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    Published on: April 12, 2013

    by Kevin Coupe

    In Canada, the CBC reported this week about a hungry young moose that wandered into a Safeway in Smithers, British Columbia, and then went into the floral department "before eventually being guided out of the store by an employee with an apple."

    Apparently, the moose was something of a regular in the area and had exhibited what was called "aggressive behavior," though after the moose was tranquilized and examined, it was discovered that it had a severe tick infestation and was "weak and lethargic."

    The bad news is that after being captured by officials, the moose died.

    The less bad news is that the carcass is not being turned over to IKEA, which was in the news this week for having to stop selling moose lasagne - produced by a Swedish company and sold in its stores in 18 European countries - after tests revealed that there were traces of pork in the moose meat.
    KC's View:

    Published on: April 12, 2013

    Advertising Age reports that Walmart is preparing a new multi-tier marketing program that will Include both print circulars and in-store media, and plans to hit up manufacturers for as much as 90 percent of the content.

    Clint McClain, senior director-marketing communications platforms at Walmart, said at the Path To Purchase Institute's Shopper Marketing Summit that he'd "be surprised if 15% of the content comes from us," and Tony Rogers, Senior VP-Marketing, added, "We have a good marketing department, but it's not that big. So we need your help ... I bet you're sitting on content that together we can take and put in front of the right customers."

    According to the story, Walmart's plan is to "enhance print" by providing shoppers with the option of scanning bar codes and QR codes that might be embedded in an ad or posted in-aisle, taking them to recipes, videos, and other relevant content.

    According to the story, "Walmart executives didn't divulge exactly what scanning technology Walmart will use, but said the retailer already has had 7 million downloads of its smartphone app."

    Under the plan, Walmart says it will be "curating" content rather than creating it from scratch, an approach that is seen as being both cost-effective and faster-to-market.
    KC's View:
    Don't you just feel sorry for Walmart, seeing as it apparently has a marketing department that's "not that big"?

    I hear those words and I think of Blanche DuBois in "A Streetcar Named Desire," just trying to get by "on the kindness of strangers."

    I actually think that an integrated approach to marketing, tying together what's going on in-store and in print, makes a lot of sense. And Walmart's target consumer probably is more likely than other demographics to pick up a circular and go through it. If its customers won't necessarily use their smartphones to scan those bard codes .... well, it has a lot of customers, and Walmart realizes that it doesn't need a big percentage of them to do so in order to have a big impact.

    Published on: April 12, 2013

    Wired has a story about a Forrester Research study that will offer some comfort to the bricks-and-mortar retail community, concluding that "in every major consumer category other than travel, shoppers said visiting a store served as the most important source of research before buying ... Forrester’s findings suggest no one in the selling business can afford to ignore the primal satisfaction of touching holding something in your hand before you buy. Human toolmaking and trade both started as hands-on endeavors; as much as we now love Amazon Prime, we as a species aren’t likely to give up in-person consumption anytime soon."

    However, it may be small comfort.

    The story also notes that while just five percent of US total retail sales are done on the internet, "that percentage is more than triple the rate of a decade ago, and the trend line is only rising. In relation to how few purchases are made online even today, Forrester’s results actually reflect the internet’s outsized influence on retail buying and selling. Retailer websites were nearly as important to shoppers as stores for clothing and over-the-counter health purchases, for example. Brand websites were almost equal to stores for beauty products and footwear. For consumer electronics and cars, professional review websites tied store visits in importance.

    "In all, 60 percent of respondents said they visited a manufacturer’s website while researching a product. Nearly as many said they visited a retailer’s website."
    KC's View:
    Nobody is arguing, at least not here, that bricks-and-mortar commerce will eventually be obsolete. The argument is simply that retailers that are not, to some degree, taking advantage of what the internet has to offer in terms of providing information and selling opportunities, run the risk of becoming irrelevant to a generation raised on iPods, smart phones and Amazon.com.

    Some still resist. But resistance, as they say, is futile.

    See our next story for yet another example...

    Published on: April 12, 2013

    Good piece from the Associated Press about how banks are trying to change their approach to retail operations, figuring out how to cater to a new generation of customers. An excerpt:

    "In an age when checks can be deposited by smartphone and almost everyone retrieves cash from ATMs, the corner bank can seem a relic, with its paper deposit slips, marble countertops and human tellers behind glass partitions.

    "But some banking executives say the brick-and-mortar branch is still the best way to serve existing customers and snag new ones. They’re trying to rebuild the nation’s neighborhood banks into hip, airy spaces where customers sign up for loans without touching a piece of paper, sign in to ATMs with a tap of their smartphones and talk to off-site tellers by video.

    "Flashiness is only part of the reason for the makeovers. Mounting costs from legal fees and new regulations - vestiges of the financial crisis - have given the banks good reason to become more efficient. The new branches will help them replace expensive human workers with cheaper machines, a development that could eventually make the bank teller an endangered species.

    "Most redesigns aim to let customers complete simple transactions, such as deposits, for themselves. That frees bank employees for tasks that make money, such as persuading someone who wanders in to put money into a mutual fund or refinance a mortgage."
    KC's View:
    Yup. Even banks.

    It really is very simple. No business model is immune from the changes happening all around us.

    Adapt or die.

    Published on: April 12, 2013

    Yahoo Shine reports that Target, which got into trouble last week for calling a color used for plus-sized dresses "manatee gray," when stand versions were called "dark heather gray," is in trouble yet again for a name it used.

    In this case, the product is a line of women's sandals, and the name was "Orina."

    The story says that "while the store initially believed the word 'Orina' to mean 'peace' or 'peaceful' in Russian, about a week ago they found out that it actually means 'urine' in Spanish. The company is now in the process of relabeling all of the $19-$22.99 shoes that are still on their shelves ... While the name isn't that offensive in and of itself, it does point to a certain amount of cultural ignorance on the part of the retail giant."
    KC's View:
    It is somewhat of a relief that the story says that "customers seem more amused than outraged." It would have been a shame if this mistake had really pissed people off.

    Published on: April 12, 2013

    The has the story of a McDonald's advertisement that was displayed in stations and trains run by the Massachusetts Bay Transportation Authority (MBTA) - an ad that mocked a mental health ad by showing the picture of a woman in clear anguish, with the words, "You're Not Alone. Millions of people love the Big Mac."

    According to a statement released by McDonald's, "A local print ad displayed on the Massachusetts Bay Transportation Authority (MBTA) was recently brought to our attention. We can confirm this ad was not approved by McDonald’s. And, as soon as we learned about it, we asked that it be taken down immediately. We have an approval process in place, with our marketing and advertising agencies, to ensure that all advertising content is consistent with our brand values. Regrettably, in this incident, our agency did not follow that process ... Pam Hamlin, president of Arnold, the ad house that produced the poster, confirmed in a statement ... that McDonald's had not approved, and that the ad was an 'unintended error'."
    KC's View:
    This is actually one that should annoy people, because it seems so tasteless. I have a pretty irreverent sense of humor, but there are some folks you don't pick on.

    I have to wonder if perhaps when McDonald's talks about "our agency," it really means "our former agency." Because I cannot imagine how this stuff hits the streets without someone losing their job.

    Published on: April 12, 2013

    In Alabama, Belle Foods - which bought stores previously owned by Bruno's in 2012 - has decided to convert some full-time staffers to part-time and hire 300 new part-timers as it looks to "right-size" the 57-store company.

    According to the story, "Many of the Bruno's stores were unionized, which put the company in a position as it closed locations that a larger number of senior employees with higher than average salaries were working in a decreasing number of stores. According to the release from the company, this caused Belle's labor costs to be disproportionate with the company's revenue. Instead of laying off employees, the company decided to offer some of them part-time positions."
    KC's View:

    Published on: April 12, 2013

    MarketWatch reports that CVS Caremark is saying "that more than three-fourths of the drugs it dispensed during 2012 were generics, helping to reduce spending for health plans and employers by 3.6%."

    The story comes just a week after Consumer Reports was out with a piece saying that CVS, along with Target and Rite Aid, were the priciest drug stores in the nation to buy prescriptions.

    CVS says it is dispensing more generics "because of a high number of brand-name drugs that lost their patents during the year."

    According to the story, CVS says that "even though traditional medicines lost ground to generics, specialty treatments used to treat such diseases as multiple sclerosis, rheumatoid arthritis, hepatitis C and cancer grew by 18.1%. The retailer says specialty medications now comprise nearly 20% of the total amount spent on drugs and that offers growth in coming years."
    KC's View:

    Published on: April 12, 2013

    ...with brief, occasional, italicized and sometimes gratuitous commentary...

    • The National Retail Federation (NRF) announced yesterday what it described as "a new initiative to broaden and enhance perceptions of the industry beyond providing consumers with great products. NRF’s This is Retail: Careers, Community, Innovation campaign, will highlight the industry’s opportunities for life-long careers, how retailers strengthen communities at home and abroad, and the critical role that retail plays in driving innovation."

    A centerpiece of the campaign is an interactive site, www.thisisretail.org, which will fully launch in June.

    “Our industry has a perception problem – and we need to address it head on," said NRF CEO Matthew Shay. "We will counter the myths about our industry with research and stories that show the true face of retail. That, in fact, retail offers richly rewarding and diverse career opportunities, is central to communities, big and small, and that retail is at the forefront of innovation. By fundamentally transforming the perception of retail, we will ensure the industry continues to thrive and grow."

    An excellent idea, albeit one that the old CIES talked about doing years ago. Alas, CIES did not make of the opportunity what it could have and should have, and so it falls to NRF to quantify and qualify the impact of retail on communities.



    MarketWatch reports that JC Penney "has hired bankers at Blackstone Group LP for advice on how the department-store chain can shore up its fast-eroding stockpile of cash.
    The challenge to once-and-again CEO Myron Ullman is to raise money and cut costs while trying to find a way to get customers back into the stores, the story says. It is not a small amount of money he's likely looking for - $1 billion - and it could come in the form of an investment from a private equity group.

    According to analysts, Penney's operations won't be able "to generate enough cash to cover the company's needs beyond a year."

    Maybe someone will put money into JCP as a real estate play, or because they think that maybe the whole thing can be sold to another retailer. But I wouldn't bet on JCP at this point, and certainly would not put any money into it. (Of course, people smarter and richer than I make more money all the time doing things that I never would do.)
    KC's View:

    Published on: April 12, 2013

    ...will return next week.
    KC's View:

    Published on: April 12, 2013

    The Street.com has a terrific story this week about the high price of beer in America's major league baseball stadiums, concluding that "Major League Baseball's average price for a small beer has risen from $5.81 in 2011 to $6.12 this year. At this time in 2011, the highest price for a small beer was the $7.25 the Boston Red Sox were charging at Fenway Park. This year five teams have exceeded that price, with two teams breaking the $8 barrier."

    The 10 most expensive ballparks for beer - rating the price of a small draft - are AT&T Park in San Francisco ($6.75), Busch Stadium in St. Louis ($6.75), Turner Field in Atlanta ($7.25), Wrigley Field in Chicago ($7.25), Fenway Park in Boston ($7.25), Rogers Center in Toronto ($7.34), Target Field in Minneapolis ($7.50), Citizens Bank Park in Philadelphia ($7.75), Marlins Park ($8), and, selling the most expensive small draft beer in Major League Baseball, Nationals Park in Washington, DC ($8.25).

    Yikes.

    I do think it is instructive that several of the ballparks charging the most for beer happen to be stadiums that have no sold their naming rights, which means they are missing a source of revenue that other owners have. Not sure this is cause-and-effect, but that stood out to me immediately.

    Also, I don't know about you, but I was more than a little surprised not to see Yankee Stadium or Citi Field on the list. Frankly, I'll pay more for a beer if it'll get the Mets a better outfield. I would've paid more for a beer if it would've allowed the Mets to keep RA Dickey.

    I also have to say that while the beer costs are going up, sometimes staggeringly so, reading the list made me feel one very specific desire - to be at the ballpark, sitting in the stands on a sunny day, sipping a cold one and nibbling on a hot dog, watching the game unfold without thinking about much of anything else.

    Baseball - the most important thing that doesn't matter.




    Just finished a terrific novel - "City of Thieves," by David Benioff, the accomplished author of "The 25th Hour" as well as a screenwriter who contributes to "Game of Thrones" on HBO.

    "City of Thieves" takes place during World War II, during the siege of Leningrad, and is framed as his grandfather's memories of being the 17-year-old Lev Beniov, caught between childhood and adulthood and trying to survive the Nazi invasion. Through a series of circumstances, Lev - and a Russian army deserter, Kolya - are charged with finding a dozen eggs in the war-torn city that the local commander can use in his daughter's wedding cake. "City of Thieves" is a wonderful adventure story, a coming-of-age novel, and an indictment of war, all pulled together in a page-turning novel that I enjoyed immensely.




    Finally, my wine of the week is Field Stone's 2009 Convivio red wine, a blend of Merlot, Cabernet Sauvignon, Syrah, and Sangiovese that is lovely, smooth and a bargain at around $14 ... Just great!




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

    Slàinte!
    KC's View: