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    Published on: November 11, 2013

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    KC's View:

    Published on: November 11, 2013

    RETAILER TO RETAILER tactical education sessions on Merchandising, Fresh Foods, Operations, Financial Controls, Digital Marketing and Store Management.

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    KC's View:

    Published on: November 11, 2013

    by Kevin Coupe

    E-commerce pioneer Amazon and the financially embattled US Postal Service (USPS) announced this morning that they will team to deliver packages on Sundays - first in the New York and Los Angeles metropolitan areas, and eventually, as the program rolls out in 2014, throughout much of the United States. The Sunday deliveries will be available at no additional charge to members of the Amazon Prime program, which provides unlimited two-day delivery of packages with the payment of an annual $79 fee.

    "If you're an Amazon Prime member, you can order a backpack for your child on Friday and be packing it for them Sunday night," Dave Clark, Amazon's vice president of worldwide operations and customer service, said in a prepared statement. "We're excited that now every day is an Amazon delivery day and we know our Prime members, who voraciously shop on Amazon, will love the additional convenience they will experience as part of this new service."

    Amazon consistently has worked to add value to its Prime program, adding benefits such as streaming video without raising the price. It is with good reason - the company has said that it ships more than twice as many items to Prime members in the United States than to those shoppers who opt for free shipping by spending a certain amount.

    The USPS, which, as the New York Times reports, lost close to $16 billion last year, has said that while it loses money on first class mail, it makes money on package delivery. And, the USPS tells the Times that it expects "to make more such deals with other merchants, seeking a larger role in the $186 billion e-commerce market."

    The Wall Street Journal reports that "a Postal Service spokeswoman said the agency wouldn't need to hire additional workers. She said officials have been working for more than a year on a "flexible" workforce that could be asked to clock in on Sundays. 'We're ready for Sunday in the current markets,' the spokeswoman said. 'If this were to expand, we would look at staffing levels and adjust accordingly'."

    At this point, delivery companies such as FedEx and UPS do not make Sunday deliveries, though it certainly seems possible that this new deal will put pressure on them to adjust to a new reality. As noted here on MNB earlier this year, Amazon's move to its own trucks in markets offering Amazon Fresh - currently just Seattle and Los Angeles, but the list is expected to grow to San Francisco and beyond - creates potential problems for parcel carriers that have grown to expect that Amazon will represent a certain percentage of their profitability. The new Amazon-USPS deal could reshape the delivery landscape, especially at a time when Amazon has been positioning itself to provide next day and even same-day delivery to customers who want products ordered online faster.

    There's no question that the notion of instant gratification is gaining increased traction. The New York Times has another story this morning on an unrelated issue that, somehow, strikes me as being connected - saying how some children's cable networks such as Nickelodeon and the Disney Channel have decided to start offering programs online before they can be seen on television; the driving idea is that kids are not tethered to traditional notions of networks and scheduling, and that one has to be far more flexible in how one provides products and services. This is not a concept unique to younger generations, since both Netflix and Amazon are moving into original programming that can be watched on people's own timetables, rather than only at arbitrary times assigned by the network.

    It seems fair to suggest that Sunday deliveries fall into this same continuum.

    One other thing, if I may…

    I take absolutely no credit for this announcement, though I think I've been suggesting for years that it makes utter sense for Amazon and USPS to do business, and that, in fact, USPS officials should have gone to Amazon founder/CEO Jeff Bezos's office on bended knee to beg for such an opportunity. Not sure if that's exactly what happened here, but I think it is a good thing for the USPS to be doing this; somehow, if it is going to be vital, it has to reinvent itself by expounding its reach and service rather than by contracting.

    I have no idea if anyone at Amazon or USPS is paying attention, but here's the next thing I want to see - Amazon lockers in post offices all over America. Assuming Amazon still is committed to installing lockers that allow people to pick up products rather than having them delivered to their homes or offices, it would make perfect sense to put them in post offices - they are located in virtually every community, they are open seven days a week, and the concept of post office boxes is a business proposition with which postal workers are familiar.

    Today's announcement is an Eye-Opener. There are, I suspect, more Eye-Openers to come…
    KC's View:

    Published on: November 11, 2013

    The Kroger Co. said on Friday that over the next two years, it will invest $150 million in North Texas to build five new Marketplace stores and to expand three locations, along with opening multiple fuel centers and remodeling existing properties.

    The move comes as the Dallas market attracts new players and investment, in part prompting the doubling down by market leader Kroger. "Dallas is a market that continues to attract new residents and retailers because of its economic strength and stability," says Bill Breetz, president of Kroger Southwest.

    The Cincinnati Enquirer writes that "Kroger says it’s already one of the top two grocers in the Dallas-Fort Worth market, but the blitz is clearly aimed at moving more aggressively … Top competitors in Dallas-Fort Worth are Wal-Mart and Tom Thumb."
    KC's View:
    It only is going to get more competitive in Dallas, especially with WinCo opening stores there for the first time. And it still is a market that HEB has to look at see opportunity. And so it makes sense for Kroger to launch a pre-emptive strike.

    Published on: November 11, 2013

    Interesting interview on with Maureen Ogle, author of "In Meat We Trust," which "traces the history of meat in America, from the livestock raised by the original settlers to the birth of the modern industrial system. Along the way, she seeks to understand what she sees as a fundamental disconnect between consumers’ demand for an abundance of cheap chicken, beef and pork, and the producers whose motives bear little resemblance to what the critics would have us believe."

    An excerpt from the interview:

    "I think what the food reformers – and I need to make it clear, I have a great deal of sympathy with their goals — don’t understand is that the system of providing food is predicated on the fact that the vast majority of Americans don’t make food. They expect someone else to raise it for them. And in the United States, if you live in a city, you absolutely expect there to be lots and lots of food at a reasonable price. For the past century that’s in fact what has driven our economy: the ability to free up spending dollars.

    "I think food reformers don’t get that the reason they have the luxury of sitting around tapping out critiques on their Apple computers is because they a) don’t have to grow their own food and b) don’t have to spend very much money for the food that they do have."

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

    Published on: November 11, 2013

    Target Corp. said this weekend that it will open at 8 pm on Thanksgiving, an hour earlier than it opened last Thanksgiving. The company said its stores will remain open all night, and close at 11 pm on Friday, November 29, commonly referred to as "Black Friday," the traditional beginning of the end-of-year holiday shopping season.

    The Associated Press reports that "Target will also be offering hundreds of deals online on Thanksgiving morning that will include almost all deals that will be available in the store. In addition, the discounter said it will be feature 15 online-only daily discounts for two weeks beginning Sunday, Nov. 24."

    Target is just the latest retailer to expand its holiday shopping season wither by opening earlier on Thanksgiving than in the past (Toys R Us, Best Buy) or opening on Thanksgiving for the first time (Macy's, JC Penney).
    KC's View:
    To some, this is a welcome development. It some, an inevitable trend. And to others, the end of western civilization.

    More on this in "Your Views," below…

    Published on: November 11, 2013

    The New York Times yesterday had an interview with former Trader Joe's executive Doug Rauch, who early next year will open his first Daily Table store in Boston's Dorchester neighborhood. The Daily Table will specialize in selling, as fast food prices, products that are either past their official sell-by date, cosmetically blemished, or "excess."

    "We’re going to grab all of this stuff, bring it on-site, cook prepared meals with it and also offer milk, eggs, bread and produce," Rauch says. "It’s going to be priced the same as junk food, basically … You will be able to get a good whole-grain loaf of bread for somewhere between 50 and 75 cents, and I think most of America feels very comfortable with using bread past its sell-by date. Most Americans probably have out-of-code bread at home or in their refrigerator, and none of us give it a second thought."

    Rauch says that the concept isn't all that revolutionary: "I’m actually not doing anything different than what many high-end, high-priced national retailers do. Within their store, they recover meat or chicken or fish that’s been out on the display counter and, instead of throwing it out, they’ll cook it up fresh and they’ll put it out on their hot tray the next day."

    The key, he says, is to create a better informed consumer who understands the concept.

    "I think that we need to become better informed," he says. "At Daily Table, our approach is to create an environment that is warm, friendly, bright and the average person walking in would not in any way think that they were getting anything but first-rate product … As with anything, you need some early adopters, and they go out and they become your messengers. They’ll tell their neighbors, the neighbors will go, Huh? and they’ll come down and try it. Generally, food is cheaper than labor, so grocers do everything they can to cut labor costs. A basket of raspberries that has one moldy raspberry in it, they’ll toss that. I’d like to take that, sort through it, pick out the good raspberries and offer them to customers dirt cheap, so they can have raspberries."
    KC's View:
    Doesn't sound all that appetizing to me. But when it opens, I'm driving up there … because I want to see how Rauch, an estimable retailer, makes this work.

    Published on: November 11, 2013

    The Wall Street Journal reports that Johnson & Johnson has stopped selling some products on Amazon because of concerns that some third-party merchants are offering expired and/or damaged merchandise.

    The Chicago Tribune notes that Amazon's CFO has said that "business generated from third-party merchants accounted for about 40 percent of items sold in the second quarter."
    KC's View:
    It is one of the challenges of the Amazon Marketplace … and something to which manufacturers have to pay attention. (Though I have to chuckle that we have this story immediately following a story about a Boston retailer deliberately selling out-of-date merchandise…)

    Published on: November 11, 2013

    Walmart-owned Asda Group in the UK plans to provide grocery pickup services - dubbed "click and collect" - in an expanded number of its store parking lots, adding 10 a week until all of its more than 500 stores have the offering.

    "Click and collect" currently is available at about 300 stores. The rollout is expected to take until next summer.

    According to Retail Week, "Arch-rival Tesco this week revealed it is piloting its first off-site click-and-collect points at a school and two car parks in York and intends to expand this to libraries and sports centres. It now has 200 drive thrus at its stores, which will rise to 300 next year."
    KC's View:

    Published on: November 11, 2013

    • The New York Times reports that Home Depot has been "scrambling to apologize after a message sent from the company’s primary Twitter account, @HomeDepot, was criticized as racially insensitive.

    "The message, part of a college football promotion, included a picture of two African-American men and a person in a gorilla suit drumming on overturned buckets, with a caption that read, 'which drummer is not like the others?'

    "The tweet, which went out midday on Thursday, was quickly deleted. Within hours, Home Depot apologized publicly and said it had fired the people who sent it out."

    The company said that "the outside agency that created the tweet and the Home Depot associate who posted it have been terminated. We’re also closely reviewing our social media procedures to determine how this could have happened, and how to ensure it never happens again."

    • Meanwhile, the athletic apparel retailer Lululemon Athletica is grappling with negative reaction in social media to comments made by its founder, Chip Wilson, to Bloomberg that struck some people as harsh.

    When discussing a "pilling" problem - fabric that wore to the point of being sheer - with some yoga pants, Wilson said, "It's really about the rubbing through the thighs, how much pressure is there over a period of time and how much they use it." And, he added, "Quite frankly, some women's bodies just actually don't work for it (his clothing). They don't work for some women's bodies."

    The problem, apparently, is this isn't what Lululemon salespeople are saying to customers. The usual sales pitch, the story suggests, is that Lululemon's pants are flattering to women with a wide variety of body shapes.
    KC's View:
    Two very different scenarios, though they are linked by the fact that they are creating a national conversation.

    In the case of Hope Depot, it is hard to image what these morons were thinking when they sent out that tweet. There may be some people who would find such a thing to be funny, but they are idiots.

    As for Lululemon … sounds like Chip Wilson has been taking sensitivity lessons from Michael Jeffries, CEO of Abercrombie & Fitch.

    Published on: November 11, 2013

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

    CNBC reports that in an interview on "Squawk Box" last week, Whole Foods co-CEO Walter Robb said that "consumers won't find any foods with artificial trans fats in Whole Foods Market stores."

    The comment came after the US Food and Drug Administration last week proposed the virtual banning of artificial trans fats, saying they were a public health hazard.

    Robb said that "as time progresses more and more of these sorts of issues are going to come out, where you're going to see the linkage between some of these preservatives and ingredients and the quality of the food."

    Variety reports that while Dish Network announced last week that it will close down its chain of 300 Blockbuster video rental stores, as well as its DVD-by-mail business, by early next year, it sent out tweets last week saying that it would stop renting movies last weekend, and would begin liquidating its inventory starting this Thursday.

    The Wall Street Journal reports that Kmart "plans to begin lease-to-own financing at its stores during the holiday shopping season … The 'no credit-required' program will apply to merchandise that costs at least $150."

    I keep asking myself … would I ever actually buy anything at a Kmart that cost more than $150? Heck, I'm not sure I'd spent $15 at Kmart…
    KC's View:

    Published on: November 11, 2013

    On the subject of expanded shopping options on Thanksgiving weekend, one MNB user wrote, responding to a reader who yearned for the good old days when stores were closed on major holidays…

    Long time reader, first time correspondent…

    Yes, we get it.  Things were better in the 60s.  People were happier and kinder and everything was rosy.  But it’s 2013 (almost 2014) and people (I mean women and especially working mothers) work.  So stores that stay open until 6.00 don’t get my business (I’m at work), stores that aren’t open on Sundays don’t get my business (I can’t get everything done on Saturday because M-F, I’m at work).

    The fundamental nature of society has changed.  Approximately 2/3 of all women with children under 18 are in the workforce.  So that magical time your reader refers to when people seemed to be able to find a time to buy their food M-S 9.00-6.00 doesn’t exist anymore.  And it’s not because stores are greedy (though they might well be).  It’s that women work.  And it’s about time some of you readers start to understand this.

    I'm with you.

    Except that I would not be one to say that things used to be "better" and that people were happier and kinder. I actually would argue that we live in a happier, more inclusive and tolerant society today. It is hardly without challenges, but I don't buy the idea that the good old days were somehow superior.

    MNB user Ken Wagar wrote:

    I know you are not particularly in favor of bricks and mortar retailers being open on Thanksgiving but your comment shown below amazed me.
    I completely understand the traditional feeling toward Thanksgiving, and actually share the sense it. But the thing is, Amazon and its online brethren will be open all day on Thanksgiving … and traditional retailers have to compete with that. I feel their pain.
    Since when did being open on Thanksgiving become the standard for competing with On-line? Using this argument everyone should be open 24/7 365 days of the year and I can’t believe you think that would make ANY difference in the competitive battles that are taking place.

    I suspect that the people that will actually get in a car and drive to Kmart to shop on Thanksgiving are very different in any number of ways from those that may spend some time on-line from home or on a mobile device to purchase a few items. To believe this move will have any impact that particular day or long term on Kmarts success at retail is just plain silly. There are 100s of things K-mart needs to do to be more successful and this one IMHO falls way down the list.

    Point taken.

    Perhaps what I should've written is that traditional retailers may feel that they need to expand their hours on Thanksgiving in order to compete with online retailers.


    Michael Sansolo and I were talking about this the other day, and he suggested that a lot of this argument is built on the premise that every family in America is sitting around eating turkey, watching football and bonding on Thanksgiving. Which may not be the case.

    Which gives me an idea for a TV commercial for Kmart, which has shown itself to be willing to use cheeky ads to garner attention.

    It should open on a Thanksgiving dinner that looks like something out of Norman Rockwell, and then the camera pans next door to another house, where an extended family is engaged in fights, arguments, and all the other crap that sometimes happens when families get together. Then, they cut to the inside of a Kmart, where arguing family is seen walking the aisles doing their Christmas shopping.

    The voiceover is simple: "Kmart. Open Thanksgiving. Saving families."

    I think it could work…
    KC's View:

    Published on: November 11, 2013

    In Week 10 of the National Football League…

    Jacksonville 29
    Tennessee 27

    Buffalo 10
    Pittsburgh 23

    St. Louis 38
    Indianapolis 8

    Detroit 21
    Chicago 19

    Seattle 33
    Atlanta 10

    Carolina 10
    San Francisco 9

    Denver 28
    San Diego 20

    Houston 24
    Arizona 27

    Cincinnati 17
    Baltimore 20

    Oakland 20
    NY Giants 24

    Philadelphia 27
    Green Bay 13

    Dallas 17
    New Orleans 49
    KC's View: