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    Published on: October 23, 2013

    by Randy Fields, Bruce Christiansen and Sage Horner

    Imagine generating the perfect order every time, delivering the right product to the right customer at the right location at the right time with the correct cost. Every point along the supply and consumer demand chain optimized so goods and information flow freely to people and places they are needed.

    Now imagine not knowing how much to order or even where your orders are because your systems don’t have the capability of tracking them. Promoted items are out-of-stock, the slowest moving products are overstocked and every point along the supply and consumer demand chain is clogged with goods, data or both. In simple terms, think about how “unproductive” the inventory is throughout this supply chain.

    PCG’s “Visibility” is now helping to drive sales, improve the customer experience and make the use of promotional funds more efficient, so the first scenario plays out much more often than the second. And while there are still too many retailers, wholesalers and suppliers in the dark, more companies are turning to tracking and trace systems to truly see where all of their products are at all time and using that information to better serve the consumer.

    Here are just a few examples of companies using technology to gain visibility in their extended supply and demand chain.

    • One “Best–in–Class” retailer had an ordering system that didn’t support ordering from multiple distribution centers. All products were being ordered without regard to how fast they were selling, or how much stocking space existed, creating inconsistent stock conditions and resulting in lost sales and overstocked slow moving items. The retailer implemented a new tracking and analytics system that reduced inventory quantities by more than 30%, reduced inventory costs by $125 million and lowered safety stock by 55%.

    On the supplier side, a beverage company deployed new supply chain technology to extend its view of sales and inventory down to the “point of sale” at retail. By having Visibility to the actual sell-thru of product to shoppers, the company has reduced days of supply at all accounts, while increasing service levels to above 98% and ultimately grew sales. It also solidified trading partner relationships allowing the company to seamlessly introduce new products.

    At Park City Group, we live in the trenches of the retail, manufacturing and distribution world so we know how to help you take advantage the opportunities and effectively address the challenges. We are experienced and understand the nuances of the business. Most important, we are committed to helping you sell more, stock less and see everything.

    Park City Group provides robust, collaborative supply chain, merchandising and store level solutions for both retailers and suppliers that increase sales, improve operational efficiencies, such as shelf replenishment and merchandising, optimize inventory and reduce out-of-stocks. Our innovative solutions provide trading partners a common platform on which they can capture, manage, analyze and share critical data, bringing greater visibility throughout the supply chain, and giving them the power to make better and more informed decisions.

    Enlightened retailers, wholesalers and suppliers are making significant investments in their ability to see and understand their extended supply and demand chains, and working to use that knowledge to build a 360 degree view of the shopper and their own 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:

    Published on: October 23, 2013

    by Kevin Coupe

    The New York Times had an interesting story the other day about how technology companies and Silicon Valley venture capital firms seem to be intrigued by the food industry - not because they see a clear path to big profits, but because "they see a big, slow-moving market just begging to be invaded by someone with new ideas and a new way of building a business."

    The Times writes:

    "Creating a successful food company requires a lot more than just a good idea. There are government rules and regulations and competition from entrenched conglomerates with vast distribution systems.

    "These obstacles will not be easily overcome. But these start-ups are trying to do that by behaving like the most successful tech outfits that have gone from ideas to multibillion dollar businesses.

    "Some have programmers writing code to test out snacks and determine the types of ingredients that can go together. Some approach management in the same way start-ups run their operations, using a process called Agile methodology, in which project managers work in very small teams with programmers and have software development practices like Scrum that are intended to move and build products very quickly.

    "Essentially, they are organizing the development of food products in much the same way that tech start-ups organize code."

    I have no idea if any of the examples cited in the piece can work or not. (I am a little dubious about the company called Chirp Farms that wants to make snacks out of crickets.)

    But the larger point, whether you are a retailer or manufacturer, needs to be taken seriously - that an industry with deep roots and traditions and (some might say) legacy issues may be particularly vulnerable to competitors that simply refuse to see the world the same way.

    When the Times wrote that "they see a big, slow-moving market just begging to be invaded by someone with new ideas and a new way of building a business," it may have been unintentionally echoing an ad campaign from Amazon.com, which said, in part, that its goal is to make sure "that once was wildly impractical is now completely normal. And normal just begs to messed with."

    Be warned. This is an Eye-Opener.
    KC's View:

    Published on: October 23, 2013

    Reuters reports that "a handful of buyout firms, including Cerberus Capital Management LP, are exploring a deal for all or part of supermarket chain Safeway ... in what could potentially shape up to be one of the largest leveraged buyouts since the financial crisis."

    Safeway is the nation's second largest supermarket chain. The story notes that while Safeway has not said it is for sale, it is "aware" of the talk and is consulting with Goldman Sachs regarding its options. The conversations appear to be at an "early stage."

    According to Reuters, there seems to be a general sense that Safeway is in play: "Activist investor Jana Partners LLC reported a 6.2 percent stake in Safeway in September, saying the company's shares are undervalued, and it held talks with Safeway management about reviewing strategic alternatives. In response to Jana's disclosure, Safeway had adopted a so-called poison pill to prevent an unwanted takeover of the company. Its board also had authorized $2 billion in stock repurchases and announced plans to exit the Chicago market."

    Cerberus, of course, is no stranger to the supermarket industry. Earlier this year, the company led an investment consortium that acquired numerous grocery banners - including Albertsons and Jewel-Osco - from Supervalu for $3.3 billion.
    KC's View:
    There is a sense out there right now that a number of companies are in play, that the climate seems to be right for big moves that could reshape the food retailing landscape. So while I don't think anything will happen anytime soon, I don't count anything out. There are always, as Spock says, possibilities.

    Published on: October 23, 2013

    Amazon.com said yesterday that it is raising the minimum purchase to qualify for free shipping from $25 to $35. It is the first change to the rate in a decade.

    According to CNN, "Amazon now finds itself in the mid-range of major retailers that offer free shipping on online orders. Wal-Mart and Target offer free shipping on many purchases of over $50, while Best Buy's minimum order is $25.
    Earlier this year, Amazon.com had warned that its shipping costs were going to increase during the holiday season."

    The New York Times writes: "When Super Saver Shipping began, it was an innovation. It helped spark the movement to cheap or free shipping by all online retailers, and cemented Amazon’s reputation as a cutthroat competitor."

    Amazon customers who are members of its Prime program will continue to get unlimited two-day shipping for a $79 annual fee.
    KC's View:
    I'm aware of the irony of this, seeing as how I've been writing so much lately about how Amazon CEO Jeff Bezos is so consumer-oriented, focusing more on Main Street than Wall Street.

    But Amazon warned us that this was coming, and I don't see it as a big deal - especially coming during the holidays, when orders probably are going to be bigger.

    Besides, this may also have the effect of driving more people to Prime ... which only is good for Amazon.

    Published on: October 23, 2013

    Publix Super Markets said yesterday that it will sell 13 PIX fuel/c-store units in Florida and Georgia that it began testing a dozen years ago, to Circle K Stores, a wholly owned subsidiary of Alimentation Couche-Tard Inc.

    One other PIX store, in Tennessee, will be sold to family-owned Max Arnold & Sons.

    "We consistently evaluate our business, including the products and services we choose to offer our customers," Publix CEO Ed Crenshaw said in a prepared statement. "The sale of PIX locations gives us the ability to remain passionately focused on our core business, our customers and the products and services we offer within our grocery retail environment."
    KC's View:
    Twelve years? Can't say that Publix didn't give it a shot...

    Published on: October 23, 2013

    Interesting confluence of stores this week focusing on salmon, from two very different points of view...

    The New York Times has a piece about how Walmart is doing battle with the Alaskan salmon industry over sustainability certification. Essentially, the story is this...

    Last year, the Alaskan salmon industry decided to stop doing business with the Marine Stewardship Council, the prominent sustainability certification organization, and do its own labeling, "reasoning that the state’s reputation for sustainable fishing was good enough for most environmentally conscious consumers. The state’s seafood marketers took the step to save money and reduce what they considered to be outside interference in a thriving business."

    But while Walmart said it would not buy seafood without the Marine Stewardship certification, the state's industry is standing firm, resisting suggestions that it is ducking independent certification for purely financial reasons.

    You can read the whole story here.

    • And, the Washington Post has a story about how "consumer and environmental activists, facing likely defeat in their bid to block government approval of the first genetically engineered salmon, are trying a different tack to keep the fish off America’s dinner plates: Getting retailers not to sell it."

    According to the story, "The Food and Drug Administration, which has been reviewing the genetically modified salmon for years, has strongly signaled it intends to approve the fish, making it the first genetically modified animal cleared for human consumption. The decision, which could come this fall, would be a milestone not only for the decades-long fish controversy but also for the heated debate over the development and marketing of other genetically modified foods ... With the agency close to approving the fish, critics want to make it hard for consumers to find. They are urging supporters to 'create a tsunami of messages' - via social media, e-mails and telephone calls — to pressure retailers not to stock it, and they have promised to reward companies that go along by praising them 'on our websites, in social media, and in the press'."

    You can read the story here.
    KC's View:

    Published on: October 23, 2013

    Marketing Daily reports on a new study by Acquity Group suggesting that, in fact, bricks-and-mortar retailers would be well advised to actually empower customers to engage in the act of "showrooming," which is defined as going to a store to look at products and then using smartphones to order the items online.

    The study, Marketing Daily writes, concludes that "half of all smartphone owners would feel more confident making a major purchase if they had the ability to use free in-store WiFi to research their purchase. Additionally, 30% of these smartphone owners said they’d be more likely to browse additional items not on their list, and 20% would spend more time in the store ... More than three-quarters (78%) of smartphone owners said they had looked up a retailer’s inventory online prior to visiting a physical store, while nearly 60% said they had been influenced to make an in-store purchase decision after browsing product images and information on a smartphone."
    KC's View:
    Showrooming is going to happen. Retailers can't do much about it. So the only choice, it seems to me, is to embrace it and then compete with it, making sure that when people are in the store, there are fewer and fewer reasons to look at the smart phone or tablet computer.

    Published on: October 23, 2013

    Advertising Age reports that McDonald's plans to change the structure of its Dollar Menu - adding pricer items (including sandwiches that go for as much as $5) and renaming it the "Dollar Menu & More."

    The company said the change will be national, supported by national ad dollars, and will begin on November 4.

    The story says that "the menu makes room for what the company calls 'pricing flexibility' for items like the McDouble, a product that caused friction between franchisees and corporate. In 2008, McDonald's and franchisees were at odds over the double cheeseburger. Franchisees wanted it off the dollar menu in light of rising commodity costs and what they said was a decrease in profitability. In the end, the compromise was the McDouble, a burger with one slice of cheese (instead of two) and two patties."
    KC's View:
    There is a sense that McDonald's, seeing stagnant growth numbers, is a little desperate. By calling this thing the "Dollar Menu & More," it sounds like it wants to have things both ways. Which may means that it only is watering down its message and image.

    Published on: October 23, 2013

    • Safeway said yesterday that the Canadian Competition Bureau "has entered into a consent agreement with Sobeys Inc. allowing the parties to proceed with their transaction whereby Sobeys will acquire the net assets of Canada Safeway. The parties now expect to close the transaction in early November 2013. As part of the consent agreement, Sobeys has agreed to divest 23 stores - 13 Canada Safeway stores and 10 Sobeys stores."


    • Published reports say that Costco plans to expand its presence in Australia. The membership warehouse chain currently has three stores there, with two more scheduled to open next month - all of them in the Australian states of New South Wales and Victoria east coast. Now, it has announced plans to open a store in Brisbane, in the state of Queensland.


    • The New York Times this morning reports that "nearly 60 percent of the scientists used as consultants by the European Food Safety Authority, or E.F.S.A., have direct or indirect ties to industries regulated by the agency, according to a report from the Corporate Europe Observatory, an advocacy group that criticizes corporate influence on public policy.

    "The authority oversees food safety in the 28-nation European Union, a role similar to that of the Food and Drug Administration in the United States, or at least the “food” part of it. While the European agency has long been assailed as relying on scientists with perceived conflicts of interest, it says it has taken steps to address the issue.

    "But consumer advocates say those steps have not gone far enough."
    KC's View:

    Published on: October 23, 2013

    • Safeway said yesterday that it has promoted Keith Colbourn, group vice president, loyalty marketing, to be the company's new senior vice president loyalty and analytics. Colbourn is a former executive at Dunnhumby USA.


    • Ready Pac Foods has hired Tony Sarsam to be its new CEO, succeeding the retiring CEO, Michael Solomon. Sarsam began his career at the Frito-Lay division of PepsiCo, and most recently was president of the Nestle Direct Store Delivery Company.
    KC's View:

    Published on: October 23, 2013

    In Minnesota, the Star Tribune reports that Hormel, "seeking to capitalize on America’s obsession with bacon' has "turned to the imaginations of independent filmmakers and asked them to ­create odes to the timeless product that today is being used to flavor seemingly everything, from martinis to lip balm."

    The results were on display last week at an event Hormel called the 2013 International Bacon Film ­Festival ... not to mention on YouTube. According to the story, "Hormel received more than 130 entries and the films have drawn about 500,000 views on YouTube."

    You can see the entries here.

    The winner was "Portrait of a Bacon Enthusiast" (the filmmaker got an $11,000 grand prize), followed by "The Bacon and the Sea," and "We Will Still Be Eating."
    KC's View:
    These movies may not make the sequel to "The Big Picture." But that doesn't mean they aren't entertaining .... and they also reinforce our central message, that telling a story is the best way to spread a message.

    Published on: October 23, 2013

    • Noel Harrison, the son of actor Rex Harrison who sang "The Windmills of Your Mind" on the soundtrack of the original version of "The Thomas Crown Affair," which starred Steve McQueen and Faye Dunaway, has passed away after suffering a heart attack. He was 79.

    Readers of a certain age may remember that Harrison also starred with Stefanie Powers in a brief, one-season spinoff of "The Man From U.N.C.L.E," entitled (natch) "The Girl From U.N.C.L.E."
    KC's View:
    Here's one thing I didn't know...that Harrison was a champion skier who represented Britain in the 1952 and 1956 Olympics.

    Published on: October 23, 2013

    Responding to our story about Walmart wanting to emulate HEB in its approach to fresh food, one MNB reader wrote:

    I just don’t understand when companies take an approach like the one Wal-Mart is taking in saying they want to emulate H-E-B.  I shop H-E-B several times a week and agree H-E-B is a great retailer, and understands the market better than anyone—but if Wal-Mart wants to be more like H-E-B do they really need to study H-E-B in Austin to know they need to completely change the quality of product they are buying, hire knowledgeable buyers and merchandisers, change the labor model at the stores, change the associate training programs, change the store fixtures, hire actual meat cutters, and dozens of other things?  Are they really willing to take any of the steps to be better, and how much learning will be required before they start?  To make things more interesting, H-E-B is less expensive in this market than Wal-Mart in both perishables and center store while providing great service in the perishable departments and the front-end, something you won’t find at Wal-Mart.

    Saying one wants to emulate HEB is a lot easier than actually emulating HEB.




    Regarding our various stories about Amazon, MNB user Mike Franklin wrote:

    I’ve done the research on the company, I’ve read the literature…I still don’t understand and I’m still not convinced of the business model’s long-term success. The model counts on the continuing and widening bifurcation of the 10% and 90%, while the survival of America depends on the convergence of the 10% and 90% with an ever-widening middle class. I don’t see the two as compatible.

    From another reader:

    Amazon’s sharing of supplier warehouses to fulfill orders is similar to the local supermarket using its stores to pick and fulfill internet shopping orders.  It is about maximizing available assets while creating efficiencies in time and space.  If you think about it, it is no different from the local farm selling its produce at road-side stands.

    And another:

    There is no question that Amazon is on the front with innovation after innovation, but there is also absolutely no question that they would not have been able to execute on these innovations -- at least at that scale - had Wall Street not been funding them and sharing their long-term bet. I don't think Amazon is ever going to implode, but I wonder what happens if investors get nervous and the stock price drops, say, 30% - 40%.

    I'm not predicting this. But for a guy who is so praised for his visionary, forward-looking thinking, I wonder if Jeff Bezos has a plan in place to deal with such a scenario? If you lose 30-40% of your valuation, and your cash on hand disappears, suddenly profits really will matter. That could be an eye-opener!





    MNB took note of a Boston Globe story about Staple survey saying that most employees will go to work sick rather than stay home.

    Which led one MNB reader to offer:

    An interesting comparison would be for the Boston Globe to conduct the same pole with Public sector workers.  I would bet the results would be quite the opposite. 

    Maybe. Though I try not to be so cynical about public employees.




    Responding to Michael Sansolo's column about how the younger generation depends on social media and texting rather than email, one MNB user wrote:

    Seems like just a short time ago I sent a note about Twitter capability to you. Now it's there!

    Can't say you aren't listening or moving fast in a quickly changing world.

    I began using Twitter just a short time ago as an experiment and to become educated about it due to its relevance. It's been fun so far.

    The most amazing thing about it to me, so far, is direct communications with folks you'd never have had an opportunity to communicate with otherwise. In addition, due to its visibility, folks are listening, responding, and communicating more.

    The power of 140 characters!

    Now, if I could just reduce an email to that level...:-)


    From another reader:

    You have to appreciate the irony of letting us know that college students don’t like email anymore through an email.  I remember Sheryl Sandberg making the exact same point at the Nielsen 360 conference two years back and not believing it.  Guess it is true.

    MNB user Peter Wildes wrote:

    After your piece on the college professor that sent the email out in regard to an upcoming test only to find out that none of the students actually bothered to check for an email, this is what came next….

    Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com

    Apparently someone still relies on this antiquated method of communication.


    Sure, MNB still sends out headlines via email. We post them on Facebook and Twitter as well.

    But I'd be the last person to suggest that we'll always do it this way. I've long said - and this is only slightly tongue in cheek - that I may someday be beaming into people's offices each morning via hologram.
    KC's View:

    Published on: October 23, 2013

    The World Series, between the Boston Red Sox and the St. Louis Cardinals, begins tonight at Boston's Fenway Park.

    The New York Times notes this morning that this year's Fall Classic also will mark the final time that Tim McCarver, the former catcher who has parlayed his on-field experience into a reputation as one of baseball's most knowledgeable and candid (if occasionally wordy) television analysts, will call the World Series.

    The story notes that while McCarver, 72, has not ruled out returning to broadcasting at some point, plans to retire so he can "pursue his passions for wine and cooking."

    McCarver has not talked much about his retirement, saying he prefers to keep the attention on the games, but the Times writes that "while McCarver has been criticized for excessive word play and for overanalyzing plays, he is perhaps best known for his uncanny ability to anticipate what will happen ... McCarver’s partners attest to his intensity; his breadth of interests; his quirks (like slathering sandwiches with mayonnaise and craving crab bisque); and his desire to improve his language skills (injecting a new word of the day into his broadcasts)."
    KC's View: