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    Published on: February 5, 2014

    by Kate McMahon

    "Kate's Take" is brought to you by Wholesome Sweeteners, Making The World a Sweeter Place.

    Memo to JC Penney: Return your attention to retail and leave punking to Ashton Kutcher.

    JC Penney did manage to become the second-most talked-about brand on social media during Super Bowl XLVIII without spending a cent on advertising. All thanks to two typo-riddled tweets that had many Americans, including folks at several other brands, publicly questioning whether JC Penney’s Twitter team had been over-served.

    The trouble is, unlike the universal praise for Budweiser’s heart-warming puppy love commercial, much of the JC Penney chatter was negative and the post-game reviews decidedly mixed.

    Like scores of other social media teams, JC Penney was hoping to score an Oreo moment on Sunday night. But its “mitten” stunt couldn’t hold a candle to Oreo’s brilliant “You can still dunk in the dark” tweet during the Super Bowl 2013 blackout.

    In the first half of the Seattle-Denver blowout, JC Penney tweeted:

    “Toughdown Seadawks!! Is sSeattle going toa runaway wit h this???” and “Who kkmew theis was ghiong tob e a baweball ghamle. #lowsscorinh 5_0.”

    The two messages were retweeted 40,000-plus times, according to BusinessInsider.com.

    A confused Twitter-verse responded with a resounding “huh?” and one post even asked “Are you drunk before half-time?” The Coors Light team chimed in with “We know football goes great with Coors Light, but please tweet responsibly” and Doritos added “Slow down, @jcpenney. Have some #Doritos".

    At half-time JC Penney tweeted a photo of GO USA mittens and “Oops...Sorry for the typos. We were #TweetingWithMittens. Wasn't it supposed to be colder? Enjoy the game! #GoTeamUSA".

    That explanatory tweet was only re-tweeted 3,706 times, a fraction of the first two, BusinessInsider.com reported. It’s a perfect example of the risky side of social media, where it is impossible to control the message or manage the dialogue. In fact, many media watchers say that is why there were fewer risky, edgy commercials this year.

    A JC Penney spokeswoman told BuzzFeed the firm thought the mitten tweets would be a “fun stunt” and the excitement “exceeded expectations” (and its social media and mobile director said he was “stone cold sober” while tweeting).

    Some marketing bloggers applauded the effort, but I would rate it a fail for the following reasons:

    * If you are going to attempt “real-time” social media, be real. A kick-off temperature of 49 degrees didn’t call for mittens, indicating this was a pre-planned rather than spontaneous tweet.

    • In my opinion, there’s nothing funny or entertaining about appearing drunk. Or illiterate, for that matter. It’s stupid to risk leaving that negative impression out there.

    • If you are a retailer struggling to survive after a failed rebranding, management shake-up and store closings, don’t play it fast and loose on Twitter. Focus on quality, customer service and convincing customers to give you another chance.

    • Finally, if you are indeed promoting Team USA mittens leading up to the Olympic Games in Sochi, you at least ought to provide a link to the product.

    Management missteps, leadership failures and a lack of retail relevance have been just some of the problems that have plagued JC Penney. The events that took place during the Super Bowl do nothing to suggest that things have changed.


    Comments? Shoot me an email at kate@morningnewsbeat.com .
    KC's View:

    Published on: February 5, 2014

    by Kevin Coupe

    Here on MNB, I've been using Netflix as a classic example of a business that has consistently challenged conventional thinking as it has expanded its model. Almost from the beginning, when it was just a company that undermined Blockbuster's value proposition and pricing policy by shipping DVDs by mail and charging monthly subscription fees rather than per-movie fees, it defined itself as being in the entertainment business, not the DVD rental business. Which is why it has been shifting to streaming video as the technology and consumer trends moved in that direction (though it actually got ahead of the wave at one point, creating some distress on Wall Street), and more recently has gotten into what essentially is private label.

    The theory at Netflix has been that to create a sustainable business model, it could not define itself only as competing with Redbox and the now-departed Blockbuster. Rather, it needed to compete with the broadcast networks and even HBO. The theory has proved out - Netflix now has more subscribers than HBO.

    Among the more prominent of its private label offerings has been "House of Cards" the politics-themed TV series based on a British series of the same name, starring Kevin Spacey and Robin Wright, and developed by David Fincher (The Social Network, Fight Club) and Beau Willimon (The Ides of March). And when the series debuted last year, Netflix played to the "binge viewing" predilections of its audience (well documented because it was able to track the viewing habits of its users) by releasing all 13 episodes at once. Viewers could watch them all in one sitting, or one episode a day, or one a week, or however they wanted - because they, rather than the network, controlled the experience.

    "House of Cards" returns for a second season next Friday, February 14. The release pattern is the same - all 13 episodes will be available for streaming at the same time.

    And here's the Eye-Opening good news. Netflix has announced that it will produce a third series of 13 episodes of "House of Cards," probably to be released next year.

    BTW … this month, Amazon is scheduled to continue its strategic approach to creating differentiated content by making pilot episodes of two series available for viewing on its site, promising to produce more if viewer support warrants it. Unlike the first time around, when the shows were all comedies, these will be dramas - "Bosch," based on the detective novels written by Michael Connelly, and "The After," written and directed by Chris Carter of "The X-Files" fame.
    KC's View:

    Published on: February 5, 2014

    The Nielsen Company is out with a new survey revealing a significant level of economic concern on the pat of many Americans…

    • "71% of Americans say the recession is their top concern."

    • "26% say the economy is their top concern."

    • "Only 28% felt that their current financial planning would get them to their financial goals," while just 31% "felt that they had no confidence that they would meet their financial goals with current or modified asset allocation."

    That said, the survey also revealed that Americans are highly focused on saving for retirement, with 30% of respondents saying it is "the one financial goal that received their highest monthly contribution - more than double the global average of 12%."
    KC's View:
    No real surprise here - it has been well documented that if you are in the bottom 90 percent in this country, things haven't been going nearly as well for you as it has for the top 10 percent. It also speaks to the unique challenge that a lot of retailers have - to establish a value proposition that includes price, which is almost always a concern, but also speaks to the cultural values that many customers still consider a priority.

    Published on: February 5, 2014

    The Pioneer Press reports that Walmart has committed to spending more than $450 million (US) in Canada, with plans to "add 35 supercenter stores, which carry everything from groceries to apparel and home decor, and house specialty services like pharmacies and garden centers … The move will bring its total store count to 395 by the end of January 2015, including 282 supercenters."

    Included in that investment is $28 million (US) that will be devoted to e-commerce operations.

    The story notes that "US retailers' growing presence in Canada has created an increasingly competitive retail arena that has left some big retailers struggling." Target and Costco both have been adding stores, while Best Buy and Sears have been laying off employees as they try to achieve greater profitability.
    KC's View:

    Published on: February 5, 2014

    Reuters reports that representatives of both Target and Neiman Marcus told members of the US Senate Judiciary Committee yesterday that "the sophistication of hackers" requires greater "collaboration with banks on anti-theft technology."

    "I think what we've learned ... is that just having the tools and technology isn't enough in this day and age," Neiman Marcus Chief Information Officer Michael Kingston said . "These attackers again are very, very sophisticated and they've figured out ways around that."

    "All of us need to move together simultaneously. It's a shared responsibility," added Target Chief Financial Officer John Mulligan.

    The executives were called before the Senate committee to speak about massive security breaches that recently exposed millions of customers' financial and personal data exposed to hackers.
    KC's View:
    There is no question that when it comes to cyber-security, there is no such thing as "done." It is going to require constant innovation and investment, because no matter what retailers and bankers do, the bad guys are going to be willing to invest a lot of time and money in breaking through whatever security there is. And it seems clear that these cyber crimes often will be underwritten not just by criminal elements, but also by terrorists and rogue nations with a vested interest in undermining the financial infrastructure of the US.

    Published on: February 5, 2014

    The Wall Street Journal reports that RadioShack, which invested in a Super Bowl commercial last weekend to promote the fact that it is overhauling the entire chain in an effort to make it more relevant, plans to close about 500 stores.

    The company is not commenting on the report. If true, the move would cut the company's fleet of more than 7,000 stores by roughly seven percent.

    The story notes that "RadioShack has been working with bankers from Peter J. Solomon Co. to boost its liquidity and with AlixPartners on its operational turnaround … Chief Executive Joe Magnacca, who took the company's helm in February 2013, has said he expected the turnaround to take several quarters."
    KC's View:
    My first feeling when I saw the RadioShack commercial was that the promise was great, but that delivering on the promise will be tougher. It'll be hard to convert 6,500 stores to a new, more relevant format with any level of speed … though I guess it'll be a little easier than converting 7,000.

    It is an interesting challenge for RadioShack - not only do they have to convert its stores to a look that seems relevant in a world where the Apple Store has set the bar, but they also have to find ways to offer differentiated merchandise and even find segments where they can establish some sort of competitive advantage.

    It won't be easy for RadioShack to avoid turning into Circuit City. But whatever it does, it better move fast.

    Published on: February 5, 2014

    The New York Times had a story the other day noting that American teenagers seem to be shopping at malls less and less, a trend that could have enormous implications for traditional retailers.

    "According to a survey of analysts conducted by Thomson Reuters," the Times writes, "sales at teenage apparel retailers open for more than a year, like Wet Seal, Zumiez, Abercrombie and American Eagle, are expected to be 6.4 percent lower in the fourth quarter over the previous period. That is worse than any other retail category."

    The story goes on: "Causes are ticked off easily. Mentioned often is the high teenage unemployment rate, reaching 20.2 percent among 16- to 19-year-olds, far above the national rate of 6.7 percent.

    "Cheap fashion has also driven a more competitive market. So-called fast-fashion companies, like Forever 21 and H&M, which sell trendy clothes at low prices, have muscled into the space, while some department stores and discount retailers like T. J. Maxx now cater to teenagers, as well."

    And there's something else:

    "Online shopping, which has been roiling the industry for years, may play an especially pronounced role in the teenage sector, analysts say. A study of a group of teenagers released in the fall by Piper Jaffray found that more than three-fourths of young men and women said they shopped online.

    "Not only did teenagers grow up on the Internet, but it has shaped and accelerated fashion cycles. Things take off quickly and fade even faster, watched by teenagers who are especially sensitive to the slightest shift in the winds of a trend."
    KC's View:
    One of the things that retailers in every segment have to think about is the likelihood that many young people may have little or no allegiance to traditional shopping experiences. That's not to say they won't go to the store and buy stuff … but they're going to have to be lured there with compelling offerings and experiences. Otherwise, it seems entirely possible that these kids, especially as they get older, get jobs and have far more distractions and commitments than they do now, simply will be looking for the most relevant and convenient shopping options. The New York Times report is just the beginning.

    Published on: February 5, 2014

    • Skogen's Festival Foods said yesterday that it plans a mobile and web upgrade, with offerings that include interactive digital circulars, personalized shopping lists, digital coupons and recipes in both a desktop and mobile format. The circulars, the company said, will be "integrated with a customer’s shopping lists, coupons and recipes, offering a fully connected shopping experience."

    The technology is being powered by Webstop.

    Full disclosure: Webstop is a longtime MNB sponsor, as well as powering MNB's site and Wake Up Calls.
    KC's View:

    Published on: February 5, 2014

    Yesterday, in the Eye-Opener, I wrote about the controversy surrounding a Coca-Cola commercial shown during the Super Bowl, in which "America the Beautiful" was sung in seven different languages and, among all sorts of familial images, a same-sex relationship was shown.

    Some people thought the commercial was promoting multiculturalism and even illegal immigration, not to mention homosexuality, and therefore was anti-American. I didn't see it that way:

    When I saw the commercial, the first thing I thought of was that it was enormously aspirational … that even people who don't speak English and who are outside what some folks would think of as the mainstream believe in the beauty of America's vision and ideals. I never felt for a moment like it was anything other than that … (and) when I saw the commercial, I didn't even notice the gay couple. Since then, I've gone back to watch it online, and yep, they're there. But I swear I didn't even notice them until some folks got in high dudgeon about it.

    I went on:

    It seems to me that Coke was advertising to a multicultural audience that speaks a variety of languages, includes gay people - all of whom it hopes will drink a Coke product.

    In the end, that's the bottom line. Marketing to the world the way it is, as opposed to the way some people would like it to be.


    One MNB user responded:

    That's exactly what "irritated" so many people.  Some ad agency communicated to a world they'd like it to be, as opposed to the way it is for a majority of Super Bowl viewers.

    I suspect you have a myopic view of who was watching the Super Bowl. I think it is called Epistemic Closure.

    From another reader:

    You know, your last sentence could go both ways…

    Interesting choice of words, considering the subject.

    But I just think you are wrong. And I think the evidence is all around us.

    From still another reader:

    I didn’t like the commercial. Loved the pictures, love the song, didn’t see a gay couple either. But here is the issue - we are united in part as a culture and country by our language as a country, though Spanish certainly could be considered our unofficial or official second language (and I speak it). To me the song suggests that there is no reason to learn the language here, or to assimilate to any degree. Our historical strength has come from assimilation, where we are all building a better and more diverse US together. This interpretation of a classic American patriotic song suggests that many tongues and cultures just happen to be residing on and appreciating the same US borders. Multiculturalism is such a nice sounding word, but to me it represents a lack of unity and lack of shared experiences, shared goals and mutual dreams for this country (not the “old” country). It’s like people who can only talk about their high school days. Really? It’s fine to appreciate your memories and history, but move on, man!

    Again, I disagree. It seemed aspirational to me - that people of many cultures and backgrounds yearn for the promise of America.

    Besides, I'd rather have people singing "America the Beautiful" in seven languages than singing "The State Anthem of the Russian Federation" (which is a literal name of the Russian national anthem) or the Chinese national anthem in those languages.

    But maybe that's just me. Better to embrace people with open arms than greet them with a wagging finger.

    An MNB user who described herself as a "long time reader, first time ‘commenter’ wrote:

    I bet the people who were upset about the Coke Super Bowl commercial were the same people that were upset about General Mills featuring an interracial family on a Cheerios commercial. My response is the same … I’ll be sure to pick up a few extra 12-packs of Coke this week at the market. And I’ll throw in some Cheerios in the cart too, just for good measure.

    And another:

    I have to admit that this commercial did not initially stand out to me seeing it during Superbowl. After going back to watch it on YouTube I found I really liked it and the message and I suspect that Coke will not regret this it all.  I was pleasantly surprised that after the video, they had full versions of the song in each language with commentary as kind of a  “making of the commercial” videos spots.

    I think that watching these young singers and families might benefit anyone confused about the meaning, intent and inspiration behind the spot.  I think that Coke having these queued up on their channel shows the intent behind the commercial.


    Another MNB reader chimed in:

    I was watching the Super Bowl in Mexico, where I could have English or Spanish language. As I did the playoff games. It may have been shown many other places in the world too. The world continues to shrink.

    And from another:

    When I first saw the Coke commercial, like you, I thought it was awesome!

    My wife and I are both 3rd generation Texans and we thought this was a beautiful message to show our three little girls.

    And then I looked at my Twitter feed.  Disgust doesn’t’ quite capture what I felt.

    This goes beyond politics and policy like some like to claim.

    This is simply about one thing……hate.

    These haters throughout social media are furious that our country has moved on from the 1950’s.

    It’s sad that I have to warn our girls about people like this but it feels good to know they will grow up to be tolerant of others and understanding of our differences.

    I think it’s time for a cold, refreshing Coke.


    And another:

    I am SO glad you addressed this topic, and I can’t help but smile reading how “surprised” you were at people’s negative reactions.

    I went to college in Northern Virginia where a lot of my peers are VERY conservative (pictures of dead baby fetuses in their dorm room, GOP BABE as their license plate, you get the picture). It wasn’t a surprise when I logged onto Facebook after the Super Bowl to see sickening reactions from them after seeing Coke’s commercial of America the Beautiful. Pictures of them dumping a Coca-Cola product down the drain because this commercial “offended” them, spewing that America’s national language is English and “how dare they” diminish what America stands for.

    Well, clearly they do not know what America stands for.

    Not that this is the most effective way to show how much I disagree with them, but I defriended about four people on Facebook yesterday because of their reactions. I had been annoyed with them before hand because of their extremist posts on Facebook, but this was the last straw.

    It’s like when I read tweets of people’s reactions to Macklemore’s performance at the Grammy’s and Queen Latifah marrying gay couples on TV, or to the Disney Channel show featuring a lesbian couple for a few minutes in one episode…what in the world are these people possibly doing that disrupts your daily life, your ability to live healthy and happy. Oh, NOW you’re going to have to explain to your children what gay means or why there are non-White people in a Coke commercial?


    For the record, I wasn't really surprised by the reaction. I was being sarcastic.

    Intolerance, unfortunately, rarely is surprising. In many places, for many people, it's a real thing.
    KC's View:

    Published on: February 5, 2014

    CVS Caremark, the nation's second-ranked drug chain, announced this morning that by October 1, it will stop selling all cigarettes and tobacco products.

    The decision will affect all of the company's more than 7,000 stores, and will cost the company an estimated $2 billion in annual revenue.

    CVS is the first national drug chain to make such a decision.

    “As the delivery of healthcare evolves with an emphasis on better health outcomes, reducing chronic disease and controlling costs, CVS Caremark is playing an expanded role in providing care,” Larry J. Merlo, president/CEO, said in a statement. “Put simply, the sale of tobacco products is inconsistent with our purpose.”
    KC's View:
    This is a huge move by CVS, and, I think, the right one. You cannot be in the health and wellness business and sell products that are designed to addict and kill you, and that have been proven to have such a heinous impact on people's health and wellness.

    It'll be interesting to see if this creates pressure on other chains to do the same. But even if they do, CVS gets credit for doing the absolute right thing. It may cost $2 billion in blood money, but the long-term benefits to the brand, I think, could be incalculable.

    We'll have more on this tomorrow, I'm sure….