of it was one particular 'Friend' from my high school days (we graduated back in 1981) was so unbearably bigoted in her posts concerning Republicans.  She'd use words like "Hate" and "Disgusting" when she referred to Republicans and had even stated in on of her posts that she was boycotting our 30th high school reunion because ....and I'm paraphrasing here...."Because there will be too many REPUBLICANS there".

    Now, I was there and do not recall anybody even mentioning politics, we were all too busy catching up with old friends, dancing and partying.  While I personally wish her nothing but the best in her life I find it very sad that any person would have such harsh and broad opinions about another persons views and that they would spew it out with at ALL of their Facebook friends like she did (and probably continues to do to this day).   Maybe that's why her FB relationship status always said "single".

    MNB user Rich Heiland wrote:

    Great observations on love and politics and I like that you concluded with Apple. A friend of my was telling me the other day about his horrible experience in an Apple store in the Woodlands, Texas. I was shocked and told him he must have just run into a below-par employee. Then, I had occasion to go to that store to find out what would be involved in repairing a broken iPad screen....and I had a horrible experience. I couldn't believe I was in an Apple store. It was 11:15 and I was told I needed to talk to a "genius" and the next appointment would be 2:50. I told them I was from 30 miles away and couldn't wait, to which they said, "well, make an appointment for another day." I told them that still meant a 60-mile round trip. What I wanted was simple. What would it cost? The person finally told me and I said "OK, I'll leave it." They told me I could not do that. Still needed an appointment with a genius, then I could give it to him or her and leave it. Seriously? As I left the store having decided to use the iPad with the broken screen, my thought was "Do I need an iPad, or do I need a tablet? Hmm...maybe I should look at the new Microsoft product, or one of the others....."

    From another reader:

    Great article and relevant.  My wife and I are at either end of the political spectrum. 

    However we use this to allow us to continuously learn how to be respectful to each other as we discuss.  No name calling or comments such as you can’t believe that.

    As for other common areas of our life, my wife was diagnosed w/ cancer 9 years ago and is now in stage 4 - no more stages.  Great way to get real life into the right perspective.

    Political diversity is a gift not a curse.  Revel in it and enjoy the journey.

    Thanks for putting it into perspective ... and my best to you and your wife.

    And MNB user Philip Bradley wrote:

    "The Love Vote" was a fabulous piece!  You combine story (whether personal or movie) and business lessons better than anyone I know or anyone I could imagine, in a compelling way and with great insight.  It's probably the main reason I read your column every day--

    Thanks. That means more than you know.
    KC's View:

    Published on: November 2, 2012

    In Thursday Night Football action, the San Diego Chargers defeated the Kansas City Chiefs 31-13.
    KC's View:

    Published on: November 2, 2012

    Okay, so I've been stuck in Los Angeles for just shy of a week, unable to go home because of air travel disruptions caused by Hurricane Sandy.

    But I learned young. Life hands you lemons, you make lemonade. So in addition to everything else I did this week, I went to the movies, seeing three films that I suspect will be making a lot of noise when awards season rolls around.

    The Master is a movie by Paul Thomas Anderson (Boogie Nights, There Will Be Blood) that follows the seduction into a kind of pseudo-religious cult of a troubled Navy veteran played by Joaquin Phoenix by a charismatic leader named Lancaster Dodd, played by Philip Seymour Hoffman. The movie is supposed to have some resemblance to the development of Scientology, but it doesn't make a big thing of it; rather than focus on the development of a controversial cult organization, it focuses much more on the interpersonal relationships, especially the mutual fascination between the two main characters.

    Now, I have to tell you that the performances are extraordinary. Hoffman gives a bravura rendition of a character who kept reminding me of Orson Welles in Citizen Kane, and Phoenix gives such a taut and revealing performance of a man tortured in body and soul that you can feel his wretched pain. Amy Adams, as Dodd's wife, is a revelation - she is the really strong one in the relationship, providing the narrative and the cult the backbone it needs, and it is hard to say whether it is controlling her or she is controlling it. And, the direction is gorgeous - this is as beautiful a movie to look at as I can imagine.

    The problem with The Master, I think, is that the narrative does not support the direction and the performances. I kept waiting for a stronger story to kick in, but it never did, and I was left feeling a little cheated and a little wistful for what might have been. In the end, there was no there there.

    To be honest, I expected to have similar feelings about Cloud Atlas. Everything I'd seen and read suggested to me that it would be ambitious in structure and in its use of filmmaking tools, but would not have the kind of narrative that would "get" me. I was wrong ... to some extent.

    Cloud Atlas takes place over hundreds of years, with six interlocking stories and actors who play a variety of characters in a wide range of circumstances. It is a hard movie to explain, except to say that it is about fate, and denying fate; about potential and loss; and about dreams and connections that go beyond lifetimes. It stars, among others, Tom Hanks, Halle Berry, Jim Broadbent and Hugh Grant - all of whom are occasionally unrecognizable in one role or another. And it was written and directed by Andy Wachowski and Lana Wachowski (who made the Matrix movies, and Tom Tykwer, based on a highly regarded and often viewed as unfilmable book by David Mitchell.

    Now, to be frank, I feel like I need to see Cloud Atlas again, just to see if I can understand more of it. (Not sure if I actually will - the movie is almost three hours long.) I'm pretty sure that it isn't good enough to support the story's pretensions. But that said, I was captivated by the movie's audaciousness, by its willing to go back and forth between stories and centuries, and by directors/writers who really wanted to do something different. I didn't love Cloud Atlas, but I liked it more than I thought I would ... and I find myself thinking about it.

    The real jewel of a movie that I saw this week was a little independent film called The Sessions. No special effects, no multiple roles, no grand scale filmmaking, and a story that takes place over months, not centuries. The movie recounts the real-life story of Mark O'Brien, played in a completely unsentimental fashion by John Hawkes, an accomplished poet who, at 38, because of a childhood bout with polio, has to spend most of his time in an iron lung. While Mark has a big heart and bigger emotions, he's been denied the pleasures of physical intimacy with a woman; feeling that perhaps his "use by date" is nearing, he decides to engage a sex surrogate to help him understand this particular life experience.

    It is not a decision he reaches easily. Mark is a Catholic, and he takes his religious beliefs seriously. But a priest friend, played by William H. Macy, tells him to go ahead: "in my heart," he says, "I believe God will give you a pass on this one." And he also understands that there may be limits to what he can accomplish physically, though fewer boundaries on his emotional life.

    Most of the movie focuses on the sessions he has with Cheryl, the sex surrogate played with luminous bravery by Helen Hunt. One has to be up front about these scenes - they are enormously intimate, with frank language and a fair amount of nudity. But these scenes are not titillating or exploitive, or really even very graphic - ultimately, they have a kind of emotional delicacy that exposes far more about the two main characters than their bodies.

    I really loved The Sessions. It won't be for everyone, and you have to be prepared for it going in. But it is so honest and captivating and even funny about love and intimacy, and so far afield from the over-the-top movies too often produced by Hollywood, that I reveled in its pleasures - a great story, and fabulous actors who make you feel and think with every move, thought and word. The Sessions, in a word, is a triumph.

    I also drank some beer and wine this week - more beer, I guess, because I was near the beach and it seemed more appropriate.

    Two of my favorites I enjoyed at a terrific place in Santa Monica called Father's Office; back in the seventies, when I went there during my college days, it was pretty much a biker bar. These days, it is a wonderful beer bar with a limited menu, and a chef who does no substitutions and does not even allow condiments - you get the food the way he wants to make it, and if you don't like it, go elsewhere. (I saw a few people get upset by this policy, but they were more than offset by the steady stream of folks who came in to order meals to go ... they love the food, and I guess they figure that if they bring the burgers home, they can use their own ketchup.) This kind of stuff doesn't bother me; I like a chef who feels so strongly about his food.

    The beers I enjoyed were Hop Rod Rye, from California's Bear Republic Brewing Co., and the Big Eye IPA, from San Diego. They were in my beer sweet spot - I love substantive amber and red ales, but not so rich that you can't drink them on a warm day. They were perfect.

    I did enjoy one particularly wonderful white wine - the 2010 Chardonnay from the Au Bon Climat Winery, located in California's Santa Maria Valley. It has real complexity without being too buttery, and was perfect with spicy fish tacos that I enjoyed at Simmzy's in Manhattan beach.

    Well, that's it for this week ... and hopefully, I'll be reporting in from MNB's Global Offices in Connecticut next week. I have a 7 am flight out of LAX today and I'm thinking that this one will be the charm. I'm determined to be optimistic; I like what Winston Churchill once said on the subject:

    “A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.”


    On the other hand, I just checked and saw that the power company is saying that most of my town won't get electricity back until Monday or Tuesday, and the cable company - which provides my internet service - isn't even being that specific. So it is possible that getting MNB out on Monday will be a bit of an adventure ... and I thank you in advance for your patience.

    Have a great weekend. I'll see you Monday. (See? Optimism!)

    KC's View: