retail news in context, analysis with attitude

Got the following email from an MNB reader:

I began following your site after I left Walmart (13 years) and joined the Supplier community now calling on this giant.

I saw the erosion of their culture 6 years ago and decided to make a change.

When I first began reading your editorials, you took every chance you could to applaud almost everything Walmart, six years later, just the opposite.

While they obviously have their flaws, for the most part they are on the right track under their new leadership ( which now reflects most of the old culture) over the past couple of years. I believe you would be better served to show some balance regarding Walmart.

While I am a conservative, I enjoy listening to both sides including the most liberal and Fox TV news broadcasts understanding that the truth typically lies somewhere in between.

That is why I continue to read your commentary daily, not for your balance, but to hear the liberal view and consider your points.

Lastly, I have a brother that is 8 years older and when I was growing up called me a punk kid and had the same type of sarcastic humor as you.

One of the phrases he used to say to me then that now applies to you is " if you we're half as cute as you think you are, you'd be pretty funny".

I'll continue to read, but mainly to get exposure to the opposing view on social issues.

I'm not sure I agree with your observations, but that's okay. As long as you keep reading...

I actually think I've been pretty consistent on Walmart. I think it is a great American success story, but hardly an uncomplicated one. If I've seemed more negative lately, it may because I am galled by the Mexican bribery story - in part because it seems to blatantly violate the law, in part because it suggests a certain hypocrisy within the company, where anything that even suggests bribery is a firing offense. And, there is a certain holier-than-thou mentality in some quarters that I find irritating.

But that's their fault. not mine.

As for my biases, one way or the other, some of them are in the eyes of the beholder. But I'm pretty much an open book on most issues.

On Friday, I took note of the internet firestorm taking place over comments made by Mike Jeffries, CEO of Abercrombie & Fitch: "In every school there are the cool and popular kids, and then there are the not-so-cool kids. Candidly, we go after the cool kids. We go after the attractive all-American kid with a great attitude and a lot of friends. A lot of people don’t belong [in our clothes], and they can’t belong. Are we exclusionary? Absolutely."

Sex appeal, Jeffries said, is "almost everything. That’s why we hire good-looking people in our stores. Because good-looking people attract other good-looking people, and we want to market to cool, good-looking people. We don’t market to anyone other than that."

And, in fact, they don't even make large sizes, because they don't want large, unattractive people wearing their labels on their large, unattractive bodies.

I wrote that there are a couple of lessons to be learned from this story.

One is that even if you think something and believe something, sometimes it does not make sense to actually say it out loud. Especially not to a reporter. And if you are asked a question that forces you to address such issues, it is critical to have crafted a less obnoxious way to say it that won't offend people.

To be fair, A&F is only doing something that a lot of retailers do: niche marketing. (After all, is A&F being any more exclusionary than, say, Casual Male XL?) But there are ways to say something, and there are ways not to say something. (Besides, sometimes not-so-attractive people actually buy stuff for attractive people, and A&F has just become a less appealing option. I'll just wander over to J. Crew.)

But here's the other lesson:

Mike Jeffries' comments were made in an interview conducted in 2006.

That's right. Seven years ago. But they've surfaced to the top, because that's what can happen on the internet ... Nothing goes away. Ever.

One MNB user responded:

A&F clearly hasn't paid a price for those 2006 comments -- and likely never will. I know you're offended that your fat ugly body can't fit into their clothes, and so am I.

But nobody wants to see either of us in their teeny-bopper clothing, believe me.

I'd say A&F hit the nail, and you're totally wrong. Again.

Well, that seems a little harsh. And personal. But if you want to say I have a fat and ugly body, that's your privilege. (I'm back to jogging four miles a day, four days a week, by the way, and I got my front tooth fixed. So I'm doing my best...)

But I'm not sure I'm wrong.

I said that the CEO's comments were inelegant. (Anybody want to disagree with me there?) I said he was practicing niche marketing just like a lot of other people, and that this can be a good idea, though you have to be careful with how you explain it, especially to a reporter. And I said that the internet makes it possible for comments to live in perpetuity.

Not sure where I was wrong.

Another MNB user wrote:

Obviously the company has a target consumer, we all do. However, when you exclude everyone else especially for trivial reasons, well you get what you pay for. I did read they closed a few stores recently…might be related.

I just think that you can practice niche marketing without sounding obnoxious.

BTW... extra credit to all of you who got the Animal House reference in the headline.

Regarding the decision by Wrigley to stop selling its caffeine-infused gum while it is part of a probe into caffeine consumption by kids being conducted by the US Food and Drug Administration (FDA), one MNB user wrote:

As a pharmacist, I find it incredible that FDA allows the sale of the "morning after" drug to 15 year olds over the counter (no prescription required), but gets concerned about 40mg of caffeine in a stick of chewing gum.

I'm okay with the caffeine probe, but I get your point - and generally agree with it - about the morning after pill.

Though I also recognize that I've worked very hard with my daughter to have the kind of relationship where if she felt the need for that solution, we could talk about it. (It wouldn't be an easy conversation, but I think there would be a conversation.) I'm not sure that every family dynamic works that way, and there may be daughters out there that, for whatever reason, may feel trapped, abused and without options.

I'm uncomfortable with the notion that the morning after pill could be made available to virtually anyone over the counter, without question. But I'm not sure my comfort ought to be the issue.

Regarding the decision by Supervalu to pay its departing CFO, Sherry Smith, a $300,000 retention bonus to stick around for two extra months while it looks for a replacement, one MNB user wrote:

New CEO - same old culture. They pay the execs al lot of money, they they pad each others pockets for nothing. Many of us at lower still have jobs, but the leadership show they have little concern for anything else than helping each other.

Responding to last week's piece about leadership lessons from LL Bean, one MNB user wrote:

Absolutely a good lesson.

Being somewhat of a perfectionist and goal oriented, in my early career as a meat department manager for privately held company based in Grand Rapids, I tried to create the “perfectly managed” department, never satisfied with the results.  I did not interview for and even turned down offered opportunities, because I felt that  I was not ready to leave my “less than perfect” department behind, and unwilling to risk my reputation on a position where I had limited experience.  Well fortunately, their business model changed and was not aligned with my beliefs so I decided to move on to a new company.  While at this new and current company, I quickly learned to manage through my perfectionism, also realizing how it had held me back previously.  I’ve been with the company now for 13-years this month, and have held 8-positions over that time.  Almost every interviewer inside and outside the company has remarked positively about my continued progression in the industry…the experiences really do matter.

My advice along those lines:  It’s not necessary to be subject matter expert in every area of your employment and career.   There are SME’s in every corner of the company.  Learn to listen to those with the expertise, then use that information to develop strategic vision and aid in problem solving, and your value will quickly be recognized within the organization.  It’s not enough to only be good at one thing.

Regarding the internet sales tax issue, one MNB user wrote:

There are an estimated 6500 local tax ordinances that an internet company would have to manage.  No mom & pop shop is subject to such complexity.  Further, they are now subject to audits from up to 500 different agencies, tribes, states etc.  This is a horrible way to get an economy moving.

Again, I go return to the fact that internet businesses do not need their sidewalks maintained, do not require police and fire protection, etc.  If anything, there should be a lower tax (say 2%) collected at a national level.  Anything else is chaos.

I would point out that the trucks that deliver their products do travel on public roads, and will call the police if they are robbed or involved in an accident, and will call the fire department if their engine catches on fire. So it is not like they are insulated from all local issues.

I'd be okay with a national collection of sales taxes, with a distribution back to the states, depending on consumption. But it doesn't look like that is an option.

From another reader:

Many opponents of the proposed new federal law contend that the customers should be reporting these purchases and pay the sales/use tax.

Ohio has recently put some pressure on businesses to do that - offered an amnesty program if they fess up.  But the ordinary consumer is not likely to do so for various reasons.

I think the main reason is that the individual consumer assumes (correctly I believe) that the nonpayment of this tax is so widespread that they would feel like a sucker if they did so.  I think this is the problem in many foreign countries.

Added to that is the fact that many consumers would have only a small amount to report - and the burden of keeping records etc.  Also, it is not always clear if the purchase is taxable. Ohio exempts "casual sales", e.g. not from a business such as tag sales, garage sales, via an ad on Craigslist etc.   The proposed federal law exempts businesses with less than $500,000 gross sales.  We have companies that currently provide software that handles a complicated mix of federal, state and city taxes.  I am certain that software developers could create software that did the same for sales tax.  It might not be 100% accurate, but it will be very close.

And from yet another reader:

Hardly anyone gets it, we don’t have a tax problem, we have a spending problem.

Liberals love all this focus and discussion new revenues.  No need to fix spending.

I think anyone who says we don't need to fix the way we spend money at the federal level in this country is an idiot.

There is way too much inefficiency and ineffectiveness in how money is spent at the federal level.

Now, I'm not sure that this means blanket, across-the-board cuts ... because there are areas where we're probably underspending, or not getting sufficient bang for our buck.

But it has long been my opinion that everything has to be on the table. But we don't seem to live in a political environment where that can happen, and where mature, non-ideological conversations and negotiations can take place.
KC's View: