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: December 13, 2013

    by Kevin Coupe

    Much has been made this week of a holiday promotion by Canada's West Jet Airlines, in which the company set it up so that some 250 passengers boarding a flight had to tell a kiosk what they wanted for Christmas while getting their boarding passes scanned; when they went to collect their bags at their destination, they found that everything they'd asked for was waiting for them on the luggage carousel.

    The entire process was captured on video, and posted to YouTube; at this point, it has been seen by more than 19 million people … which means that West Jet has gotten a lot of free publicity, certainly in excess of what it cost them to buy all those presents (which ranged from socks and underwear to flat screen televisions … it all depended on what people asked for).

    You can see the video at left. And it admittedly is heartwarming…

    Except, I cannot shake the feeling that all this promotion does is reinforce the notion that you can always get what you want … at least sometimes.

    At the risk of being accused of being a Scrooge, I watched the video and only could think that the people getting these presents were all people who could afford plane tickets.

    And that maybe the socks and underwear and flat screen televisions and all the other presents might have been better distributed to people who actually are needy.

    I don't want to diminish the effort, or the results. But I can't help but think that maybe West Jet missed an even bigger opportunity here.

    UPDATE: As of 11 am today, I have received countless emails confirming the fact that, yes, I am a Scrooge who has missed the point. I'll run many of them Monday … but just wanted to say here and now that perhaps I should have shown a little more generosity of spirit this morning, and a little less Bah, Humbug.

    KC's View:

    Published on: December 13, 2013

    USA Today reports this morning that Amazon is developing a new business called Pantry, specifically designed to compete more effectively with warehouse clubs such as Costco and Sam's. The initiative, which Amazon is not talking about, reportedly will launch in 2014, will use four of the company's distribution facilities to begin with, and will be run by Billy Hegeman, a senior manager in vendor management and consumables at Amazon.

    According to the story, "The service will be targeted at existing members of Amazon's Prime shipping program. It will launch with about 2,000 products typically found in the center of grocery stores, such as cleaning supplies, kitchen paper rolls, canned goods like pet food, dry grocery items like cereal and some beverages.

    "Amazon will let Prime shoppers put as many of these items into a set sized box, up to a specific weight limit. If the products fit and they don't exceed the maximum weight, Amazon will ship the box for a small fee … Encouraging consumers to put multiple items into a single box increases revenue from each order, potentially helping Amazon cover the shipping cost."

    The story goes on to say that "Pantry will put Amazon into much closer competition with Costco and Sam's Club, which specialize in selling a limited number of items in huge volume at very low prices, according to retail industry experts … Warehouse club members tend to be higher income households with kids — the type of shoppers that have huge lifetime value to retailers.

    "The demographics of an Amazon shopper are similar to the club store shopper and Amazon wants to appeal to that audience, one of the people familiar with the effort explained."
    KC's View:
    What I don't completely understand about this initiative is that I'm not entirely sure how it is better for me than the combination of Amazon's Prime and Subscribe and Save offerings, both of which I use to great effect and keep me from having to brave the lines at Costco.

    Maybe it is really just a marketing ploy - a way of repackaging existing services in a way that makes them more accessible to people not currently buying such products from Amazon. Of which there are many.

    In that sense, this could be a very big business for Amazon if it takes off … and Amazon has all the data necessary to know which customers are at the center of the bullseye, and it knows how to target them effectively.

    And, if it works, it won't just impact the clubs … it'll also affect all the stores that sell such products, that now will find themselves facing yet more competition.

    Published on: December 13, 2013

    In South Africa, Pick n Pay CEO Richard Brasher said yesterday that the company will donate all the profits from all its stores on Sunday to charitable causes in honor of former President Nelson Mandela, who passed away a week ago.

    Sunday is the day of Mandela's official funeral. Brasher said he'd considered closing the stores for the day, but consultation with staff and customers persuaded him that donating profits was a more appropriate tribute.

    Brasher also said that any employee who wished not to work on Sunday would be permitted to take the day off, and that stores will only be staffed by people who wanted to work.

    "All of South Africa is united in wanting to honour Nelson Mandela’s extraordinary life and legacy, not just in this the week following his passing, but in the time to come," Brasher said in a prepared statement, adding, "Our staff are tremendously excited about this initiative. With their help and with the support of our customers, Pick n Pay’s 'Day for Madiba' will be a fitting way to contribute to the enduring legacy of a truly great man."
    KC's View:
    This is a particularly appropriate tribute coming from Pick n Pay, which has a long history in South Africa of fighting against apartheid when it was politically incorrect to do so. I remember visiting South Africa more than 20 years ago, and spending time with Raymond Ackerman, the company's founder … an extraordinary man who was using the might of his company to fight against the injustice of that racist policy. I've always said that Ackerman was as close to a saint as anyone I've ever met in business … and it is good to see the company continuing that tradition.

    Published on: December 13, 2013

    The Wall Street Journal reports that Netflix will release today the results of a study into binge viewing, discovering that "about half the viewers studied finished a season (up to 22 episodes) within one week."

    According to the story, "Netflix only examined users who finished a season within the space of a month. For one serialized drama, 25% of the viewers finished the entire 13-episode season in two days, while it took 48% of them one week to do so. The pace was pretty much the same for a very different kind of show—a sitcom with a 22-episode season: 16% of viewers finished the season in the equivalent of a weekend, while 48% completed it within one week."

    The Journal writes that "the data adds to evidence that binge viewing is becoming a social norm. It also shows that no matter what kind of shows are available, viewing patterns are remarkably similar. Netflix's message is that the stream-and-binge model it helped create is here to stay, undermining the stereotype of stupefied couch potatoes."
    KC's View:
    This is a vivid illustration of how fast and completely consumer behavior can change. "Binge viewing" is a relatively new phenomenon … and now, it is completely mainstream, describing how an enormous number of people consume content. A perfect example of how a company can disrupt the status quo, create a trend, and then benefit from being positioned to exploit it.

    Published on: December 13, 2013

    The Wall Street Journal this morning reports on Home Depot's decision to build out "the capability to offer same-day shipping and delivery.

    "The retailer plans to spend at least $300 million on supply chain, technology and online improvements in the fiscal year that begins in February, including building new fulfillment centers and overhauling its warehouse technology systems. It plans to open three new fulfillment centers in California, Atlanta and Ohio over the next two years.

    "The moves are aimed at boosting online sales, including a same-day delivery service aimed at customers and professional contractors who might be in the midst of a home improvement product and want lumber, tiles or screws in a matter of hours."

    In fact, the story says, Home Depot has pretty much stopped building new bricks-and-mortar stores, and is focusing most of its attention on the online arena. The goal is to make the company more competitive with the likes of Amazon and Walmart, both of which are playing to varying degrees with same-day delivery models.
    KC's View:
    Hard to imagine that delivering some screws the same day they are ordered can be profitable … but maybe the reality is that retailers simply cannot afford not to play in this arena.

    Published on: December 13, 2013

    There is a long, excellent piece on the website about Tom Seaver, the extraordinary Hall of Fame pitcher who now works in his own vineyards in California's Napa Valley. The piece is by Pat Jordan, a journalist and former ballplayer who has known Seaver for more than four decades, and the story has the easy, reflexive, often profane yet affectionate jousting of two aging jocks who know their best days are behind them, but have a sense of humor about it.

    You can read the entire piece here. But there are a couple of stories from the piece that are wonderful business lessons…

    Here's one:

    • "When Tom was pitching for the White Sox, as he was approaching his 300th win, he was warming up in the bullpen before a game. Dave Duncan, the pitching coach, watched him throw. He shook his head and said, 'Tom, you don't have (crap)." Tom said, 'Yeah, so what?' Tom pointed to the other team's dugout and said, 'They don't know that! So what's the problem? By the time they find out, it'll be too late'."

    And here's another, built around the fact that for Seaver, his best pitch was always a fastball, and his belief that if the other team is going to beat you, it has to be on your best pitch:

    • "…A pitcher must always avoid his W.C.S. He told me, 'I always tried to avoid my Worst Case Scenario, and if I couldn't, I had to have a plan on how to deal with it when it came up. This one game against the Giants, you can guess what my W.C.S. was.' I said, 'Willie McCovey, with the bases loaded.' He said, 'Thank you very much. So what do you think happens in the late innings?' I smiled. He said, 'Thank you very much. Willie McCovey, up with the bases loaded. So I'm saying to myself, 'OK, big boy, you think you're so hot, a couple of Cy Youngs, what do you do now?'

    "There, by the side of a road between vineyards in Calistoga, 30 years later, he looked at me as if he were seeing that moment right now. Big Willie McCovey, waiting at the plate, the bat on his shoulder. Tom said, 'This is my all-time favorite moment in baseball. I managed to get 3-2 on Willie, and all of a sudden, it came to me. I'm in my stretch, and I keep checking the runner on first. Now, everyone knows the runner can't go anywhere, the … bases are loaded, so what is Seaver doing? I keep checking him, refusing to make eye contact with Willie, throwing him a little birdseed, getting him to think, 'What … is Seaver doing?' I wanted him to be anxious, confused.

    "He stopped talking. I blurted out, 'So what happened!'

    "'I struck him out on a changeup. Twenty years later, we're at the Hall of Fame, and Willie says to me, 'Tom, why the hell did you throw me a changeup in that game?

    "'Why did you?' I said. 'You broke your own rule.'

    "'That's the point, big boy. Everyone knew how methodical I was. How this pitch had to be a fastball. I was Tom Seaver. So this time, I went on instinct.' He looked at me with a grin. 'Even Tom Seaver has to acknowledge mystery in life.'"
    KC's View:
    The first story is a terrific lesson about the force of competition … that it doesn't matter how much you have going for you, that it is critical to get out there and compete with the best you have, every day.

    And the second story is a great metaphor for not always doing what is predictable … that you have to break the rules from time to time, and throw a competitive change-up when everybody is expecting a fastball.

    While I am a longtime Mets fan, I've never been the biggest Seaver fan … while I can't deny the talent, I've always sort of felt that he had a little bit too much self-regard. (That really came through when he worked as a broadcaster.) But I came away from this piece with a new level of respect for Seaver … and I really recommend spending some time with it, especially (but not only) if you are a baseball fan.

    Published on: December 13, 2013

    There is a lovely story in the Wall Street Journal about Amy Dixon, a self-described Blind Sommelier who began losing her sight at age 22 and now is to the point where she has just one or two percent of her eyesight. She's had 14 surgeries so far, but hasn't let her physical condition diminish her passions - while she no longer works as a restaurant sommelier, she has developed a thriving business as a wine consultant, is developing a wine bar, and also works in wine retail (she used to be a fine wine buyer for Stew Leonard's, and now works with a Connecticut retailer called Nicholas Roberts Fine Wines."

    And, she's a champion disabled triathlete. The Journal writes, "After competing in seven paratriathlons this past year, she's focused on the national championship next May.

    "Ms. Dixon also serves as an ambassador for Guiding Eyes for the Blind, conducting wine tastings and fundraisers on behalf of the organization. She will take part in a Guiding Eyes wine tasting fundraiser in Palm Beach, Fla., in February."

    You can read the entire story here.
    KC's View:
    It so happens that I know Amy … and MNB readers will notice that the store where she's working these days, Nicholas Roberts, is not just the place where I get most of my wine, but also the retailer that powers the MNB Club.

    And let me tell you this … you would be hard-pressed to meet someone with as great a passion for her vocation and avocation than Amy. I'm reasonably sure that the last thing she'd want is to be turned into a poster girl for anything, but it is nice to meet people who remind you of what can be achieved when you put your mind to it.

    Plus, she's got a great dog - Elvis, who hangs out at the store when she's there.

    Which allows me to put in yet another plug, because Elvis is from Guiding Eyes for the Blind, an organization that we've had some involvement with over the years. We raised a Guiding Eyes puppy for a couple of years (a puppy, we later learned, that saved her owner's life several times once she got through final training). And these days, my daughter will often bring multiple Guiding Eyes puppies home to socialize them for a few days. Guiding Eyes is a terrific organization and a terrific charity, and I recommend them to anyone looking to make a difference.

    Published on: December 13, 2013

    The New York Times has an interview with Daymon Worldwide CEO Carla Cooper, in which she talks about her leadership style.


    • "My boss at Procter & Gamble … taught me that my job was to create the environment for my employees so that they can be as successful as they can be. The second thing he said is that it’s hard to turn the Queen Mary on a dime. The lesson was that the larger the organization is, the longer it will take to transform not only the business, but also the culture and the leadership. You have to recognize that. You have to really push hard, and the intensity of the turn has to be constant. But you can’t expect to turn around in six months because it’s not going to happen.

    "What I developed was a model over time, and you have to get faster and faster at this. You have to quickly evaluate and assess the business and the people, and then figure out what needs to be changed and what doesn’t need to be changed. It’s either going to be an evolution or a revolution. You have to decide which. Then you set the strategy, the structure and the people, and it has to be in that sequence. In other words, don’t start trying to make people decisions until your strategy and your structure are set."

    • "Your strength can really be a weakness at some point in your career. I embraced this idea of getting things done through other people and figuring out how to counsel associates so that they can motivate themselves, but it takes a lot of time and patience. So my patience is seen sometimes as being not aggressive or forceful enough about telling the team what to do. So I constantly struggle with the balance of being patient and, on the other hand, saying, 'Here’s the mountain, here’s where we’re going, here’s what I need you to do, and here’s why I need you to do it.' I tend not to do that. The balance is where the magic is."
    KC's View:
    Good interview …. and Carla Cooper is a great example of a CEO trying to turn around the Queen Mary. From my experience, she's been willing to face and deal with tough issues, and it is interesting to hear her reflect on what she thinks are her weaknesses.

    Published on: December 13, 2013

    • Walmart is expanding its technology operations in Bangalore, the Economic Times reports, and plans to double its headcount there from 200 to 400 by the end of next year.

    According to the story, teams will be established "to work on mobile applications and gather social media intelligence to make its e-commerce business more competitive" with Amazon's.
    KC's View:

    Published on: December 13, 2013

    • The Chicago Tribune reports that when Safeway's Dominick's stores in Chicago are closed at the end of the month, it is possible that close to 6,000 people will lose their jobs, though not every employee who has been warned of such a possibility will necessarily be laid off.

    To a great extent, it depends on who buys the stores. Mariano's, for example, has said that Dominick's employees will not receive preferential treatment but are welcome to apply for jobs at the 11 units it is buying from Safeway. Jewel-Osco, on the other hand, has said it will offer jobs to people working at the four stores it is acquiring.
    KC's View:

    Published on: December 13, 2013

    • Publix Super Markets announced that Bill Fauerbach, vice president of the company's Miami division, has announced his retirement after 46 years of service.

    • Walmart announced that it has hired Krish Iyer to be president/CEO of its India business.

    According to the Economic Times, Iyer "joined Walmart International as a senior vice president in 2012. Prior to Walmart, he spent six years with A.S. Watson Group, a leading international health, beauty and lifestyle retailer, serving as managing director in Thailand, Taiwan and the Philippines and regional business development director and regional director for store design and development for Asia and Eastern Europe."
    KC's View:

    Published on: December 13, 2013

    …will return.
    KC's View:

    Published on: December 13, 2013

    In Thursday Night Football, the San Diego Chargers stunned the Denver Broncos with a 27-20 win.
    KC's View:

    Published on: December 13, 2013

    Here's a wonderful wine for you to check out … the Planet Oregon 2011 Pinot Noir.

    Planet Oregon comes from Tony Soter, found rod the Soter Vineyards in the Willamette Valley … the grapes used in the wine are certified, sustainably farmed fruit, and the farmers involved are Organic, Biodynamic, LIVE and Food Alliance certified

    And here's the most important thing - Planet Oregon Pinot Noir is delicious - juicy and aromatic and yummy. And, BTW…it is available from Nicholas Roberts Fine Wines, which powers the MNB Wine Club.

    We had a chance to see The Hunger Games: Catching Fire last weekend, and I can report that I liked it … it is better than the first Hunger Games, but suffers from being a middle movie - there is no real end, but rather just a set-up for the finale that will come out in two parts, in 2014 and 2015.

    That said, Catching Fire has a lot of current relevance, being about the oppression of the masses by the privileged top 10 percent; Donald Sutherland is wonderful as the president working to maintain power at all costs.

    And it almost goes without saying that Jennifer Lawrence, as the heroine of the story, Katniss Everdeen, is fabulous - simultaneously gritty and vulnerable and totally relatable. She is an amazingly resourceful and versatile address for someone who is just 23 years old … and I'm almost getting to the point where I'd see her in anything. (And there are not many actors I feel that way about.)

    That's it for this week. Have a great weekend, and I'll see you Monday.

    KC's View: