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    Published on: January 30, 2014

    This commentary is available as both text and video; enjoy both or either. To see past FaceTime commentaries, go to the MNB Channel on YouTube.

    Hi, I'm Kevin Coupe and this is FaceTime with the Content Guy.

    One of the things I hear a lot, both when speaking at companies and via email, is the sentiment that bricks-and-mortar retailers are sort of genetically better at customer service than e-tailers. That can be the case - a store with great customer service can generate enormous loyalty. But as the George and ira Gershwin once wrote, it ain't necessarily so.

    Case in point…

    I have a daughter who is a sophomore in college, with a criminal justice major and a law minor. (She works really hard, and is doing exceptionally well. I'm particularly thrilled when she starts talking to me about all the stuff she is learning, and I have no idea what she's talking about.) But the books can be a little pricey, so sometimes we'll try to order them from Amazon instead of from the school bookstore; with tuition prices what they are, it's good to save a buck wherever we can.

    When she started the new semester recently, we ordered some books that we'd learned about at the last minute from Amazon, with every confidence that she'd have them a day or two before she'd need to bring them to class. But on the day when they were supposed to be delivered, I got a notification that the postman had been unable to deliver them, and would try again the next day.

    Now, I could not imagine what the problem could have been. We have a mailbox. We have a front porch. The garage door was open. There were tons of places to leave the books, unless, for some weird reason, a signature was required. Which seemed unlikely.

    So I went on Amazon's site, and clicked on the "call me now" button. And within about 15 seconds, my phone rang.

    I ended up speaking with a very nice woman named Emee, and I explained my problem. Almost before I'd finished the explanation, she told me what they were going to do. They'd ship a new set of books, for next day delivery, no charge. When the original order showed up, I could just send them back, no charge. And they were going to put a $5 credit on my account for whatever my next Amazon purchase was, just to compensate me for my trouble.


    I'd initiated the phone call, to be honest, in a pissed-off mood. But within about 30 seconds, I had a big grin on my face … because short of actually reading the books for my daughter, I cannot imagine how Amazon could've been more responsive. And I'm pretty sure that the problem wasn't of Amazon's making, but rather the Post Office's.

    And that, in a word, is what Amazon's competitors have to deal with. Not that they can't. Not that they can't do better. But, for example, if Walmart really believes it can invest enough money to bring it to online parity with Amazon within two years, this is one of the things with which it must compete. And judging from what it's like to go to the customer service desk at a Walmart physical store - painful at best, interacting with people who don;t seem to want to be there - they have some distance to go.

    Walmart, like all retailers, have to understand that online customer service can be excellent … and that they have to focus on their own cultures, their own priorities, if they are to achieve excellence in this arena.

    When retailers consider what they must to do compete, I would urge them to pay attention to the line from William Shakespeare's "Julius Caesar," in which Cassius says, "The fault, dear Brutus, is not in our stars but in ourselves."

    That's what is on my mind this Thursday morning. As always, I want to hear what is on your mind.

    KC's View:

    Published on: January 30, 2014

    by Kevin Coupe

    With the Super Bowl taking place on Sunday, there will be a lot of conversation and debate about the most effective and entertaining commercials. That's appropriate. Buying time on the Super Bowl broadcast can cost as much as $4 million for a 30-second spot, and companies put a lot of emphasis on this venue, with more than 100 million people tuning in.

    The Super Bowl-related ad field has changed however, as companies increasingly use the internet to draw attention to their commercials before the game and build on the visibility after the game.

    One example … this wonderful Budweiser commercial, which almost certainly will be among the top few ads at this year's Super Bowl.

    It is all about using the web to build buzz.

    Well, it's also about puppies. And horses. And you can't do better than that.

    KC's View:

    Published on: January 30, 2014

    The Seattle Times reports that yesterday, the day after his annual State of the Union address to a joint session of the US Congress, President Barack Obama took his anti-income inequality message to Costco, visiting a Maryland store where he said that Costco serves as proof that higher wages are “a smart way to boost productivity and to reduce turnover.”

    Costco is known for paying its store employees roughly 50 percent more than the federal minimum wage, and paying its senior executives significantly less in salary than executives make at other companies, believing that the company will be healthier long-term if there is not an enormous gap between what the highest level and the lowest level people in the company make. Indeed, Wall Street analysts have long argued that Costco would be better regarded on Wall Street if it would lower its labor factor and raise its margins, and Costco's leadership's response, in essence, has been that it more concerned with how it is regarded on Main Street.

    Meanwhile, USA Today has a story that addresses this issue, quoting economists and analysts who say that comparing Costco to Walmart, say, is not like comparing apples to apples. Costco has far fewer employees per store, they say, and so is better able to afford higher wages.

    But, Occidental College politics professor Peter Dreier, chair of the urban and environmental department, tells the paper, "People making Walmart wages can't afford Walmart products. On the other hand, what Costco uses is the multiplier effect or the ripple effect - if you raise wages by some percentage, that ripples in the whole economy."
    KC's View:
    For me, this always has been as much about culture as economics. Companies like Costco realize that so-called "low level" employees often have the highest impact on the success or failure of a store, because they are on the front lines, interacting with customers, setting the tone for the store experience. If they are compensated as if they have that kind of value - treated as assets, not as costs - then they'll take ownership of the experience, will stay longer and maybe even save the retailer money in terms of training, turnover, etc…

    Published on: January 30, 2014

    The New York Times reports that the Washington Post, having after years of financial problems was acquired from longtime owners the Graham family by Amazon founder Jeff Bezos for $750 million, is now "significantly" increasing its budget, plans to hire dozens of people to work in the newsroom, "will add a breaking news desk and a Sunday style and arts section, as well as a revamped Sunday magazine."

    This is in contrast with many newspapers, where the response to economic difficulties has been to cut staff and reduce services and spending.

    According to the Times, Bezos has "closely consulted" with Post leadership in plotting strategy and tactics.

    "Bezos would “just challenge our assumptions, cause us to rethink things,” says Mart Baron, the Post executive editor. “He’s spent his entire life and his entire career thinking about where the consumer will be in the long run, and where the technology will be in the long run … He hasn’t been passive. He’s heavily engaged, keenly interested in what our ideas are. He offered his own thoughts and expressed a willingness to invest."
    KC's View:
    The core question that seems to have been asked through the Post process has been, how do we best produce growth? And Bezos has learned over his career, and he continues to demonstrate at Amazon, that he believes that the best way to grow is to invest in future growth. Backing down just opens opportunities for the competition.

    Fascinating. And one of the reasons that an old-world industry like the newspaper business needs people like Bezos to come in and shake things up.

    Published on: January 30, 2014

    The Seattle Times reports that Starbucks CEO Howard Schultz is stepping away from overseeing day-to-day operations of the company, which will give him time "to chart a digital path through the retail industry’s increasingly challenging waters."

    Taking over the day-to-day management duties will be Troy Alstead, who will move from being CFO to COO, a newly created role at Starbucks.

    “The addition of a COO will provide me with more time to focus on innovation and strategic initiatives,” Schultz told analysts on Wednesday. The Times writes that "the shuffle also brings Schultz, who made Starbucks into a global phenomenon, back to what analysts say is one of his core strengths: figuring out disruptive ways of making money."

    Alstead will be replaced as CFO by Scott Maw, currently senior vice president of corporate finance.

    Schultz told the analysts yesterday that the new organizational chart is not about succession planning.
    KC's View:
    I hope this goes differently than it went back in 2000, when Schultz stepped down as CEO moved into the chairman's office, and was replaced as CEO by Jim Donald. That only last until 2008, when Schultz unceremoniously dumped Donald and returned as CEO - which, to my mind, had more to do with his Messiah complex than any sense that the company was moving in a direction that he hadn't approved. (The economy was tanking, which was affecting Starbucks sales, but the real issue was that Schultz wanted to take back the reins.)

    That all said, I think this is a smart move. But I am intrigued by the fact that Schultz makes the point that this is not about succession planning. Wouldn't a responsible CEO - especially one as tied to brand equity as Schultz - want to make sure that everyone knows that even if he gets hit by a truck, everything is going to be fine? Unless, of course, it is more about him than the company…

    Published on: January 30, 2014

    Bloomberg reports that Target Corp. believes that the breach that affected tens of millions of its customers' debit and/or credit card data, may have occurred when an "intruder" stole a vendor's credentials and was able to hack into its systems.

    No further information yet has been made available. Federal authorities are investigating the Target breach, as well as a breach at Neiman Marcus and a suspected similar problem at Michaels, the crafts chain.
    KC's View:

    Published on: January 30, 2014

    Interesting piece in Forbes about how it can be transformative to view each new hire as a "future former employee." The theory is that if one views each employee through that prism, it helps managers and leaders to frame that workplace experience differently - supporting their goals and investing in their growth. When they leave, as even great employees inevitably do, they walk away having had a great experience … and maybe it even creates an environment from which it is much harder to leave.

    Worth reading, I think, and you can see the piece here. And, I think, a test worth taking.
    KC's View:
    Whenever I see these kinds of stories, I cannot help but think back on my own work experiences. I think I'm a reasonably talented guy with a strong worth ethic. What I lack in ability I make up in enthusiasm. But I've never really felt like anyone I worked for ever took an interest in mentoring me, in helping me develop my career, or viewed me as an asset worth investing in. Now, some of this may be because I may not be the easiest person in the world to manage; I tend to be pretty autonomy-minded, and that isn't always easy. But it would've ben worth it. (I've always related to the resignation letter written by Robert B. Parker when he was leaving an insurance job that he hated: As I look back on my years with the company, I see that there have been three of them.) Though, heaven knows, I'm not complaining about how things turned out…

    I wonder how many people like me there are out there, craving the opportunity to contribute and craving the experience of being valued. I'd bet lots. Enough to make a difference for a lot of organizations, if they'd pay attention.

    Published on: January 30, 2014

    The Kroger Co. said yesterday that it has completed its acquisition of Harris Teeter Supermarkets, which allows it to "expand with the prestigious Harris Teeter brand and a base of 227 stores in the fast-growing and attractive southeastern and mid-Atlantic markets and in Washington, D.C."

    As part of the completed deal, Harris Teeter chairman/CEO Thomas Dickson and CFO John Woodlief have resigned from the company.
    KC's View:

    Published on: January 30, 2014

    • In the UK, the Retail Gazette reports that Tesco and Waitrose "are set to launch click and collect hubs at London’s tube stations after Asda’s recent trial was heralded as a success." In addition, Amazon has said that it will "take further space at tube stations," as the nation's retailers increasingly see train stations and parking lots as places where they can connect to shoppers who have place don line orders and are looking for convenient pick-up points.

    TechCrunch reports that Walmart is expanding its Denver Walmart To Go online offering to include pickup points adjacent to participating stores.

    The story says that Walmart does not believe that the pickup option will replace home delivery, but rather will supplement it; in addition, the company believes that many pickup customers will decide to go into the store for impulse items, which will help it grow overall sales.
    KC's View:
    It is all about figuring out "the last mile," and retailers of all stripes will be looking for multiple touch-points that will allow them the most convenient customer connections.

    Published on: January 30, 2014

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

    • The Asbury Park Press reports that the US Department of Agriculture (USDA) has suspended the operations at the Catelli Bros.slaughterhouse in Collingswood, NJ. The decision came after the USDA reviewed a video of operations there, provided by the Humane Society, that showed mistreatment of animals, including still-conscious calves hanging upside down on a conveyor belt.

    According to the story, spokesman Tony Catelli said the firm is "deeply concerned" about the allegations and is "cooperating fully" with federal regulators. "Any mistreatment of animals at our facility is unacceptable," he said in a statement.

    The next step, if New Jersey follows the lead of some other states, will be to introduce legislation that will make it illegal to shoot secret videos - even videos that expose cruel and illegal activities - on private property. Which is so typical of government and certain private interests, and such a crock…
    KC's View:

    Published on: January 30, 2014

    Reuters reports that Justin King will step down this summer as CEO of Sainsbury in the UK, and will be succeeded by Mike Coupe, the company's commercial director.

    "Coupe "had been the favourite to succeed the highly regarded King as the boss of the grocer that is battling with Wal-Mart Stores' Asda, to be Britain's No. 2 behind market leader Tesco."
    KC's View:
    For the record, I have no idea if Mike Coupe and I are related. But still, it's nice to see that someone who could be a relation is making good…

    Published on: January 30, 2014

    …will return.
    KC's View: