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    Published on: March 18, 2013

    by Kevin Coupe

    Inside Retailing reports that in Australia, Target and Disney worked together to create an interactive retailing wall inside a Sydney movie theater that was showing Cinderella, the 1950 animated classic.

    The wall offers young theatergoers the opportunity to use their parents smartphones to scan QR codes to buy costumes, DVDs and other products related to the movie. And while Target, which is handling fulfillment for the project, says it has no intention of making the installation permanent, it does say that it will evaluate the project to see what future possibilities are.

    The Sydney movie theater project is described in the story as being similar to the retailing walls installed by Tesco in subway stations in Seoul, South Korea, in 2011.

    This is yet another Eye-Opening example of how the retail world is changing, and how smart companies are seeking out unusual opportunities and accessibilities.

    BTW ... if you haven't seen the original MNB story and video about the Tesco subway store,

    click here.

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

    Published on: March 18, 2013

    The New York Times had a long piece over the weekend about a case, that while specific to the nutritional supplement industry, could have an impact on retailing in general, as it looks to assign blame for a negative outcome not just to the manufacturer that created a product, but a retailer that sold it.

    The specific case focuses on a 22-year-old Army private, Michael Lee Sparling, who collapsed and died while running in formation with his unit in Texas, shortly after having consumed the recommended dose of a workout supplement called Jack3d that the Times describes as containing "a powerful stimulant called dimethylamylamine, or DMAA for short, which some medical experts and health regulators say has similar effects on the body as amphetamines."

    The Times continues: "Leanne Sparling and her husband, Michael, blame Jack3d for their son’s death. It is the only way, they say, they can make sense of a healthy young man dying from cardiac arrest. Last month, they filed a wrongful-death lawsuit against USPlabs, the maker of the supplement, and GNC. They argue that the companies sold a defective product and failed to warn about its risks.

    "The case has united some military physicians, professional sports organizations and supplement researchers who say Private Sparling’s death, and reports of at least four others, expose major weaknesses in federal protections for consumers. It also opens a very public challenge to GNC’s image as a trusted supplier to athletes and bodybuilders."

    The entire story can be read here.
    KC's View:
    As I read this story, all I could think about is how a finding in the Sparlings' favor could open the door to other such suits, and not just limited to the supplements business. I'm not sure this would always be a bad thing ... and it may be an inevitable thing.

    Published on: March 18, 2013

    Business Insider reports that Citi analyst Deborah Weinswig is saying that Walmart management seems to be focused on its Made in the USA initiative, and that this effort could lead to improved profitability.

    An excerpt: "While global sourcing remains a significant source of EDLC opportunity, we believe that the $50B commitment to increase domestic sourcing over the next decade should benefit topline and profitability at WMT U.S.

    "Domestic sourcing will help the company avoid wage inflation overseas and shipping costs, while increasing flexibility through shorter lead times and generating positive reputational buzz. WMT U.S. kicked off the initiative this week with Georgia state sourced towels, priced at $8.97 for bath size. They are offered in 600 stores and will be in an additional 600 stores by Sept., supported by local marketing."
    KC's View:
    I do have a bit of a dog in this hunt, since one of MNB's longtime sponsors offers certification of Made in the USA products. But I was a big proponent of such programs long before this company began sponsoring MNB, so I don't feel like I have any apologies to make.

    I think you are going to see a lot more of these programs, because Made in the USA increasingly will be seen as an advantage for marketers. You have to do it right, you have to be credible, and you can't take shortcuts. But it makes a lot of sense ... and I don't think it is hard to imagine Amazon having a Made in the USA section, for example ... which may be enough for Walmart to do it.

    Published on: March 18, 2013

    The Tampa Bay Times reports that Publix is testing a new nutrition and meal planning service in its Riverview, Florida, store, offering a registered dietician "on hand to help costumers make sense of food labels and plan healthy meals ... The program includes personal shopping assistance, nutrition counseling, meal planning, and group tours of the store."

    In addition, the dietician will work with the store's pharmacy to offer things like cholesterol tests, and then provide nutritional guidance to help people make smarter buying decisions.

    According to the story, Publix is testing the program "and will use customer feedback to evaluate it."
    KC's View:
    Think of this as Apple's Genius Bar, adapted to the supermarket. Great idea ... the only problem is that more companies should have been doing it years ago.

    Published on: March 18, 2013

    The Los Angeles Times had a piece over the weekend about how Carl's Jr., the 72-year-old California-based fast food retailer that specializes in "bosomy brand ambassadors, debaucherous burgers and a clientele that leans toward young, hungry dudes."

    Carl's Jr. is owned by CKE, which also owns the Hardee's chain. The CEO, Andy Puzder, points with pride to the fact that it "sells 20 times more Western Bacon Cheeseburgers, with 740 calories apiece, than it does BBQ chicken sandwiches, which each have 390 calories. 'It's not our personality and it won't become our personality," Puzder said of the health craze that has swept rivals such as McDonald's. 'All of our products are indulgent, decadent'."

    And while Carl's Jr. does offer fish sandwiches and has plans to offer a veggie burger, Puzder says that generally the company plans to stick "to a tried-and-true tactic: promoting premium products such as its Six Dollar Burger instead of relying on low-priced items on a dollar menu. 'You can demean your product if you're locked into a price point,' he said. 'We'd rather have a message of value for the money rather than one about a lot of gut-filling, bottom-feeder stuff'."
    KC's View:
    Nothing wrong with debaucherous burgers, as long as you are transparent. Which I guess is part of the point of the bosomy brand ambassadors.

    Published on: March 18, 2013

    Bloomberg reports that in the latest blow to JC Penney CEO Ron Johnson's plans to revitalize and remake the chain, Caribou Coffee is pulling out of a deal that would have had it opening stores inside all JCP locations.

    Caribou Coffee CEO Mike Tattersfield declined to say why the company was abandoning the plan.
    KC's View:
    He didn't have to.

    I hate to say it, because I've been a big fan and I think his ideas for JC Penney were good and probably necessary. But I don't see Ron Johnson having his job on Memorial Day.

    Published on: March 18, 2013

    Reuters reports that at Starbucks' annual shareholders meeting later this week, attendees are expected to vote on a shareholder proposal that would ban the company from making political contributions or forming a political action committee (PAC).

    The proposal actually builds on a movement begun several years ago when CEO Howard Schultz organized 100 of his brethren, getting them to "forswear campaign contributions till Washington came up with a plan to fix the nation's debt."

    This new shareholder proposal is part of a national movement, Reuters writes: "Starbucks is one of 125 companies that have faced shareholder proposals over the last two years related to political spending, according to a March 7 report by the Sustainable Investments Institute, which tracks political spending and corporate governance issues.

    "In votes held this year, 37 percent of VISA's voting shareholders and 31 percent of those of Accenture supported proposals to disclose contributions for lobbying, according to filings from both companies."

    The story notes that "over the last three years, Starbucks made no direct political contributions, or operated a political action committee, according to the annual report to shareholders on its activity, though it paid dues to trade organizations that lobbied, it said. Its corporate policy, however, allows contributions to state or local candidates, political action committees or state ballot measures."

    Starbucks management is against the shareholder proposal. "We rarely make contributions and when we do we're committed to doing so transparently," said Starbucks spokesman Zack Hutson. "We believe that we have a responsibility to advocate for public policies that support our business, our partners and the communities we serve."
    KC's View:
    One expert explains that Starbucks does need some political flexibility ... wouldn't it need to get active if, say, someone wanted to ban caffeine?

    Published on: March 18, 2013

    • The Seattle Times reports that Amazon.com has been hit with a class action lawsuit, filed in U.S. District Court in Seattle, charging that the internet retailer has unlawfully held monies due to third-party sellers for more than 90 days after sales have been made. The suit is seeking restitution, interest and other unspecified damages.

    According to the story, "The suit revolves around Amazon’s third-party-seller business, which enables merchants both large and small to sell their products on its website. The complaint argues that, by holding sellers’ money longer than allowed, Amazon racks up interest and uses the extra cash to support its operations."

    • The Seattle Times reports that Starbucks in investing heavily in drive-through kiosks, both for its flagship brand as well as for its Seattle's Best Coffee banner.

    The company says that "all future Seattle’s Best stores will be drive-thru kiosks," and it eventually expects to have thousands of them. In addition, "Starbucks now has more than 2,300 U.S. drive-thru locations and plans to add about 900 over the next five years," the story says.
    KC's View:

    Published on: March 18, 2013

    • Safeway announced that Bruce Everette, 61, is retiring as Executive Vice President, Retail Operations after a 44-year career at the company. Kelly Griffith, currently the President of Merchandising, has been chosen to succeed Everette.

    • The Boston Globe reports that Zipcar CEO Scott Griffith is leaving the company, just months after the care-sharing company was acquired by Avis for $500 million.

    Griffith will be succeeded by Mark Norman, president of the company.

    The Globe reports that Griffith's memo to employees said, in part:

    "After a thoughtful review of the company’s needs over the next several years, I’ve concluded it’s best if I step back and give someone else the opportunity to put the pedal down and take Zipcar to the next level. This is a bittersweet decision because I don’t feel like my work here is completely done. I recently heard someone say ‘artists rarely feel they have finished a piece of work, rather at some point they simply decide put their brush down and move on to their next piece.’ I get that. It’s time to put my brush down and move on to my next piece. So as of today, I’ll be handing off our unfinished canvas to a new leader. With great excitement, I’ll be proudly transitioning the leadership of the company to Mark Norman and the team that will take Zipcar to the next level."
    KC's View:
    This isn't confirmation, but it does suggest that maybe Avis is on the verge of screwing up the Zipcar value proposition. Which would be a real mistake.

    Published on: March 18, 2013

    The changes taking places at Delhaize America have gotten a lot of attention here, which is why it was interesting to get this email from an MNB user:

    With all the changes and reports both good and bad of things happening at Delhaize America that have been reported here and other places I wanted to share something that I think may be telling about the direction of the company.  As many organizations do, we have Short term incentive programs that only activate when financial and other goals are met.  This year we knew several months ago with everything going on that these would not happen based on goals set for 2012.  This week we received a note that said our leadership team went to the board and got approval for a one-time special bonus as a thank you for the work that was done to make it through the year.  It is a fraction of what it would have been if we had reached our goals, but it is something, and most of us are thankful.  While I appreciate this, what really impressed me was that that the payout factor for our retail partners was more than twice that of corporate associates (of which I am one).  While I don’t know how this impacts executives, and it only applies to salaried associates I think it is a far cry better than what we have seen done in other companies.  Our retail partners have kept the ship afloat despite anything else happening to them and this token seems fitting.

    I do not agree with every decision that has been made in the last 6 months, but I have respect for the way they have been made.  I am still sad for the friends that have been hurt by the changes, but this recent announcement gives me one more sign to be optimistic for the future of the organization.


    There's a way to make people on the front lines feel like they are valued, and a way not to.




    We had a story the other day about a new tech-based system designed to streamline the foodservice experience at an MLB spring training ballpark. Which prompted one MNB user to write:

    Reading your summary of the new "GeeBo" system that purports to create a new fan experience by allowing fans to order remotely and have the food delivered, I couldn't help but to think back to my first Virgin America flight.

    It was only four weeks after the inaugural service that I boarded a plane from JFK to SFO. I was all excited to try their much touted service where you order via the inflight system and they "bring it right to you" How exciting could this be? A restaurant at your fingertips?!?!

    The reality was that there were four options--a sandwich, a wrap, a snack plate, etc. and they "delivered" the items to you during routine inflight service. The only difference was that by the time the cart rolled up, I had already paid and they handed me my food without asking me what I wanted.

    Which, by extension, begs the question, how will this service differ from the old fashioned hot dog guy who walks around the stands? If they are able to deliver something really cool like, say, a menu of 20 - 30 interesting entrees brought to your seat with 5 minutes, that would be a truly great experience!! But having soda, beer or hot dogs delivered to my seat doesn't change anything about the current MLB experience.  I suppose being able to use credit cards is an upgrade, but hardly "game changing."

    But what really left me puzzled was this line "Fans can also order online from eight kiosks inside Roger Dean. Kiosk users pick up their items..." What? You order from a kiosk and then pick up your items? At...where...the concession stand?!?! 
     
    I'm all for innovation, but one would think they could at least describe the innovation with a narrative that distinguishes it from the current state of the world.


    MNB user John J. Toner V wrote:

    It is a great service – and we have at RFK for DC United soccer games – undoubtedly the best fan experience of any major league sport (at least in the DC area).  It’s my understanding that they are working on how it scales above 20,000 attendees along with quality of service.  I think they are still trying to figure out those kinks – 10K and below is pretty easy.




    Regarding the GMO labeling announcement from Whole Foods, one MNB user wrote:

    Whole Foods got raked over the coals a few years ago, when it was revealed that over 70% of the products they sell contain traces of GMOs.  Facebook, twitter, and other communication channels were abuzz encouraging boycotts of Whole Foods, blaming them for not revealing it sooner.    The comment made that they announced this without consulting suppliers is not accurate.  Suppliers were and are well aware then and now, that raw materials and ingredient supply chains contain GMOs, and most quite frankly, looked the other way, feeling there was nothing we could do, the food chain is contaminated.  There is responsibility on all sides here.  For transparency, I do not work with or for, Whole Foods, I do work in the natural products industry.  I am not their defender, but they deserve to be commended for this bold action.   Their customers have demanded it, and they responded.

    More importantly, however, I am a passionate natural consumer, and as you know from many comments made to MNB over the years, GMOs have been a concern of mine for many years.  After 20+ years as a health food store shopper, I was shocked to learn that even certified organic foods contained traces of GMOs, even those with USDA seal.  I felt betrayed by "my" industry, and after the immediate shock, determined to direct my energy towards solving and resolving this.  I actively supported Prop 37 in CA,  read labels more closely than ever, avoiding corn, soy, tomatoes and potatoes  and the many derivatives from those crops ( and there are thousands).  The "Just Label It" campaign www.justlablit.org is ingenious, as is the Non GMO Project (www.nongmoproject.org) - because, it doesn't demand "proving" or disproving if GMOs are harmful or not - just the simple fact of transparency, just label them.  We label clothing and mattresses, and food, for the consumer's information.  It is absurd to avoid labeling GMOs.

    Yes, it s going to a challenge for suppliers. Loyal customers will learn that their favorite "natural" brands have traces of GMOs, OR the suppliers will source non GMO ingredients - if they exist.

    They may lose customers, but we simply must label them.

    The natural products industry, in its defense, was small, growing, and naive, 40 years ago, when this "science experiment" was foisted upon our food chain, without any consideration or adequate safety testing.  When the leaders in the industry learned of this, they have done everything humanly possible to stem the tide, against significantly larger and well capitalized forces that were against them.  Thankfully, the industry has grown, the consumers are getting more informed all the time, and this bold move by Whole Foods, down to Earth and others, is the right one.

    I am not unique in feeling this way.  I actively seek the non GMO project seal, it's more important to me now  than "organic". I appreciate that you post some of my comments, Kevin, because I know many much more influential then I, read your column!  If my anonymous but passionate and sincere words, reach a Kroger, Whole Foods, or Amazon decision maker, and it's taken into consideration as " a voice of our customer" - because, I am one of many who feel this way, then  my efforts will not be in vain.


    Just for the record - it was Whole Foods that said it did not consult manufacturers before making the decision, but simply informed them when it was made and just before it was announced. But your point is well taken.




    On another subject, one MNB user wrote:

    Don’t you find it interesting that Facebook is modeling their site to emulate the Print media that is going away?

    Yup.




    Still getting emails about that obituary we directed folks to the other day, such as this one from MNB user Steven Ritchey:

    Just read this great obituary.  I think I’ll be happy if a few people will say they will admit to knowing me and maybe saying a few nice things about me when I’m gone.  It sounds like this gentleman certainly was a character, and they nailed it in his obituary.

    I figure that most of the people who show up for my funeral will probably just want to make sure that I'm actually dead.

    As for my obit ... I think I'll just encourage the MNB community to write it. In essence, I'm going to crowdsource it.

    Also...not to get too deep in the weeds here, I've already told Mrs. Content Guy that if I find out I'm going to die sometime soon, I'm going to have the wake/memorial service before I go ... because I hate to miss a good party.




    Regarding Amazon.com's efforts to corner certain domain names, one MNB user wrote:

    Is it me, or does this seem both old fashioned and redundant?  Who DOESN’T know the phrase “Amazon.com” by heart?  For that matter, I can’t remember the last time I placed an Amazon order from my desktop computer—I just tap the app on my iPhone or iPad and BOOM, it’s on its way!  Maybe Amazon could put their efforts towards returning their targeted marketing and suggestions to seem as if they pay more than cursory attention to my purchase history.

    I’m tired of e-mails that say (in effect) ‘Because you have purchased DVDs, we think you would like this piece of trash new release’.  This morning I received an e-mail from them suggesting books for my Kindle—the top three suggestions are the three most recent downloads to my Kindle!  Yes, “Gone Girl” was a mind-bendingly good read, but I’m not going to download it again!





    Love it when I get reports like this one from an MNB user:

    My wife and I visited a JCP and a Kohls store yesterday.

    Marked difference in attitude of the sales people, Penny's were cold and uncaring, Kohl's were friendly and helpful and I saw a floor manager instruct a check-out clerk to honor an expired coupon.

    Based on this experience, I would think Penny's problems stem from much more than EDLP and lack of special sales.

    It still goes back to how the front line people treat the paying customers.

    Just sayin'...





    On another subject, one MNB user wrote:

    Kevin, I had to respond to the reader who believes raising the minimum wage does more harm than good.  What I would like to see is some data to back up these assertions.  Preferably data not concocted by Fox News or other idealogical data sources.  In keeping with that idea, I want to offer evidence that we are in real trouble of losing the core middle class earners in this country.  Dispute it, but only with facts not anecdotes.  Then we can debate the facts.

    For millions of working Americans, the phenomenon economists call "median wage stagnation" has become a way of life. For decades, their annual incomes have remained virtually the same, leaving many just a paycheck or two from the street, as we witnessed during this last recession.

    Experts attribute the causes to various factors: the decline of organized labor, the erosion of the minimum wage, the shift from a manufacturing-based to a service-based economy, and the transformation to a more globalized economy. But a common thread is the choking of America's middle class.

    The ability of the economy to produce more goods and services has not translated into greater compensation for either group of workers. The questions we should be asking are: Why has pay fared so poorly overall? Why did the richest 1% of Americans receive 56% of all the income growth between 1989 and 2007, before the recession began (compared with 16% going to the bottom 90% of households)? Why are corporate profits 22% above their pre-recession level while total corporate sector employees’ compensation (reflecting lower employment and meager pay increases) is 3% below pre-recession levels? The answers lie in an economy that is designed to work for the well off and not to produce good jobs and improved living standards for the majority of Americans.

    Productivity has surged, but income and wages have stagnated for most Americans. If the median household income had kept pace with the economy since 1970, it would now be nearly $92,000, not $50,000.

    Essentially, economic policy has not supported good jobs over the last 30 years or so. Rather, the focus has been on policies that were thought to make consumers better off through lower prices: deregulation of industries, privatization of public services, the weakening of labor standards including the minimum wage, erosion of the social safety net, expanding globalization, and the move toward fewer and weaker unions. These policies have served to erode the bargaining power of most workers, widen wage inequality, and deplete access to good jobs. In the last 10 years even workers with a college degree have failed to see any real wage growth (Economic Policy Institute data).

    While I am not a fan of anecdotal data, how many of your readers have college-graduated kids living at home or working full-time for slightly above minimum wage?

    Consider the table below that was recently reported in a paper by the Federal Reserve Bank of St. Louis.

    Year    Weekly Earnings (1982-84 dollars)
    1972          $341.83 (peak)
    1975          $314.75
    1980          $290.86
    1985          $285.34
    1990          $271.12
    1992          $266.46 (lowest point; 22% below peak)
    1995          $267.07
    2000          $284.79
    2005          $284.99
    2010          $297.67
    2011          $294.78 (still 14% below peak)

    These statistics DON’T lie.  We have had 39 straight years where real wages have yet to get back to their 1972 peak and, they are a long way from that peak still. This is doubly surprising when we consider that productivity has been increasing steadily throughout that period, approximately doubling from 1970 to 2011, (Bureau of Labor Statistics).

    Income inequality is one of the most important problems that needs to be addressed.  Raising the minimum wage is only one positive thing that can be done to help those at the bottom of the income rung.  If we don’t seriously address all the critical factors, there won’t be a “middle class” to buy our goods and services leaving America behind in the fight to remain the wealthiest nation in the world with the highest standard of living. That is already eroding.





    I wrote the other day about being a man who has had the chance, because of career choices, to spend more time at home raising my kids than many dads. (Not a value judgement on my part. I've been lucky.) Another MNB user wrote in to share his experience:

    I worked in the grocery business for 24 years, beginning as a teenager.   During that time, I completed high school, graduated with a bachelor's degree, got married and headed down the fast track into retail management with a large grocery firm as my wife finished her college education.   I worked the requisite long hours and moved numerous times until I had a track record of successfully managing a store.  My wife and I finally thought we had reached the point that we could purchase a home and have children.

    Shortly after our younger son was born, the unexpected decision was reached that I would no longer work in retail and the choice to do so was not entirely mine.  Just the same, my wife immediately offered to take over the primary breadwinning duties and I was suddenly thrust into the role of a "domesticated dad" as the caretaker of two sons, ages 4 and 1.   I spent a year at home full-time and took on all the responsibility for cooking, cleaning, and educating our kids, all the while looking for the job that would lead to my next career.

    My "work inside the home" was easily the toughest work I have ever done, but I wouldn't trade it for anything.....and I know it has had a profound effect on the relationships I have with our sons today (not to mention my relationship with my wife).   Once I found my job, I had the sole responsibility of selecting their child-care arrangements as I returned to work.   Needless to say, I have no problem understanding the angst that parents experience while leaving their children in someone else's care as they go off to their jobs.   I ate my lunch at our sons' daycare facility every day for the first two weeks they were no longer under my full-time care.

    Almost 14 years have passed since I began my second career, having started it from scratch.   I have been fortunate that I have been able to build my career on my terms and continue to make my family a priority when it comes to my schedule.   Looking ahead, it is likely that I will work for many more years than my friends in retail - but I have a career that I love and can continue to be flexible in my scheduling to allow for time with our sons as they move into adulthood.   I can only hope that if our kids eventually choose to have children of their own, they will have the desire and ability to participate in the lives of those children to the same or greater extent than we did.    In the end, my wife and I hope it will be our greatest reward.


    I could never do what you did. While I enjoyed the flexibility my job gave me, I've always also needed the flexibility to get on a plane and go see new places, meet new people, eat new food and drink new beers and wines. (My family has always joked that if I'm home for more than three weeks in a row, I get twitchy and cranky.) So, kudos.



    Finally, we had a story the other day about how March Madness affects US productivity. Which led one MNB user to write:

    I was laid off from Delhaize, live in NC.  Gonna add to my resume, "could give less than a crap about basketball."  Good career move or bad?

    Bad.
    KC's View: