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    Published on: January 11, 2013

    by Kevin Coupe

    Here on MNB, I've long written about the advantage that a strong subscription program can give retailers, and talked about how Amazon's Subscribe & Save initiative locks consumers not just into buying certain products and categories from Amazon, but also how it locks shoppers into specific brands ... which takes them out of the market and far less susceptible to competitive offers. And, I've made the point that companies like Starbucks and even Jockey (the underwear company) are offering subscriptions to their customers.

    Now, TechCrunch.com takes note of yet another example. (I'm going to quote directly here, because their description and imagery deserves to be attributed.)

    "If ever there was a consumer product suited for monthly subscriptions, it would be tampons. It only takes one midnight trip to the pharmacy for you to agree with me.
    That’s where Le Parcel comes in. It’s a new startup that lets you choose which brand of feminine hygiene products you’d like to have shipped to you monthly, along with some chocolate of course.

    "After hitting up the website, users can choose up to 30 different products, including tampons, pads, and panty liners. Le Parcel offers brands like Playtex, Tampax, Kotex, and Always.

    "You can choose up to thirty different products, which means that you can choose 10 Regular Tampax tampons, 10 Super Tampax Tampons, and 10 Always panty liners, or whatever it is that your cycle requires ... The service costs $15 per month, and should take all the hassle out of your period preparation.

    "Users can even indicate when in the month they need their shipments to arrive, ensuring that Le Parcel arrives before Aunt Flo."

    What can I add?

    It's an Eye-Opener.
    KC's View:

    Published on: January 11, 2013

    Reuters reports that "Amazon.com Inc., taking aim at Apple's dominant iTunes store, on Thursday unveiled a service that it hopes will boost digital music sales and encourage more people to use its Cloud music service. It launched Amazon AutoRip, which gives customers free digital versions of music CDs they buy from the world's largest Internet retailer.

    "The digital music files are automatically stored in customer libraries in remote datacenters run by Amazon, where they are available to play or download immediately through its Cloud Player service, the company said."

    And here's the interesting part: "The move sparked speculation that Amazon may be able to do the same for books, making Kindle ebook copies of physical titles."
    KC's View:
    If Amazon does that, it indeed would be a big "wow!" It is hard to overestimate the competitive advantage it would give Amazon if it were able to give me (or, frankly, even sell me at a small surcharge) a digital copy of every physical book I buy from it. And it would be even more amazing if it would be willing to do so for books I've bought in the past. (I'd be thrilled to pay a buck or two for digital copies of many of the hardcover and paperback books I've bought from Amazon.)

    By the way ... it seems to me that Apple ought to be trying to strike the same kinds of deals for music bought through iTunes and books bought through iBooks. (It is a little more complicated because the content starts in these cases as digital ... but I'd certainly be looking for a way to compete across media.)

    Such a move says clearly that it is all about content, not the form in which you consume the content. Which is a very 21st century way of looking at things.

    Published on: January 11, 2013

    Fast Companyhas a piece about what makes people happy at work, pointing out that "in her book 'It’s Always Personal,' Anne Kreamer points to recent research from Sigal Barsade of the Wharton School of Business that indicates positive moods prompt 'more flexible decision-making and wider search behavior and greater analytic precision,' which in turn make the whole company more willing to take risks and be more open.

    "On the flip side," Fast Company notes, "analysis conducted by the Gallup Organization found that disgruntled employees disengage and cost the American economy up to $350 billion a year in lost productivity."

    So what makes for happy employees? According to Fast Company...

    • "Happy employees don’t stay in one role for too long. Movement and the perception of improvement create satisfaction. Status quo, on the other hand, creates burnout."

    • "There is a strong correlation between happiness and meaning; having a meaningful impact on the world around you is actually a better predictor of happiness than many other things you think will make you happy."

    • "A workplace is far likelier to be a happy place when policies are in place to ensure that people regularly get acknowledgement and praise for a job well done."

    • "Recognize that employees are people first, workers second, and create policies that focus on their well-being as individuals."

    • "Emphasize work/life integration, not necessarily 'balance'."
    KC's View:
    Doesn't seem like it would be so hard to make employee happiness a high priority, especially because it does not seem like such a leap of faith to believe that this would make companies more productive.

    And yet, think of all the companies out there that don't even think about this stuff...

    Published on: January 11, 2013

    The Chicago Sun Times offers some analysis of the Cerberus deal to acquire five of Supervalu's retail chains - Albertsons, Acme, Jewel-Osco, Shaw’s and Star Market stores and related Osco and Sav-on in-store pharmacies - for $3.3 billion, plus the right to acquire up to 30 percent of Supervalu's common stock at $4 per share.

    Some analysts believe that this is primarily a real estate play, and that the private equity group will look to maximize profits by selling stores or entire chains.

    Others suggest that "Jewel will become a stronger competitor once freed from the Supervalu connection. Jewel has to buy its wholesale goods from Supervalu and now can shop for better deals that will reduce prices at the checkout counter, the source said."
    KC's View:
    I think that Cerberus is going to sell real estate where it can, getting rid of dead weight, but that it is unlikely that it will sell of entire chains. The goal will be to make both the Cerberus holdings and Supervalu slimmer, trimmer, and more manageable. I just hope that the folks involved focus on being more effective, not just more efficient.

    Published on: January 11, 2013

    The Wall Street Journal reports that a pair of Congressional Democrats investigating bribery charges made against Walmart are saying that the company's senior executives "appear to have known about bribery allegations regarding a store near Mexican pyramids in 2005, saying that was contrary to what the retailer stated last month.

    "Wal-Mart rebutted the accusation, saying that the lawmakers misinterpreted its prior remarks that executives didn't know about bribery allegations, which the company said referred to an earlier time period before the store opened in 2004."

    The story goes on: "In a letter, ranking Democratic members of two House committees said they possessed company emails that appeared to show executives knew of bribery allegations surrounding the permitting of the store in Teotihuacan, Mexico, located near ancient ruins.

    "The emails, they wrote, appeared to contradict statements Wal-Mart made in response to a New York Times story last month that claimed the company convinced officials to allow the controversial store by bribing them.

    "The emails were released by the lawmakers. One email, written by former Wal-Mart international general counsel Maritza Munich in November 2005 and sent to executives including Mr. Duke, then head of the international division, listed an array of alleged bribes a former Mexican employee claimed the company had made, including payments involving the pyramids store."

    Walmart has been conducting an ongoing internal investigation into the bribery charges, while at the same time cooperating with probes by the US Department of Justice and the Securities and Exchange Commission.

    The congressmen making the new charges are Rep. Elijah E. Cummings (D-Maryland), ranking member of the House Committee on Oversight, and Rep. Henry Waxman (D-California), ranking member of the Committee on Energy and Commerce.
    KC's View:
    This does seem to be a case of the congressmen playing "gotcha" with Walmart, and it is hard to know, because of all the various charges and dates, whether they are correct or not.

    However, I continue to believe that the internal probe is more about getting stories straight than revealing previously unknown information. I'll bet you would not need a very large room to have a meeting of people who believe that top management at Walmart did not know anything about the systemic and systemic bribery that was greasing the wheels down in Mexico. They may not have known details, but they figured that it was the cost of doing business, that this how things work south of the border. (Which, as we've pointed out here before, is ironic considering the extent to which Walmart goes to make sure its buyers won't be influenced by anything even remotely like a bribe.)

    Published on: January 11, 2013

    The New York Times reports that "two large egg producers have received warning letters from the Food and Drug Administration, which said they violated a two-year-old rule aimed at preventing salmonella contamination.

    "During inspections conducted last summer, the F.D.A. found failures to prevent pests and wildlife from entering barns housing laying hens, poor record-keeping and other infractions that amounted to what it called 'serious violations' of the rule."

    According to the story, "Both producers, Midwest Poultry Services of Mentone, Ind., and SKS Enterprises Inc., in Lodi, Calif., failed to comply with plans they had submitted to the agency aimed at preventing salmonella enteritidis, one of the most common types of salmonella bacteria, the F.D.A. said. Such plans were required by a rule set out two years ago.

    "Officials noted the presence of more than 30 wild birds and their nests in three of the five SKS facilities they inspected between May and August, despite the company’s plans for preventing wildlife from coming into contact with its chickens and eggs. After the inspection, SKS told the agency it would use chicken wire to prevent wild birds from entering its barns, but the agency said it had not received any follow-up report on that correction.

    "The F.D.A. also said the company was missing pest control records and failed to conduct tests of its birds within time frames specified by the rule."
    KC's View:
    First of all, let me say this...

    Yuck.

    Second of all, this seems to be yet another example of why we need tougher, more aggressive food safety rules, and why I hope that the Congress doesn't dither over funding the new rules being proposed by the FDA, which are mandated by law.

    Published on: January 11, 2013

    • The Boston Globe reports that the Ocean Spray Cranberries cooperative has acquired a Chilean cranberry processing business that it says will "expand its multinational footprint and increase its capacity to produce dried cranberries by 12 million pounds annually." Terms of the deal were not disclosed.

    USA Today reports this morning that when Super Bowl XLVII takes place on February 3, it will be "overflowing with beverage promotions," as both Pepsi and Anheuser-Busch InBev using the forum to push product.

    According to the story, "Pepsi will run a 30-second ad for its mid-calorie soft drink Pepsi Next, and also have a 30-second promotion that helps to introduce the half-time performance by Beyoncé Knowles." And A-B "will tout existing brands Budweiser and Bud Light, as well as introduce new brews such as Beck's Sapphire and Budweiser Black Crown." In addition, "Pepsi and A-B, who both are major National Football League sponsors, are combining their brand power for joint retail displays. Pepsi's soft drinks, as well as its snack chips such as Doritos, will be touted alongside A-B's brews in stores."

    • The New York Times reports that Unilever-owned Lipton is launching an ad campaign "that play up the traits of hot tea rather than making comparative claims against coffee. The campaign, by DDB New York, seeks to generate interest in the flagship Lipton product of black tea in bags packed in yellow boxes, which has been overshadowed by newer Lipton offerings like green tea, tea in pyramid-shaped bags, herbal tea, iced tea and ready-to-drink tea."
    KC's View:

    Published on: January 11, 2013

    • Convenience store chain The Pantry announced that B. Clyde Preslar is joining the executive leadership team as Senior Vice President and Chief Financial Officer. Preslar joins The Pantry from RailAmerica, Inc., where he served since 2008 as Senior Vice President and Chief Financial Officer for the short line and regional freight railroad operator.
    KC's View:

    Published on: January 11, 2013

    Responding to yesterday's piece in which we noted that Edward Lampert, the hedge fund manager becoming CEO of Sears Holdings, compared himself to Jeff Bezos (a former hedge fund guy), MNB user Ray England wrote:

    As someone that spent over thirty years in the retail trade as a merchant I find Mr. Lampert’s remarks quite insulting and truly illustrative of why so many LBO’s fail. I worked for three different regional retailers over the course of my retail career all of which through LBO’s. Having lived through three different scenarios, I think I know what I’m talking about. There was a time in this country when regional supermarket retailers, unencumbered with detailed reporting to Wall Street, or in puffing up numbers to satisfy an investment group with the sole desire of maximizing their ROI ruled the roost in most major marketplaces. Maybe not in total market share dollars, but no doubt in meeting the needs of their customers.

    Why? Because they were started my MERCHANTS with an idea and profitability worked back from there. Over the course of time they built a brand equity with their consumers based on what they delivered every day and the support mechanisms necessary to keep those real (aka necessary training and labor investment) evolved over time. That brand equity demanded investment and attention to detail….details in place designed to bring the merchants vision to life.

    The onset of the LBO era in the late 1980’s caused a dramatic shift from family owned supermarkets being merchant driven to leveraged companies that were now operations driven. AKA raise margins and cut labor…so the emphasis shifted from perfecting and moving forward those things that made these MERCHANTS different to figuring out how to cut overhead costs and drive the top line. I mean no disrespect to “operators”, in the day, great operators were those companies that executed their merchandising programs flawlessly, which is different than operating with a singular focus of driving down costs. There are great operators out there today, oddly enough most are family owned, but not all. I think it’s a great thing when the expectation of a merchants vision comes together with the appropriate operational execution. There is nothing worse in my opinion than stated expectations from ownership that in no way match the investment necessary to make those expectations happen.

    It is very difficult today to develop and execute complex merchandising platforms today because so many folks have forgotten what it takes to do so. Back to Mr. Lampert, my guess is that he would have no clue in walking one of his stores and determining what might or might not be working, much less how to fix it, or understanding a merchandising driven effort designed to separate a particular department from its competitors in order to increase sales and customer retention. But when it comes to counting beans, well...


    From another reader:

    I can tell you that for those of us in the field this is not taken as good news. We are waiting for a true retailer to take the helm and actually try to grow the business instead of finding ways to only drive a profit line through cost savings. There is amazing skepticism regarding any new initiatives and there is a general feeling of dread that as soon as a store's lease expires that's all she wrote. There is very little trust of leadership, or that any leadership outside of Mr. Lampert has any real authority to do anything, permeating the company and this will make it all the more difficult to turn around. So many of us in the field see potential but feel that we are really on the slowest train wreck ever. We don't have to be Target or Walmart- we can't be Amazon, but we can at least try to figure out who our real customer presently is, what customer we are going after, and then make the changes necessary to become necessary to our customers again. Or, we can just enjoy the ride into oblivion...




    I wrote yesterday about being delighted by a self-checkout experience I had at the Apple Store.

    One MNB user responded:

    I too was recently surprised by an Apple experience, although a dash of creepiness accompanied my delight.

    Santa kindly left an iTunes gift card in my stocking. When I went to enter the code into my account from my desktop Mac, Apple gave me the option to take a picture with my camera. Out of curiosity, I chose that option. My computer camera came on, I held the card in front of it as it recognized the code and clicked ok. That was it - my credit was in my iTunes account. Cool but a little creepy, right?


    Another MNB user wrote:

    You need to get out more.  And maybe stay away from the Apple Store.

    Still another reader wrote:

    Great story about Apple checkout experience and I couldn't agree with you more about Amazon Prime.

    Want to share with you my recent stellar customer experience with Amazon. Bought my son an electric razor for Christmas which he decided was not something he wanted right now. I went on line to return the unopened, hermetically sealed razor to discover it is on the list of hazardous materials (who knew!?) one cannot return.

    Incredulous, I sent Amazon a question about returning the item.  I received a very polite reply reiterating that it is not returnable and in a VERY diplomatic tone explained how I could make sure my future purchases are not on the cannot-be-returned list.

    So far, good but not necessarily remarkable.

    Then, the note went on to say that this time only, they would refund my purchase price and I could dispose of the item any way I choose.

    Wow. I was blown away.  This was not an inexpensive item.

    You can bet that my experience virtually guaranteed my continued use of Amazon (and Prime). I'm not sure that it was the refund that did it or the fact they didn't use the usual "you are an idiot for not seeing this is not returnable and I'm going to make sure to rub it in your face" tone I've gotten from other retailers.  Probably both.


    MNB user Jim Swoboda wrote:

    As an Apple nut, which you are, I can not believe you just found out Apple allows self checkout.  It's been in place for more than a year 🙂  Must be the miles you travel cause it's not age!

    The simple fact is that no Apple employee ever told me about it before.

    I did get a few emails asking me why I had not simply ordered the chargers I needed online, and the interesting thing is that I never even thought about it.

    Why? Because I actually like going to the Apple Store.

    There must be an object lesson in there somewhere...




    Not surprisingly, I got a lot of emails regarding my commentary yesterday about nobody being elected to the Baseball Hall of Fame because of continued concern and disgust about the steroid era and the use of performance-enhancing drugs by ballplayers.

    MNB user Douglas Madenberg wrote:

    As a fellow Mets fan, I’m surprised you found this result satisfying.  I found it doubly disappointing that Mike Piazza didn’t make the cut on this first ballot.  With only Tom Seaver wearing our team’s cap currently in Cooperstown, my son and I were looking forward to his being joined by a catcher who (presumably) didn’t take part in the whole PED craze and still managed to put up some of the best historical numbers for the most demanding of positions.  I understand that these things tend to take more than one vote (Yogi Berra also missed on his first try), but to me, this would have been the BEST year to induct some great, clean players while excluding the dope heads.  I fear what will happen is that Bonds, Clemens etc will get in eventually, perhaps in the same year as Piazza, and it will turn into a controversy about the steroids era, rather than a celebration of his career and accomplishments.

    MNB user Ryan Tonies wrote:

    I agree with your take on Pete Rose and his absence from the HOF (“…eats away at his soul.”), however the issue I have with it is that his banishment is a result of his gambling as a MANAGER; not his accomplishments as a great baseball player.  This clearly isn’t a case of him possibly taking PED’s (Performance Enhancing Drugs) and cheating as a player.  Quite frankly he should be in the HOF as a player in my opinion based solely on his playing merits.  Although I see from the Hall’s POV that it would be somewhat contradictory to now reverse this decision and allow him inducted simply as a player; not the complete package.

    Regarding Bonds, Clements, McGwire, Sosa, Palmeiro, potentially A-Rod, etc., all these guys have a potentially endless battle into the HOF and I really don’t see them ever getting into the Hall in my lifetime.  It’s a shame when you consider their on-field accomplishments, however I firmly believe most people have a real problem with cheating even though none of them were caught with PED’s (except Palmeiro) and there wasn’t testing during the majority of most of the aforementioned players careers.  Palmeiro’s suspension was especially stinging after he went on Capital Hill and vehemently denied ever taking PED’s, but I digress…….


    Regarding Rose ... there is a big sign in every locker room reminding players, coaches and managers that gambling on baseball is forbidden. He broke that rule. As far as I'm concerned, he pays the price. No negotiation.

    MNB user Carl Morley wrote:

    I have to say....your's is the most spot on comment I have heard in two day concerning the Hall of Fame. Thanks a ton.  Players such as Bonds and Clemens hurt the chances of players such as Murphy, McGriff, and Morris.  No telling if these 3 would have made it, but Bonds, Clemens and other cheaters skewed numbers and hurt legitimate players.

    From another reader:

    Yes, I agree with your comment and think this send a strong message to aspiring professional athletes. It would be gratifying if the writers decided to nominate and vote on someone like Rusty Staub, who not only is a stellar example of a solid player but someone who always helped fellow teammates. Perhaps people need to start to look at the overall person – performance and accountability – before nominating and voting on a place in the Hall of Fame. Life if more than just how much money you have in the bank, or your title, or your stats!
     
     MNB user Dan Johnson wrote:

    I can agree with the assessment of Bonds and Clemens. My frustration would be with including Pete Rose. Rose’s transgression was betting on the game of baseball. He did nothing to alter the outcome based on his ability to perform the task required. He was a Hall of Fame player by all measure. I may not agree with Gambling on the game per se but as it was not a physical enhancement to performance and was never proven to change the outcome of any game. How then can it be treated as the same?. This is more about character than performance; will we not allow Tiger Woods into the Hall of Fame for his choices and bad character? By any measure and arguably he is/was the greatest golfer in modern times.

    Oh, come on. Tiger Woods made bad personal choices. But saying that gambling on baseball does not have the potential of affecting the game is absurd.

    They are totally different.


    MNB user Chris Reading wrote:

    Couldn’t the same message be sent by voting players like Biggio or Jack Morris into the Hall?  These guys were not a part of the steroid issue.  Biggio, with over 3,000 plus not going in on the first ballet is a shame.




    Finally, I got a ton of email responding to my piece on Tuesday about Vic Magnotta. Let me share just one of them with you...

    Hi Kevin, just read this morning’s Eye Opener and it really struck a chord with me.  My eye-opener in this area came 9 years ago when my only sibling, my big brother, was very unexpectedly hospitalized with what turned out to be Stage IV melanoma.  I’ll spare you the gory details; suffice it to say that he went from playing a hockey game on Saturday night to being in a coma 10 days later and dying shortly after.  My brother lived life to the fullest-although he graduated from high school with honors, he quit college after one week and made his own way as a painter of fine old homes in Topeka, Kansas and on the side was a self-taught artist, carpenter, basket maker, tanner and blacksmith among many other things. 

    Since his loss I’ve tried to live by exactly those words.  My husband, daughter and I (along with our frequent traveling companion, my father, who has been long retired from the food industry) try never to miss a chance to travel, volunteer, adopt a pet, try a new wine, scotch, restaurant or recipe and take every chance we can to be with family and friends.  Thanks for reminding me again that life is short, death is certain and the only thing you take with you is the joy that you experienced in life.


    Amen.

    Thanks for sharing.
    KC's View:

    Published on: January 11, 2013

    Not Fade Away is the new movie from David Chase of "The Sopranos" fame, looking at the travails of a small New Jersey rock band trying to get traction in the mid sixties. Inspired by the Rolling Stones and influenced by counter-cultural forces that seem to creating a chasm between them and mainstream culture, these young people grow their hair, drink and smoke and do drugs, and try to find a way to express their discontent and longings in song. The movie, as you might expect, has a terrific soundtrack, produced by Steven Van Zandt of the E Street Band.

    This is an interesting and effective little movie, populated by distinctive and individual characters played largely by unknowns; the only actor you are likely to recognize is James Gandolfini, also of "The Sopranos," who plays the protagonist's dad, who is wrestling with his own demons and discontents. Because Not Fade Away doesn't accept easy explanations and resolutions, it is that rare movie that does not seem to be made for teenaged boys, even though it is largely about teenaged boys. I think it works because it is so familiar - I'm just a little younger than the people portrayed in the film (I was just 10 in 1964), but the themes of alienation and searching have a universal quality.

    In many ways, Not Fade Away is like the dark side of That Thing You Do, the Tom Hanks film that, oddly enough, portrays the exact same period of time but through a much sunnier prism. That's not to say that one is better than the other - they are like opposite sides of the same coin. In fact, when I came home the other night, I was flipping around and found That Thing You Do starting on one of the myriad movie channels we get. I watched the whole thing (it is one of those movies that I find hard to turn off), and thought that if I were teaching a film class, I'd definitely want my students to see a double feature of Not Fade Away and That Thing You Do - their differences and similarities and instructive about culture, filmmaking and how different artists can see, experience and explain period of time. They are playing the same song, but it sounds entirely different because they are using different instruments and following a different beat.




    Speaking of different takes on the same song ... "Ironhorse," by Robert Knott, continues the adventures of Virgil Cole and Everett Hitch begun by the great Robert B. Parker in four novels that began with "Appaloosa." (This continues what has become a tradition with Parker's novels since his death three years ago next Friday. The iconic Spenser novels are now being written by Ace Atkins, an accomplished novelist in his own right, and the Jesse Stone books are being written by Michael Brandman, a screenwriter who is working to find his novelistic voice.)

    Knott, as it happens, co-wrote (with Ed Harris) the screenplay for the film version of Appaloosa, which was terrific, so he knows the characters and the genre. This is his first novel, and I'd say that he falls somewhere in between the excellent Ace Atkins and the less accomplished (but working hard to improve) Brandman. I'm a little conflicted about it - I thought it was a decent yarn, and showed that the author did a ton of research to get the western elements right. But it is like a cover band doing a hit song - they may get all the notes right, but it just doesn't measure up to the original.

    That said, "Ironhorse" is a strong first effort. Knott changes enough of the formula to avoid some direct comparisons, and he clearly loves the characters and wants to explore them further. If he wants to keep writing the adventures of Hitch and Cole, I'm happy to keep reading them.




    I've gotten a couple of emails from readers expressing some surprise that I haven't yet reviewed Quentin Tarantino's Django Unchained. The reason is simple - I haven't seen it. And I'm completely torn about it.

    On the one hand, Tarantino is a major filmmaker, and I ought to see his work. But, especially these days, with the Sandy Hook slaughter so fresh in memory, I cannot work up any enthusiasm for a movie that seems intent on celebrating violence. I am one of those people who believes that the film and television industry does have some responsibility for not being exploitive in how it treats violence, and I'm just not sure I want to go where Tarantino wants to take me.

    We'll see.




    Three adult beverages to recommend to you this morning...

    • 2010 Halter Ranch Cabernet Sauvignon (which includes 12% Malbec, 11% Merlot), which is wonderfully smooth and rich.

    • 2008 San Lorenzo Rosso di Montalcino, which is great with spaghetti, meatballs and spicy sausage.

    • Allagash Tripel Reserve Belgian Style Ale, which is potent and complex and satisfying.

    Great stuff.



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

    Slàinte!
    KC's View: