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    Published on: June 10, 2014

    by Michael Sansolo

    Maybe it’s societal attention deficit disorder or simply the desire to keep up with the pace of change. The reality seems to be that too many companies give up on too many initiatives before finishing the work. It happens repeatedly and the risks can be huge.

    Consider the issue of social media. Three years ago it was the greatest most important thing ever. Now, when I discuss the topics with some business groups, the response is essentially: “that’s so yesterday.”

    Really?

    Let’s consider two interesting statistics. First, the Washington Post had a front-page story Monday on how social media is altering love and marriage. Multiple studies say one-third of marriages in the US now begin with a social media relationship.

    Second, think of the power of Facebook alone. Sure, there have been articles about Facebook’s fading power, especially among younger users, yet the numbers show the exact opposite.

    Four years ago, Facebook had just hit 400 million users; today the number is 1.3 billion. That means Facebook now has a larger population than India, the second most populous country on the planet. Stated another way, Facebook has added 900 million users in the past four years or nearly three times the population of the US.

    The power of the social web is only growing. So the question becomes, what are you doing about it?

    The final section of the four-year study of social media by the Coca-Cola Retailing Research Council examines just how well the industry is doing in the world of Facebook, Twitter, Pinterest, SnapChat and more. The study, which you can download here, is something you need read because the answer is unsettling. (Full disclosure: In case you’ve forgotten from past articles; I am the research director of the council and am directly involved in this study.)

    In short, shoppers say they know you’ve got a Facebook page and they aren’t impressed. You’ve got lots more work to do.

    The eighth part of the social web study included surveys and in-depth interviews with shoppers, plus interviews with social web executives in the industry and the results are both startling and disappointing.

    Shoppers say they welcome social media as a tool to aid shopping, menu ideas and more, but most shoppers say supermarkets in particular aren’t rising to the level they want. In fact, many find the information on social networks is little more than the old circulars presented in a new format.

    Since that’s all they are finding, their activity mirrors exactly what you’d expect.

    Those deeper relationships or the sharing of information that are the hallmark of the social web still aren't happening for many retailers, even though that’s exactly what shoppers say they want and expect, certainly in the very near future.

    The industry’s front line people working on social media aren’t surprised by these findings because many say their own companies continue to struggle with how to use the social web. That struggle is reflected in funding and cultural issues that handicap more aggressive use of social media sites.

    Obviously, there is no simple answer to reacting to any of these findings, but Part 8 of the report is must reading for those who want to take the temperature of this new world. What more, those attending FMI this week can catch a council presentation on the findings, Thursday at 9 a.m. in room 102b.

    Either way, keep this in mind: 1.3 billion people can’t be wrong and that’s just the population of Facebook. Social media is a huge opportunity, but only if you seize it.


    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 .
    KC's View:

    Published on: June 10, 2014

    by Kevin Coupe

    A new study from the Leichtman Research Group says that 49 percent of US households has at least one television set that is internet enabled, up from 24 percent just four years ago, and that 47 percent of all US households has a subscription to Amazon Prime, Netflix, Hulu Plus - or a combination of more than one.

    Gigao.com notes that this "combination of connected TVs and internet video subscriptions is increasingly shaping what we are watching. Forty-nine percent of all Netflix subscribers watch online video programming on a connected device every week, compared to only eight percent of viewers who don’t subscribe to Netflix. And 78 percent of all Netflix subscribers watch their videos on a TV.

    Indeed, the research suggests that the combination of internet-enabled televisions and the availability of such services is allowing shoppers to "cut the cord" from traditional TV program providers. Gigao.com notes that "in 2010, 88 percent of Netflix subscribers also had pay TV. Fast forward to 2014, and that number is down to 80 percent.

    "At the same time, the number of cord cutters who also subscribe to Netflix is rising, from 16 percent in 2010 to 48 percent in 2014."

    In other words … yet more evidence of how new business models disrupt and threaten existing models.

    If it can happen to them, it can happen to you.
    KC's View:

    Published on: June 10, 2014

    Advertising Age has an interesting take on Walmart's Savings Catcher program, which is being tested in seven markets and is scheduled to be rolled out nationwide this summer.

    Essentially, Savings Catcher allows customers to go to Walmart's website and compare prices on some 80,000 grocery and household products with those of competitors. If Savings Catcher finds lower prices at a competitor, the shopper gets the difference in the form of money placed on a Walmart gift card.

    What Walmart really is doing, Ad Age suggests, is "using rivals' discounts to fuel its own loyalty program and get individual shopper data into its database … One goal is to highlight the retailer's longtime ad-match guarantee. But it's also clearly about data collection just like loyalty-card programs long used successfully by supermarket chains such as Kroger."

    Key to Walmart, the story says, was creating a loyalty program "without the promotional deals it's long shunned as part of its everyday-low-price philosophy." The data it generates from the program will allow it to more successfully target shoppers with relevant offers, but without any of the legacy systems and coupon distribution infrastructure that, it believes, weighs many retailers down.
    KC's View:
    I'd never really thought about Savings Catcher in this context before, but it makes a lot of sense. The more Walmart can accumulate actionable data and then actually act on it, the more effectively it will be able to get past the stagnant business its been experiencing in US stores. And the approach tires nicely into what it seems to be trying to do with online and mobile marketing, which can thrive on customer-specific data.

    Published on: June 10, 2014

    PwC US is out with a new study, scheduled to be released on Thursday at the FMI Connect show in Chicago, saying that "as consumers continue to demand more from retailers, the grocery industry should adapt and provide targeted shopping experiences tailored to specific consumer needs and changing demographics."

    The study goes on:

    • "83 percent of survey respondents prefer to shop at traditional grocery stores. That is unlikely to change in the future; however, customers will likely call for more personal connections with their grocer in the form of targeted coupons and deals, robust reward programs and convenient, efficient in-store shopping experiences."

    • "More than half of the shoppers surveyed complained of long lines and crowded stores. Grocers that provide a smoother in-store experience by taming congestion are likely to earn repeated shopper visits. Furthermore, shoppers will increasingly look to store employees as shopping advisors, whether for additional product information, new recipe tips or purchase recommendations, as they will want increased service and assistance with decision making."

    • "Although online shopping is seeing exponential growth in the retail industry, the grocery segment has not shown the same levels of engagement. Only one percent of survey respondents consider online shopping their primary way of getting groceries, though 92 percent reported having the option to online grocery shop."
    KC's View:
    I'm not nearly as smart as the folks at PwC, but there is a degree to which this study seems to reinforce what I think is the mistaken notion that while the food retailing business is evolving, retailers can succeed by tweaking their existing approaches as opposed to preparing for a potential revolution. My general feeling is that it is a mistake to underestimate the extent to which the existing business can be challenged and disrupted by new approaches, especially when you think about the next generation of shoppers. I just don't think that fixing long lines in traditional grocery stores is going to cut it.

    Published on: June 10, 2014

    Bloomberg reports that Target interim CEO John Mulligan, looking to fight what he sees as stifling bureaucracy at the retailer, "has moved the company’s entire leadership team to the 26th floor of its headquarters in Minneapolis, allowing for faster decisions and more clarity, he said in a memo to employees. Target also is scaling back on its four governance meetings, which have focused on the supply chain, marketing, design and capital expenditures. Mulligan even changed the name of the executive committee to the 'leadership team.'"

    Mulligan, Bloomberg writes, says that "as we continue to focus on accelerating our transformation, everything matters -- including what we call ourselves. All across Target, we need more 'leadership' and less 'committee'."
    KC's View:
    These all strike me as smart moves. Now, if Mulligan also works to empower the people who work in the stores - manning the front lines of the retail business - then he'll make some real progress.

    Published on: June 10, 2014

    Reuters reports that in an effort to compete with PayPal, Amazon "will start managing subscription payments for start-ups and other companies … The service, which launches on Monday, allows the company's more than 240 million active users to use credit card details stored on Amazon.com to pay for services such as a monthly phone bill or a digital music subscription. Amazon then charges a fee on each transaction … The new service broadens Amazon's profitable role as a middleman for third-party sellers, which account for 40 percent of its sales and extends its influence beyond its website."

    According to the story, Amazon is compensating for merchant concerns that it could use the data to compete with its own customers by saying that it will only have access to transaction amounts, not specific items.
    KC's View:

    Published on: June 10, 2014

    The Wall Street Journal reports that in the UK, Tesco "aims to turn its vast pool of grocery buyers into bank customers by offering loyalty points and high interest rates on checking accounts, in the biggest effort yet by Britain's largest retailer to shake up the country's tightly held personal-banking market." However, "to win more banking customers, it will have to stand out in a market that is dominated by five banks and includes a clutch of so-called challenger banks that have sprung up in recent years with mixed success."

    The story notes that Tesco, "which sells about 29% of Britain's groceries even after a sharp decline in first-quarter sales, will pay 3% interest on savings of as much as £3,000 ($5,000) and turn account debit cards into loyalty cards that earn points on transactions at the retailer and elsewhere. The grocer set up Tesco Bank in 1997 for credit cards, loans and savings accounts. Tesco Bank already has six million customers."
    KC's View:
    Read this, and you realize why US financial services companies are so scared of allowing companies like Walmart into the banking business.

    Published on: June 10, 2014

    The New York Times reports that Joel Anderson, president of walmart.com for the past three years, is resigning from the company to take a position with an as-yet unidentified company.

    Anderson will be replaced by Fernando Madeira, president of Walmart’s Latin American e-commerce division. According to the story, "his new responsibilities will include leading Walmart.com’s domestic and Latin America teams, as well as other 'growth areas'."

    According to the story, "Though these are some of the more visible changes to be made at Walmart’s e-commerce division, they are far from the only shifts in personnel. Dan Toporek, a company spokesman, said Walmart.com had hired about 1,000 employees in the last 18 months in Silicon Valley alone. Another 600 people were hired in Brazil in that time, he said.

    "The company has also been beefing up its infrastructure, announcing three new e-commerce centers in just the past few months — one in Texas, one in Pennsylvania and one in Indiana."
    KC's View:

    Published on: June 10, 2014

    • The Triangle Business Journal reports that Relay Foods, the five-year old pure play online grocer that provides products from local vendors, is expanding beyond its current Charlottesville , Richmond, Baltimore and Washington, D.C. markets to Durham, North Carolina.

    According to the story, "In this case, Relay Foods will start with one pickup location in downtown Durham, and will be expanding to allow pickup in Research Triangle Park on Wednesdays and Oval Park on Fridays. Relay Foods will source local produce and goods from local farms and stores, including Weaver Street Market in Carrboro, Counter Culture Coffee in Durham, Vintage Bees, Maple View Farms and Lunapops."
    KC's View:

    Published on: June 10, 2014

    • There seems to be some further details - and some debate - emerging about the circumstances surrounding the multi-car accident that allegedly was caused by a Walmart truck driver in New Jersey over the weekend, killing one man and sending three others - including comedian Tracy Morgan - to the hospital. The driver, Kevin Roper has been charged with one count of death by auto and four counts of assault by auto.

    The criminal complaint says specifically that Roper had gone 24 hours without sleep, but Walmart says that it "believes Roper was operating within federal regulations, which require drivers to work no more than 14 hours — 11 of them driving — for any shift."

    The Associated Press reports that Walmart is saying that the truck had a safety system installed that is "designed to slow the truck's speed and notify the driver of stopped traffic ahead"; Walmart has been installing such systems in its trucks since 2010, though there is no word as to whether the system on Roper's truck was working.

    Walmart says that it "is consistently recognized as having one of the safest private fleets in the country, with an accident frequency of 0.342 per million miles traveled, according to the U.S. Department of Transportation. Wal-Mart drivers get annual safety training, and the company has 65 drivers who have driven 3 million miles or more without any accidents." However, the AP story points out that "Wal-Mart trucks have been involved in 380 crashes in the last 24 months, according to data compiled by the Federal Motor Carrier Safety Administration. Nine people have been killed in those crashes; 129 have been injured."
    KC's View:

    Published on: June 10, 2014

    Reuters reports that Family Dollar has adopted a "poison pill" that is designed to give it time "to consider any possible deal that activist investor Carl Icahn could push for after becoming its largest shareholder."

    According to the story, "Family Dollar adopted a one-year shareholder rights plan … with a trigger of 10 percent." If any entity acquires 10 percent of the company, it triggers the issuance of new shares, which dilutes the position of threatening shareholders. Icahn bought 9.39 percent of Family Dollar, and he says that the poison pill "puts a damper" on prospects for constructive dialog with the retailer.


    • The Los Angeles Times reports that the price tag for Tyson Foods to buy Hillshire Brands, the maker of Jimmy Dean sausages and Ball Park franks, will be $7.7 billion. That works out to about $63 per share, and it beats out a $55 per share bid by Pilgrim's Pride.

    The story notes that "as part of its deal, Tyson expects Hillshire to nix the previously announced merger with Pinnacle Foods that would force Tyson to pay a $163-million breakup fee. Yet in a statement, Hillshire said it had received the offer but its board hasn't yet made a decision."
    KC's View:

    Published on: June 10, 2014

    Yesterday's MNB Wake Up Call went out late enough yesterday that, if it woke you up, it meant you were taking a nap. (Good for you!) Apologies for that … the lateness of the delivery was one of those coding/scheduling issues that I cannot quite explain, but for which I take full responsibility. As always, thanks for your patience…

    Mea culpa, mea culpa, mea maxima culpa.
    KC's View:

    Published on: June 10, 2014

    Got the following email from MNB reader Danny Silverman:

    Just a few comments on your comments on Amazon…

    This business with Hachette is amusingly blown out of perspective. Amazon does this EVERY day with EVERY vendor. The difference here is that Hachette appears to have violated their NDA by going public. Good PR move, bad for any hope they had of quick resolution with Amazon. One point: Amazon.

    Keep in mind the Kindle versions of these books remain available. That’s EXACTLY where Amazon wants customers to go. Hachette is making a stink about paper books. Meanwhile, Amazon’s profit margins just went up the moment they slowed/stopped shipping books. Score another one for Amazon.

    Along those same lines, does Amazon want the Hachettes of the world to go out of business? Absolutely. They believe authors can and should self-publish in the e-format and allow Ratings & Reviews to determine best sellers. Not the NYT. No slick PR campaigns. The age of publishers is coming to an end and Amazon seeks to expedite it in the name of customer value.

    Speaking of which, most shoppers aren’t going to complain if they couldn’t find their book in the short term on Amazon (they just went to B&N or Walmart or Target for it) and in the long run, get to pay less for those books when they’re back on Amazon. Indeed this squabble is Customer Obsession at its best. The whining about how this is bad for the customer is Hachette PR working hard.

    As for “Amazon Subprime,” I agree Add-On is a train wreck (and Amazon knows it). I think Pantry is another train wreck. Both are solving an Amazon problem, not a customer problem. In that regard, they have slipped. I also believe allowing 3p’s to use FBA and get the Prime badge also leads to poor customer experiences when the product quality isn’t up to Amazon standards. I’m not sure how much longer their cut-throat, 24/7 culture will support the growth they’re seeing. Lots of soldiers making many more decisions that Bezos can’t keep his finger on. But I do believe it will shake out. The coming automation via Kiva and whatever form an in-house transportation network will take, will likely bring back their mojo. That’s my prediction anyway.

    KC's View:

    Published on: June 10, 2014

    Winooski, VT – MyWebGrocer, a leading provider of digital marketing solutions to the grocery and CPG industries, today announced the launch of Aisle BeaconSM, new in-store technology that leverages proximity marketing to deliver personalized content to consumers while shopping in a grocery store.

    Exclusively available on MWG’s mobile applications, this is the first beacon messaging system that is built directly within a grocery retailer’s branded app. Retailers can use Aisle BeaconSM to provide consumers with the most relevant offers from their circular, private label brands and CPG manufacturers. This gives retailers another opportunity to bring useful, customizable content directly to shoppers, while improving the in-store experience and increasing sales.

    Aisle BeaconSM is able to deliver hyper-personal messages based on a shopper’s preferences and past buying behavior. The platform is designed as a natural extension to MWG’s existing shopping and planning tools and seamlessly integrates with all other digital and mobile products within the MWG suite, providing a full omni-channel solution.

    MWG’s Aisle BeaconSM will be featured at FMI Connect in Chicago, IL, June 10-13. Demonstrations will take place at MWG booth 1323 throughout the conference. Beacon technology and other digital innovations will also be a part of the Retail Experience of the Future, a special exhibit at this year’s FMI Connect.
    KC's View:

    Published on: June 10, 2014

    Tampa Bay, FL – Webstop, a leading digital marketing provider for grocery retailers, is proud to announce a partnership with PlaceWise Media, a leading digital marketer for malls and retailers and the provider of one of the nation’s largest shopper media networks. Webstop retailers, operators of 1,700 stores nationwide and providers of millions of shopper connections each month via web, mobile and email, will now have the opportunity to display lucrative advertising on their digital properties and gain revenue as a result.

    Along with its core offering of website and mobile features for grocers, Webstop will now provide advertising from many of the nation’s top brands. Retailers will have an opportunity to display these promotions throughout their digital properties including on mobile devices that continue to see increased use from grocery consumers. The PlaceWise platform allows retailers to benefit from the Research Online/Buy Offline (ROBO) trend, driving more traffic to physical stores with online and mobile tools.

    Webstop’s partnership with PlaceWise Media is another example of the company’s willingness to work with best-of-breed providers versus developing everything in house. Webstop partners with other grocery specific technology companies such as Inmar, You Technology and Accelitec to name a few.

    PlaceWise and Webstop will attend the Food Marketing Institute’s FMI Connect show next week in Chicago and can be found in Webstop’s booth #2127.
    KC's View: