retail news in context, analysis with attitude

MNB Archive Search

Please Note: Some MNB articles contain special formatting characters, and may cause your search to produce fewer results than expected.

    Published on: December 21, 2012

    by Kevin Coupe

    The Mayans, apparently, were wrong.

    The Mayan calendar came to an end earlier today, which led some to believe that the world would come to an end at the same time. Which it didn't.

    On the other hand, I wonder if the Mayans had a phrase that was the equivalent of "fiscal cliff"?

    BTW ... "Doonesbury" has had a series of strips this week addressing the Mayan prophesy, and this morning, discovering that world had not come to an end, one character, Boopsie, announces that "no one disappeared."

    To which her husband, B.D., responds: "If you don't count the Mayans."

    The fact is that there are some six million Mayans still on the planet.

    But methinks they need to do something about their branding. Not to mention work on getting a new calendar...
    KC's View:

    Published on: December 21, 2012

    The Associated Press reports that while it looks like a "record number of Americans" have been ordering holiday presents online, responding to a flood of "extra discounts, free shipping and easy returns" offered by e-tailers, there may be a glitch in the form of Mother Nature. The AP notes that "a storm bringing heavy winds and snow to much of the Midwest on Thursday — the heaviest shipping day of the year — could mean that some packages might not make it under the tree in time for Christmas. That's a headache for retailers, shippers and customers alike who already were experiencing problems because of the surge in shipping this year."

    So far, so good, the story says, with no significant weather-related delays reported, and the major shipping companies are said to be fully prepared. But the "storm's timing couldn't be worse," and so there are a lot of retailers, shipping companies and consumers holding their breath until Monday.

    And, on the subject of shipping, here's an interesting excerpt from the story:

    "More than 46 percent of the major online retailers emailed their subscribers on Monday Dec. 17, a.k.a. free shipping day, with offers to ship gifts free with no minimum purchase. Fewer than 10 percent made that offer last year, according to marketing software company Responsys.

    "That spurred shoppers to spend more — online shopping is expected to have risen 17 percent this holiday season to a record $43.4 billion, according to comScore. But with that increase came logistical problems, and not just at small retailers."
    KC's View:
    On the other hand, this storm could be good news for bricks-and-mortar retailers, who may seen an influx of customers over the weekend when people start worrying that certain presents aren't going to show up on time.

    If those customers are able to get around in the snowstorm.

    Published on: December 21, 2012

    Forbes has a piece that suggests that JC Penney CEO Ron Johnson, who has been moving the company to an EDLP strategy that depends less on promotions and coupons and more on a perception of real and sustained value, may be working against certain scientific precepts related to shopper appeal.

    The story says that "a new study, soon to be published by the Center for Neuroeconomic Studies at Claremont Graduate University, measured the hormone levels, heart rates, breathing and perspiration of subjects who received a $10 coupon while grocery shopping online compared with those who didn’t get a coupon.

    "The result: Levels of oxytocin, a feel-good hormone linked to love and happiness, were an average 38% higher for people who got a coupon. Their breathing and heart rates were slower. They reported better moods."

    In essence, by eliminating coupons, Johnson seems to be forcing his customers to go through withdrawal.
    KC's View:
    And, as we all know, when addicts are denied their fix, the first step is to find a new dealer. Which could explain JC Penney's continuing problems.

    However, while there certainly can be legitimate questions raised about Johnson's tactics and their short-term impact, it also has to be said that JC Penney was an retailer bordering on obsolescence when he took it over. That's why they hired him! Something had to change, or the retailer might not continue to exist.

    I have no idea if the company will be able to survive the short-term problems, but the long-term solution strikes me as the right one.

    Published on: December 21, 2012

    • On Twitter this morning, Fresh & Easy Buzz reports that the company plans to offer store employees four weeks pay and six months COBRA insurance coverage if they will stay until the end.
    KC's View:
    Of course, what "the end" means for Fresh & Easy remains somewhat amorphous. Tesco has said it wants to get out of its US business, but that could mean selling a majority share in Fresh & Easy, selling the whole thing, or just closing the chain down.

    But it's nice to see store employees getting the kind of retention deals that in many failing companies are reserved for the people at the top.

    Published on: December 21, 2012

    Advertising Age reports that General Mills-owned Green Giant is getting into the snack business "with the launch of Green Giant veggie chips ... The snacks will come in two flavors: sweet potato multigrain chips with sea salt and roasted veggie tortilla chips with a 'zesty cheddar flavor'."

    According to the story, "The snacks are among more than 100 new products that General Mills is rolling out in the U.S. in its fiscal year 2013, which ends in May, including some offerings that have already made their debut. Hitting stores soon is Honey Nut Cheerios Medley Crunch, which includes clusters and wheat flakes. The launch represents the first time that top-selling cereal brand Honey Nut Cheerios - a line extension of Cheerios - has rolled out its own line extension."

    • The New York Times reports that the Quaker Oats Co. is launching a new marketing campaign "that makes subtle tweaks to the company’s tried and true marketing approach in hopes of appealing to modern mothers, a new target for the brand. The campaign includes new packaging, in-store displays, coupons, and is designed so that it refreshes the brand and targets young mothers who "are much more likely to be employed, are more ethnically diverse, more mobile and more connected to technology than ever before."

    • The Washington Post reports that Dr Pepper "plans to roll out 10-calorie versions of five of its biggest soda brands: 7-Up, Sunkist, Canada Dry, RC Cola and A&W Root Beer. The drinks are an extension of Dr Pepper Ten, which was launched last year as a better-tasting alternative for men who don’t like the image or taste of diet soda," though the new 10-calorie drinks are being marketed to both genders.

    "Dr Pepper isn’t alone in trying to redefine the image of diet soda," the Post writes. "With soda frequently blamed for fueling obesity rates, executives at Coca-Cola Co. and PepsiCo Inc. are also convinced that producing better-tasting diet sodas can reverse a steady decline in overall soda consumption that began in 1998. That’s despite the growing number of options soft drinks are competing with in the beverage aisle, such as flavored waters, sports drinks and teas."
    KC's View:

    Published on: December 21, 2012

    • Walmart said yesterday that it has named Karen Roberts, the lawyer who has been handling the company's real estate operations, to be its new general counsel.

    The move comes, Bloomberg reports, because her predecessor, Jeff Gearhart, has been focusing "on global compliance efforts while the company grapples with allegations of bribery in Mexico."
    KC's View:

    Published on: December 21, 2012

    • The Food Marketing Institute (FMI) has announced the passing of Murray Grigg, who passed away on December 4 at age 91.

    According to FMI, "Grigg started his career at the Supermarket Institute in 1971 and retired from FMI in 1984 ... Grigg was known for making significant enhancements to the FMI Show by expanding the convention exhibit floor and education program. He involved the  research and education departments directly in planning, thereby increasing the quality of the workshops offered and added new dimensions to the trade show."
    KC's View:

    Published on: December 21, 2012

    On the evening of Monday, January 14, during the annual National Retail Federation (NRF) Show in New York City, MNB will be hosting a special retailer-only reception that is sponsored by Balance Innovations and WorldPay. (Michael Sansolo and I can promise terrific wine and beer, splendid food, and sparkling conversation...and maybe even a cameo appearance by Mrs. Content Guy.)

    If you are a retailer attending NRF, please let me know ASAP (email me at kc@morningnewsbeat.com . There are just a few slots left on our retailer-only guest list, and we’d love to have you join us.
    KC's View:

    Published on: December 21, 2012

    On the subject of lion meat for human consumption, and my joke about eating reindeer meat and telling my (then little) kids that I found a little red bulb at the bottom of the plate, one MNB user wrote:

    Too funny!  Many years ago I had dinner in one of the Colonial Restaurants in Williamsburg VA.  One of the items on the menu was game pie, consisting of rabbit, venison, and duck.  As much as I wanted to, I just couldn’t get past the fact that I would be eating Bambi, Thumper, and Donald!!

    I'd order that in a second.




    On the subject of a piece we posted yesterday about staffing issues that Amazon has been experiencing in one distribution center, one MNB user wrote:

    If the Temp Agency only worked for Amazon that would be one thing, but the excerpt does not mention that.  In most cases the "employees" work for the temp agency.  The temp agency just bills Amazon.  The temp agency would be responsible to pay all the payroll taxes including the unemployment share.  Since the temp agency pays payroll they have the standing to dispute the unemployment claims---not Amazon.

    It seems the article is making assumptions or conclusions that the excerpt does seem to support.

    Suppose and employee was terminated for theft.  The employee could still file for unemployment.  The employer would normally contest the claim---as they should and are entitled to do.  Assuming the employer had sufficient evidence the claim would be closed without compensation.

    The statistic that is missing is how many wins or loses did the temp agency have in the period looked at?  It could be that Amazon used 75% of the temp agency's resources but the temps they actually used were involved in say only 15% of the claims and some lesser percentage of awards.  It would be very difficult to conclude that Amazon is a poor employer.


    The excerpt was just an excerpt.

    You can read the entire story here.

    For the record, I was not accusing Amazon as being a poor employer. I was more interested in the piece in the context of some suggestions that Walmart gets unfairly targeted because of its size. The focus on Amazon will be ever greater as it grows, and the company needs to realize that. It also may not matter which entity is the actual employer ... at least not in terms of public opinion.

    MNB user Rick Chubb wrote:

    There is no doubt that Amazon is using Integrity Staffing to reduce its unemployment insurance burden; however, in fairness to Amazon, it should be recognized that Amazon is not doing anything that is currently “illegal”, and I am quite sure that Integrity does pay Federal and PA unemployment to its “ex” workers, whether they worked for Amazon or XYZ Corporation.  Both the Feds and the State of PA would haul them into court if former employees who are due unemployment insurance payments were not paid their earned unemployment compensation.
     
    That Integrity Staffing “fights” (bad word choice, btw) their obviously “large” volume of unemployment claims is not “unusual” – especially not for a temporary staffing agency.  If they are “fighting” them, it most likely means that they think an employee was rightfully and properly discharged, and is therefore not due unemployment compensation that would be charged to their hourly unemployment insurance “rate”.  If Integrity “wins” an unemployment hearing, it does not necessarily mean that the employee will absolutely not be able to collect unemployment, but it does mean that Integrity’s “account” with the State will not get “charged”, and their “rate” will then not be negatively impacted.
     
    We have used temporary staffing agencies to help us find and hire unskilled factory/warehouse workers for our two manufacturing plants (insulating glass plant and refrigerator door plant).  We have used temp agencies to find employees that we subsequently hire on a temp-to-perm basis, wherein we use the temp agency as a “recruiter”, and as an “OJT agent”, where we have the ability to “try out” the employee for up to 600 or 700 hours (whatever their particular hiring-with-no-fee agreement says), before we hire them.
     
    Unfortunately, our experience has been that hourly workers that are hired from a temp agency are usually not “high-quality” workers.  They tend to be working for a temporary staffing agency “for a reason”.  And this means that turnover among these type of workers is necessarily high.  And this means that an outfit like Integrity Staffing spends a huge amount of time “recruiting” and “placing” and “turning over” their hourly workers, all in an effort to find those “diamonds in the rough”, that ultimately end up being hired as permanent workers at an outfit like Amazon.  Integrity is essentially a “body shop” for “warm bodies”, more often than not – especially at a highly-seasonal outfit like Amazon.  Thus, Integrity spends a huge amount of time managing unemployment claims, and they certainly have a vested interest in defending against the payment of up to 99 weeks of unemployment benefits (I believe this is the current Federally-mandated maximum that is paid out on a State-by-State basis, if my memory serves me) for an hourly worker that is not worth their salt.
     
    Amazon is probably making a “wise decision” if they use a large quantity of temporary workers for order fulfillment jobs on a seasonal basis.  For their “level” and/or “permanent staffing” requirements, Amazon has a vested interest in hiring and retaining “A” players – defined by Jim Collins as “people you would enthusiastically rehire if given the opportunity”.  We use this definition in our hiring process, and we are constantly seeking “A” players to build our team – in both management and the hourly ranks.
     
    Amazon probably views Integrity Staffing as their “go to supplier” for “B”, “C” and “D” players, and they probably have a separate hiring process for trying to find the “A” players that I am sure they want as long-term, full-benefit-type, permanent employees.
     
    Hope this helps give you an employer’s perspective – from someone who is directly involved in hiring strategy, etc.


    It does. Thanks. 
    KC's View:

    Published on: December 21, 2012

    I got an early Christmas present.

    Portland State University in Oregon, where I team-taught a marketing class last summer with Prof. Tom Gillpatrick, has asked me back for summer 2013 ... and it took me about three seconds to say yes. (Let's be clear. If they hadn't asked, I would've begged.)

    As I've said in this space, it is great to have a life-changing experience at my age, especially one that does not involve a tattoo, a body piercing, a divorce, or my prostate. That's what PSU was for me - an enormously energizing, intellectually stimulating and emotionally satisfying experience, and I can't wait to get back there.

    So thanks, Portland State, and thanks to Tom Gillpatrick. You made my 2012, and I'm looking forward to a wonderful 2013.




    I really did not know what to expect from The Silver Linings Playbook, the new film from writer/director David O. Russell (Three Kings, The Fighter), but it felt - based on the trailers and reviews - like a movie I ought to see.

    I'm glad I did. The Silver Linings Playbook is an unusual piece of work, essentially a portrait of two troubled personalities, played with great effectiveness and verve by Bradley Cooper and Jennifer Lawrence. They come together - actually are sort of thrown together - in a middle class, blue collar, Philadelphia Eagles-worshipping Pennsylvania neighborhood. They are quite literally bouncing off the walls emotionally, reeling from devastating personal circumstances, but somehow manage to anchor each other ... and Silver Linings ends up being a touching, funny, quite remarkable little love story that finds little moments of truth throughout.

    By the way ... watch for Chris Tucker, a comic actor (Rush Hour) who doesn't work nearly enough. He essentially delivers an extended cameo here, and he is wonderful ... understated, and totally serving the material.




    I know there is a lot of debate about it on the internet, but I really liked the season finale of "Homeland". (SPOILER ALERT: DON'T READ ANY FARTHER IF YOU HAVE NOT YET SEEN THE SECOND SEASON'S FINAL EPISODE.)

    Now, it is true that there are some plot holes that one could drive a truck through. (How exactly were Carrie and Brody able to escape from CIA headquarters without anyone having seen them? Maybe she has James Bond's invisible car?) But I think the great genius of the show is in the casting - Claire Danes and Damian Lewis are such strong performers that they manage to take the viewer over the plotting rough spots. Lewis, especially, is really good at making us feel sympathy and empathy for a character of dubious values ... it is that performance that creates uncertainty about his motives and actions, and keeps us coming back for more.

    Hard to know where the third season will go ... but it seems likely that Mandy Patinkin, as a top CIA analyst, will play an even bigger role in the proceedings. And that's a good thing, because he is brilliant in the role.



    As for the finale of "The Voice," I'm totally okay with Cassadee Pope being the winner ... she had an amazing set of pipes, and they only got better from week to week. (At the risk of being sexist, I'd also observe that the rest of her wasn't too bad, either.) I thought until the end that her main competition was Nicholas David, who had an amazingly soulful voice. "The Voice" is the only so-called "reality TV show" that I watch, and I can't wait until the show return with new contestants On Monday, March 25 ... though I did think, by the end, that maybe the series went a week or two too long. But it is generally first class, uplifting entertainment. I love it.
    KC's View:

    Published on: December 21, 2012

    Today is the final MNB of 2012.

    As is the custom around here, we’re going to take a little time off to catch our breath, sleep a little late, read some books, go to a bunch of movies (including our annual viewing of Love Actually), and just generally recharge the batteries. I hope you’re able to do the same...or whatever it is that makes you happy...during the next week or so.

    (As always, the MNB archives will be open.)


    MNB will be back on Wednesday, January 2, 2013, for the beginning of what I hope will be a fun, eventful, energetic, and, yes, even prosperous year for all of us.

    Slàinte!

    And Happy Holidays!
    KC's View: