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    Published on: March 12, 2014

    by Kevin Coupe

    This is one of those occasions on which it would seem to be more appropriate to email a card, rather than going down to the store, buying one, then going to the post office, buying a stamp, and then making sure that you mail the card early enough so that recipient receives it in a timely fashion.

    Today is the 25th birthday of the World Wide Web, described by the Pew Research Center's Internet & American Life Project as "one of the most important and heavily-used parts of the network of computer networks that make up the internet. Indeed, the invention of the Web by Sir Tim Berners-Lee was instrumental in turning the internet from a geeky data-transfer system embraced by specialists and a small number of enthusiasts into a mass-adopted technology easily used by hundreds of millions around the world."

    (It also makes MNB possible … though I suppose on the scale of things that is a minor achievement.)

    The Pew project uses the moment to assess the impact of the internet since its invention, something it has been doing since 1995. Among the findings:

    • 87 percent of American adults now use the internet, "with near-saturation usage among those living in households earning $75,000 or more (99%), young adults ages 18-29 (97%), and those with college degrees (97%). Fully 68% of adults connect to the internet with mobile devices like smartphones or tablet computers."

    • "90% of internet users say the internet has been a good thing for them personally and only 6% say it has been a bad thing, while 3% volunteer that it has been some of both.

    • "76% of internet users say the internet has been a good thing for society, while 15% say it has been a bad thing and 8% say it has been equally good and bad."

    • "53% of internet users say the internet would be, at minimum, 'very hard' to give up, compared with 38% in 2006. That amounts to 46% of all adults who now say the internet would be very hard to give up."

    Along these same lines, the New York Post has a story about a new survey saying that 16 percent of respondents plan to observe Lent - the period of time between Ash Wednesday and Easter Sunday that stresses penitence - by forgoing social media usage. That's far more than the number of people who plan to give up swearing and smoking (about two percent, the story says), though less than the 30 percent of respondents who plan to give up chocolate.

    It's all an Eye-Opener.
    KC's View:

    Published on: March 12, 2014

    The City Wire reports that at a Bank of America Consumer and Retail Conference in New York, Walmart CFO Charles Holley said that the company "is highly focused on accelerating its small format and linking them up with expanded digital and mobile capabilities. These two initiatives comprise more than half of the company’s $12.4 billion in capital expenditures for the fiscal year … Holley told the group that there was still room for hundreds, if not thousands more small format Wal-Mart stores. He added that the small formats offer fuel and pharmacy along with an in-store kiosk that allows shoppers to order any product Wal-Mart offers elsewhere. The tests underway in home delivery, storage lockers and depot pick-up locations are going well, according to Holley."

    According to the story, "Holley said Wal-Mart is in a strong financial position to invest in future growth which will occur at the 'intersection of physical and e-commerce.' He said the small format acceleration married to improving e-commerce and digital services is the winning prescription."
    KC's View:
    I completely agree with Holley about the 'intersection of physical and e-commerce' thing, though I am less sanguine about the company's small stores. Maybe I just visited the wrong stores on bad days, but the small Walmarts I have seen have been haphazardly merchandised at best, with little sense of specificity … they seem more designed to cram as much stuff as possible into small spaces, rather than to be something distinguishable in their own right.

    I also found this passage from the City Wire story to be interesting:

    "Oddly enough, Holley said Wal-Mart was taken by surprise that more than 100,000 additional employees signed up for health care under the Affordable Care Act. He said that was an unexpected cost increase of $300 million this year.

    "When Analysts asked Holley why Wal-Mart was surprised (and) didn’t anticipate the expense, he said Wal-Mart is not aware of every employee’s situation and what other insurance they may or may not have outside the plan that Wal-Mart offers."

    I always thought that one of the reasons that Walmart hewed to its salary and health benefits policies was that it knew what is employees needed and wanted, and was providing care and benefits appropriate to their situations.

    Except that now, Walmart is saying that it doesn't know as much as it thought it did.


    Published on: March 12, 2014

    Starbucks, the Seattle Times reports, will next week unveil a smart phone application that "will allow customers to tip from their smartphone, a move that flexes the coffee giant’s digital muscle and could help line baristas’ pockets with money from the millions who use mobile devices to pay for their lattes … The new feature connects Starbucks employees with a rapidly expanding universe of potential tippers: 10 million customers use the Starbucks mobile app, accounting for 12 percent of transactions, double the rate from a year ago … Starbucks processes 5 million mobile payments per week."

    All tipping currently is done with cash.The story says that "Starbucks’ tipping feature will give customers the option of tipping 50 cents, $1 or $2 via a push notification sent to their iPhone a few minutes after paying at the register. Customers will have a two-hour window to decide about the tip, or to change the amount."

    Meanwhile, in a related story, Bloomberg reports that Starbucks "will test a mobile-phone service for ordering items ahead of time at some U.S. cafes this year as it looks to bolster its smartphone applications."
    KC's View:
    Excellent idea, and I can't wait to try it … especially because Starbucks first announced that it would soon have this functionality back in October 2012 … and I thought it was a good idea then, too.

    Published on: March 12, 2014

    A site called DCVelocity is reporting that Amazon "is moving quickly to revamp its delivery network to gain more control over its fulfillment infrastructure while reining in spiraling transportation costs, according to a supply chain consultant with close ties to the e-tailing giant."

    According to the story, Amazon's top 40 markets "will be served by a private fleet being built by Amazon to support an expansion of its online grocery business, called 'Amazon Fresh' … The next 60 will be served by an array of regional parcel delivery carriers … (and) the remainder will be served mostly by the U.S. Postal Service."

    The goal of the realignment will be to move to same-day, next-day, or, at most, two-day delivery for virtually every item Amazon sells; UPS and FedEx would see their roles in Amazon's delivery infrastructure dramatically reduced as a result.

    And while Amazon Fresh has not been a big profit service considered on its own, the grocery service has proven to be an effective "proving ground to test a more ambitious delivery model rather than as a way to build a national grocery footprint."

    The story notes that Amazon is not confirming any parts of the story, and that there are competing analysts who believe that the transition to an in-house private fleet is not as imminent as some would suggest.
    KC's View:
    Nothing would surprise me … and I generally think that Bezos seems like the kind of guy who would like to control every part of the experience that he can. If that means owning trucks, and he thinks it is in customers' best interests and the long-term best interest of Amazon's ability to compete, then that's what he'll do.

    Published on: March 12, 2014

    The New York Times reports that Procter & Gamble and ConAgra, described as "once fierce competitors," are teaming up on a project designed to help alleviate childhood hunger: "The program helps fund Feeding America by prompting donations to the organization (via) product codes that consumers enter online. Five agencies are working on the campaign for 2014, with a budget estimated at $14 million to $18 million."

    The initiative actually is several years old, having been launched by ConAgra in 2010, and the Times writes that "the ending-hunger campaign is another example of a popular trend known by names like cause marketing and purpose marketing, by which advertisers seek to do well by doing good. An increasing number of consumers are seeking out brands from companies that donate to nonprofits at the same time they ring up sales and profits." In this case, "The campaign pledges to donate 11.1 cents for each code entered on the website, the cost for Feeding America to provide one meal through its network of local food banks. ConAgra is promising a minimum of one million meals ($111,111) and a maximum of five million ($555,555), and Procter is promising a minimum of one million and a maximum of two million ($222,222)."

    The Times notes that "for decades, Procter and ConAgra sold rival brands of peanut butter, respectively, Jif and Peter Pan; and cooking oil, respectively, Crisco and Wesson. But Procter sold Crisco and Jif to J.M. Smucker in 2002 and subsequently left the packaged-food business." The elimination of the former rivalry "means the campaign can cover more ground in stores by representing packaged-food categories through ConAgra and household staples like detergent, diapers, shampoo and paper goods through Procter. Participating ConAgra brands include Banquet, Marie Callender’s, Chef Boyardee, Healthy Choice and Hunt’s. Among the participating Procter brands are Charmin, Pampers and Tide."
    KC's View:

    Published on: March 12, 2014

    MarketWatch reports that at least one Citigroup analysis suggests that JC Penney may be coming back from its recent travails as once-and-again CEO Mike Ullman invests more in private label, tries to develop a better national brand assortment, eliminates brands of dubious value (like the Martha Stewart line that resulted in a lawsuit being filed against the company by Macy's), and pursuing a "go narrow and deep" strategy that will appeal to longtime customers that need to be lured back into the store.
    KC's View:
    Listen, I've spent a lot of time here beating up on JC Penney, so I felt it only fair to report on some optimism about the company's future. But I'm still not convinced.

    On the other hand, at least Ullman doesn't seem to be as delusional about his company's future as Sears CEO fast Eddie Lampert.

    Published on: March 12, 2014

    USA Today reports that "several days ago, Reddit posed this question on its site: 'Fast food workers of Reddit, what should we NOT order at your restaurant? Why not?"

    Among the suggestions coming from fast food employees….

    • McDonald's McCafe drinks, because "the machines are hard to clean."

    • Subway's egg and tuna salad sandwiches, because "the salads come from a bag and are heavily mixed with mayonnaise. The cold cuts are kept in a smelly syrup."

    • Pizza Hut pizza, because "chances are the dough is old, oily and handled without gloves."

    • KFC's BBQ sandwich, because "the chicken is too old to even give away. It's soaked in barbecue sauce until it can be pulled apart."

    • And Wendy's chili, because "the beef comes from old, dried-up meat on the grill that's re-heated."
    KC's View:

    Not sure what is more disturbing - the situations as described by the fast food workers, or the fact that fast food workers are disclosing this information.

    Either way, I'm really glad that these are not establishments that I would frequent, nor meals that I would order.

    Published on: March 12, 2014

    Advertising Age reports that in the wake of the data breach that exposed the personal information of millions of its customers, Target "is slowly returning to a normal marketing cadence.

    "Shoppers visiting its stores are being prompted to sign up for the retailer's credit card. Social-media channels have been turned over to product and partner news. And an campaign promoting the idea of the 'Target Run' will roll out TV ads March 30."

    The "Target Run" campaign is designed to promote the notion of fast trips to Target to pick up essentials. While the promotion was scheduled to be unveiled during the recent Olympics, Target decided to delay it a bit while it dealt with the data breach maelstrom.
    KC's View:

    Published on: March 12, 2014

    • The Milwaukee Business Journal reports that Meijer plans to open 10 to 12 stores a year over the next few years, with a lot of that expansion concentrated in Wisconsin.

    CEO Hank Meijer told a recent Milwaukee Business Journal Power Breakfast audience that there will be eight built in the Milwaukee area just in the next two years. And the expectation is that a fast Meijer expansion in the state will heighten the competitive situation there as the company goes "head-to-head with longtime dominant player Roundy’s Inc., along with Sendik’s Food Markets, Woodman Food Markets and general merchandise national players Target and Walmart."

    • Men's Wearhouse said yesterday that it will acquire Jos. A. Bank for $1.8 billion, ending a six-month series of bids and counterbids as the two companies tried to get the best of each other.

    No branding or strategic changes are expected at either company once the deal is complete.

    There is, however, one casualty: Jos. A. Bank's planned acquisition of Eddie Bauer, seen as one way of discouraging Men's Wearhouse, has now been terminated as a result of the deal.

    USA Today reports that Green Mountain Coffee Roasters has officially changed its name to Keurig Green Mountain, acknowledging that the new name reflects the reality that single-serve coffee makers have become an enormous part of its business.
    KC's View:

    Published on: March 12, 2014

    • Publix has announced that Richard Schuler, the chain's vice president of distribution, is retiring on May 2 after 40 years with the company.

    He will be succeeded by Casey Suarez, currently the company's director of warehousing.
    KC's View:

    Published on: March 12, 2014

    I'm sort of on the run this morning, so I'm only going to post one email … and it is because I want to correct any misconceptions that might be out there.

    Yesterday, in writing about the climate change debate, I wrote, in part:

    "…I actually feel a lot of compassion for folks who find it difficult to deal with so much change in so many societal, cultural, religious, political, and even scientific areas."

    Which prompted an MNB reader to write:

    Other than to point out that your "compassion" comes across as condescending and that Christian principles don't change because what Christ taught hasn't changed, I'll offer an analogy:

    Often times on the golf course a tee shot will flirt with a hazard and there will be disagreement among the foursome as to whether the ball is in the hazard or not. The discussion always ends with someone saying, "we'll find out when we get there." 

    Popular opinion is comfortable and easy to go with, but it often contradicts the Bible. Is it right? We'll find out when we get there.

    I don't want to get into a debate about Christian principles, except to say that I know plenty of people who are committed Christians who would say that they see no moral, ethical or religious contradiction in accepting the notion of societal/cultural changes that could not possibly have been foreseen two thousand years ago when that book was written.

    I'm happy to accept on faith the notion that some Christians don't feel that way. As I've often said here, I'm pretty much for whatever gets you through the night, as long as nobody else gets hurt.

    I remember from my Catechism days one specific line from the Bible: "Three things will last forever - faith, hope, and love - and the greatest of these is love." I'm not always sure that everybody remembers that.

    But I don't want anybody to believe for a moment that I was being condescending in my original comments.

    I was trying to demonstrate genuine compassion, just as it has been shown to me over the years by a lot of MNB readers who have promised to pray for me and what they view as my endangered soul. I don't see that as condescending, though I could; rather, I take it as it is offered … and I always figure that the more people praying for me, the better. In its own way, that is a kind of love.

    It couldn't hurt.
    KC's View: