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 8, 2013

    by Michael Sansolo

    Author Garrison Keillor described the virtues of his imaginary Lake Wobegon as the place where: "all the women are strong, all the men are good looking, and all the children are above average."

    Keillor was away ahead of his time because in this age of grade inflation everybody is above average including anyone and everyone in customer service.

    In the last month I have twice brought in cars for servicing and twice—at totally different locations—got the exact same request. I was told I would soon get an online evaluation and it would really only matter if I gave the facility the highest ratings of 9 or 10.

    I’ve gotten similar requests elsewhere. In short the message is this: please rate us really, really highly or don’t rate us at all.

    Talk about a great way to gauge customer satisfaction…well, this isn’t it.

    As a parent I’ve suffered through the years of grade inflation and trophies for all. While I appreciated my children getting recognized for their efforts, I also bemoaned the practice because it deprived them of any sense of accomplishment or need for improvement. If everything everyone does is special, then how do we actually know when anything really is special?

    But that’s behind me now. My kids are grown and have quickly come to realize that the world doesn’t applaud the mere act of showing up. In the best of circumstances, good work, hustle, caring and innovation get rewarded. Attendance never does.

    Yet this isn’t a soapbox moment. I think this practice of service employees urging customers to give extraordinary ratings is a problem that business need be aware of and stop immediately.

    First off, as a customer the entire process is off-putting. When I get this request for only the top grades, I hear it as: “Don’t give us a bad grade because those don’t matter.” In other words, you only want my feedback if my feedback is glowing, when I’d argue that just the opposite would be more insightful. Ask me for input on where my expectations were left unmet and you might learn something.
    Second, it makes me wonder what message leadership sent to these employees because at times the request for “a 9 or 10” is amplified by the desire to demonstrate excellence to management. Yet what kind of management would see an ocean of only the highest grades and find any value in that?

    If the ratings are to be believed, the front-line crew must be simply blowing away sales and profit projections and killing the competition. Anything less has to raise endless red flags.

    Instead of getting any kind of instructive or insightful feedback it’s like getting an endless parade of ribbons for “participation.” Only rather than delighting small children, these prizes could mislead a business into thinking its customers are far more satisfied than they really are.

    What makes this grade grubbing so silly today is that consumers are now permanently linked to countless avenues to provide authentic feedback. Social web sites like Yelp and the like aren’t perfect gauges, but they are far more effective than response cards from consumers pushed to grant inflated scores.

    That is ... if you actually want feedback.


    Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com . His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available by clicking here .
    KC's View:

    Published on: October 8, 2013

    by Kevin Coupe

    The New York Times this morning reports on technology that is being employed to allow customers to indulge their shopping impulses, being able to instantly order something they see in a magazine or on a television program, or replenish something that they have in their refrigerators or larders.

    Today, the Times writes, "MasterCard plans to announce a partnership with Condé Nast, the publisher of Vogue, Wired, Vanity Fair and other popular magazines, that will allow digital readers to instantly buy items described in an article or showcased in an advertisement by tapping a shopping cart icon on the page. The partnership, called ShopThis, will begin in the November tablet edition of Wired, due on Oct. 15.

    "Peapod, an online grocer in the Northeast and Midwest that provides home delivery, recently developed a feature on its mobile app that allows customers to restock household staples by scanning bar codes with their smartphones at home."

    The Times goes on to report that "this push for immediate retail gratification is occurring as the delivery wars are escalating among some of the biggest e-commerce companies in a dash to get orders to consumers as fast as possible.

    EBay and Amazon have initiated same-day service in a handful of cities. Walmart has been looking at ways to use its 4,000 stores as distribution points to fulfill orders the same day to customers outside major metropolitan areas. Even Google has gotten into the act with Google Shopping Express, a program that allows Northern California residents from San Francisco to San Jose to receive deliveries within hours of ordering from numerous local and national merchants."

    Meanwhile, in another take on impulse shopping, the Wall Street Journal this morning reports that Canadian movie theater chain Cineplex is experimenting with a concept called SuperTicket, "which bundles admission to a movie with a digital copy of the film, delivered electronically months later. The experimental bundle costs more than twice as much as a regular movie ticket ... By selling a theatrical ticket and home-video copy simultaneously, studios can consolidate costly marketing campaigns that usually promote the same movie twice, first in theaters and then again for home video. The upside for theater operators, meanwhile, is that they typically don't benefit from home video sales or other revenue a movie generates after its theatrical run, but they get a cut when tickets and home video are bundled."

    A similar initiative is slated to be tested in the US later this year, though the program is likely to be tweaked to make it both more seamless and more understandable to consumers.

    I think these are fascinating developments, long in the making, that have the potential of redefining the relationship between shoppers and the brands they trust, desire, and consume. It will be up to retailers to figure out how to be part of these transactions, because it is not hard to imagine that in some cases, the new initiatives will have the effect of disintermediating traditional retailers.

    I would suggest that in the case of the movie theaters selling digital copies, it might make sense to do so after people see the movie in addition to before ... it might have the impact of promoting impulse sales at the moment when these patrons are highest on the experience.

    The whole thing, I think, is an Eye-Opener.
    KC's View:

    Published on: October 8, 2013

    Delhaize, the Belgium-based retailer, said yesterday that Stefan Descheemaeker, its former CFO who has most recently been serving as CEO of Delhaize Europe, has resigned. No reason has been given for his departure.

    The move comes just a month after Delhaize Group announced the simultaneous departure of Roland Smith, who took on the job as CEO of Delhaize America a year ago, and naming of Frans Muller to succeed Pierre-Olivier Beckers as CEO of Delhaize Group. Smith reportedly left because he did not get the top job.

    The Salisbury Post reports that "Muller in a statement Monday said the company is searching for a successor for Smith. In the meantime, new Food Lion President Beth Newlands Campbell is reporting directly to the parent company in Brussels."
    KC's View:
    Hard to tell exactly what is going on here. It may just be the normal shifting of people in the executive suite that often happens when top leadership changes take place. Or, it could be like moving deck chairs around on the Titanic.

    What makes this all so noteworthy, as I've written here before, is the fact that Delhaize for so many years seemed to have stable management and a flair for staying away from the soap opera theatrics that infect companies. And I still think that Delhaize has to be careful that its competition does not take advantage of this upheaval to make market share inroads, and to raid it for anyone with skills who does not have a contract with a non-compete clause.

    Published on: October 8, 2013

    The Wall Street Journal reports that there are indications that Amazon's grocery business may be expanding to San Francisco, with the company currently "seeking a quality-assurance manager for AmazonFresh, its name for the delivery service, at its newly opened Tracy, Calif. warehouse, according to a posting on its jobs site. Tracy is about 60 miles from both San Francisco and San Jose, which is the largest city in the Bay Area."

    Amazon was tested in Seattle for several years before expanding to the Los Angeles market earlier this year. It has been widely assumed and reported that San Francisco would be the next location for Amazon Fresh, but this is the first suggestion that the company may be staffing up there.
    KC's View:
    Staffing up, building warehouses, and intent on world domination ... that seems to be the Amazon strategy these days.

    Published on: October 8, 2013

    The Chicago Tribune reports this morning that Walgreen is slated to launch low-cost financial services programs in three markets - Detroit, Milwaukee and Nashville - "with a nationwide card rollout expected by year-end and additional financial services in 2014."

    According to the story, the program is linked to its Balance Rewards loyalty scheme, and "will be built around its new Balance Financial Prepaid MasterCard ... The prepaid MasterCard, which can be reloaded at any of more than 8,100 Walgreens or Duane Reade stores, offers an alternative to cash for those with limited access to traditional checking accounts or credit cards. It also will allow no-fee ATM withdrawals and check-cashing services. Users also will earn Balance Rewards points, which can be redeemed when making purchases, for using the Balance Financial card."
    KC's View:

    Published on: October 8, 2013

    Variety reports that Nielsen and Twitter "have released their first rankings of TV shows, designed to show the reach of TV-related conversation on Twitter. And one thing is immediately clear: There is practically no overlap between the most-tweeted shows on TV and the highest-rated shows."

    "To be clear," the story says, "the Nielsen Twitter TV Ratings are not intended to demonstrate that a highly tweeted show means it will be correspondingly a highly viewed program. Rather, the metric is designed to show the total Twitter activity relating to specific shows, to help networks and advertisers figure out how to better use the social service to drive awareness and tune-in."

    Only one show appears in both lists: "The Voice."
    KC's View:
    The lesson here is one that all businesses need to keep in mind ... that in a new world order, old metrics may not apply, and certainly may not be enough to figure out what is working and what is not.

    Published on: October 8, 2013

    Reuters reports that Starbucks CEO Howard Schultz, who during the last national election cycle urged his fellow CEOs to stop donating money to political campaigns until the nation's leaders got their act together and actually started leading, now is calling on "fellow business leaders to ratchet up the pressure on U.S. political leaders to end the stalemate that has partially shut down the federal government since last week.

    ""This weekend I heard from several business leaders who shared their concern about our relative silence and impact in urging the political leadership to act on behalf of the citizenry," Schultz wrote in a letter posted on the company's website. "It is our responsibility to address the crisis of confidence that is needlessly being set in motion."

    Schultz says in the letter that he is "utterly disappointed by the level of irresponsibility and dysfunction we are witness to with our elected political leadership ... I don't pretend that both parties are equally to blame for this crisis. But I do think they are equally responsible for leading us to a solution."
    KC's View:
    I'll say the same thing here that I've said when other CEOs have made statements that might be seen as controversial, whether about politics, religion, sex, or whatever.

    When you wade into these waters, you'd better be prepared to get smacked upside the head by a wave.

    You can say what you want, but prepared for consequences.

    I suspect that Schultz knows exactly what he's saying, and who he is saying it to ... and figures that the vast majority of his target consumers will agree with his sensibilities, if not his political views. Or, they'll be too hooked on his lattes to care.

    Published on: October 8, 2013

    Advertising Age reports that Walmart CMO Stephen Quinn told the Association of National Advertisers Masters of Marketing conference last week that chief marketing officers should really be chief innovation officers, and to "protect the 'next' from the 'now'."

    "You take people who are mavericks and innovators, and you put them on the things you think are going to be important," Quinn said. "A big part of my job is to protect those people, because the core of your business will try to kill them."
    KC's View:
    He's got that right ... especially when it comes to Walmart's online business, which the supercenter folks are going to want to kill simply because they think it threatens their livelihoods. Extinguishing that kind of cultural infighting may be one of the most important things Quinn can do.

    Published on: October 8, 2013

    We spend a lot of time here on MNB chatting about the different priorities, habits, and cultural values of new generations, and why businesses - especially traditional retailers seeking or clinging desperately to the idea of being relevant - need to pay attention. Well, there is an excellent piece reading in this week's The New Yorker that uses "an art-and-tech collective called the Sub" there to illustrate how young people think and act differently, suggesting how traditional businesses need to think about them differently both as customers and employees.

    "San Francisco has traditionally been a Dungeness crab of a city, shedding its carapace from time to time and burrowing down until a new shell sets," the story, by Nathan Heller, says. "It has not been an industry town in the sense of New York, which media and finance have shaped for well over a century. It is not like Washington, D.C., or Los Angeles, whose dreams are dominated by one Hydra-headed business. San Francisco has never been dominated by anything, but it’s always ended up preëminent in something. Gold, for instance. Free love. Microchips. People do not move to San Francisco as much as swarm to it. Those irked by change rarely stay long."

    But lately, that "pattern has begun to break. San Francisco is an industry town. This industry is usually called 'tech,' but the term no longer signifies what it used to. Tech today means anything about computers, the Internet, digital media, social media, smartphones, electronic data, crowd-funding, or new business design. At some point, in other words, tech stopped being an industry and turned into the substrate of most things changing in urban culture. That broadening has had other effects. Like many observers, I’ve been dimly aware of a shift in the country’s aspirational character over the past few years. It showed up in what people—mostly ambitious middle-class city people—wanted from life, and how they reached for it. Many did good works or started companies that did them. Many who’d been racing up ladders in New York or Los Angeles or Washington dropped everything and moved out to the Bay Area to work. You could enter any coffeehouse in certain neighborhoods there and hear kids talking eagerly about creative plans, a rarity in most cities thought to have inventive youth cultures ... "

    I think this is a fascinating piece, and you can read it here.
    KC's View:

    Published on: October 8, 2013

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

    • The Oregonian reports that Lisa Sedlar, the former CEO of NewSeasons Markets, is scheduled to open her first, much anticipated Green Zebra Grocery tomorrow, in North Portland.

    Described as a healthy convenience store, Green Zebra "packs in a salad line, deli counter, produce section and juice bar among more traditional aisles of frozen pizza and potato chips. With 48 employees and $4 million in financing, Sedlar envisions a bright future: two Southeast Portland stores in 2014, then expansion in neighborhoods, college campuses and airports across Oregon and Washington.

    "Investors and analysts are optimistic the model fits where shoppers are headed.
    Consumers classify 53 percent of their eating occasions as snacks, and demand is high for pre-prepared food, said David Wright, senior marketing manager for Bellevue, Wash.-based consumer research firm The Hartman Group."

    Can't wait to see it. I think the concept makes sense, and Lisa Sedlar is terrific ... and besides, she is a big fan of Jean-Luc Picard. Can't do better than that!


    • Dollar General has announced that it recently opened its 11,000th store in the US.

    According to the announcement, the company "has opened 375 new outlets and remodeled or relocated 377 stores during the first half of 2013.The company plans to open about 650 new stores, up from 635 projected earlier in fiscal 2013. Moreover, it hopes to remodel or relocate about 550 stores."


    Advertising Age reports that "there was plenty of optimism in the air as nearly 4,000 distributors and suppliers gathered in Las Vegas last week for the National Beer Wholesalers Association annual meeting. While volumes are down, the industry remains hugely profitable." The reason for the optimism, apparently, is the intention of big brewers to focus on more high-end products, hoping to capture of some of the magic that has been created by the burgeoning craft beer sector.

    However, the story says, "There was also chatter about a 'craft-beer bubble,' with so many regional and local brewers popping up. Still, with craft sales growing at a double-digit rate, that concern seems unfounded," especially because the explosion in craft beers seems driven by consumer demand rather than fads that are unsustainable.


    • The Orlando Business Journal reports that Publix Super Markets "plans to open its first stores in north Myrtle Beach and Pawleys Island, S.C. The 49,000-square-foot store in Myrtle Beach is expected to open in late 2014, while the 45,000-square-foot store in Pawleys Island is expected to open in early 2015."
    KC's View:

    Published on: October 8, 2013

    Yesterday, in an Eye-Opener designed to train a spotlight on how young people think and act differently, we had a story about how Los Angeles public schools were launching a program that would put iPads into the hands of students, albeit iPads that were programmed so kids would be unable to play games or access social networking sites. Of course, it was inevitable that some students would be able to quickly hack the iPads so they could do exactly what administrators did not want them to do ... which had some folks questioning the wisdom of the program.

    I wrote:

    Now, I get why this is a problem. But there is a part of me - and this is the part that almost certainly is going to be criticized by Mrs. Content Guy, who is an elementary school teacher - that thinks these kids should get commendations for original thinking. (Sort of like if they had managed to figure out a way to survive the Kobayashi Maru test, if you get my meaning.)

    Sure, we want to teach kids discipline, in addition to math. But I think the ability of these kids to figure out how to do things that their teachers probably weren't able to do also speaks, in no small measure, to their ability to navigate a 21st century competitive environment.

    While it is entirely possible that the initiative wasn't fully thought through, it is more than possible - indeed, it is a certainty - that old fashioned paper-and-ink textbooks are an obsolete concept. Because of how fast information changes, they are out-of-date almost from the time they are printed, and tablet computers are going to create an environment in which organic, interactive and potentially more relevant learning can take place.

    The solution to this problem isn't to scrap the program. No, the solution is to do it better. If it were me, I'd start by hiring each of these kids to help me figure out how to make it work more effectively, and put a letter of admiration into each of their files. I'm not sure the old command-and-control approach works in education anymore, simply because so many of these kids are so smart about so much. (Smart. Not wise. And not able to think clearly, objectively, and critically. That's what a good teacher will help them achieve.)

    I do think there is a business implication in this story, because so many of the people you are hiring, or are going to hire, are going to have these same impulses and knowledge set. And it is incumbent on businesses to figure out who these people are, and take advantage of them. You may have a kid stocking shelves who could be your next IT director ... if you are open to the idea that there are always possibilities, and part of your job is to nurture and allow them to flourish.


    I was right ... Mrs. Content Guy didn't entirely agree with my reasoning:

    While I agree with most of what you said in MNB "Out of the Mouths of Babe" this morning, I would only have given the kids accommodations if they had informed their administration of how easy it was to hack into the computers and help solve the impending problem.  Unfortunately, their skills at hacking just caused thousands of kids and teachers to lose a wonderful teaching tool and many learning opportunities (whether for the short or long term)...

    Let's just say that Mrs. Content Guy has a lower tolerance for civil disobedience and irreverence than I do. Perhaps because, unlike her, I was something of wisenheimer in elementary and high school. Still am, in fact.

    MNB user Mike Franklin responded:

    Perhaps, the lesson is…everybody over the age of 45 should consider a Millennial Mentor.

    From MNB reader Kelly Smith:

    Couldn’t agree with you more on this. Arguing that the district was hasty in achieving something that should have happened 10 years ago is ridiculous. As is the expectation that kids should only use technology for school related assignments. Any good marketer knows that you only succeed by knowing your customer and their lifestyle. Students are online. Hell, everyone is online (or should be).

    You can pretend that’s not the case or try to manage against the tide, to no avail (as some tech savvy kids demonstrated). Why not make access to gaming and social media a reward as part of this program? Of course, these kids will have much better ideas for how this program should work and I really hope someone asks them!


    MNB reader Leo Martineau wrote:

    I agree that today’s students need to be encouraged to think outside of the box but with the proper guidance and controls.  The kids should be congratulated for their adventurous behavior and skills as long as they use them in a positive and constructive manner.  Who knows, some day they may work for the NSA!

    And, extra credit to the MNB reader who used a movie reference:

    The lesson here comes from the movie Troy.  The character Agamemnon, talking about Achilles, states:  "He can't be controlled".

    Nestor's immediate response is, "We don't need to control Achilles, we need to unleash him".

    The talents of the new workforce today need to be unleashed, not controlled within the same framework of 20 years ago.


    Absolutely.




    I got a lot of email yesterday about my colonoscopy, with folks thanking me for being so public about it and making it seem both necessary and less scary than it often is portrayed.

    My pleasure. And I appreciated your stories.

    Besides, as Nora Ephron used to say ... "Everything is copy."
    KC's View:

    Published on: October 8, 2013

    In Major League Baseball action, the Los Angeles Dodgers defeated the Atlanta Braves 4-3 to win their best-of-five National league Divisional Series 3-1.

    The St. Louis Cardinals beat the Pittsburgh Pirates 2-1, evening the best-of-five series at two games apiece.

    In the American League Divisional Series, the Tampa Bay Rays beat the Boston Red Sox 5-4, but the Red Sox continue to hold a 2-1 lead in the best-of-five game series.

    And, the Oakland Athletics beat the Detroit Tigers 6-3 to take a 2-1 lead in the best-of-five series.




    In NFL Monday Night Football, the NY Jets defeated the Atlanta Falcons 30-28.
    KC's View:

    Published on: October 8, 2013

    Did you know that Stevia is becoming the preferred zero calorie sweetener of conventional shoppers as Sucralose (-13.5%), Saccharin (-10.7%), and Aspartame (-10.9%) continue to decline in sales? Stevia is up 8.9% in the conventional channel and if the sales trend of the past 3 years continues, Stevia sweeteners are projected to sell $100M in 2013. That’s 15% growth over 2012’s sales.

    Wholesome Sweeteners is the #1 Organic Stevia Brand in both conventional and natural channels. What’s even better is Organic Stevia had been driving double and triple digit growth for the past 3 years while non-organic stevia’s growth is slowing.

    Is Wholesome Sweeteners Organic Stevia in your sweetener aisle? Call or email us to add it to your planograms today. 1-800-680-1896 or email CS@OrganicSugars.biz.

    Source: SPINS, Latest 24 weeks ending 07-06-2013

    KC's View:

    Published on: October 8, 2013

    by Randy Fields, Bruce Christiansen and Sage Horner

    According to a study by Retail Feedback Group in October 2012, when shoppers can’t find what they want…

    • 50% will purchase at a competitor, up 64% from six years ago.
    • 38% won’t purchase the item at all, an increase of 30% from six years ago.
    • 12% will switch brands, down 20% from six years ago.

    Visibility
    is defined as the state of being seen and is synonymous to clear view. For retailers and their trading partners, visibility in the consumer demand chain STARTS at the shelf and supports better decision making at each node back up the demand chain…ultimately putting the right product, at the best location with the appropriate inventory level and at the lowest cost.

    Visibility enables an objective approach to sales and inventory planning that makes retailers and suppliers the shoppers’ vocal advocate. Visibility answers the question –“what is best for your consumers?” Versus – “what is best for your trading partners?” Or even—“what is best for your internal operations environment?”

    The bottom line is that Visibility helps companies drive sales, grow customer loyalty and ensure transparent product sourcing and handling throughout the extended supply and consumer demand chain.

    Perhaps a better way to look at the issue of visibility is to see what happens when you don’t look at the extended supply chain. Not having visibility to inventory in the supply chain can result in dramatic swings in stock levels, from overstocks to out-of-stocks and back. Not having visibility to the store shelf and the consumer leads to a decrease in customer loyalty, the corresponding loss of brand relevance in the customers mind and an increase in “secondary shoppers” who tend to be less profitable. And, not having visibility to promotional effectiveness and other merchandising activities can quickly turn a popular item, brand or store into a dinosaur.

    Leslie Hand, a research director IDC Retail Insights, recently wrote that the “Optimization of the supply chain goes hand in hand with another important prediction IDC Global Retail Insights sees for the coming year. We believe retailers will invest in technologies that enable visibility, visualization and virtualization.

    Central to this growing effort to build visibility into the food supply chain from farm to fork is the desire for grocers to strengthen their brand, which today includes an increasing amount of store-brand and private-label product that thrust grocers into the role of manufacturer or at least product developer and steward.”

    At Park City Group, our portfolio of technologies and solutions enable an “illumination” of your supply chain. We help drives sales, maximizes return on inventory investments, realize supply chain efficiencies and assist you in building customer loyalty.

    We invented third party scan-based trading and remain the premier system. We created USE – Universal System Exchange™ – to ensure that all retail and supply chain systems can quickly and accurately talk to other. We developed a series of industry leading standards and business metrics, and built a consultative solutions team all with the goal of truly understanding all trigger points for shopper activity. Partner with PCG and we’ll combine of our industry leading technology and veteran merchandising and supply chain expertise to customize collaborative solutions that will differentiate you from your competition, grow customer loyalty and create win-win-win’s for Retailer, Manufacturer and most importantly THE CONSUMER!

    Next time we’ll discuss how visibility is helping to drive sales, improve the customer experience and make the use of promotional funds more efficient. We’ll show how retailers and suppliers are making investments in their ability to see and understand their extended supply and demand chains, and then work to use that knowledge to build a 360 degree view of the shopper and their operations.

    Contact us today and we’ll listen to your challenges and then help you develop and execute a plan to Sell More, Stock Less and See Everything: Email us at sales@parkcitygroup.com, or call (435) 645-2205.

    KC's View: