retail news in context, analysis with attitude

Published on: November 26, 2013

by Michael Sansolo

Katie Couric is leaving network television for a gig on Yahoo!, which speaks volumes about where media power is moving. (We'll have more about that below, in our Eye-Opener.) Mick Jagger’s granddaughter is expecting her first child, which should give every Boomer pause about the reality of aging.

And like it or not, stores will be open and, at times, fairly crowded this Thanksgiving.

Change is all around us.

Anyone looking for a different perspective on the debate about Thanksgiving need watch the wonderful 1990 movie, “Avalon.” The film tracks the path of a family from the patriarch’s arrival in Baltimore at the turn of the 20th Century through to the 1960s. In the process we see the changing nature of Thanksgiving itself.

Early in the movie the entire extended family gathers in one of the small Baltimore row homes for a massive holiday celebrations and arguments. By the end, the family squabbles and changing times have splintered the group and we see a small gathering of four eating around the television.

Sad yes, but also a reality because very few of us are riding over the river and through the woods.

I wish Thanksgiving were still a day of reflection and thanks, but I’m not certain it’s ever been that way in my entire life. Likewise, I wish that all those retail workers got a wonderful day home with their loved ones with time to root against the Dallas Cowboys. (Okay, that’s what we do. Sorry Dallas readers.)

But it’s just not that way.

The reality is that family traditions have changed. For an ever-increasing number “cooking” the meal means unwrapping or microwaving items cooked elsewhere. Likewise, the biggest family activity is the trip to the strip mall or the sofa for endless football.

In fact, there are news reports of families who make it a tradition to camp out all week to get to the front of the line at Best Buy.

You may dislike all of that, but family traditions are what families do. Their traditions might include the shopping trip, the football game or even the vegan turkey.

The business challenge is how to handle this as best as possible. One of the other changing realities we face is that today we can and should build relationships with our shoppers to help them understand what we do and don’t do. That might include figuring out how to explain to your shoppers why you do or don’t open on any holiday just as you have to explain why you stock or avoid certain types of products.

Just remember that we’ve always lived in times of change. Take one last example from that same movie, “Avalon.”

One plot line involves two family members who open a succession of ever-larger retail stores, the largest of which has a shocking grand-opening spectacular on July 4th. In the time period of the movie that was a shocking thing to do, much as was the case once with Sunday shopping, Katie leaving networks or Mick having great-grandchildren.

Give thanks that you know how to change with the times.


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 .

Published on: November 26, 2013

by Kevin Coupe

As noted briefly above, Katie Couric, the highly popular former host of Today and, less successfully, anchor/managing editor of the CBS Evening News and talk show host and special correspondent for ABC News, yesterday announced that she has signed a new deal that will extricate her from her ABC deal one year early and take on a role as "global anchor" at Yahoo!

That role will have her handling both news reporting and interviews for a company that is just beginning the process of building a news operation as it looks to expand the ways in which it serves its user community. As the New York Times writes, "The addition of Ms. Couric is consistent with the aggressive repositioning of Yahoo under its new chief executive, Marissa Mayer, who has been looking to restore Yahoo’s diminished profile.

The Times continues: "The completion of the deal between Yahoo and Ms. Couric offers another example of an established media figure leaving a print or television outlet for purely Internet sites. In the case of Ms. Couric, one of the biggest names in television news over the last quarter-century will now base her future work away from the established pillars of network news. In her career, she has worked for all three broadcast network news operations, as well as CNN."

Couric says she will continue to do her syndicated daytime talk show, but speculation is that since it has less than a barn-burner when it comes to ratings, the show likely will not be renewed for another season.

This is not an isolated case. Not that long ago, Yahoo! hired David Pogue away from the New York Times, where he had developed a strong following as the paper's technology columnist. Pogue's reasoning for making the move, in part, was that Yahoo! would offer him more bandwidth and expanded platforms on which to work.

It is yet another lesson in how traditional businesses are being nibbled away at by relative newcomers with less orthodox approaches. Now, to be clear … this isn't as simple as the internet killing the TV star. Since leaving Today, Couric's star power has diminished to a degree, and she never really seemed to have much impact on ABC News. With the exception of Fox News, where she would not have been a good fit, there simply weren't any networks left.

Still, any traditional business has to see this for what it is - a case of shifting fortunes and trends that shows how old-world business models are losing at least some of their luster. The trend only will continue, and likely will pick up momentum.

It is an Eye-Opener.

Published on: November 26, 2013

As reported in an MNB Breaking News alert yesterday, Walmart announced that Mike Duke, 63, is retiring from his job as CEO of the company, and will be succeeded by Doug McMillon, 47, who has been running Walmart's international business.

The change is scheduled to take place in February 1. McMillon will be just the fifth CEO of the company founded by Sam Walton since it went public in 1970.

Some analysis of the leadership changes….

• Bloomberg Businessweek: "McMillon has some well-chronicled challenges to address, from an increasingly competitive retail landscape to the collateral damage of bribery allegations in Mexico. That could mean he starts out playing defense. Let’s hope not. McMillon has an even bigger opportunity to build on Wal-Mart’s strengths. To do that, he needs to foster a different mindset in Bentonville and focus more sharply on a few areas. The biggest and most pressing challenge: figuring out how to win online.

"The world’s largest retailer has an underwhelming record on the digital front. Yes, Wal-Mart was late to the e-commerce party and let Amazon steal the digital thunder. Having recognized that, retail giant has since invested heavily in building out a digital presence. What’s perplexing is how little it has achieved. While online sales grew 40 percent last quarter, it’s likely to account for only $10 billion in sales this year. For a company that’s expected to ring up $480 billion in sales by the time its fiscal year ends on Jan. 31, that’s hardly a stunning success. Amazon, for one, is likely to generate sales of $75 billion in 2013. Some of that will come areas like web services, of course, but there’s no reason Wal-Mart couldn’t find new revenue opportunities online, too.

"With its mantra of 'everyday low prices' and a famously efficient supply chain, Wal-Mart should be unbeatable in cyberspace. It’s not. One reason could be that its logistics operations are largely focused on serving its bricks-and-mortar stores. Anyone who has dealt with the inconvenience of having to pick up goods at a store or FedEx location will know what I mean. The website itself is also oddly clunky and impersonal while Amazon greets users like a familiar friend. That’s something McMillon can potentially fix by ramping up investment and forging innovative partnerships."

• Washington Post: "He will take the helm of Wal-Mart at a challenging moment for the world’s largest retailer. The company is struggling to grow same-store sales in the United States. It also has been the target of repeated job actions by workers and outside organizers, putting it at the center of the growing movement to pressure employers to raise the pay of low-wage workers.

"Workers and their backers are planning protests at 1,500 Wal-Mart stores — including those in the Washington area — when the company hosts its annual Black Friday sales event, which marks the official start of the holiday shopping season the day after Thanksgiving. They hope to use the Black Friday protests to draw attention to the plight of Wal-Mart workers, who they say are underpaid, given less than full-time hours and receive few benefits.

"Last year, hundreds of Wal-Mart workers walked off the job in 46 states on Black Friday, according to OUR Wal-Mart, a group advocating for Wal-Mart workers. The giant retailer has been hit with new job actions in recent weeks, including walkouts in Miami and Tampa, according to protest organizers."

• New York Times: "The choice to name Mr. McMillon — who will be the youngest chief executive to lead the company since its founder, Sam Walton — elevates an insider with deep roots in the company. He joined Walmart in 1984 as a summer associate in a distribution center, then rejoined in 1990. From 2006 to 2009, he was president of Sam’s Club, Walmart’s warehouse stores division … At the shareholders’ meeting in 2012, Mr. McMillon told a story of receiving a Post-it note about the price of trilene fishing line from Walmart’s founder, 'Mr. Sam,' in 1991, on his first day on the company’s merchandising team. Kmart’s price, the note said, was just a bit lower than Walmart’s.

“'This is from Sam Walton,' Mr. McMillon’s new boss said, he recounted. 'Have you fixed it?'

"At Walmart, a connection to 'Mr. Sam' is currency."

• And, this analysis from an MNB reader with some experience:

"It was great to see Doug be appointed by the Wal-Mart Board as the next CEO. This wasn’t the best kept secret; many who have been associated with Wal-Mart for years have always thought Doug would be on the short list when the time came. I believe Lee Scott deserves a lot of credit for mentoring Doug although I’m sure Lee won’t get the credit he deserves for putting this succession in place.

I think Doug is an excellent choice. His appointment could be best characterized as 'no left turns, no right turns,' just stay true to what Wal-Mart is all about. He’s a merchant at heart but has a great sense for how the functions within Wal-Mart operate together to 'sell more.' I’ve experienced him to be tough when it was required but always fair. He listens carefully to the Vendor community and has very solid and deep relationships there. I think he’s done a great job of extracting fair-share + resources from Wal-Mart vendors, even better than his predecessors. My own sense is that he’s not involved in the long-standing bribery scandal. Hopefully, the Wal-Mart Board will see the last few months of Duke’s time in the role as the time to prioritize scandal closure, so that Doug has that behind him.  It’s probably not that easy nor clean, but it would be the best gift the Board could give Doug over the coming weeks.

"With a 47 year old CEO at the head of the world’s largest retailer, one of Doug’s priorities has to be to ensure robust succession planning exists in all Wal-Mart’s business units.  It is likely some Org changes at the top of Wal-Mart business units will occur as current leaders assess their own career paths; this is natural for any major corporation. Assuming Doug performs admirably, it’s likely that his own replacement could be someone in the middle management tier who may not be a “headline individual” today.  This is an exciting prospect for the high performers in these roles today. I hope Doug makes succession one of the things for which his own legacy as CEO is remembered.

"There is no doubt that Doug will be humble in telling his co-workers, vendors and business partners that he needs them now more than ever. Sam, Lee and Mike (amongst other Wal-Mart leaders) role modeled that approach. Given Doug’s age, good people management and some luck, it’s also not unfathomable that Doug could well be head of the worlds first $1T company.  No one person can ever achieve that without help from everywhere."

Published on: November 26, 2013

In the Los Angeles Times, columnist David Lazarus has a pre-Thanksgiving piece about continuing problems of food insecurity in America.

"At least 4 million Californians are struggling with what's called food insecurity — being unable to consistently put food on the table — according to the latest data from UCLA's Center for Health Policy Research," he writes, noting that "food-stamp benefits for about 47 million people nationwide were reduced this month when a temporary boost to the federal program ended. That cut about $5 billion in annual funding.

"That means a family of four that had been receiving $668 a month in benefits will now get by on $36 less. Such a drop might not sound like much, but the Department of Agriculture estimates this means a loss of roughly 21 individual meals a month."

"There's been no letup since the Great Recession hit," Michael Flood, president of the Los Angeles Regional Food Bank, tells Lazarus. "We're talking about people who have to decide between buying food and paying the rent, or between food and medicine. It's a very difficult situation."

Published on: November 26, 2013

About a month ago, MNB drew your attention to a fascinating must-read in Fast Company about a company called 23andMe, an at-home genetic testing startup founded by the company CEO, Anne Wojcicki, and partially funded by Google.

But now, the Wall Street Journal reports, the US Food and Drug Administration (FDA) has ordered the company to stop marketing its $99 mail order kit, "citing the risk that false results could cause consumers to undergo unnecessary health procedures such as breast-cancer surgery." And, the FDA said it could trace stronger action - including the seizing of product - if the company does not act appropriately.

The story notes that the warning "follows a debate that has grown as hundreds of thousands of people have turned to direct-to-consumer genetic tests for clues about disease risk and ancestry. Proponents say people have a right to direct access to their genetic data. But some public-health experts worry about inaccurate results or the misuse of data outside of the guidance of doctors and genetic counselors."

The company said that the warning seems to have in part resulted because it has not met the FDA's "expectations" when it comes to communicating in a timely fashion. And, it promised to work to meet FDA concerns and strengthen its quality-control procedures.

Published on: November 26, 2013

Intriguing story on QZ.com about Boxed, an internet startup which is positioned this way: "If Amazon is the online Walmart, Boxed is the online Costco."

More impressively, Boxed is less than a year old and was started up with $1 million in initial funding … and now ships to the lower 48 states, with free shipping on orders of $75 or more.

Boxed believes it may have cracked the code on auto-replenishment, something that Amazon has been successfully exploiting with its Subscribe-and-Save program, with what is called a "predictive shopping algorithm."

And, Boxed is only available through a mobile app.

Great story … and you can read the whole thing here.

Published on: November 26, 2013

Forbes has a piece about how Adam Littler, an undercover reporter for the BBC, got a job working at an Amazon warehouse in Swansea, Wales:

"Littler was employed as a 'picker,' whose task was to search 800,000 square feet of storage space to find goods to fulfill Amazon customers’ orders. Littler was expected to walk as many as 11 miles per shift and to find a product for shipment every 33 seconds … A handset told him what to collect and put on his trolley. It allotted him a set number of seconds to find each product and counted down. If he made a mistake the scanner beeped."

Following the BBC story, Sir Michael Marmot, a top expert on the causes of stroke and heart disease at the University of London, ventured an opinion that the system puts workers art risk for mental and physical illness: "It seems to me the demands of efficiency at the cost of an individual’s health and well-being – it’s got to be balanced."

Forbes reports that "Amazon said government safety inspectors had raised no objections about the work and that an independent expert had ruled that Littler’s task was 'similar to jobs in many other industries and does not increase the risk of mental and physical illness'."

Published on: November 26, 2013

• The New York Post is reporting that Sears chairman Eddie Lampert is considering the sale of the company's Canadian operations as a way of generating cash for its troubled US Sears/Kmart operations. The process is to the point where Lampert is interviewing banks that could facilitate such a sale.


• The Wall Street Journal reports that Charlie Trotter, the iconic Windy City chef, died of a stroke due to high blood pressure when he passed away unexpectedly at age 54 earlier this month.

"Neither drugs nor alcohol contributed to his death," Stephen Cina, the county examiner, said in a statement. "Additionally, there is no scientific evidence to indicate that recent travel contributed to his death, though there was evidence of a prior stroke."


• NACS just sent out a press release noting that this Sunday, December 1, is a date of some merit - it is the 100th anniversary of the modern gas station:

"While fueling stations existed before 1913 — after all, Karl Benz is credited with inventing the first gasoline-powered automobile in 1885 — fueling was far from convenient a century ago. Early fueling sites were a patchwork collection of pharmacies or even ramshackle sheds and blacksmiths’ shops where fuel was usually dispensed from a container, as opposed to being directly pumped into a vehicle’s tank.

"That all changed 100 years ago when Gulf Refining Company opened the nation’s first drive-up service station in Pittsburgh, Pennsylvania, designed and built specifically to sell fuel. On December 1, 1913, the station opened and sold 30 gallons of gasoline — less than one percent of the daily sales volume of a fueling station today."


• The Food Marketing Institute (FMI) announced that it is now accepting nominations for the 2013 Community Outreach Awards. These awards highlight the many contributions food retailers make to their community and serve the industry as a source of creative inspiration for service programs. Nominations are being accepted across three categories: youth development programs, programs addressing food insecurity, and neighborhood health improvement programs.

Two winners from each category will receive a $1,000 donation to enhance the program, and a plaque. Nominations are due December 31, 2013 and winners will be announced in January 2014.

Published on: November 26, 2013

• Stater Bros. Markets announced the promotion of David Harris to the position of Executive Vice President Finance, Chief Financial Officer and Principal Accounting Officer.

Harris joined Stater Bros. in 2009 as Vice President Finance.  In June 2011 he was promoted to Senior Vice President Finance, and in 2012 he was promoted to Senior Vice President Finance, Chief Financial Officer and Principal Accounting Officer. 


• CVS Caremark announced the elevation of Helena B. Foulkes, the company's Chief Health Care Strategy and Marketing Officer, to the role of president of CVS/pharmacy, effective January 1, 2014.

She succeeds Mark Cosby, who has been in the job since October 2011.

Published on: November 26, 2013

Yesterday, MNB took note of a Chicago Grid.com story exploring what it might be like to go grocery shopping while wearing a pair of Google Glasses.

The broad impact: in the long run, the technology will make shoppers more informed and even more in charge of the shopping experience.

You can check out the entire piece here.

My comment, in part:

found it instructive - and not at all surprising - that one self-styled consultant interviewed for the piece talks about how stores won't welcome the technology because it will permit instant comparison shopping and give shoppers "another tool to kind of get one up on the store." And, the piece wonders how retailers that don't allow picture taking in their stores will react.

All of which strikes me as typically myopic thinking.

First of all, any store than bans cameras and picture taking in the store is guilty of self-delusion. Virtually every shopper now carries a camera into every store, and can take pictures - and post them instantly on the internet - at will.

As for empowering the customer … exactly. This is a good thing. Or, at the very least, an inevitable thing, so you might as well embrace it and treat it like a good thing. Because the impact of technology almost always is to empower the shopper through information and context, and to deny it, resist it or decry it is to simply waste energy that would be better spent creating a shopping environment that takes advantage of these shifts.

MNB reader Tom DeLuca responded:

Enamored with your story “Grocery Shopping While Wearing Google Glass”.

I share in your sentiment, “The real issue is whether retailers are wise enough to embrace a smarter shopper, to understand that while it may be tougher and more challenging to compete, the fruits of such efforts may be sweeter, with better connectivity to core customers.”

The notion that Google Glass will make a “more educated shopper” and allow for easier comparison shopping is so yesterday.  That ship has sailed. There’s a plethora of apps that do that today (with one simple scan of a barcode).

Take the issue a step further, that is, what if a retailer were more proactive and outfitted “a lucky customer(s)” with a pair of glasses to help said retailer see their store through “their” shoppers’ eyes?

Imagine a day when retailers really listened, I mean really embraced how the shopper experiences their trip – NOT how it’s imagined to be based on conjecture in a meeting room filled with “category experts”.

That “lucky customer”, donning a pair of glasses could navigate through a retailer’s aisles collecting mountains of insights for the retailer.  Did they see that new fixture? Did they take note of the display of bananas in the pudding aisle?  Did they even find what they were looking for on their list?

Retailers could collect invaluable information in real-time, and in this perfect world, they could in similar fashion react to what shoppers aren’t doing (or accentuate more of what’s working).

O.K. – so I’ve exceeded my 108 character limit, but my point remains.  We need to embrace the customer and see what they see.

One term you used really grabbed me: "category experts."

Because you are absolutely right. Most retailers have category experts, but those people are not necessarily customer experts. That is a huge gap, and it is growing as customer become more educated.

Retailers ignore this at their own peril….

Published on: November 26, 2013

In Monday Night Football, the San Francisco 49ers defeated the Washington Redskins 27-6.