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    Published on: November 20, 2013

    by Kevin Coupe

    I love advertising that seems to be aware of the outside world, of popular culture.

    Take, for example, this ad from Foot Locker, carrying the theme of the company's "Week of Greatness" promotion, in which Kyrie Irving of the Cleveland Cavaliers talks about how the promotion makes him feel like "all is right with the world."

    All I can say is this. Any ad that brings together Mike Tyson and Evander Holyfield - two aging warriors who today seem far more mellow than when they were in the ring - has a certain amount of savvy. (The fact that Tyson is enjoying a kind of cultural resurgence - his one-man show, "Mike Tyson: Undisputed Truth," currently is on HBO - is gravy.)

    Good ad. Funny. And in its own way, an Eye-Opener.

    KC's View:

    Published on: November 20, 2013

    Wired reports that Costco "is joining the Google Shopping Express same-day delivery service. It’s the highest-profile new partnership for the program since Shopping Express came out of private testing and became available to the San Francisco Bay Area public in September."

    The reason for the Google-Costco partnership. As Wired puts it, the rationale can be summed up in one word: Amazon.

    Here's how Wired frames the analysis:

    "The online retail king chips away at Google in so many markets, whether it’s cloud computing, tablet hardware, or — most significantly — online advertising. Amazon is often the first place people go online to search for products, reducing the need for Google’s ad-laden search engine. One way to fight back is to encroach on Amazon’s primary source of revenue: retail.

    "To succeed, Google doesn’t have to overtake Amazon as the dominant online retailer. It only has to muddy perceptions enough that Amazon loses its singular status as the default destination for online shopping. If consumers start associating Google more closely with buying things online, more people will start their product searchers there. And it’s those searches that fill out Google’s bottom line."

    In addition to Costco, Target also is a partner in the Google Shopping Express program, which means that Google is doing business with the nation's third and fourth largest retailers.
    KC's View:
    It isn't just Amazon that is being targeted here … it is virtually every retailer selling the same stuff that Target and Costco sell. Which is why every retailer that fits that definition has to either figure out a way to get into this game, or figure out what differential advantage it has that will keep people coming into the store on an ongoing basis. It seems to me that becoming a destination shopping experience with every passing day is becoming more of a price of doing business.

    Personally, I find this fascinating. There are things I buy from Amazon that I used to buy from Costco, but decided to switch over because it saved me the trip to the store and the inevitable lines. But an offering like this might get me to switch back. And I'm not sure what a store would have to offer me to get me to move these categories back to the bricks-and-mortar column…

    Published on: November 20, 2013

    All Things D reports that job listings from Amazon seem to suggest that the online retailer "is in the process of creating its own line of the kind of products that you’d normally find on supermarket shelves … One of the listings, for a financial analyst, mentioned the 'launch of the Private Label Business in Consumables.' In another, for a 'Senior Product Manager, Consumables Private Label,' Amazon said it is looking for the new hire to help 'launch new high quality Amazon-branded products to our global customers'."

    The story notes that Amazon is not commenting on the listings and their implications, and that it is unclear "whether Amazon will target its own brands at just one product type — say, diapers or snacks — or across all of the categories."

    Amazon has had its virtual toe in the private label waters for some time. "A few years ago," All Things D writes, "Amazon launched Pinzon, its own brand of sheets and towels. It also sells a private label called AmazonBasics, which includes products such as batteries, keyboards and USB cords. But the company hasn’t aggressively marketed the private-label brands in recent years and rarely mentions them in media appearances or on analyst calls."
    KC's View:
    Not surprised by this at all. In fact, I think I've been predicting it … simply because in categories where it makes sense, an Amazon private label offering might be compelling … especially because price transparency on the site makes comparison shopping very easy. It won't work in every category …. but if Amazon is smart about this, and really goes after the segment with lots of lowball pricing and sampling, I can see it having an impact.

    Published on: November 20, 2013

    Today has a story saying that Australian researchers have concluded after a study of kids in 28 countries between 1964 and 2010 that "kids today aren’t running nearly as fast as their parents did at the same age. In fact, in a one-mile run, youngsters now are about 1.5 minutes slower on those laps than children 30 years ago."

    The story goes on to say that "in the US alone, researchers found that children’s cardiovascular endurance — one of the cornerstones of physical fitness — fell an average of 6 percent per decade between 1970 and 2000."

    The research, the story says, is consistent with "another study published this past summer in the Journal of Adolescent Health," which found that "only about half of adolescents are physically active five or more days a week, and fewer than one in three eat fruits and vegetables daily. The survey included nearly 10,000 children, between 11 and 16 years old, from 39 states."
    KC's View:
    Both studies highlight a generational tragedy. Our kids may have more expensive sneakers and carry gadgets that will track their every move, but that doesn't mean they're physically fit.

    Published on: November 20, 2013

    The Chicago Tribune reports that Walgreen Co. has laid off several employees at its corporate headquarters in Deerfield and will continue to make adjustments to its workforce 'to optimize our organization'."

    The company says that "the job cuts spanned the organization, including workers in human resources, finance, information technology and others."

    Michael Polzin, a Walgreen spokesman, says that "like all companies, we’re constantly looking to optimize our organization and drive greater efficiency and effectiveness."
    KC's View:

    Published on: November 20, 2013

    Spartan Stores and Nash Finch said yesterday that the two merged companies will operate as SpartanNash Company.

    The official name change is expected to take place next May, at the annual shareholders meeting. The merged company began trading under the symbol "SPTN" yesterday.

    "This merger brings together two highly complementary organizations to form a leader in the grocery wholesale, retail and military commissary and exchange channels," CEO Dennis Eidson said in a prepared statement, adding, "We look forward to leveraging our new platform with its broader customer base and geographic reach to create significant long-term value for our shareholders."
    KC's View:

    Published on: November 20, 2013

    The Wall Street Journal reports that Mayor Michael Bloomberg yesterday signed a law that raises the minimum age for tobacco purchases to 21 from 18.

    "The new law – the strictest of any major city in the nation – is New York’s latest effort to combat smoking in the five boroughs and marks a reversal for Mr. Bloomberg, who previously opposed legislation to increase the minimum age to buy tobacco products," the Journal writes. "The law will take effect in mid-May, more than five months after Mr. Bloomberg steps down as mayor.

    "A companion bill, also signed into law by the mayor on Tuesday, creates new penalties for the evasion of cigarette taxes, bans discounts on sales involving cigarettes, sets a price floor on packs of cigarettes and little cigars at $10.50 and requires inexpensive cigars to be sold in packages of no fewer than four."

    Mayor Bloomberg said that he hopes the legislation will spur other municipalities to make similar moves.
    KC's View:
    I'm conflicted about this. On the one hand, if kids can vote and be sent off to war, it seems fair to allow them to buy tobacco products that, at least for time being, are legal. (They also ought to be allowed to buy a beer, by the way.)

    On the other hand, anything that slows the source of tobacco consumption is, in my mind, a good thing.

    I don't always agree with Mayor Bloomberg, but I do agree with something he said about the people who are saying that this new law will hurt commerce at a time when the economy still is fragile. That strikes me as such a short-sighted and shameful thing to say … and part of the problem with this country is that we think short-term instead of long-term.

    Published on: November 20, 2013

    • C&K Market Inc., which operates 60 supermarkets in Oregon and Northern California, has filed for bankruptcy protection. The company anticipates selling or closing about one-third of its fleet and cut staff by one-fifth, with the company saying that over-aggressive expansion and increased competition brought the family-owned company to this point.


    • The Los Angeles Times reports that CKE Inc., parent company to the Carl's Jr. chain, is being sold by the affiliates of New York private equity firm Apollo Global Management that control it to an affiliate of Roark Capital Group, a private equity firm in Atlanta, that owns Cinnabon and Auntie Anne's. Terms of the deal were not disclosed.
    KC's View:

    Published on: November 20, 2013

    • The Kroger Co. announced that Paul W. Heldman, a 31-year Kroger veteran who has been serving as the company's general counsel since 1989, secretary since 1992, and executive vice president since 2006, will retire in the spring of 2014. He will be succeeded by Christine S. Wheatley, currently Kroger's vice president, senior counsel and assistant secretary.
    KC's View:

    Published on: November 20, 2013

    …will return.
    KC's View:

    Published on: November 20, 2013

    I'm happy to report that MorningNewsBeat is entering new territory … forging a business relationship with the Hartman Group that will result in our working together on a new conference series:  "A.C.T.:  Anthropology, Culture, Trends." The first iteration, Evolving Culture of Food & Beverage, is scheduled for Chicago, Illinois, on February 5, 2014.

    Yes, I know what you're thinking.  it's going to be cold in Chicago on February 5.   That's true.  But the conference itself is going to be hot, hot, hot…!

    The conference will take place at the Catalyst Ranch, one of the most unconventional and provocative spaces in Chicago, which is perfect for what we're going to accomplish - which is an unconventional and provocative look at food culture in America, and what retailers and manufactures should be doing to capitalize on the opportunities created by shifting and fast-evolving trends.

    The day is going to be lively, fun, interactive, and filled with chances to interact with the cultural anthropologists from the Hartman Group, who are going to help you see the food business through a fresh prism that will shed light on opportunities you didn't even know existed.  And I'll be there, too … facilitating the conversation, moderating discussions, poking and prodding and provoking and making sure that everybody not only comes away with actionable intelligence, but also has a good time doing so.

    I hope you'll consider joining us. There are a limited number of seats available, and you can find out more by going to ACT-Chicago.

    KC's View:

    Published on: November 20, 2013

    by Randy Fields, Bruce Christiansen and Sage Horner

    Having visibility to product movements throughout the extended supply chain enables retailers and suppliers to enhance the shopping experience while creating sales lift. That may seem obvious, so to see how visibility increases in-stock positions and reduces inventories and the number of days of supply, here’s a revealing story of how one company saw the light (please pardon the puns).

    A leading supermarket retailer, a leading innovator in the deployment of data management and analytics tools, operates in an extremely competitive environment and has found information technology is a critical factor in gaining an edge. The retailer wanted to give corporate decision makers added functionality in demand forecasting, inventory management and assortment optimization, while increasing the speed of responses for all of the inventory activities.

    Three years ago, the retailer implemented a comprehensive solution using a sophisticated web-based system that sets optimal inventory policies for more than 4,000 grocery items sourced from about 200 vendors.  As a result, warehouse inventories were reduced significantly, saving millions in carrying costs across the grocery, dairy, frozen, GM and HBC departments while at the same time maintaining a 98% service level on priority items. Along with a decrease of 100,000 cases in the retailer’s distribution centers (from 180,000 cases of safety stock to 80,000 cases) days of supply decreased from 17.6 to 12.4 –an incredible 55% reduction.  
    The retailer now plans to expand the initiative to additional categories, including deli, cheese, prepared foods, bakery, frozen meat and frozen seafood to experience further savings while reviewing new opportunities to leverage POS data to make additional improvements in their supply chain.
    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.

    Next time we’ll review the issues that keep executives up at night. In the meantime, we’re interested in your feedback, so feel free to contact us today. 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:
    I don't usually contribute commentaries to DrumBeat or Spotlight pieces, but I'm making an exception in this case … to note that Park City Group has been ranked # 381 on Deloitte’s Technology Fast 500, a ranking of the 500 fastest growing technology, media, telecommunications, life sciences and clean technology companies in North America. Park City Group grew 202 percent during the period evaluated by Deloitte LLP.

    As I said yesterday, I love having cool companies as MNB sponsors. As this is yet another example.