retail news in context, analysis with attitude

Published on: January 22, 2013

by Michael Sansolo

The Internet can be a blunt and brutal place. It’s built on unruly mobs moving across the virtual terrain, digesting stories and leaving behind carcasses. But it is also one of the last vestiges of wide-eyed, unfettered belief.

The former describes how it is that the strange and elusive case of Manti Te’o is being efficiently dissected on the Web. The latter describes how it is that people on line could love girlfriends who do not exist.

Those two paragraphs launched a front-page story in the Washington Post Friday about the strange case of the Notre Dame football star with the deceased girlfriend who wasn’t there. Given the sordid nature of the story, there is very little chance you have not already heard about this case.

But this column isn’t about Te’o ... because, quite honestly, I don’t know the facts nor do I have any idea what to believe. What’s more, the story might change radically overnight or minute-to-minute.

Instead we need to think about why this strange story matters to you and your business.

Like it or not the uncharted world of the Internet where stories like this can both be born and can become universally discussed, is part of the reality facing business today. Today everything can be public, can be examined and can be right and wrong at the same time.

Pretty scary, isn’t it?

Yet here’s the thing: like it or not, this is the world we live in. In this new world, you don’t get to choose whether to be part of the social web and the non-stop conversations raging on there. Rather, you can only choose how to engage and try your best to make that engagement positive.

The trick is figuring out how to do it. How to speak and listen, and and how to decide in which networks you’ll actively participate. You need to understand how to change and grow in this new environment, and how to possibly manage and measure success. You also need to quickly figure out the rules of engagement for communication both inside and outside your company. Any one of those points is a massive project in itself and you need to do them all.

Last year I wrote a number of columns here on MNB about Untangling the Social Web, the newest study from the Coca-Cola Retailing Research Council of North America. (Again, full disclosure: I am the research director of the Council.) The first five parts of the study attempted to help companies approach the social web by examining what it is, why it is so widely used and how business need to engage.

This year, we take it a step further. As of today you can download Parts 6 and 7 of the study (plus an executive summary of the two) that will walk you through the tactical questions and decisions you face on the social web. The study, authored by the Integer Group, provides discussions, exercises and even simple tips to aid your journey.

Based on feedback I’ve had with countless companies in the past year, this guidance is essential because the discussion they need to have has yet to occur. Instead, they lose sleep as they witness the steady parade of strange stories on the social web whether it concerns Te’o or the real length of Subway’s foot-long sandwiches.

When the executives who make up the Council first conceived this study, they did so acknowledging that they and their peers needed a lot of work to understand the changing landscape of community and communication. Two years later, that need has only grown.

The study can be downloaded here, or you can visit the Council’s website: www.ccrrc.com.


Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com . His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available by clicking here .

Published on: January 22, 2013

SCOTTSDALE, Arizona -- Daymon Worldwide and the Hartman Group revealed yesterday at the Food Marketing Institute (FMI) Midwinter Executive Summit here the results of a comprehensive research study into food culture shifts, suggesting that we have become an "eating culture" that requires retailers and manufacturers to reconsider traditional approaches to how they market food. Consider the following shifts in consumer behavior, variously described as "tectonic" and seismic":

• 68 percent of US households have no children.
• 46 percent of primary grocery shoppers are men.
• 47 percent of eating occasions are people eating alone (up seven percent since 2010).
• 35 percent of alone eating occasions result in people eating better than usual.
• 52 percent of easting occasions involve the consumption of snacks.
• 63 percent of people make eating decisions within an hour of eating.
• 77 percent of eating occasions involved some prepared food.

And among the changes in food culture identified by the report:

• "Food, and where consumers buy it, is evermore central to personal identity. We truly are where we shop and what we eat."

• "Consumers actively seek variety and new avenues of discovery, and to try different kinds of cuisines, greens, grains and salts."

• "In this context, brand loyalty is no longer a given. It’s not that consumers are disloyal; they just want to try new things."

• "Consumers shop by occasion with eating in mind. What they want depends on the many factors that make up the occasion: who, what, where, how and why."

• "They prefer retailers who “get them,” not a one-size-fits all approach."

• "When all else is equal, price matters, and consumers like to have clear, differentiated choices."

These are not fads, said Carla Cooper, CEO of Daymon, in her presentation to the audience. "I think they spell opportunity."

And Harvey Hartman, founder of the Hartman Group, suggested that food retailers should begin acting as "curators," helping shoppers to make intelligent and relevant choices. "Those who understand consumers ... and understand food culture ... have the greatest opportunity to succeed with consumers," he said.

"While conventional SKU rationalization is meant to improve the bottom line by ensuring slow moving products give way to those with higher turns," the study says, "it puts the focus on pruning. Rather than training customers to alway seek the lowest price, retailers can impress and secure loyal shoppers by acting as curators and introducing consumers to less familiar, exciting products. Understanding just how far your shoppers will stray from the familiar is essential to successfully implementing this strategy."

And Cooper added, "It is important to go beyond understanding the cultural shifts and move to acting on them."

The study, “Reframing Retail Through The Lens of Changing Food Culture,” combines what the companies call "insights from qualitative and quantitative research methods conducted from 2010-2012, plus targeted ethnographic interviews in the major urban markets of Seattle, Detroit and Dallas, to inform the surveys and capture in-person, in-home and at-store behavior."

In other news from the Midwinter Summit...

• FMI laid out a plan for strengthening its core member proposition, which includes, according to CEO Leslie Sarasin, "doing more forward thinking, edgier consumer research" that positions FMI and its members as being central to understanding consumer behavior and food-related issues - especially food safety and legislative concerns - and acting on them in an effective and responsible way.

The plan also includes re-instituting the FMI Show as an annual event, rather than as an every-other-year show that alternates with the Future Connect educational conference.

• Robert Safian, the editor and managing director of Fast Company, spoke about what he called "Generation Flux," a group defined not by demographics but by attitude and psychographics, that is able to adjust to fluid economy by being agile and open to change.

In his presentation, Safian cited three approaches taken by the late Apple CEO Steve Jobs, who believed in taking ideas from everyone and that "innovation often comes from the spaces between the silos"; in "redefining the corner office" as a place not primarily focused on making the trains run on time and keeping the stock price up, but as the place where ideas are incubated that will have a profound impact on the core business; and in "editing and amplifying," figuring out "what you're good at and doing it really, really well." It is important, he suggested, "to do less and do more with it."

• Ric Jurgens, the retired chairman/CEO of Hy-Vee, was given the Sidney R. Rabb Award, FMI's most prestigious honor, for excellence in serving the consumer, the community and the industry.

• FMI also honored Anne McGhee Curry, the longtime FMI vice president of government relations who is retiring at the end of the month, with the Glen P. Woodard, Jr. Award for three decades of contributions to public affairs.

Published on: January 22, 2013

USA Today reports on how "it's becoming downright American to make stuff in America," as well as more American to buy things that are made in the USA. Here's how the story frames the issue:

"Over 80% of Americans are willing to pay more for Made-in-USA products, 93% of whom say it's because they want to keep jobs in the USA, according to a survey released in November by Boston Consulting Group. In ultra-partisan times, it's one of the few issues both Democrats and Republicans agree on.

"When considering similar products made in the U.S. vs. China, the average American is willing to pay up to 60% more for U.S.-made wooden baby toys, 30% more for U.S.-made mobile phones and 19% more for U.S.-made gas ranges, the survey says."

Walmart's announcement that it plans to buy $50 billion more in American-made products over the next 10 years is seen as part of this momentum; other companies, such as Caterpillar and 3M, also are making efforts to source more products at home.

However, the story also notes that some companies - Apple is prominently mentioned - are perceived as being Made in the USA companies when they actually source most products and components abroad. "It's illegal to claim a product is U.S.-made unless both the product and all it's components are sourced in the U.S.," the paper writes. "Even products that could imply a phony country of origin with a flag or country outline are verboten."

Published on: January 22, 2013

The Wall Street Journal reports that it is warning suppliers "that it is adopting a 'zero tolerance policy' for violations of its global sourcing standards, and soon plans to immediately sever ties with anyone who subcontracts work to factories without the retailer's knowledge."

The new standards will be enforced beginning March 1, and come "after Wal-Mart clothing was found at a Bangladesh factory where a fire killed 112 people in November—a factory the company said was no longer supposed to be making its clothes."

The Journal notes that Walmart used to have a "three strikes" policy, but is now getting even tougher in response to events.

"Obviously our three-strike policy wasn't working as well as it could have," Rajan Kamalanathan, Walmart's vice president of ethical sourcing, tells the Journal. "Our message of zero tolerance is meant to get people's attention."

Published on: January 22, 2013

The Los Angeles Times reports that Dish Network-owned Blockbuster will close about 300 of its stores, or more than a third of its American fleet - some of them because of poor performance and some because they have reached the end of their leases.

The closures are yet another indication of how technology is changing, and how the once-ubiquitous Blockbuster stores are becoming more and more irrelevant to a world in which people are either streaming movies and TV shows over the internet or finding other ways - such as the mail via Netflix, or via instore Redbox kiosks - to get DVDs.

And, the decision follows the bankruptcy filing last week of Blockbuster's British business and the closure if 160 stores there.

According to the Times, "Dish itself has been hurting. The company lost 19,000 subscribers and reported $158 million in red ink for the third quarter. Fourth-quarter figures have not been released."

Published on: January 22, 2013

Advertising Age has a piece about how higher Social Security taxes that took effect on January 1 are likely "to suck more than $1 billion from spending in 2013, presenting marketers with yet another challenge as they seek to pry precious dollars from shoppers."

Here's how Ad Age describes the change:

"Paychecks began shrinking Jan. 1, when the tax rate jumped to 6.2% from 4.2%, ending a temporary break that began in 2011. For a household making $50,000 a year, that means a loss of about $83 a month, or $1,000 a year. The payroll tax applies only to wages up to $113,700. Various analysts have projected anywhere from a $113 billion to $120 billion hit to the economy, with most agreeing the keenest pain will be felt in the first quarter as consumers adjust. IHS Global Insight cited the higher taxes when lowering its first-quarter consumer-spending growth projection to 1.4% from 2.6%."

Published on: January 22, 2013

The Houston Business Journal reports that JJ Watt, the superstar defensive lineman for the Houston Texans, will now serve as a spokesman for HEB Grocery Co.

According to the story, Watt "has already been featured in some H-E-B tailgating advertisements along with several other Texans' linemen encouraging viewers to load their grocery sacks with H-E-B beef products ... The new sponsorship partnership also extends to the all-star player's Justin J. Watt Foundation, which provides support to after-school athletic programs in Wisconsin and Texas, with a particular emphasis on middle schools that lack the funding for after-school sports.

Published on: January 22, 2013

• The Chicago Tribune reports that Kraft Foods Group has sold its headquarters in suburban Chicago, though it plans to lease back the building for at least the next decade. Terms of the deal were not disclosed.

The decision to sell the real estate is, the story says, "part of a broad-based effort to return cash to shareholders," and comes after the spinning off its global snack foods business as Mondelez International.

Published on: January 22, 2013

• Tesco announced that it has hired George Fischer, formerly the managing director of Lidl Stiftung's Belgium operations, to be its new CEO of Malaysian operations.

• ShopKo announced that Jill Soltau, its EVP/CMO, has been promoted to the position of president/CMO.

• SymphonyIRI Group announced that Piyush Chaudhari, the company's executive vice president of strategy, has been named president of the Americas, reporting directly to Andrew Appel, president and chief executive officer.

Published on: January 22, 2013

...will return.

Published on: January 22, 2013

On April 22, 2013, MNB wrote about Time Magazine’s cover story:  “Just caught up with a Time piece about how and why Walmart has decided that a "made in America" initiative makes sense, noting that "the same forces that are making the U.S. a more hospitable place for manufacturing —higher shipping costs and wage rates overseas among them—have prompted the company to reevaluate its sourcing on a variety of products." It is worth reading, and you can do so here.

And KC commented: "Clearly, Walmart believes that it can use a made-in-America program to clear up some supply issues without raising its prices, which marks a real sea change in how the company works. And, at a time when the company has taken some hits because of issues like foreign bribery, a made-in-America initiative also can have a positive PR impact"

Isn’t it time you made this a competitive advantage for your products?  Whether it’s detergent or diapers, apple juice or orange juice, pork or beef, the USA Certified seals signal strict compliance to American-made inputs, services and/or processes, and outputs.  Your customers, regardless of where they’re seeing the seal, are ensured of buying American.  Join other companies who have found that certifying their American products is a competitive advantage.

To learn more about how to certify your products as Made in USA Certified or Product of USA Certified, click here.

Published on: January 22, 2013

Here on MorningNewsBeat.com, you've read about how the food culture in America is shifting...

MNB, 1/22/13 ... Daymon Worldwide and the Hartman Group unveil a new study looking into the changing American food culture, emphasizing that retailers and manufacturers need "to reconsider traditional approaches to how they market food. One major point: "Brand loyalty is no longer a given. It’s not that consumers are disloyal; they just want to try new things ... consumers like to have clear, differentiated choices"

MNB, 1/24/13 ... "Content Guy" Kevin Coupe writes: "I think it is terrific that a new campaign, called 'Let's Put Our Plates Together,' has been begun (by FMI) to encourage and coordinate efforts by retailers to get families to eat together on a regular basis, because we all know that when families eat meals together, their kids are better adjusted, have fewer drug and alcohol problems, and get better grades ... This stuff cannot be overstated. It can't be talked about too much."

MNB, 1/31/13 ... MNB looks at a company called Kid Chow, one of a number of companies that are providing "fresh, healthy meals for schools and school districts." KC suggests that this sounds like "a big business opportunity and a ray of hope" for a generation that will eat better and be smarter about their food choices.

"Cooking Together, Cooking Forever" is a new online marketing program that builds on these trends - offering parents and schools the opportunity to partner with their local supermarket to encourage kids to make and eat healthy meals ... which can serve as a way to improve your sales and profits.

It has been created by the folks who developed the highly successful 'Apples for the Students' program ... so it has both a pedigree and a track record.

Want to find out how to get involved? CLICK HERE NOW.