retail news in context, analysis with attitude

Published on: February 13, 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.

Just a couple of quick thoughts this morning about the mess that Tim Armstrong, CEO of AOL, created for himself the other day when he did a town hall meeting with employees and announced that the company was cutting back on 401 (k) benefits in part because of healthcare costs, and specifically referred to "two distressed babies" that had cost more than a million dollars to care for.

He didn't use any names, but it didn't matter. The comments went viral almost immediately, and one of the moms went public to defend her family; her child was born prematurely in 2012 and required treatment in a neonatal unit.

There are several lessons here.

For one thing, you don't single people out in public. And you especially don't single out babies. He didn't say it, but the implication was that the company would have been better off financially if the babies had not been covered by insurance, or if the parents had gone bankrupt covering the expenses on their own.

Is that really the message you want to send to your workforce?

Healthcare is a complicated subject, and there are plenty of legitimate criticisms that can be leveled at how it has been handled by both parties and both the executive and legislative branches of government. I'm not going to get into that here, but I am going to go out on a limb and say that when people have distressed babies, there ought to be a mechanism by which those children are nursed to health. Period.

AOL had $2.2 billion in revenue last year, and as it should, it provides healthcare to its employees. You really want to start picking on "distressed babies?"

The other lesson is how fast the whole thing became public. This may have been an internal AOL issue, but it quickly became a public spectacle, and Tim Armstrong has nobody to blame but himself. That's a good lesson for every CEO.

Since the whole thing hit the fan, Armstrong has apologized and reversed his 401(k) decision. But it may be too little, too late.

He put his foot in his own mouth, and he left a bad taste in everybody else's.

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

Published on: February 13, 2014

by Kevin Coupe

MyNorthwest.com has an interesting story about a micro grocery store concept called Stockbox that has been opened in three Seattle neighborhoods deemed under-served by traditional supermarkets. Stockbox focuses on the staples - offering fresh produce, meat, milk and cheese.

And, the stores partner with local producers and with local community centers to offer food education classes.

The concept has been successful enough that Carrie Ferrence, the owner, wants to open three more over the next year or so.

Now, to be clear, it isn't like Stockbox is reinventing the wheel. But it is an interesting notion … that sometimes, when companies think about neighborhood-centric marketing, perhaps they get too fancy, too complicated, too focused on trying to do more than the neighborhoods need and the companies can deliver.

Could be an Eye-Opener. And I'm looking forward to seeing one of these next time I'm in Seattle.

Published on: February 13, 2014

Kroger is facing a potential class action suit that accuses the company of deceptive labeling "by marketing a store brand as products from humanely raised chickens when the animals were raised under standard commercial farming," according to the New York Times.

The suit - filed in the Supreme Court of the state of California, seeking class action status - says that Kroger's "Simple Truth" chickens were actually raised by Perdue, which uses "industry practices like electric stunning of birds before slaughter."

Kroger has not yet commented on the suit.

Published on: February 13, 2014

The Washington Post reports that personal shopper service Instacart has begun offering its service in the District of Columbia and Northern Virginia. For the moment, it is only offering consumers the ability to order products available at Kroger-owned Harris-Teeter.

According to the story, "Customers select items on the company’s mobile app or Web site, then choose a preferred delivery time. An Instacart shopper shows up as scheduled with the milk, eggs and bread in hand. Payment for the groceries, including a delivery fee, is made online … Instacart charges a $3.99 fee to deliver orders worth $35 or more within as little as two hours. Customers who want an order worth $15 or less delivered in just an hour pay a premium of $14.99. Orders must be at least $10."

The Post writes that "Instacart is essentially a carbon copy of similar services that have cropped up in the District recently. Washio debuted last month with an app to pick up, wash and drop off your laundry. The month before that, Postmates came to the D.C. market with a promise to deliver anything to your home or office in under an hour.

"All of these upstarts see the same market opportunity in Washington: A ballooning population of young professionals who work long hours, collect sizable paychecks and don’t own cars. That trifecta makes them more willing to spring for the convenience of someone else running their errands."

Published on: February 13, 2014

Advertising Age reports that while Coca-Cola's controversial "America the Beautiful" commercial on the Super Bowl was the second-ranked ad on the broadcast, with viewers/consumers preferring Anheuser-Busch's "Puppy Love" commercial, this past week it leapt into the number one position in terms of viral appeal with 13.7 views online, compared to 12.3 views for "Puppy Love."

The "America the Beautiful" ad was deemed controversial because it portrayed the song being sung in seven different languages by a wide variety of people, including a gay couple - something that some folks saw as being anti-American values and even pro-illegal immigration.

Published on: February 13, 2014

• Reuters reports that Alibaba Group Holding, China's dominant e-commerce company, "is set to launch a U.S. e-commerce website through its subsidiaries Vendio and Auctiva," The new site is described as "an online shopping business that offers 'interesting, quality products' from 'hand-picked shop owners' such as fashion, tech and jewelry goods." The site will be called 11Main.com.

The story notes that "Alibaba has been ramping up its international expansion with various acquisitions, including leading a roughly $200 million investment round in U.S. retail site ShopRunner Inc, setting up an investment division in the United States and offering more of its e-commerce and online payment products overseas."


• Amazon has announced that it will be hiring for 2,500 full-time jobs at distribution centers around the country, saying that the positions will be in picking, packing and shipping roles.

The jobs are said to be available in Virginia, Tennessee, South Carolina, Kansas and Washington.

Dow Jones notes that last year, Amazon says, it "hired more than 20,000 people into full-time jobs at its U.S. fulfillment centers. More than half had started as seasonal employees, the company said. As of Dec. 31, the company had 117,300 full- and part-time employees."

Published on: February 13, 2014

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

• Analytics firm Datalogix, which has made a name for itself looking at the sales impact of ads seen on social media, reportedly has acquired shopper marketing firm Spire Marketing, which handles analytics for more than two dozen regional supermarket companies around the US.

Terms of the deal were not disclosed.


• The Associated Press reports that the Dr Pepper Snapple Group plans to test 60-calorie versions of its Dr Pepper, 7Up and Canada Dry soft drinks later this year, using natural sweeteners instead of the artificial sweeteners common to most diet sodas. The calorie count is less than half of that in full-calorie drinks, though more than the zero-calorie versions.

More people than ever seem to be more concerned than ever about putting artificial and bad stuff in their bodies. Which would seem to present challenges for an industry that is built on high fructose corn syrup and artificial sweeteners.


• Iowa-based convenience store chain Casey's General Stores said yesterday that it has signed an agreement to acquire 24 Stop-n-Go locations; 20 of the stores are in North Dakota, and four are in Minnesota.

Terms of the deal were not disclosed.


• BrightFarms Inc. announced that it has been contracted by Roundy's-owned Mariano's Fresh Market to finance, build and operate a hydroponic greenhouse in Chicago that will provide its stores with fresh produce.

BrightFarms reportedly is evaluating potential sites in Chicago for the installation.


• The Charlotte Business Journal reports that Delhaize America "says it wants its pork suppliers to eliminate a controversial type of animal crate used to house pregnant pigs," and has "sent letters to its suppliers about switching to open pens from stall housing used for sows."

“Consistent with its commitment to animal welfare, the company is asking all pork suppliers to report in 2014 on their progress in this direction,” Delhaize says in a release. “The company will continue to work with our suppliers to find solutions that are more sustainable and humane and that deliver our expectations for food safety and traceability.”


• The Associated Press reports that Kraft "is removing artificial preservatives from its most popular individually wrapped cheese slices." According to the story, "sorbic acid is being replaced by natamycin, which Kraft says is a 'natural mold inhibitor'."

The AP says that this move is just "the latest sign that companies are tweaking recipes as food labels come under greater scrutiny.

These last two stories continue to make the point … people are thinking more about what they put in their bodies, and they want transparency and ethical behavior from the companies with which they do business. Resistance is futile.

Published on: February 13, 2014

Harvard Business School historian Nancy Koehn tells Marketplace on National Public Radio that there is a simple fact that is influencing - or should influence - how marketers communicate to the American public.

"The average American attention span in 2013 was about 8 seconds," she says. "The average attention span in 2000 was 12 seconds. And then get this kicker - the average attention of a goldfish is 9 seconds."

Published on: February 13, 2014

• Sid Caesar, a seminal figure in the history of television, has passed away at the age of 91.

Caesar's 1950-54 TV series, "Your Show of Shows," was a 90-minute sketch show, co-starring Imogene Coca, that had as its writers people like Woody Allen, Mel Brooks, Carl Reiner (who based Alan Brady on Caesar for "The Dick Van Dyke Show"), Neil Simon (who wrote about the experience in his play, "Laughter on the 23rd Floor") and Larry Gelbart ("M*A*S*H").

Later in his life, Caesar struggled with pill and alcohol addiction, but survived to become a regular TV and film presence. While he never achieved the kind of greatness that characterized his early career, his peers and successors generally agreed that Caesar was both a comic genius and a complete original.

"Sid Caesar set the template for everybody,” Reiner has been quoted as saying. "He was without a doubt the greatest sketch comedian-monologist that television ever produced. He could ad lib. He could do anything that was necessary to make an audience laugh.”

And Brooks has said, "I know of no other comedian, including Chaplin, who could have done nearly 10 years of live television. Nobody’s talent was ever more used up than Sid’s."

Published on: February 13, 2014

Regarding Robert Hermanns, longtime industry executive and, most recently, head of the Food Industry Management Program at the University of Southern California (USC), who has passed away after a brief illness at age 70…

MNB user David Higginbotham wrote:

I had the opportunity last year to attend the USC FIM Program as a student. Bob brought us all together to make the FIM program one of the best in the nation. He will be missed by many, especially those fortunate students that were able to attend the FIM program over the years.

MNB reader Joe Burke wrote:

For anyone who knew Bob and Carolyn at all, this is a really sad day. Like many of your readers, I went back to the time with Bob, when he and Dick Goodspeed were together at Lucky North.  

Bob's energy for the business, WAFC, and the USC program was so awesome.  He was never satisfied and I loved that about him.  

When I was honored at NGA last year, he and Carolyn were the first to congratulate me.  They were a great team and so much fun to be with.

He was one of the many in this great industry I hoped to see again someday.

From MNB reader Mike Starkey:

I’m sure that you will receive a lot of kind words about Bob Hermanns, but I could not pass up the opportunity to share my positive experiences about Bob as well.  Bob was a gentleman in every sense of the word and not too many of us embrace the role of mentor as well as Bob did.  Bob and I both worked for Lucky Stores, Bob in the North and I was in the South which was like working for two competitive companies at that time…the culture was strange and counter-productive to say the least.  After graduation from the FIM program at USC I moved into a Marketing Role and we were trying to figure out this new targeted marketing “thingy” which we called Neighborhood Marketing (long, long ago…simply trying to reconfigure our stores to reflect our neighborhoods without messing up the bottom line – key markets were Hispanic & Upscale).  Bob and I connected at a corporate meeting and agreed to share results, learnings and success stories with one another – literally like John Boehner and Nancy Pelosi working together for the common good.  That was over 20 years ago now.  Following that time, Bob and I stayed in contact, shared ideas (mostly him mentoring me) and stayed friends…it’s a very sad day for our industry and humanity in general.

From MNB reader Dean Danhour:

I share your words about Bob.

A friend, gentleman, leader, and all around wonderful person. I had the privilege of working closely with Bob early in our careers.

As you are, I'm shocked and in disbelief to hear this sad news.

And finally, MNB reader Gus Sagastume wrote:

I learned about Bob’s passing yesterday morning and was in complete shock. I meet bob while attending  the USC FIM program. Bob was always willing to help his students and his passion for the food industry was invigorating. He genuinely wanted to help everyone who went through the program and strongly believed in what the program stood for. When I was just starting out in the program I asked Bob “What can I do to learn more about what’s going on in the food industry” he turned and said “Have you heard of MorningNewsBeat”. And since that day two years ago I have read your site every morning. He will be missed by his students and friends.

That's kind of you to share it, just as it was kind of Bob to support me in my various efforts over the years. He was a big fan of MNB, and was one of the folks who got excited for me - and provided me with opportunities - as I segued, a little bit, into part-time teaching gigs.

When my son Brian moved to Los Angeles last year and I wrote about it on MNB, Bob almost immediately called me up and asked how he could help Brian land a marketing job, and he brought Brian together with graduates of the FIM program on the USC campus. Which was just an unbelievably kind thing to do.

I don't think that Stef Stamires would mind my sharing with you this email sent to me yesterday after the MNB piece about Bob ran…

Kevin - thank you so much for this.  My dad had so much respect for you and your work.  He always spoke about you and so appreciated the rapport you had together.  He always got so excited when you both were going to meet.

He was the most kind, generous, thoughtful person in the world.  That man was also my dad - which makes me the most blessed person on Earth.  He is one of those rare examples where the insides match the outsides.  He was the same man at home that he was at work.

Heaven just got a lot brighter.

It seems to me that it is a pretty good goal in life to work to be worthy of such feelings. That doesn't change … even though Bob is gone now.

And I just hope that when I go, my kids talk about me the same way that Stef talks about Bob.

Published on: February 13, 2014

Derek Jeter, who has been the New York Yankees shortstop since 1995, getting 3,000 hits and earning five World Series rings while being selected to13 All-Star teams, said yesterday that he will retire at the end of the 2014 season.