retail news in context, analysis with attitude

Got some interesting emails last week about the story we had about how, 12 days after Amazon announced that for the first time, it would offer its Prime membership - which gives subscribers automatic two-shipping and free online streaming of movies and television programs - on a monthly basis for $7.99 per month, the company stopped selling the monthly option.Previously, Prime was sold only on an annual basis for $79 per year.Gizmodo.com, in reporting the change, suggests that this probably means that "they didn't sell all that many."

An Amazon spokesperson explained the change this way: "We regularly test new options for our customers. At this time, we've completed our test and are no longer signing up new customers for Amazon Prime monthly memberships."

I commented:

This proves something I've always believed - which is that CEO Jeff Bezos is willing to kill Amazon's young if he thinks they are not helping to build value. I'm not sure about the back room machinations that may have led to the monthly Prime option being approved and then dumped in less than two weeks. But I am sure that a) it proves yet again that Bezos is willing to make tough decisions, and b) for some reason, Bezos felt that this option was not pro-customer.

But a number of MNB readers had interesting takes on the decision that were a lot more incisive than mine.

One MNB user wrote:

Hmmm….I’m thinking that maybe they sold too MANY monthly…if you think about a time of year to leverage luring your customers to take advantage of annual prime spending account, wouldn’t it be when your customers were likely going to order much larger volumes?  $7.99 for one month during the holiday shopping season seems like a no brainer.

Another MNB user wrote:

We spend a  lot of time analyzing Amazon and have guys on our team who worked with Amazon for years. 

Here's their perspective on the news:

Guy #1: "Just my thoughts: 2 weeks? Somebody screwed something up.  Simple."

Guy #2: "Two other possibilities: Someone reran the numbers and discovered the profit loss potential from one month subscribers during peak holiday, or it was never intended to go live – someone flipped the switch by accident. (seriously – this happens all the time) ... Imagine if you could do all of your holiday shopping the week before christmas with all you can eat free 2 day shipping, for $7.99. They would risk exceeding capacity and blowing up the whole system.

"Good test. But not right before holiday."

This article gives Amazon too much credit for being plodding and deliberate. Their motto should be 'throw crap at the wall and see what sticks'.





Also got some email regarding Toys R Us CEO Jerry Storch saying that e-commerce will be limited because people will see it as bad fort the environment.

One reader wrote:

Kudos to you on your Toys comments – spot on, as usual.  Storch’s conclusion that e-shopping is less “green” is classic, skim the surface, thinking about sustainability.

And another MNB user chimed in:

I particularly enjoyed your Toys ‘R Us article. I agree with your viewpoint that Jerry Storch has no idea what he’s talking about. As a marketer, and a mother of a toddler son, I can tell you that the Toys ‘R Us shopping experience is horrendous. The stores are dirty, unorganized and not exactly ideal for a parent to take a child to when shopping. (For today’s working mom, the option of going to the Bricks and Mortar store after dropping their child off at school is completely unrealistic. His comments there indicate that he needs to some ethnographic research to really understand his consumer).

Further, in today’s world of consumer-centricity, Toys ‘R Us and Babies ‘ R Us don't grasp the concept of omni-channel shopping in order to allow the consumer to shop when and how she needs to shop. They only allow you to use their coupons in-store, which I understand is how they’re trying to drive you to the store, but completely ignores the needs of the consumer who needs to shop online. That just frustrates me. Forcing the consumer to shop in only one manner does one thing for that consumer…drives them to a different retailer. Environmental footprint aside, let’s focus on the consumer experience with the banner, regardless of bricks vs. clicks. Toys ‘R Us just doesn’t measure up in today’s world. I’ll take Amazon any day.


And another wrote:

Was Jerry Storch’s statement about “driving a truck down a country lane in rural Connecticut to deliver a package is hardly the greenest way of product delivery to occur" a dig at you or just coincidence?

I assume it was just coincidence. I think Jerry Storch has a lot better things to do than worry about what I think about his strategy and (IMHO) misguided reasoning.

But how funny would it be if it were?




We also continue to get email about the scathing review written by the New York Times restaurant critic of Guy Fieri's new Time Square restaurant. I loved the review, though some folks believed it went over the line.

MNB user Kari Mitchell wrote:

I disagree with that person saying review was mean.  Irregardless on whether the review was mean spirited or not Guy should use this wonderfully written (and hilarious) review as a business lesson and maybe even objectively review his restaurant himself.   As a Top Chef fan I have also embraced the “After Top Chef” show and one episode showed Richard Blais getting ready to open his restaurant and just being brutal to his chefs.  He knew his name would be on the restaurant thus his reputation was on the line, better for him to be brutal than a critic or more importantly a customer.  Does make me wonder if Guy knows this as well.  (btw I am still of fan of Diners, Drive-Ins and Dives)

From another reader:

It doesn’t take an experienced restaurateur to know if food is tasty and service is good.  This isn’t a case of a snobbish critic panning a lowbrow eatery simply for being lowbrow.  As a customer, it doesn’t matter if there is a ‘degree of difficulty’ I need to make allowances for.  To paraphrase Yoda, there is only Do Well, or Do Not Do.  There is no Try.  In a story I read online about the reaction to the review, it was noted that customer reviews posted on Yelp and Urban Spoon reflect similarly meh experiences.

I defended the right of critics and pundits to ply their trade, which led one MNB user to write:

So your conclusion is: just because you don't know what you're talking about is no reason to shut up.

Dimwitted TV anchors across the land are applauding.


My conclusion is that critics and pundits are paid to opine. As the reader, you can agree or disagree with them.

That's a far cry from hiring someone to deliver the news just because they have a pretty face.

And MNB user Steven Ritchey wrote:

I think the thing I want to say more than anything else, the critics review of Fieri’s restaurant was  plain mean, it was ugly.    I can write that way also, it’s not that hard to do.  What’s more difficult in my opinion is to write about your disappointments in such a way that you show a modicum of respect for the owner of whatever it is you are reviewing.

I generally enjoy reading your reviews, I may disagree with them.  My boss saw Skyfall last weekend, and he didn’t like it.  I’ll try to see it and see what I think.   However, our personalities are so different, as well as our education, we will almost certainly look for different things in the movie.  What makes it fun for me is, neither of us is wrong.  The restaurant you love, I may hate, switch places and handy dandy (guess where that quote came from), because different things are important to  us.
 
I don’t like reading reviews, editorial, commentaries,  that make it seem as if the writers attitude and opinions are the only ones that count.





On another subject, an MNB user wrote:

I seldom shop at Walmart (for many reasons) but had to stop at one during a recent vacation. They are so big, so ridiculously big, that it reminded me of a big reason why I don't shop there - I don't have the time to wander around that vast space looking for the one or two items I may need. Enter, Walgreen. They sure are convenient, easy to get in an out of of and usually have what I'm looking for. 

I have to think that a smaller, genuinely smaller (not a 'neighborhood Walmart' that is still more than 50,000 sq. feet), format store is a winner both for busy younger people and for older people. 

I know our smaller size - what we like to call 'human-scale' stores -  seem to fit that niche as well. But, they are harder to do and more expensive to run as you lose the economies of scale somewhat.





And on still another subject, a reader offered:

Best Buy's new CEO has a challenge on his hands; and that challenge is his people. I recently went into a Best Buy looking for an extra 120 volt charger for my iPad to carry in my suitcase. There were four BB employees in the section, standing around talking to each other. It was obvious that I was looking for something. When I found it and started to walk up to the front one of them deigned to look at me and ask if I needed help. I said that "no i didn't need any help as I wouldn't want to interfere with their socializing and that I hoped they all had an easy time finding jobs when Best Buy closed". One of the group, who turned out to be the manager, took exception to that, as he said BB was doing well and was even acquiring other companies.

The Best Buy in my home town is no better. As far as converting lookers to buyers, that will take decent people on the floor. They don't have them. What they do have is a poor corporate culture. I expect them to go the way of Circuit City. Virtually all my electronics, including my last flat screen TV, comes from Amazon.




As always, email about Supervalu.

One MNB user wrote:

An example of how deep the inept management runs through Supervalu.  The bread I buy to supply my morning toast has an everyday shelf price of $4.29 at Cub Foods.  The same product at Super Target has an everyday shelf price of $2.99.  Do these executives really believe the problems causing their company to flounder are related to things such as employee recognition rewards and merit raises?

Regarding the announcement of compensation changes for HQ personnel, one MNB user wrote:

HR personnel were very surprised that the cuts were handed out to the employees. It has been said that if the top 100 paid people in the company had taken just a 10% pay cut, none of these employee cuts would have happened. So much for Wayne Sales being "all in", huh?

But from another reader, an entirely different perspective:

Do you know what is disheartening?  The negative emails SV employees write to you.  I must be very naïve.   I’m a 12 year employee who has been through every up and down this company (Supervalu, not Albertsons) has had and yet, I still believe that I will see a once great company, return to glory.  Maybe it’s because each time I looked for an a new opportunity to grow, there was one available.  Each time we sold off something or closed something down and my position was eliminated, someone out there in Supervalu land thought I was valuable enough to keep around.  I’m one of MANY employees who are “grateful to have a job”, don’t complain and keep giving it my all.  Our leadership is finally making decisions that will change us for the better and frankly, I’m excited for the future.  I’m more than happy to show the constant whiners (it’s always the same ones) the way out of the building.

I respect your optimism.

But I would suggest that when folks write to MNB, it may be because they feel that there are few places where there voices are being heard.

My sense is that these people are not whining or complaining. They're just desperate to save a place they work and may even love ... but they feel their opinions and contributions are not respected.




I wrote about we'd be drinking several Oregon wines on Thanksgiving, leading MNB user Rudy Dory to write:

Thanks for supporting our Oregon Wine Industry both by consuming and promoting our products.  It is appreciated.

My pleasure. I think of the Pacific Northwest as my soon-to-be-adopted home.




Responding to Wednesday's piece about the demise of the Silver Fox Club, one MNB user wrote:

As a proud member of the Silver Fox Club, I would only point out that there is no future without a past. We owe this group, and especially Paul,Corliss, a lot !

And from MNB user Richard Townsend:

Hi Kevin, in looking at your photo insert, I couldn't help but hear in the back of my mind a little voice whispering "Carpe diem...." in the voice of Robin Williams, Not to suggest that the men pictured are deceased necessarily, and with all respect to the foundations they have laid, but a reminder that time and business waits for no man, and we should press forth and continue to build and improve upon their foundations.
KC's View: