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    Published on: January 15, 2014

    by Michael Sansolo

    SCOTTSDALE, Arizona — While the topics and presenters for the concluding day of the Food Marketing Institute (FMI) annual Midwinter Executive Conference were far from the usual, the topics they focused on clearly highlighted some of the core challenges coming for the industry.

    Those challenges, not surprisingly, are important, complex and inevitable.

    First, the speakers were probably the two youngest ever on the program. Jason Dorsey, who focused on the challenges of employing, serving and understanding Gen Y, is 35; Nate Silver, the researcher who famously predicted the 2012 presidential election with complete accuracy, is 36.

    As if to amplify Dorsey’s point that no generation is monolithic, the two could not have employed more opposite speaking styles. Dorsey was borderline theatric in reviewing the special quirks of Gen Y. Silver, in contrast, could be charitably called awkward.

    Yet, Silver’s points about data analysis, coming on the heels of Monday’s Big Data heavy presentations, were essential. Silver highlighted some of the failures we all make in analyzing data, using as an example the 2012 election and the numerous pundits who badly miscalled the election. As Silver said, the challenge comes in accepting the biases that impact the handling of the data, plus the background of those using the data, which influences what they know and what they see.

    Silver demonstrated how data can produce results when the conditions are correct, which requires context in the form of significant data, a culture that accepts the findings and potential of new thinking, and competition that creates urgency for using the data.

    In many ways that exact model speaks to the recent past of the industry. Just about 25 years ago, supermarket widely claimed a world-class supply chain only to discover significant inefficiencies once “non-traditional” operators like Walmart and Costco expanded into the food industry. In other words, the industry had context and culture, but it took a new competitive force to create widespread change and improvement.

    Some of that new thinking could flow from younger employees, but as Dorsey explained, Gen Y needs its own special handling to succeed. The young generation, which is larger than the Baby Boom and soon to eclipse it in spending power, is creating challenges for employers and marketers.

    Dorsey said that Gen Y requires some different understanding. For example, on average members of the generation are moving out of their parent’s homes, getting married and having children at far later ages than all preceding generations. He actually sees the generation splitting in two as some Gen Y’ers are moving on with life activities at around age 30, while others do not. So in addition to understanding multiple generations in the workplace and consumer population, companies need to understand how people of the same age will behave differently based on where they were raised, their parents and their upbringing.

    What’s more they are also getting their first job experiences later, which means they don’t always know the protocols for many work behaviors. (Or, as he pointed out, they also don’t understanding shopping and cooking very well.)

    Companies need adjust their communication policies to succeed, including a greater reliance on texting, social media and visual demonstrations. Doing so can overcome even the most basic issues, from dress codes in the workplace to simple decision making in supermarket aisles.

    All together, it’s a picture of a brave—and scary—new world.
    KC's View:

    Published on: January 15, 2014

    by Kevin Coupe

    Okay, I've heard that it is important to give customers what they want.

    But…the feeling of going down within the Titanic?

    Reuters reports that there is a new theme park in China being built with an unusual feature - it will have a life-sized replica of the Titanic, along with "a shipwreck simulation to give visitors a harrowing sense of the 1912 disaster … The simulation will allow several hundred people at a time to feel what the shipwreck was like."

    "When the ship hits the iceberg, it will shake, it will tumble," says Su Shaojun, CEO of the Seven Star Energy Investment Group that funded the project. "We will let people experience water coming in by using sound and light effects ... They will think, 'The water will drown me, I must escape with my life'."

    Which is exactly what I'm looking for in a vacation.

    However, perhaps this is marginally better than the last Titanic-themed project that made the news (and MNB, because I can't help myself) a couple of years ago. In that case, an Australian billionaire announced that he was building a full-scale replica of the doomed Titanic called Titanic II, that will be just as luxurious but will have "state-of-the-art 21st-century technology and the latest navigation and safety systems." Not to mention being designed "so it won't sink.”

    Which we've all heard before.

    But I suppose, when it comes to a Titanic-themed experience, I'd rather have a simulation than actually go out on the real ocean on one.
    KC's View:

    Published on: January 15, 2014

    As Michael reports above, and has often been noted here on MNB, marketing to younger generations often means taking a different approach, or understanding that young people may have different needs or sensitivities than older shoppers.

    Which may be what Ahold-owned Giant of Landover had in mind when it decided to run an ad welcoming students at local Howard University back to school after the holidays and letting them know that a nearby Giant store had reopened while they were away.

    The only problem was that the ad featured a picture of a young woman shopping in a Giant store. A young woman who was white. And Howard is a historically African-American university where the majority of the students are, well, African American.

    According to the Washington Business Journal, "People started calling the company out on Twitter late last week, noting that the picture of the woman in the ad doesn't reflect a typical Howard University student."

    Jamie Miller, a spokesman for Giant, tells the Journal, "Unfortunately an incorrect stock photo was used in the ad and we apologize for this oversight."
    KC's View:
    This isn't a matter of political correctness. In fact, it is just a matter of paying attention. Because details count. And if you get things wrong, it can cost you customers, sales and profits.

    Published on: January 15, 2014

    Mobile Commerce Daily has an interesting story about how the Mall of America in Minnesota is embarking the notion of showrooming, by rolling out free Wi-Fi for the entire 4.2 million square foot facility and marketing space that retailers can use as showrooms, with the actual merchandise available online.

    "We are creating showrooms so retailers have a chance to showcase their products,” Jill Renslow, vice president, business development and marketing at the mall, told an audience at the National Retail federation (NRF) convention in New York. "The idea is that [showrooming] is here – and it is here to stay … We also are changing our model to respond to that, to drive consumers to the space and to create memorable experiences."
    KC's View:
    The whole notion of virtual stores - whether in malls or in subway stations - is one that has been slowly gaining traction, but it is fascinating to see a major mall actually embracing the idea and marketing around it. In essence, it will be trying to attract online retailers to set up showrooms with which they can compete against the bricks-and-mortar retailers that have been the more traditional tenants.

    Now, malls always have pitted competitors against each other in an enclosed space, but this is a new wrinkle that essentially acknowledges the sea changes that retailing is undergoing. Look for this to be a trend that is picked up by other malls.

    Published on: January 15, 2014

    Media Post reports that "Amazon.com was the best-perceived brand in the U.S. last year, according to YouGov BrandIndex's year-end rankings," which ranks 1,100 brands based on 1.5 million interviews conducted over the period of a year.

    According to the story, "Amazon (which was #2 in 2012) had an average 2013 Buzz score of 30.6. Ford won 2013's #2 ranking with a score of 29.5 (Ford was #6 in 2012). Subway, which was #1 in 2012, came in third in 2013, with a score of 29.4.

    Others in 2013's top 10 included the History Channel (26.4 average); Lowe's (25.9); YouTube (25.1); Walgreens (24.8); V8 (24.7); Cheerios (23.9); and Kindle (23.8). Rounding out the top 25 were Samsung, Netflix, Aleve, Olive Garden, Home Depot, iPad, iPhone, Apple, Google, M&M's, Target, GEICO, Tide, Dawn and John Deere."
    KC's View:
    Amazon as the nation's best-perceived brand? Makes absolute sense to me.

    Published on: January 15, 2014

    The National Retail Federation (NRF) said yesterday that "total holiday retail sales, which includes November and December sales, increased 3.8 percent to $601.8 billion, which was in line with NRF’s projected forecast of 3.9 percent and $602.1 billion. In addition, non-store holiday sales, which is an indicator of online and e-commerce sales, grew 9.3 percent to $95.7 billion."
    KC's View:
    The NRF said, with a certain amount of justification, that the increases demonstrated a "resilient" retail sector that "knows what their customers want, when they want it and how they want to get it."

    But mostly, to me, it seemed like what retailers decided consumers wanted was discounts, discounts and more discounts. Which they gave them.

    But whether this reflects any sort of consumer confidence in the economy remains a question.

    Published on: January 15, 2014

    • In the UK, the Telegraph reports that Sainsbury will open its 594th convenience store this week - which means that it now will have more c-stores than supermarkets.

    According to the story, Mike Coupe (no relation), Sainsbury’s group commercial director, said "the milestone was a reflection of how consumers are increasingly looking to shop little and often, rather than focusing on one weekly shop."

    The Telegraph also reports that "Sainsbury’s sales beat Asda for the first time in a decade at Christmas after a surge in December sales," which for the period put Sainsbury in second place to Tesco. The story says that "Sainsbury’s growth was faster than Tesco, Asda and Morrisons, but also Waitrose."


    • The Wall Street Journal reports that Green Mountain Coffee Roasters is changing the company name to Keurig Green Mountain in "recognition of the increasing importance of the single-cup brewing system that made it famous … Green Mountain acquired Keurig, known for its K-Cup and associated brewers, in 2006 after years of working together. Since then, Green Mountain has maintained its position as the dominant player in the fast-growing single-serve coffee market."


    Salon reports that the US Supreme Court has thrown out a lawsuit "filed by farmers and seed companies that sought to prevent (Monsanto) from suing them in the case that their fields became inadvertently contaminated with its patented line of crops … Monsanto has filed over 140 lawsuits against farmers for intentionally planting its seeds without paying royalties and settled 700 others cases. But Monsanto promised that farmers found with trace amounts of its seeds — defined as less than 1 percent — would be left alone."
    KC's View:

    Published on: January 15, 2014

    • The Chicago Tribune reports that William Emmons is retiring from the presidency of Jewel-Osco.

    The story notes that Emmons, who retired from Albertsons in 2011 after 40 years at the supermarket chain, was "lured out of retirement in March to run Jewel after it was acquired by Idaho-based New Albertsons as part of a $3.3 billion deal … During his tenure at Jewel, Emmons oversaw a number of initiatives including the chain's decision to drop its preferred customer card in June. Other changes include the phasing out of self-checkout, brightening the stores, expanding fresh offerings, a new dress code for employees and an renewed emphasis on customer service."

    Jim Rice, vp-operations at Jewel-Osco, will run the chain on an interim basis until a replacement is found.


    • The Wall Street Journal reports that Time Inc. has hired Colin Bodell, a former Amazon executive, "to spearhead the magazine publisher's overall technology strategy" as the company's new chief technology officer and executive vice president … Prior to his current appointment, Mr. Bodell was vice president of Amazon's digital-store platform, helping organize the Kindle's book, periodical and magazine store as well as technology that supported the e-commerce company's digital content across the Internet, Kindle and third-party devices."


    • The St. Louis Business Journal reports that Cathy Smith, the outgoing CFO for Walmart International, has been hired to be the EVP/CFO at Express Scripts Holding Co., the nation’s largest pharmacy benefits manager.
    KC's View:

    Published on: January 15, 2014

    …will return.
    KC's View: