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    Published on: April 9, 2014

    by Kevin Coupe

    Ad Week reports on the results of a survey by the Toluna marketing research firm suggesting that "privacy worries are a major stumbling block for Google Glass, with two in five consumers citing concerns such as the potential for hackers to access private data, the ease with which others could record their actions without their knowledge and the potential for private actions to become public."

    The second major concern "cited by a majority of Toluna’s survey respondents was distractibility," the story says. "The dangers of driving and texting are well-known. Less reported are the injuries and embarrassments sustained through text walking, resulting either from stepping blindly into a roadway, being a participant in a head-on pedestrian sidewalk collision or sundry other semi-blind missteps. Over a third of the 1,000 consumers specifically cited concerns about being mugged while wearing the device."

    I don't find this particularly surprising … and I also don't think that these concerns will end up being major inhibitors to the development of Google Glass or other forms of wearable technology.

    To begin with, if two of five consumers are concerned about privacy issues, that means that three of five don't feel the same way … which means that the concerned 40 percent may really have something to worry about. The same goes for the more than 33 percent worried about distractibility … there is another two thirds out there that could be using such products and, yes, getting distracted.

    I also think that we're still early in the development process for wearable tech … and I tend to think that this stuff tends to be a lot more acceptable a lot faster than one might think. That doesn't mean that privacy and distractibility concerns aren't legitimate, just that when it comes to technological progress, people tend to get past these issues. (For better or worse.)

    Besides, never underestimate the impact of commercial concerns on these technological advances. The reason that Ad Week is reporting this story is because advertising firms and their clients all see ways in which they'll be able to use wearable tech to reach consumers. It's all about money … and money is a powerful motivator.

    There's no way to know exactly how wearable tech will develop, nor how fast. But it is a pretty good bet that its development and acceptability are inevitable.
    KC's View:

    Published on: April 9, 2014

    Interbrand is out with its annual Best Retail Brands index, concluding that Walmart remains the nation's most powerful retail brand, "even with a 6% decline in brand value it preserves an enormous margin over the next closest brand."

    There were four retail brands that increased their brand value by more than 25% this year, the story says: Macy's, Whole Foods, Amazon and Cabela's.

    "Looking at the Top 10 retail brands in North America, the first five maintain their positions from 2013," the report says. "Following Walmart is Target, who remains at #2 with a value of $27 billion, which is an 8% increase over 2013. The Home Depot holds at #3 with a brand value of $25 billion.

    "Amazon is #4 at $23 billion, increasing 27% from last year. CVS/pharmacy rounds out the Top 5 nearing $18 billion, up 12%. Coach drops from #6 to #9, clearing the way for three other brands to move up. Walgreens is now #6 with an 8% rise. Sam's Club remains steady at $13 billion and takes the #7 position. eBay progresses to #8  with a 20% increase. Publix advances into the Top 10 for the first time, with a brand value just over $10 billion. With a 12% decrease in brand value Nordstrom falls out of the Top 10 this year and lands at #12."

    You can read the entire index here.

    One of the biggest increases in "brand value" was seen by Whole Foods, which was up 173 percent.

    Among the biggest declines were at Best Buy (down 41 percent) and Lululemon (down 13 percent).
    KC's View:
    I have to say that the one on this list that surprises me is Macy's, a company that I criticized a lot a few years ago as it went through a centralization and brand-winnowing process that led me to believe that it was going to be less local in its marketing and merchandising, which could be a long-term problem. I think it is fair to say that I've been proven wrong on that one. (Not the first time, won't be the last.) Though, I also have to admit that I think my broader thesis is correct - that decentralization and localization can be powerful weapons as retailers seek differential advantages.

    Published on: April 9, 2014

    The New York Times reports that Target plans to "expand its inventory of 'natural, organic and sustainable' goods to meet growing customer demand. The company said it would introduce more than 120 new products over the next several months, and unveiled a new umbrella category for these items — 'Made to Matter — Handpicked by Target'."

    The story says that this initiative has been in the works since 2012, and that "Target is working with 17 brands whose goods it already stocks — like Seventh Generation, Vita Coco, Kashi and Burt’s Bees — to provide new or adjusted products exclusive to Target for at least six months."

    The Organic Trade Association (OTA), the story notes, says that the organic segment "grew to $31.5 billion in United States sales in 2012 … from $8.4 billion a decade earlier. From 2011 to 2012, the sector grew 10.3 percent."
    KC's View:
    Not to doubt Target's commitment, but I'm sure this seems particularly useful as it tries to change the conversation and get people to focus a little less on the data breach that took place there.

    Published on: April 9, 2014

    Mobile Commerce Daily reports that "Subway joins the quickly blossoming list of quick-service restaurants making a bigger push into mobile by enabling customers to place orders via an application on their smartphones."

    The story goes on to point out that "Panera, Taco Bell, Burger King, McDonald’s and Wendy’s (have) all announced plans to build or expand mobile ordering strategies. In many cases, ordering is being paired with payments and loyalty … These restaurants also wish to repeat Starbucks’ success with its mobile payments app, which sees more than 14 percent of transactions taking place through its mobile app."

    This follows up on a story from Reuters the other day talking about many big retailers are "entering the mobile payment business, each hoping their app will become the industry standard … Retailers' apps might struggle to take off as customers are unlikely to be willing to use a variety of services for different stores, but the success of Starbucks Corp in combining mobile payments with promotions shows big players can succeed."
    KC's View:
    I use the Starbucks app a lot, and I keep wondering why it doesn't do even more than it does. For example, there ought to be the ability to program in what my "usual" order is, so all I have to do is say, "I'll have my usual" when I hand them my card.

    It also ought to be built into the system that when I order two or three coffees, I get credit for two or three coffees in the frequent shopper program. The way it is now, I have to have them ring up the coffees separately, or it gets marked down as one just transaction. This matters, because I get a free coffee for every 12 I pay for. (Most cashiers don't mind ringing them up separately, but it adds a step.)

    These aren't big deals, but sometimes it is the little things that really matter.

    Published on: April 9, 2014

    City Wire reports that recent internal meetings at Walmart revealed that the company's new CEO, Doug McMillon, is "maniacal about growth," saying that "growing comp sales is 'a must' … (and) wants to see more excitement and energy displayed inside the retailer’s physical stores."

    At the same meetings, the story says, CMO Duncan Mac Naughton, "said the retailer’s goal is to grow inventory at half the rate of sales, a disciplined approach, while also embracing more localization. His main objective is to grow top line sales, leveraging every tool at his disposal — individualized pricing perks with 'Savings Catcher,' more price rollbacks billed as 'Amazing Finds' which are three to four items featured in weekly tabs."


    • The Business Standard reports that while the Indian government continues to resist some calls to allow direct foreign investment in multi-brand retail chains there, Walmart plans to open 50 wholesale, or "cash and carry," stores there to add to its existing fleet of 20 such units. The story says that Walmart remains "optimistic about India and will focus on cash-and-carry till policies governing multi-brand retail are eased."
    KC's View:

    Published on: April 9, 2014

    The Los Angeles Times reports that because of extreme weather that "has thinned the nation's beef cattle herds to levels last seen in 1951, when there were about half as many mouths to feed in America," beef prices have hit an all-time high, "roiling the beef supply chain from rancher to restaurant."

    The story says that "the retail value of 'all-fresh' USDA choice-grade beef jumped to a record $5.28 a pound in February, up from $4.91 the same time a year ago. The same grade of beef cost $3.97 as recently as 2008."

    "Soaring beef prices are being blamed on years of drought throughout the western and southern US," the Times reports. "The dry weather has driven up the price of feed such as corn and hay to record highs, forcing many ranchers to sell off their cattle. That briefly created a glut of beef cows for slaughter that has now run dry … One reason why beef prices will take some time to ease: Calves require more than two years to gain enough weight for slaughter. And not every rancher will still have a herd to breed from after so much liquidation."

    One of the places where this is expected to be most felt - the nation's fast food burger chains, where some think the notion of "dollar menus" and "value menus" could become a thing of the past.
    KC's View:

    Published on: April 9, 2014

    The Financial Times reports that a UK sales decline of seven percent that led to declining market share means that Tesco senior execs are "coming under renewed pressure."

    According to the story, "Janet Smith, head of loyalty, who is responsible for Tesco’s flagship Clubcard scheme, also departed, according to people familiar with the situation. The news follows the resignation of longstanding finance director Laurie McIlwee … However, Tesco denied reports that Matt Atkinson, chief marketing officer, was being replaced.

    "The deterioration in the retailer’s trading performance will put pressure on Philip Clarke, chief executive, and Chris Bush, managing director of the UK business."
    KC's View:
    Tesco's miserable performance has to ratchet up the pressure on everyone at the highest levels of the company. Plus, one has to wonder if there might be ways to go back and get some bonus money back from former CEO Terry Leahy, who, it might be argued, made all the decisions and set in motion all the initiatives (Fresh & Easy!) that led Tesco to this point in its history.

    Published on: April 9, 2014

    San Francisco Weekly reports that Instacart, the personal grocery shopping service, has added an organic, worker-owned grocery store, Rainbow, to its roster, which in San Francisco thus far has included Whole Foods, Safeway, and Costco.

    "This is a coup of sorts for Instacart," the story says, "which is competing in the increasingly dense online grocery delivery space. S.F.'s delivery market for local goods has been dominated by Good Eggs, the online aggregator of dozens of small farms and food producers."
    KC's View:

    Published on: April 9, 2014

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

    USA Today reports this morning that PepsiCo plans to roll out three varieties of its soda sweetened with real sugar instead of high fructose corn syrup - Pepsi Made With Real Sugar, Pepsi Vanilla Made With Real Sugar, and Pepsi Wild Cherry Made With Real Sugar.

    The move is seen as being tied to a desire to inject some energy - and new sales - into a category that has seen sales declines in recent years.


    • The Los Angeles Times reports that CVS Caremark has struck a deal with the US Securities and Exchange Commission (SEC), agreeing to pay $20 million "to settle charges that it misled investors and used improper accounting techniques to artificially boost its financial earnings" during the third and fourth quarters of 2009.

    CVS Caremark says that it is not admitting any wrongdoing by writing the check.

    Yeah. Because people always write $20 million checks because of lack of guilt. This is one of those weird constructs that I hate - people and companies that insist on saying things that seem demonstrably absurd.


    • The newest National Association of Convenience Stores (NACS) monthly Consumer Fuels Survey says that "consumer optimism remains steady in April, a period in which the ongoing spring transition to summer-blend fuel usually increases gas prices and reduces optimism. While gas prices increased nearly another dime over the past four weeks, 44% of consumers remain optimistic about the economy, the same figure as March.

    "Last year, consumer optimism dropped 5 percentage points between January and March, when gas prices peaked. This year, optimism increased from 43% to 44% since the beginning of the year, despite a 25-cent increase in retail gas prices since January."
    KC's View:

    Published on: April 9, 2014

    …will return. Really. I promise.
    KC's View:

    Published on: April 9, 2014

    In the NCAA women's basketball final last night, the University of Connecticut defeated Notre Dame 79-58, completing a fifth undefeated season for the university's women's program. The New York Times reports that the win gives coach Geno Auriemma "one title more than his former nemesis, Pat Summitt of Tennessee, and only one fewer than John Wooden, whose pyramid of success brought 10 national titles to the men’s team at U.C.L.A."

    And, the Times writes, for a school "whose early mission was agriculture, UConn has come to regularly harvest basketball championships. The women’s team again shares a national title with the men, as it did in 2004. Since 1999, the Huskies men and women have made a combined 17 appearances at the Final Four. Duke is next with eight."
    KC's View: