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: October 3, 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.

    Hi, I'm Kevin Coupe and this is FaceTime with the Content Guy.

    There's nothing like connectivity, and how it can change our lives for the better.

    One example.

    Advertising Age reports that Major League Baseball has begun testing a new feature on its "At The Ballpark" smartphone application that uses sensors placed throughout stadiums to "welcome fans when they enter the vicinity, surface historical tales, and potentially enhance sponsor messages and displays with ad content."

    The first test was run this fall at Citi Field, home of the New York Mets. While I wish the Mets would invest in some hitting and pitching, it's nice to know that they are at least trying to take the lead in terms of technology.

    Ad Age writes: "The idea for now is to enrich the gameday experience as fans traipse through the park en route to watch batting practice or to grab a dog during the 7th inning stretch. At Citi Field, for instance, when fans are within close proximity to the original Mets Home Run Apple -- which now resides near the entrance of the park and once lived at Shea Stadium -- a nearby beacon will trigger the app, notifying them that a video recounting the history of the apple is available.
    "The opt-in At the Ballpark app serves as a loyalty program, intended to give people access to better, more customized offers as they use it. Currently they can use the app to keep track of games they've attended, explore stadium features, watch video and check-in for deals."

    All good stuff, though I think the opt-in feature is key here. Because it doesn't take much to violate consumer trust, and to venture into territory that is, to be honest, a little creepy.

    For example...

    Last week, Mrs. Content Guy decided she wanted to do a little refinancing research, and so she went onto the LendingTree.com website and started to fill out the application that, when submitted, would generate quotes and phone calls from all sorts of refinancing companies.

    Except that, before she hit the "submit" button, she thought better of it, and signed off the site.

    Guess what? The phone started ringing, and hasn't really stopped, as we've been deluged with calls from people wanting our refinancing business.

    She asked the first one to call how he got her information since she never hit "submit," and he said that you don't have to hit the button to have your information spread out far and wide ... it happens the moment you start filling out forms.

    That's creepy. And a violation of our privacy.

    We know better now, and won;t make that mistake again.

    There are ways in which organizations - from retail stores to baseball teams - can use increased connectivity to build functional, sustainable relationships with customers. And, there are ways to make it all very dysfunctional, very quickly.

    Be warned. Don't do the latter.

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

    KC's View:

    Published on: October 3, 2013

    by Kevin Coupe

    This may explain some of the problems that Gristedes has had in recent years.

    The New York Times reports that John A. Catsimatidis, the owner of Gristedes who ran for the Republican mayoral nomination in New York City and lost, spent what works out to be $419 per vote in the recent primary, far more than the winner of the primary, Joseph J. Lhota, spent - $119 per vote. (Catsimatidis spent $10.4 million in the primary election, compared to the $3.8 million spent by Lhota.)

    Catsimatidis also vastly outspent Bill de Blasio, winner of the Democratic primary, who came in at $24 per vote on a budget of $6.8 million. Perhaps the most infamous candidate in either primary - Anthony D. Weiner, the disgraced former Congressman who became better known for texting pictures of his personal body parts to women he didn't know than for his political philosophy - spent more than $190 per vote, the second most, compared to Catsimatidis, but only came in fifth in the Democratic primary.

    Not exactly what I would call a savvy investment.

    But it is an Eye-Opener.
    KC's View:

    Published on: October 3, 2013

    The San Jose Mercury News reports that office supply chain Staples has acquired Runa, a Silicon Valley software company that specializes in sending shoppers "automated personalized promotions to customers based on their shopping history, real-time delivery estimates and offers for cheaper shipping."

    Terms of the deal were not disclosed.

    According to the story, Runa "becomes the latest e-commerce hub for Staples, which also recently opened tech labs in Seattle and Massachusetts ... Staples is the second-largest e-commerce company after Amazon, with deals to provide office supplies to about 60 percent of the nation's 1,000 largest companies."

    Staples tells the paper that the goal is to be able to better compete with Amazon by creating a more personalized shopping experience: "Staples has been working to remake its image as a brick-and-mortar retailer that sells printer paper and envelopes, office supplies that grow increasingly dated with tech innovations and more companies moving their operations to the cloud. Staples has funneled resources into building up its mobile presence and e-commerce offerings, including same-day delivery through Google Shopping Express and next-day delivery with its own fleet."
    KC's View:
    Staples is being very smart, in my view, by identifying and acquiring the kind of expertise that it needs to remain relevant, with a sustainable business model, in a world that is being rapidly changed by evolving technology. And it isn't just identifying the usual suspect ... it seems to be casting its net far and wide in looking for unique fits that can help it.

    Published on: October 3, 2013

    Marketing Daily reports that both Nordstrom and LL Bean are using pop-up stores "in a bid to build sales and broaden their appeal," with expectations that this is a trend that will continue as retailers look for ways to compete with the online experience.

    In the case of Nordstrom, the pop-up stores will be inside a number of its existing department stores, celebrating specific themes and categories. For example, the first one is said to focus on "all things French." There also will be pop-up stores on Nordstrom.com that connect back to the in-store efforts.

    As for LL Bean, the company "opened a Boston pop-up shop just briefly, driving its Bootmobile down from Freeport, Maine headquarters. Its shop, at a two-day event designed to showcase American craftsmanship, showed off its stitching prowess, and offered shoppers the chance to buy some 60 varieties of its namesake boot." The experiment is expected to be repeated at least several times in different locations before the end of the year.
    KC's View:
    Finding compelling ways to appeal to customers that will make them want to experience actual, physical stores, as opposed to just clicking online, is job one for bucks-and-mortar retailers. If you're a retailer and you're not doing it, you are putting your business model at risk.

    (I particularly love it that two of my favorite retailers are thinking this way. Nordstrom is the only department store I ever go to (I like their shirts and recently bought two blazers there, the first blazers I've purchased in about a decade), and LL Bean might as well be the official outfitter of MNB, based on what's in my closet.)

    Published on: October 3, 2013

    Not everybody in the MNB community will enjoy it, but...

    If you like the comedy stylings of Lewis Black and you have a sense of humor about the kerfuffle created by Barilla chairman Guido Barilla when he made statements that seemed, at their core, to suggest a certain lack of appreciation for the gay community, then you may enjoy the "Back In Black" segment from last night's "The Daily Show with Jon Stewart."

    You can watch it here.

    Caution: Some may find the language to be a little rough.
    KC's View:

    Published on: October 3, 2013

    Investors Business Daily reports that at least one stock analyst believes that Amazon Fresh can be a big performer. It quotes Carlos Kirjner, an analyst for Sanford Bernstein, as saying:

    "Amazon Fresh is an important element for Amazon to address a large, largely untapped opportunity. We believe Amazon Fresh can be highly profitable. We believe that at scale Amazon Fresh incremental margins could be as high as 16%. If Amazon reaches 4% penetration of the CPG (consumer packaged goods) market in the areas where it launches Fresh, fixed costs will be around 3% of sales, and operating margins could be as high as 13% ... Amazon has a strong track record of tinkering with new businesses and getting the model right before ramping them up ... We think operational challenges led to the spectacular failure of entrants such as Webvan and to the fact that (recent entrants) such as Ocado and FreshDirect are still unprofitable after many years of operation and relatively large infrastructure investments."
    KC's View:
    I don't think Amazon Fresh is a slam dunk. But I do think that Amazon is sufficiently committed to making it work that it is more likely than not that the service will be successful.

    Published on: October 3, 2013

    Salon.com reports on a new study from the Mayo Clinic revealing that "drinking more than 28 cups a week can harm your health considerably, with those consuming more than four cups a day twice as likely to die than those who are non-drinkers ... The study specifically found that men aged 55 years or younger who consumed more than 28 cups of coffee a week were 56 percent more likely to have died from any cause than those who were non-drinkers, and younger women doubled their risk of mortality with consumption."

    However, the story says, "the study did not find any significant link between coffee consumption and heart disease deaths and there were no increased mortality risks associated with less than three cups a day."
    KC's View:
    Uh-oh.

    The good news ... and I wouldn't usually describe this as good news ... is that I'm 58 years old, and therefore outside the demographic group describe din the study.

    The bad news is that I easily drink more than four cups of coffee a day, usually before 9 am.

    The worse news is that I've been doing this for more than a decade.

    I think I'm going to be selective about this, and choose to believe the studies that suggest that coffee consumption can actually prevent stroke, heart disease and diabetes. Because it would appear I have a choice, and I might as well go with the study that suits my lifestyle.

    Published on: October 3, 2013

    Columbus Business First reports that Lucky's Market, a 10-year-old organic and specialty grocer operating two stores in Colorado, has decided to make "a big leap into Ohio," with plans to open a store later this month in Clintonville.

    The story notes that the Clintonville area is proving to be a magnet for foodie-oriented stores, with units operated by Whole Foods, Earth Fare, and Hills Market operating there, and with both Kroger and Giant Eagle upgrading existing stores there to include a stronger specialty foods and organic selection.


    United Press International reports that Walmart, Amazon, Sears and several other retailers have pulled a Halloween costume from their shelves - an Osama bin Laden getup that generated complaints from the Sikh Coalition, described as "a U.S.-based Sikh advocacy group sent letters and made phone calls to retailers to ask them to remove the costumes."

    “If you lost a loved one during the 9/11 attacks or during our nation's war against Al Qaeda, or if someone attacked your father in a hate crime because he wears a turban, I doubt this costume would make you comfortable,” Rajdeep Singh, director of law and policy at the Sikh Coalition, tells UPI.


    • Guiding Stars, the food nutrition rating system pioneered by Delhaize-owned supermarket chains that was created a half-dozen years ago, announced that Concord Hospital in New Hampshire will implement the system in its cafeteria, hoping that it will help staff and visitors make wiser food choices.

    Guiding Stars uses a patented algorithm to evaluate foods and then award qualifying foods with one, two and three stars based on whether they are good, better and best for the consumer.


    • The Wall Street Journal reports that Starbucks "is beginning to kick some regulars out of its coffee shops.

    "In recent months, Starbucks has replaced pastries it used to carry with baked goods made from recipes from La Boulange, a San Francisco bakery Starbucks acquired last year. The company also has been swapping out Kind granola bars, Peeled fruit snacks and Naked Juice in favor of products made by Evolution Fresh, a juice brand that Starbucks acquired in 2011. Under Starbucks, Evolution Fresh branched out and now produces Evolution Harvest snack bars and freeze-dried snacks."

    The move is seen as part of Starbucks' broader strategy of converting itself from being a coffee-driven company to one with a broader - and potentially more sustainable - portfolio of CPG products.
    KC's View:

    Published on: October 3, 2013

    • Tom Clancy, the former insurance salesman who virtually created the techno-thriller with his first novel, "The Hunt For Red October," and went on to write or co-write a number of novels, seventeen of which went to number one on best-seller lists, passed away yesterday. He was 66. He reportedly had been admitted to Johns Hopkins Hospital, but the cause of death has not been divulged.
    KC's View:
    Clancy reportedly had a love-hate relationship with Hollywood, where four of his novels were adapted into movies: The Hunt For Red October, with Alec Baldwin as his CIA hero, Jack Ryan, and Sean Connery, Patriot Games and A Clear And Present Danger, with Harrison Ford as Ryan, and The Sum of All Fears in which Ben Affleck as Ryan. (A fifth movie, Jack Ryan: Shadow One, featuring Chris Pine as Ryan, is slated to be released on Christmas Day. And a new Ryan novel, "Command Authority," is to be published on December 3.)

    Clancy used to complain that the movies did not show enough fealty to his plots, but I've always thought he was wrong about that, that in many ways (at least for people like me, who tend to view techno-thrillers as being full of too much techno-babble) the movies were superior to the books ... or, at the very least, expert examples of how to adapt big books into two-hour movies. (I've also thought that the movie versions of Ryan were better than the books', because Clancy had almost too much reverence for his hero.)

    But I think that Clancy was a great example of an author who understood his brand, and was expert at creating brand extensions that included video games and TV shows. And he knew how to write a best-seller ... and there are publishers and booksellers who will miss him. A lot.

    Published on: October 3, 2013

    Got the following email in response to a "Worth Reading" piece we ran yesterday about a Harman Group white paper:

    The Hartman report is a reminder from my college “101” marketing course… “It’s all about consumers’… In today’s world of digital and e-commerce, we need constant reminders so we don’t lose sight that effective campaigns are what matter.  I always believe business is about solving a problem and executing better than anyone else.   Always follow the consumer; how you follow thru the “buy vs. build” decision depends on how well the solution fits the problem.

    With regards to Tesco F&E, they did pay attention to the shoppers but chose not to listen to their vendors in their formation days, which I would have argued might have improved their look-n-feel when consumers first went into their stores and voted not to return.  No need beating a dead horse that’s already at the glue factory.

    There are, however, exceptions of “brawn” companies doing well.  Best example I can think of is Samsung.  All over the world, they throw advertising monies at consumers, the core message of which is thin and I would argue mostly meaningless.  But, their product sells because they make exception, functionally-driven products. Their advertising therefore, serves as reminders; keeps their products top-of-mind. We’re now starting to see Windows do the Apple comparative ads they frankly should have done long, long ago.  So, the glue buyers will have to go elsewhere, for now….

    Samsung’s weakness – and it’s a big one – is that they have not owned being iconic in consumer’s minds, uniquely, in any way other than (copyable) function.  They are overtaking Apple because functionally, they now have a better (technological) product at a better value, it could be argued. I believe not focusing on iconic ads plays to Samsung’s advantage who really don’t care what others think of the smartphone we’re using.  I’m very happy to enjoy a better value and let the youngsters (over)pay the other guys.  Hopefully, that makes Samsung work even harder.
     
    I realize some patent lawyers might offer another POV, but I like what Samsung does as a “brawn” marketer.  Thanks again, Kevin for sharing the story / link.


    My pleasure. And for those who may have missed it yesterday, you can check out the entire white paper - available for free - here.



    I love it when I get emails like this one, that reflect on the consumer experience:

    In the last year, I have become fond of and proficient in utilizing Amazon more often than brick and mortar stores for a lot of purchases.  This week is a birthday in my family and I wanted to get an economical tablet as a gift.  Out of the blue I got an emailed “ad” from Walmart touting a great price on a tablet that would suffice for my gift needs.  I went to a local store yesterday morning to purchase said item and could not locate it anywhere, nor could I find someone to assist me - seems they were having a Team meeting at 7:45 a.m. on a Tuesday.  Nonetheless, I left disappointed, but after arriving at work, I reviewed the ad again only to notice a “buy it and ship free” option.  I went through the process and ordered the item only to be informed it would be available for store pickup at the exact same Walmart store within 4 hours, which was puzzling as I could not locate the item at all when walking the store.

    After receiving the confirmation and instructions, I printed the needed documents and went back to the exact same Walmart store after work, as the paperwork said “Go to your store’s Walmart.com Services/Site to Store desk during pickup hours, 10am-10pm daily.  If there are no Walmart associates in the pickup area, use the touch screen located near the register to call for assistance”.   Upon entering the store, I could not locate any signage or directions, so I went to the front/customer service desk where I patiently waited in line for a few minutes.  When my turn for assistance came and I presented my paperwork, I was told I had to go to the back of the store near the bicycles.

    I did locate the Walmart.com Services/Site to Store desk (one sign hanging from the ceiling near the bicycles), which also serves as the Walmart Layaway counter.  Once in line, patiently waiting as customers placed items on layaway, I noticed two signs referencing to “touch the screen” to pick up items, which was funny because there was no screen in sight, only the one register that occupied both individuals working the counter.  During a lull in the process, one of the associates asked me what I needed, and when I explained, he said I would have to wait for the other associate as he had only been working back there two weeks and didn’t know how to complete my transaction, which was already paid for I might add.  Eventually, I did make it to the front of the layaway line and received my item, which was priced great, but I would rate the overall experience as one I would not, as a shopper, choose to have again.  I would rather stick with Amazon, which in this case, did not have the price/features I wanted, but would have saved me frustration, time and gasoline.
     
    Thinking out loud, I wonder how many secret shoppers, or Walmart personnel, have actually tried their own service and how they would rate its performance.  I doubt it has this many flaws in Bentonville, but my retail experience reminds me that the further away from the Corporate Office, the worse the execution.  While it might be great on paper, the execution was horrendous, and provides me with another example of how traditional retailers fail by not meeting consumer’s expectations.


    Points taken.

    I hope that my Walmart readers are paying attention, because this is the kind of stuff that sinks even the best strategy.
    KC's View:

    Published on: October 3, 2013

    In the American League Wild Card Playoff game, the Tampa Bay Rays defeated the Cleveland Indians 4-0, and now will advance to the AL Divisional Series where they will play the Boston Red Sox.
    KC's View: