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    Published on: April 3, 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. I'm recording this on a day that started with me spending two hours at the local DMV office and ended with me spending two hours at the dentist. Not exactly my definition of Nirvana…

    Anyway, what's on my mind right now is something that has been brought to my attention by a number of MNB readers, as well as by my 19-year-old daughter. All of a sudden, people who have signed up to be notified when their Amazon packages are being delivered are actually being told when their packages are being handed over to the US Postal Service.

    That's right. It appears that Amazon is turning packages over to shipping companies like FedEx and UPS, which are then dropping those packages to the post office, where, after all, they have people driving postal routes every day.

    Now, I find this interesting. Maybe a little worrying, since I don't have the greatest faith in the post office. It certainly suggests that Amazon's deal with the USPS, which offers Sunday delivery in major metropolitan areas, is part of a thicker delivery web than we might've guessed, with the post office being more important than ever to how it all works. Since I've been suggesting for years that the post office's best chance for relevance was to go to Amazon headquarters and beg Jeff Bezos for the opportunity to be the company's primary delivery vehicle, I can hardly object.

    What's hard to know is whether such arrangements will solve the kinds of delivery problems that so many online retailers and delivery carriers suffered from last December. Maybe. But we won't really know that until this December.

    My suspicion, however, is that this is just a patchwork solution that is designed to hold just until Amazon can get its own delivery trucks on the road in major markets. Whether this will be a profitable approach for Amazon remains to be seen, and is far beyond my meager analytical skills. But I think the impulse will be to control more of the customer experience - from the website to the delivery - not less as Amazon continues to grow.

    My sense is that the more hands that touch a package, the better the chance that somebody is going to screw things up. Which will irritate and frustrate consumers - even those that have not spent too much of the day at the DMV and dentist's office.

    That's something that no retailer can afford to do, because it would suggest that at some level management decided that efficiency was more important than effectiveness. My guess - or maybe my assumption - is that Amazon knows this, right down to the very core of its being.

    Attention must be paid.

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

    KC's View:

    Published on: April 3, 2014

    by Kevin Coupe

    Over the years, I've occasionally made fun of the Jos A. Bank men's clothing chain, mostly because I've always kind of wondered whether at some level it undermines its own sense of value with its "buy one, get two free" approach. I mean, how much can the suit actually be worth if they're giving them away two at a time? (The chain is largely able to do this because it is both retailer and manufacturer … everything is private label, and it can control its supply chain costs more than a retailer that just sells branded suits.)

    Now, clearly the Jos A. Bank chain knows more than I do. It's been growing, and just has been acquired by the Men's Wearhouse chain. I suspect that a lot of the reason for the growth, at least over the past six years, is that in a troubled economy, getting two free suits speaks to what people need … and people aren't really worried about what they're worth. Whether this could have negative long term implications remains to be seen.

    But … as it often does, "Saturday Night Live" cut right to the heart of the matter last weekend when it did one of its patented commercial parodies that directly addressed the issue of value at Jos A. Banks. I found it both funny and insightful … and I hope you'll enjoy it.

    You can see it by clicking here.

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

    Published on: April 3, 2014

    The Associated Press reports that after $77 million of research and development, investors in technology that would have brought genetically modified salmon to the nation's supermarkets have begun to get "skittish" about the product - in part because both Kroger and Safeway have pledged not to sell it if it ever is approved by the Food and Drug Administration (FDA), and in part because FDA has delayed making a decision for four years and seems no closer to making a ruling.

    While FDA has said in the past that the GM salmon appears to be safe to eat, with little impact on the environment, it has not even suggested when it could make a final ruling.

    The salmon, developed by AquaBounty, is designed to grow faster, and has said that "there are several safeguards designed to prevent the fish from escaping and breeding with wild salmon." But critics aren't buying it, and say that there are too many unknowns to allow the product to be sold in the US.

    "By altering genetic materials of animals, scientists have proposed — and in some cases actually created — animals that would be bred to be free of diseases, be cleaner in their environment or grow more efficiently," the story says. "Think chickens bred to resist avian flu, 'Enviropigs' whose manure doesn't pollute as much or cattle bred without horns so they don't have to be taken off during slaughter.

    "But where the scientists see huge opportunity, critics see a food supply put at risk. They say modified organisms can escape into the wild or mingle with native species, with unknown effects."
    KC's View:
    I'm not anti-science, so I don't like to make a knee-jerk judgement about such products. I can imagine circumstances when and where the development of such GM items might be necessary and/or desirable.

    That said, if these things end up on the market, they need to be clearly labeled … that ought to be rule one. No ambiguity, no debate.

    I also have to admit that maybe because I'm getting old and cranky about this stuff, I have no real desire to eat these things. Life's too short not to eat the real thing.

    Published on: April 3, 2014

    The New York Times this morning reports that "demand for meat alternatives is growing, fueled by trends as varied as increased vegetarianism and concerns over the impact of industrial-scale animal husbandry on the environment. The trend has also attracted a host of unlikely investors, including Biz Stone and Evan Williams of Twitter, Bill Gates and, most recently, Li Ka-shing, the Hong Kong magnate."

    According to the story, among the issues being addressed by meat alternatives "are land and water use, stress on global supply chains and the world’s growing population."
    KC's View:
    The biggest evidence that the meat alternatives business is gaining creative traction - last year, Whole Foods accidentally mixed up chicken salad made with real chicken and a variety made with a plant protein substitute … and nobody noticed. The company had to do a recall because of allergens issues, but the fact remains that virtually nobody tasted the fake chicken and said, "Yuck!"

    Not every product is that good, but the sense from the article is that major strides are being made in developing products with mouth appeal.

    Published on: April 3, 2014

    Amazon announced yesterday that it has begun selling a $99 television set-top box, dubbed Amazon Fire TV, that is designed to hook directly into a TV set and give viewers wireless access to over 40,000 Prime Instant Videos, "over 200,000 TV episodes and movies, millions of songs, and over a hundred games," and is pre-registered to Amazon accounts so viewers can easily access favorite titles and personalized recommendations.

    The new system will also offer viewers access to Hulu, Netflix and ESPN.

    The New York Times reports that "the device, an effort to win the battle of the living room that just about every tech company is engaged in, puts Amazon in competition with companies like Microsoft and Sony, which make full-scale game devices, and Comcast, which does not want to see its subscribers cut the cable cord in favor of technology and entertainment from Amazon." Amazon Fire TV also is in direct competition with Apple TV.
    KC's View:
    At some level, I imagine that Amazon is hoping that enthusiasm over Fire TV will generate more conversation than discontent about the $20 increase in its Prime membership fees.

    And, while Amazon is not talking much about how people will be able to use Dire TV to shop … I'm sure this is factored into the product's development.

    It also will facilitate people's ability to access the original content that Amazon is generating as a way of differentiating itself.

    I do know this. I've ordered mine. And I'll report back to you soon.

    Published on: April 3, 2014

    • The National Association of Convenience Stores (NACS) released a report this week saying that "US convenience stores reached record in-store sales in 2013, with sales climbing 2.4% to $204 billion. Combined with motor fuels sales of $491.5 billion, overall convenience store sales were $695.5 billion."

    According to the report, "In-store sales in 2013 were led by continued growth in foodservice (2.4%), driven by prepared food and commissary." But there's a downside to that, NACS said: "The biggest increase in costs was wages and payroll taxes. The industry saw a dramatic 19.5% increase in employees, a function of the industry’s continuing embrace of foodservice, which requires more labor to manage."


    • New research from the Specialty Food Association (SFA) says that "Americans have a growing appetite for specialty food. U.S. sales of specialty food and beverages reached $88.3 billion in 2013, a record high for the fourth year in a row and a jump of 18.4 percent since 2011.

    "Cheese dominates specialty food sales at retail, with $4 billion in sales in 2013, followed by the categories meat, poultry and seafood; and chips, pretzels and snacks. The fastest growing categories are nut butters, eggs, and frozen desserts."

    The study goes on to say that "the outlook for retail is robust, with sales at specialty food stores and natural markets skyrocketing by 42.4 percent and 33.8 percent, respectively, between 2011 and 2013. Mainstream supermarket sales growth was more sluggish, at 6.9 percent."

    One interesting observation from the report: "Distributors of specialty food say non-GMO has the highest potential for growth of all product claims during the next three years." And, "Seventy percent of retailers surveyed cite 'local' as the claim that interests consumers most today."
    KC's View:

    Published on: April 3, 2014

    Direct Marketing News reports that the 2014 Temkin Experience Ratings are out, the fourth year in which customer experiences with 268 brands across 19 industries are assessed. Three major factors are evaluated - functionality, accessibility, and the emotional component (how consumers felt about the interaction).

    According to the story, it is notable that "most companies in the best overall brand category fell into the fast food or grocery categories, while health plan and service providers comprised the majority of the worst overall brands segment."

    Among the best overall brands: H.E.B., Trader Joe's, Chick-fil-A, Publix, Aldi, Food Lion, Sonic Drive-In, Dairy Queen, Kroger, Piggly Wiggly, Regions, Sam's Club, and Starbucks.
    KC's View:

    Published on: April 3, 2014

    eBay Now, the same-day delivery service that looks to facilitate online transactions between consumers and bricks-and-mortar retailers, now is serving an expanded number of markets with a fast-growing roster of retailers, according to a story in EcommerceBytes.

    The service now is available in n Francisco and the Peninsula, San Jose, parts of New York City, Chicago and Dallas, the story says, with a retailer roster that includes Best Buy, AutoZone, Toys R Us, Home Depot, Office Depot, Walgreens, GNC, Radio Shack, Macy's, Microsoft, Guitar Center, Bloomingdale's, Urban Outfitters, Ann Taylor Loft, Armani Exchange, Barnes & Noble, Bed Bath & Beyond, Champs, Crate & Barrel, Eastern Mountain Sports, FootLocker, FootAction, GameStop, Golfsmith, JCPenny, Johnston & Murphy, Journeys, Kmart, Pier One Imports, Quiksilver, Staples and Sunglass Hut.

    The story notes that "last fall, eBay said it would expand eBay Now same-day delivery to 25 U.S. markets by the end of this year as well as international locations such as London. The company acquired Shutl last year, allowing eBay to move from hiring "valets" to deliver goods to using a marketplace approach."
    KC's View:
    This is all about finding ways to compete effectively with Amazon. It's that simple. And it goes for both eBay and the participating retailers.

    Published on: April 3, 2014

    • The other day, MNB took note of a Chicago Sun Times report that Kraft's Macaroni & Cheese, a product that drives more than $500 million in annual sales, has seen its market share drop from 82 percent three years ago to 78 percent in March - because, while the product is "a favorite among picky young kids, cash-strapped college students and adults wanting a comfort food," the brand is taking a hit "as people hunt for healthier versions."

    Now, the Wall Street Journal reports that Kraft is making changes in another of its longtime staple products - Philadelphia Cream Cheese. According to the story, "Kraft Foods Group Inc. has changed its packaging design from those familiar circular tubs to an oblong container it hopes will keep its label facing front so shoppers can better see it on store shelves.

    "And for the first time since the spreads' introduction in 1982, Kraft is making significant changes to its recipe, hoping to appeal to increasingly health-conscious shoppers. It is adding more fruit and vegetables and reducing artificial flavors and colors in some varieties."

    "Freshly made and simple ingredients are becoming primary purchase drivers," says Kraft CEO Tony Vernon. "There is a cultural shift at work here."


    • Family Dollar said yesterday that "it is introducing more than 400 new food items in each of its more than 8,000 stores across the country," as well as lowering the prices on more than 1,000 branded items in a multitude of segments.
    KC's View:

    Published on: April 3, 2014

    Regarding the ability of Toys R Us to be relevant, one MNB user wrote:

    At Toys R Us I bought my son a bike for Christmas.  They asked if I would like it in the box or assembled.  I asked for the box so it could be wrapped.  No one at the time told me that a non-assembled bike could not be returned.  Well you could guess what happened.  One of the pedal bracket holes was not tapped so the pedal could not be threaded onto the crank.  I took it back to the store.  Was promptly told that I could not return the bike because I purchased it in the box.  I clearly explained and showed the manager that there was a manufacturing defect.  She said I cannot take it back because she had no one to fix it and consequently could not re-sell the bike.  I told her the bike should never have been sold in the first place because it was defective.  I also said it was ridiculous when she suggested I find a bike shop that could properly thread the part for me.  It took me more than half-an-hour of back-and-forth debate until the store manager finally conceded and said she will take the bike back, but I could not take another boxed bike, but that I would need to let the store assemble the bike and that they would call me when the assembly was complete.  Needless to say the only times I have been back in the store was to return duplicate birthday or Christmas gifts.




    Regarding the increasing tendency of people to get their news from social media, MNB reader Mark Delany wrote:

    The larger implication, and potential problem IMHO, is the increasing use of “filters” to disseminate the news. In previous generations newscasters like a Walter Cronkite would simply communicate the news as they saw it – perhaps with some opinion layered on top – but essentially “just the facts”. Hopefully by now any knowledgeable viewer realizes that their choice of network largely determines the news they see reported and that there is almost always a “spin” applied. Now insert the younger generation and the “filter” may only get narrower and harder to break out. Our teenage son sees little use to network news and finds it almost laughable to sit through a newscast or God forbid read a paper – when he can see it all real time on his iPhone. Sites like youtube are his go to for anything from music to news to sports tips and the concern becomes that many will lose sight of the fact that these “filters” are being applied and that could lead some pretty scary results!

    I think it actually can work both ways.

    Yes, people tend to get their information from sources with which they already agree. People who watch MSNBC don't watch Fox News, and vice-versa.

    But in his own way, Cronkite also was a filter. And social media also allows unfettered access to a lot of unfiltered news … which also creates its own problems, because nobody is separating the facts from the speculation.

    MNB reader Ken Wagar wrote:

    I think you left out a few words in the sentence below:
     
    But the broader point is the degree to which social media continues to make inroads in shaping opinion, informing citizens, and serving as a tactic in ongoing culture wars.
     
    Should have read:

    But the broader point is the degree to which social media continues to make inroads in shaping opinion by both informing and miss-informing citizens, stating opinions as facts, ignoring science, allowing anyone to say anything about anybody at any time and serving as a catalyst in the ongoing and divisive culture wars.

    True.

    Let's not forget, however, that some of the greatest and most divisive culture wars we've ever had in this country occurred during the sixties and seventies … and social media didn't exist then. Culture wars happen, I think, because of inequalities and power struggles. Social media can enable such struggles to become more public and more passionate.

    But I'm not sure that's necessarily always a bad thing. A little revolution can be good for the soul.




    Finally, thanks to all of you who wrote in about Tuesday's April Fools column. I'm glad you liked it … and no, I do not have any inside information about real Obamafones being in the pipeline. (Some of you thought it was a good idea, and some not so much.) It was fun to write, and I'm glad you had fun reading it.

    As for yesterday's comment about Robin Sparkles … for those who asked, that was a semi-oblique "How I Met Your Mother" reference. Just FYI…
    KC's View: