retail news in context, analysis with attitude

MNB Archive Search

Please Note: Some MNB articles contain special formatting characters, and may cause your search to produce fewer results than expected.

    Published on: June 6, 2013

    This commentary is available as both text and video; enjoy both or either. To see past FaceTime commentaries, go to the MNB Channel on YouTube.

    Here's a statistic for you: A survey by the Dollar Shave Club claims that 51 percent of men use flushable wet wipes after going to the bathroom, rather than toilet paper.

    And so, Dollar Shave Club, which CNBC describes as being "known for its cheap subscription service for men's razors," is getting into the flushable wet wipe business: "Meant as a toilet paper alternative, the One Wipe Charlies run $4 for a pack of 40 including shipping, but are only available with a razor purchase."

    Now, I have to be honest. When I saw this story and read the first few paragraphs, my initial reaction was that these guys are nuts, and that there is absolutely no groundswell of male public opinion out there calling for wet flushable wipes to replace toilet paper. And I wanted to know who the people in that 51 percent were ... though I'm also fairly sure that I already know too much about them.

    But then I read the following passage, which suggests that it is me who is out of the loop:

    "Although shock jock Howard Stern has been advocating wet wipes for years, the trend has only begun to gain traction in recent years, with more consumer interest and available products. In 2012, documentary filmmaker Morgan Spurlock explored male cleansers such as Fresh Balls - a genital antiperspirant - in his film Mansome.

    "In fact, Dollar Shave Club isn't the first to market butt wipes for men. Among other products, there are also Biz Wipes from Mangroomer ($3.75 for a pack of 50) and Dude Wipes from Dude Products ($8.99 for 30), both available at Amazon.com, Drugstore.com and Walgreens, among other retailers."

    Really?

    Now, the story says that this has been a slow trend to catch on here in the US, especially compared to Europe - but that does not entirely surprise me, considering how in some countries there is scant difference between toilet paper and sandpaper. (I remember when I backpacked there in the late seventies, one of the things I packed was toilet paper. Smart move.) But, the story also says that this could be a category simply waiting to explode. So to speak.

    As with so many things, it will all depend on marketing. And whether the next generation of male shoppers thinks that this is one of life's real necessities.

    Nothing would surprise me.

    That's what is on my mind this Thursday morning. As always, I want to know what is on your mind.

    KC's View:

    Published on: June 6, 2013

    The Associated Press reports that when they finally hit the market and become commercially available, there will be at least one place where people wearing Google Glass - "tiny eyeglasses-mounted device capable of shooting photos, filming video and surfing the Internet" - won't be allowed.

    Casinos.

    According to the story, "The New Jersey Division of Gaming Enforcement issued a directive on Monday ordering Atlantic City’s 12 casinos to bar casino patrons from using the device ... Similar bans are in place at casinos in Las Vegas, Pennsylvania, Ohio and Connecticut, among other places."

    It is believed - quite reasonably - that people using the wearable computers would be able to shift the odds in their favor. A practice otherwise known as "cheating."

    It is hard to tell at the moment, but there is at least a possibility that there will be a plethora of places where people will be banned from using the wearable computers. Locker rooms, for example. Or rest rooms. I can imagine that there will be classrooms where teachers will ban them. And if states stop people from using handheld cell phones while driving, doesn't it follow that there will be questions raised about whether people can use them while at the wheel of a car?

    Of course, in Google's case, it also is working on a self-driving car. So maybe there's some logic to its development patterns...
    KC's View:

    Published on: June 6, 2013

    The Chicago Sun Times suggests in a piece this morning that with Amazon's decision to begin rolling out its Amazon Fresh service to Los Angeles (this week) and San Francisco (later this year) comes the probability that it will also expand into Chicago - a market that already has been softened up by Ahold-owned Peapod, which has been providing online grocery ordering and delivery for years.

    Tony Stallone, vice president of merchandising at Peapod, says such competition is inevitable. “We think it’s going to enlarge our customer target base,” he says. “People will become more aware of it and ultimately help us build our business.”
    KC's View:
    Chicago would be a perfect market for Amazon in a lot of ways - the broad awareness of online grocery ordering plus the geography of the place would likely make it a market where the company could ramp up easily.

    There are some retail experts - far more distinguished and astute than I - who seem to believe that whatever Amazon does, there is no way that the online grocery business will ever generate more than 10 percent of the total business. While I think this certainly seems likely in the short term, and I'm aware of the tact that during the internet bubble there were a lot of crazy numbers being bounced around about the category's potential, I would never presume to put a cap on what online grocery can achieve.

    The thing is, we don't know. If this is a nine inning ballgame, we're only in the second inning. Maybe the top of the second.

    There are so many ideas and concepts that have not yet been generated, so much money that has not yet been plowed into the online grocery business, so many smart people who have not yet begun to come up with notions about how to change and evolve the model ... to say that it'll only hit 10 percent seems myopic to me.

    It is the company that we've not het heard of, created by someone we're not yet aware of, using a concept that we've never even dreamed of, that will really change things.

    If I were a traditional grocery retailer, I think that this is what I'd be looking for, and I'd even consider throwing some seed money at people and companies that show the potential to rock my world and change my life. Because these people and companies are going to rock my world and change my life anyway, and better they should do it with my money, with my company having some skin in the game, than they do it for someone else. That someone else, by the way, would be the competition.

    Published on: June 6, 2013

    The New York Times reports this morning that while it remains a mystery how an Oregon field ended up with genetically modified wheat growing in it, from seeds that had been created and supposedly discontinued by Monsanto, few scientists are surprised: "Even with extensive precautions, gene-altered plants turn up in unwanted places regularly enough that farmers have come to consider a few of them weeds, and even a threat to their livelihood.

    "And while none of them yet poses any known public health hazard, experts say the boom in so-called transgenic crops should prompt even more careful evaluation of future varieties with an eye to the prospect that they, too, could eventually appear elsewhere."

    Monsanto officials call this case "a random isolated occurrence," with no evidence that "the wheat had moved beyond the single farm or that its seeds were in the seed stocks that the farmer used to plant his fields." And, scientists say, there is little likelihood that "the Monsanto wheat likely to spread elsewhere."

    You can read the whole piece here.
    KC's View:

    Published on: June 6, 2013

    USA Today reports that Kroger is leading the charge against proposed rules from the US Food and Drug Administration (FDA), hoping to persuade the agency that it should "reconsider proposed rules that would expand the requirements for posting nutritional labels on prepared food items at stores."

    "The (proposed) rules today, while it makes sense for fast food (restaurants), it doesn't make sense for grocery retailers," says Kroger spokesman Keith Dailey. The story says that "Kroger, the nation's largest traditional grocer with 2,400 stores under several brands, has been lobbying for two years with industry trade groups to change the proposed rules. Kroger said the current proposal could cost it $20 million a year, which it says would place Kroger at a competitive disadvantage and force it to raise prices. Industry groups involved in the push include the Food Marketing Institute and the National Grocers Association."

    The new rules have been proposed as a way of making people more aware of the nutritional impact of the foods they buy and consume, thus impacting the nation's high obesity rates.

    "While the FDA works to finalize the rules, Kroger will launch a pilot program in a limited number of stores later this year that will add nutritional labels on a larger number of products," USA Today writes.
    KC's View:
    While I am in favor as much transparency as possible, I also think it seems silly to treat fast food joints and supermarkets as if they are the same thing. Such an approach could only be taken by a government bureaucrat who has little clue about how such businesses work.

    Published on: June 6, 2013

    The Los Angeles Times reports on a new Anderson Forecast from the University of California at Los Angeles (UCLA) saying that "the country's tepid growth in its gross domestic product isn't creating enough good jobs to build a strong middle class ... Real GDP growth - the value of goods and services produced after adjusting for inflation - is 15.4% below the 3% growth trend of past recoveries, wrote Edward Leamer, director of the UCLA Anderson Forecast. More robust growth will be necessary to bring this recovery in line with previous ones.

    "That has long-term implications in the face of technological advancements that continue displacing workers, Leamer said. And the country's education system isn't adequately developing the workforce of the future, he said. 'Regrettably we reward teachers if their students can regurgitate the information on standardized tests,' he wrote. Future workers will need creative and analytical thinking skills for 21st century jobs, he said."
    KC's View:
    Along these same lines when talking about how education has to change, I would refer you to a Ted talk by Jeff Jarvis that you can watch here. If you are work or around children, be warned - there is the occasional use of a word that might be considered profane. But it is worth it.

    Published on: June 6, 2013

    KSC Kreate, which describes itself as "a creative production studio specializing in visual content," has released the findings of a new study into grocery shopping behaviors and preferences. Excerpts:

    • "The vast majority of consumers (85 percent) visit a physical store for groceries at least once per week, with 42 percent of consumers going more than two times a week. Most consumers (62 percent) frequent grocery store chains like Jewel-Osco or Publix, followed by mass retailers (SuperTarget, Walmart) or specialty stores (Whole Foods, Trader Joe’s). In addition, 84 percent of consumers spend $30 – $150 per trip."

    • "Before going to the store, 36 percent of consumers research grocery purchases online, most often to search for coupons, competitor pricing and recipe ideas. One in three grocery shoppers use a mobile device in store to look up recipe ideas, coupons, nutritional information or competitor pricing."

    • "Three out of four consumers make a list before going to the grocery store, and 61 percent of shoppers spend five to 20 minutes researching and making their lists. Even though most consumers make a list before going to the store, they rarely stick to it – 76 percent buy an average of one to five extra items that are not on their original list each shopping trip. This is most often because a product is on sale, they forgot to put it on their list or because they decide they want the product while they are at the store."
    KC's View:
    These numbers are interesting, though not exactly conclusive. "84 percent of consumers spend $30 – $150 per trip." Really? That's a pretty big range...

    Plus, this study was conducted by talking to a whopping 574 consumers. I know that the science of polling means that you can extrapolate a lot from such small numbers, but I tend not to trust such tiny samples.

    Finally, here's my biggest complaint. These days, data analysis makes it possible to know a lot more about specific consumers and specific behaviors. These kinds of broad generalizations are not only not helpful, but they may hurt the larger cause.

    I don't want to know that "84 percent of consumers spend $30 – $150 per trip." I want to know about the specific habits of people who spend $30 vs. those who spend $150, so I can figure out how to influence the low spends and make them big customers.

    Specifically.

    Published on: June 6, 2013

    Bloomberg has a piece in which it notes that the Walton family, through a series of stock buybacks, now owns more than 50 percent of Walmart's shares - 50.9 percent vs. 39 percent 10 years ago - "which could give it greater control over the board of directors."

    Under New York Stock Exchange rules, this means that Walmart could "opt out of a requirement to have a majority of independent directors" on its board. Which it says it has no plans to do ... though three independent directors were not renominated, the board is being reduced from 17 members to 14 (meaning that 64 percent of the board will be independent, as opposed to 71 percent), and, in fact, some of the "independent" board members aren't that independent - "seven of the nine remaining independent directors have outside financial ties to the company."

    This is, apparently, a concern shared by some institutional investors, with some expressing a concern that a lack of keen oversight by the board may be one of the reasons that Walmart current is embroiled in probes about alleged bribery of foreign officials.

    Some, however, say that it doesn't matter how many independent directors are on the board - Walmart always has been a closely held company, and the Walton family has always run it pretty much the way it wants to.


    • Meanwhile, Bloomberg also reports that in the wake of the internal and external bribery probes, "a number of global investment and pension funds led by the United Auto Workers Retiree Medical Benefits Trust have filed a proposal asking Wal-Mart to disclose whether the company has reclaimed the pay of executives found responsible for serious and costly misconduct. The proposal, which has received the backing of the proxy advisory firms Institutional Shareholder Services and Glass Lewis & Co., will go to a vote at the company’s shareholder meeting on June 7.

    "For large companies with far-flung operations, some misconduct is inevitable," the story goes on to say. "There is simply no way to police the actions of hundreds of thousands (in Wal-Mart’s case, millions) of employees. Wal-Mart isn’t immune to this problem. The important thing is that those responsible are held to account -- and that such efforts are made transparent, so that the misdeeds don’t become larger or systemic."

    Bloomberg says that "Wal-Mart’s response to the proposal has been predictable. The company says it has strong policies to claw back pay from executives who engaged in wrongdoing. But it hasn’t said whether these policies have ever been invoked, despite having some of them in place for more than a decade."
    KC's View:

    Published on: June 6, 2013

    • The Financial Times reports that Amazon has launched an e-commerce marketplace in India that allows other retailers to place their products on its site and sell them to shoppers, but does not sell items itself.

    The story notes that this keeps Amazon within the boundaries of Indian law, which prevents non-Indian retailers from selling directly to Indian consumers.
    KC's View:

    Published on: June 6, 2013

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

    • Consumers Union, the advocacy arm of Consumer Reports, has come out in favor of the Connecticut legislation mandating the labeling of food containing genetically modified ingredients and urged Gov. Dannel P. Malloy to sign the bill.

    The statements notes that "the bill makes Connecticut the first state in the nation to mandate the labeling of GE food ... The mandate would take effect after four other states, including one bordering Connecticut, enact a similar law. It also requires the aggregate population of any Northeast states that enact such a law to comprise a total population of more than 20 million people."

    No surprise here. It is, I continue to believe, a good way to approach this particular issue. take a stand, but wait for some traction so that businesses aren't faced with having to change everything for one state.


    • The Wall Street Journal reports this morning that the US Department of Transportation has "canceled plans to allow passengers to carry small knives onto planes, succumbing to months of public backlash from airlines, fliers and lawmakers arguing that the move would endanger the flying public ... The agency's administrator, John Pistole, unveiled the proposal in March after receiving positive feedback from some interested groups, saying that letting fliers carry some pocket knives, hockey sticks, golf clubs and other sports equipment aboard commercial flights was consistent with the agency's move toward more-flexible security policies."

    Maybe one of the dumbest policy proposals ever made. Good decision to make the change.
    KC's View:

    Published on: June 6, 2013

    will return. Really.

    There are two reasons that "Your Views" hasn't appeared for a few days. One is that I'm sick. The other is that yesterday, when I thought I'd have time to go through emails, the entire MNB email system went kablooey on me. ("Kablooey" being the technical term, I think.) So if you sent me an email yesterday, I didn't get it. Hopefully, we'll have the whole thing repaired today, and I'll be able to catch up.

    And maybe even feel a little better....

    Thanks for your patience and understanding.
    KC's View: