retail news in context, analysis with attitude

Published on: March 18, 2014

by Michael Sansolo

It’s hard to imagine that any business - no less retail - has somehow ignored the ongoing news from Target stores. Just last week there were reports of soft sales from the powerhouse retailer with much speculation focused on the lingering impact of the company’s massive data spill.

As we’ve argued here in the past, other businesses will look at such news with a sense of schadenfreude - the wonderful German word meaning taking joy at the misfortune of others - when they should be viewing it as a cautionary tale.

Misery, we know, loves company and no doubt it’s simply a matter of time until others sadly face the issues tainting the once (and likely once again) glorious brand of Tar-zhay.

A new study conducted by Balance Innovations (Full disclosure: a member of the MNB family of sponsors) and 210 Analytics shows just how serious the entire issue of data security has become. In many ways the negative attention and reaction being visited on Target should be viewed in much the same way as some of the earliest well-publicized food safety outbreaks.

If you don’t recall how much impact those issues had, try to have lunch one of these days at Chi-Chi’s. That once popular restaurant chain came apart only a decade ago. Weakened by financial issues, Chi-Chi’s fate was sealed by a large food-borne illness outbreak. Today, Chi-Chi’s no longer operates in the US.

Anne-Marie Roerink, once FMI’s research director and now the brains at 210 Analytics, says the recent study of shopper attitudes toward data security revealed it to be far more troubling to shoppers than even food safety. Today nearly half of shoppers are very confident about food safety, while only 39% feel the same about the safety of their payments.

Every way Anne-Marie looked at the numbers, she found a troubling story. Consider that 12% of shoppers have little to no confidence in payment safety. And among every age group, food safety confidence easily tops feelings about payment safety.

The only slightly comforting news for supermarket operators is that shoppers have slightly more confidence in the channel’s handling of data security than they have in clubs, specialty stores or supercenters. But that’s only until another news story breaks.

The thing is, this issue isn’t going away. While a significant percentage of every shopper age group says they are using more cash in purchases, the reality is that most habits aren’t changing. Whether shoppers are in their 30s or 60s, it’s clear that plastic is part of the way they buy things and that’s not going to change.

As Anne-Marie and I discussed these troubling findings, we wondered whether the level of concern reflects a powerful reality: shoppers have learned that there are many steps they can take to improve food safety at home. Data safety is another matter; there is no control.

All in all, it points to a couple of important to-dos, starting with the steps hopefully every company is taking to shore up defenses wherever possible. It’s cold comfort to read that Target fired its CIO, despite her unheeded warnings that more security was needed.

It might be time to look at data the way we should look at so many issues in the supermarket; with an eye on how we can help our shoppers get smarter, better and safer. When it came to food safety the industry took fabulous steps to educate consumers on proper food handling, refrigeration, cooking and cleaning. Those steps made the shopper a better partner in an important fight.

Incredibly, data security may be an even harder battle. But as Target keeps showing us, it may be every bit as important.

Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com . His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available by clicking here .

Published on: March 18, 2014

by Kevin Coupe

Here's a story, from the Sacramento Bee, that yet again illustrates how the world is changing and how some business models are adapting and some are not…

"Looking for the white pages? Try a museum.

"In another sign of the supremacy of digital technology, the new phone books that have begun arriving in Sacramento are missing something: the residential white pages. The books showing up on Sacramento doorsteps contain the yellow pages and alphabetized business listings, but that’s all.

"AT&T and YP, the company that publishes AT&T’s phone books, said in a press release that the decision to stop delivering the white pages 'reflects recent usage feedback and research from consumers.' YP said delivery of the white pages has also been halted in several other California markets, including Los Angeles, Orange County, Stockton and Bakersfield, but the decision hasn’t gone statewide yet … The two companies are also eliminating white-pages delivery in selected markets in Connecticut, Georgia, South Carolina, Louisiana, Texas and Mississippi. Other phone-book publishers like Verizon have been scaling back white-pages deliveries around the country in recent years."

According to the story, it remains possible to get the white pages if you want them - all you have to do is either make a phone call or go online and request them, and they'll be delivered "either in print or on CD-ROM."

Which is the phrase that really caught my attention.

Because I'm trying to remember the last time I bought or otherwise acquired a CD-ROM, or, for that matter, inserted one in my MacBook Pro.

And for the life of me I can't remember.

And the idea that the phone company/directory publisher would still offer to make them available on a CD-ROM may be indicative of how quickly these two entities are changing with the times.

Because I also can't remember the last time I used the white pages. Or the yellow pages.

I suspect, based on my reading of the article, that one of the reasons they're eliminating the white pages is that it is a document without a revenue stream … unlike the yellow pages, for which they still are able to sell advertising. For now. But what it really means is that they are actually making an easy decision, and clinging to the old-world yellow pages business model like a castaway hanging onto a life raft by his fingernails.

But the window in which the yellow pages will be relevant or even useful is a small one, and it is closing rapidly, replaced by digital services that are far more informational and comprehensive. (Who needs the yellow pages when we have Angie's List?)

It's all over, except for the crying and gnashing of teeth by those not paying attention and adapting to the future that already is here.

It's an Eye-Opener.

Published on: March 18, 2014

There is a fascinating piece in the Seattle Times about how Amazon - which collects browsing and purchasing data on some 237 million customer accounts and already is "one of the Web’s ad juggernauts, the seventh-largest seller of digital ads worldwide … already generating more ad revenue than Twitter, Pandora and LinkedIn, and … on pace to sell nearly $1 billion worth of ads this year - actually is stepping "gingerly" into the digital ad business.

The concern? That while the company knows it is sitting on a digital gold mine, it does not want to do anything that might disrupt the customer experience.

Now, Amazon reportedly "has been aggressively experimenting, tapping its vast online network of websites in search of new, high-margin revenue that won’t alienate shoppers. Amazon even believes the precise targeting of ads meshes with its goal of providing a place for customers to find and purchase anything they might want online."

You can read the entire story here.

Published on: March 18, 2014

The Daily Beast reports that the founders of Italy's renowned Eataly market and restaurant complex plan to build and open a 20-acre foodie theme park in Bologna called FICO Eataly World that they hope will "harness tourism in Italy to kick-start the economy."

According to the story, the theme park "is a joint venture with a start up investment of around $55 million divided between a host of food-friendly entities, including Fabbrica Italiana Contadina, and the local Bologna city government, which has already raised more than $100 million to get started.  Eataly president Oscar Farinetti says he hopes to draw on Eataly’s global success. The Italian food mecca has 26 stores world wide, with the largest number in Italy and Japan and the most successful store in Hong Kong. Farinetti hopes to lure six million visitors a year using the Eataly reputation for offering food products and cuisine that represent all of Italy’s diverse cultural traditions. He hopes the venture will become the 'Disneyland of Food,' making around $118 million annually within five years and creating some 5,000 new jobs, including hiring 1,340 people to work in the stores and restaurants and the rest for logistics like transporting produce and keeping stock.  Ground will break in April for the 20-acre park, which will feature around 125 restaurants, grocery stores, food courts, and learning labs. There will be 'live trees' where customers can pick their produce, and spaces for kids to play with food."

The story goes on to say that "one of the key features of Eataly will be the educational opportunities available.  The organizers hope to host seminars, offer culinary classes and provide certified training for all sectors of the food industry. There will be 15 auditorium style classrooms, each with a capacity for 700 students. The organizers say there will be plots of land to test and study different varieties of vegetables grown in the country."

Published on: March 18, 2014

We've got good news and bad news…

• The Chicago Sun Times reports on the continued growth of the US craft brewing segment, which "captured 7.8 percent of the U.S. beer market last year, up from a 6.5 percent market share in 2012," according to the Brewers Association.

"Craft breweries made 15.6 million barrels of beer last year, 18 percent more than in 2012, according to preliminary annual figures from the association. The retail value increased 20 percent to $14.3 billion."


The Milwaukee Journal Sentinel reports that since beer is generally about 95 percent water and is dependent on water not just taste but also because "it irrigates the fields that produce beer's next most critical ingredient - barley," brewers are concerned that "the golden age of cheap, seemingly limitless supplies of fresh water is at an end, even in the world's most developed nations."

According to the story, "All told, it takes 300 barrels of water on average to produce a single barrel of beer, with only three or four of those barrels added at a modern, efficient brewery," and so manufacturers are getting ambitious and aggressive with their water conservation efforts."

You can read more about them here.

Published on: March 18, 2014

The Wall Street Journal reports that Amazon is said to be ready to begin selling a new video streaming device next month that will "carry a variety of apps available on Roku Inc. and Apple Inc. set-top boxes and run on a version of Google Inc.'s Android software, like Amazon's tablet computers … Roku's most popular apps include video services Netflix and Hulu Plus and music service Pandora, as well as Amazon's own video-streaming service."

The name of the new device and the pricing are as yet unclear, but the story notes that the device would be released on the heels of a $20 price increase for its Amazon Prime annual membership, and so there likely will be "incentives available to members of Amazon's Prime streaming video and shipping program."

Published on: March 18, 2014

• The New York Times this morning reports that Walmart "is expected to announce on Tuesday that starting March 26 it will begin allowing customers to convert old games into store credits in over 3,100 Walmart stores nationwide, most of its locations in the United States. The program represents a major push by Walmart into a lucrative segment of the games business, one that games publishers have unsuccessfully sought to stymie in the past because of the potential threat used games represent to new game sales."

The story notes that "the trade-in plan is an expansion of a program through which Walmart gives customers credits for used tablets and smartphones that they can apply to new devices. The retailer is betting that it can stimulate sales of new items by giving people a new currency in the form of their old purchases."

Published on: March 18, 2014

• Headline: Pig returns to Windy City.

Crain's Chicago Business reports that Butera Finer Foods is buying a shuttered former Dominick's store in Buffalo Grove, Illinois and convert it to a Piggly Wiggly - a banner not seen in the Chicago area in some two decades. Butera Finer Foods operates nine local groceries under the Butera Market name.

Published on: March 18, 2014

…will return.