retail news in context, analysis with attitude

MNB Archive Search

Please Note: Some MNB articles contain special formatting characters, and may cause your search to produce fewer results than expected.

    Published on: September 18, 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.

    Last week, when I sat down to chat with Reed Farrel Coleman, the terrific novelist who has taken over the Jesse Stone series created by the late Robert B. Parker, we spent some time talking about his early career as a writer. And he used a metaphor that did not make my piece about him and his new book, "Blind Spot," last Friday, but that I thought was a pretty good business lesson. So I thought I'd share it now…

    Coleman told me that when he began writing novels, he quite literally had no experience, and so he'd write himself into corners that he'd have no idea how to get out of … and sometimes would just ignore those corners and move on, because that was his skill level at the time. (Needless to say, that doesn't happen to him anymore…)

    Then, he told me the story of Sarah Winchester, the widow of gun magnate William Wirt Winchester, and the Winchester House in San Jose, California.

    I've never been to the Winchester House, but apparently it is quite the architectural oddity. Because after her husband's death in 1881, and her move west to San Jose a couple of years later, poor Sarah apparently decided that her house needed to be under constant construction, which it was until her death in 1922. Now, some of the stories say that a medium convinced her that it was the only way to appease the spirits of the people killed by Winchester rifles. Coleman told me that he'd read that she was convinced that she would only stay alive as long as there was construction at the house. And, if you read some internet sites, there are even more bizarre explanations than those.

    But what it meant in terms of the house is that there are stairs and hallways that go nowhere, windows that look out onto other rooms, and other weird building oddities that were the result of a) not having a master plan, b) not having a strategy, and c) not really being focused.

    In essence, as a homeowner, Sarah Winchester did what Reed Farrel Coleman did as a writer - she built herself into corners she could not get out of, so she just kept building, but things got worse with every passing day.

    That's a great business metaphor.

    There are a lot of things going on in the business world today, whether you are a retailer, manufacturer or service provider. Lots of options, lots of distractions, lots of opportunities. But you have to have a plan - you have to have a strategy, and you have to be focused. if not, you end up like a crazy homeowner or an inexperienced novelist, and these days we live in a business climate that is not very forgiving.

    So thanks to Reed Farrel Coleman for that … and once again, read "Blind Spot," and then start working your way through his other books, especially the Moe Prager series. You won't be disappointed.

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

    KC's View:

    Published on: September 18, 2014

    by Kevin Coupe

    Talk about an Eye-Opener.

    A New York Times story earlier this week reported that "an estimated two million Americans age 60 and older who are in debt from unpaid student loans, according to data from the Federal Reserve Bank of New York. Its August 'Household Debt and Credit Report' said the number of aging Americans with outstanding student loans had almost tripled from about 700,000 in 2005, whether from long-ago loans for their own educations or more recent borrowing to pay for college degrees for family members.

    "The debt among older people is up substantially, to $43 billion from $8 billion in 2005, according to the report, which is based on data from Equifax, the credit reporting agency. As of July 31, money was being deducted from Social Security payments to almost 140,000 individuals to pay down their outstanding student loans, according to Treasury Department data. That is up from just under 38,000 people in 2004. Over the decade, the amounts withheld more than tripled, to nearly $101 million for the first seven months of this year from over $32 million in 2004."


    That's just amazing to me - that many people of my generation, for whom college costs were not nearly as high as they are today, are in the position where student loan payments are being deducted from their Social Security checks.

    This speaks to a number of things, I think. This problem in part is because there is a segment of my generation that, because of a number of factors, has never been able to get ahead … and the recent recession has made things even worse. These folks may never be able to dig themselves out. (There will be some who will think of all these folks as deadbeats, but I think that paints the situation with an inaccurate broad brush. Sure, some people take advantage and want a free ride. But not everybody. And if we're willing to bail out banks and car companies, and offer subsidies to farmers and aid to foreign countries, it seems to me that some of that largesse could be directed closer to home.)

    We can also talk about the utter absurdities of the student debt situation in this country, the high cost of a college education, and a political system that seems not to understand that the only way a society can prosper and advance is through an educated populace, and that money used to keep educational costs down is money invested in a nation's future.

    But when I read those paragraphs in the Times, all I could think of is the long-term economic implications for the generation that currently is in college, members of which are amassing sometimes stunning levels of student debt. What is this going to mean in terms of their ability to buy houses, cars, and spend disposable income in a way that will drive the economy for the decades to come?

    I read these numbers, and I realize how lucky I was that I was able to pay for my own education at a private university, taking out a minimum of student loans that I was able to pay back by writing a check for $63.86 a month for 10 years. (I finished paying off that loan in 1987, but that number remains burned in memory.) And I realize how lucky we've been to be able to send our kids to college, and they've emerged almost completely debt-free. (I give Mrs. Content Guy all the credit for that, and it is one of the best things we've done for our kids.)

    But it seems to me that as a culture, we have to get our arms around this serious problem, which has economic, political and even national security implications. If we don't, it will be a societal failure of epic proportions.
    KC's View:

    Published on: September 18, 2014

    The Associated Press reports that in rejecting Dollar General's latest $9.1 billion offer to acquire Family Dollar, which prefers to accept Dollar Tree's $8.5 billion bid, Family Dollar is saying that Dollar general is more interested in derailing the lower offer than actually making the acquisition.

    Dollar General CEO Rick Dreiling described the accusation as "not worthy of debate."

    In rejecting the offer, Family Dollar urged its shareholders not to accept the bid by Dollar General, which has gone hostile with its acquisition bid in the face of the Family Dollar rejection.

    According to the AP story, Family Dollar called the Dollar General offer "illusory and a distraction." The story says "the claims are the latest twist in a monthslong merger saga about the country's three biggest dollar retail chains. Family Dollar is worried that if it goes ahead with Dollar General's deal as written, it could end up empty-handed due to antitrust concerns. But that could change if Dollar General were to agree to divest as many stores as regulators mandate."
    KC's View:
    It doesn't come as any surprise to me that Dollar General would see complicating the proposed Family Dollar acquisition by Dollar Tree as a nice side benefit of making its own bid. I'm no expert on such things, but it remains unclear to me why any shareholder would want to take an $8.5 billion bid when there is a $9.1 billion bid on the table.

    Published on: September 18, 2014

    Amazon last night announced what the New York Times called "a refresh of its Kindle tablets and e-readers … with a set of internal hardware improvements and updated software features that Amazon hopes will woo new crowds to its line of devices."

    Two examples of what Amazon is up to:

    • "Take the updated Kindle Fire HDX 8.9 tablet," the Times writes. "It now includes a powerful 2.5 GHz Snapdragon processor from Qualcomm and comes with the WPS Office app, essentially a way to create and edit documents from the tablet. The app is integrated with Amazon’s Cloud Drive, which will back up documents on Amazon’s servers. Amazon has also built a Fire Keyboard, which connects wirelessly to the HDX 8.9 tablet via Bluetooth.

    "The aim here, it seems, is to go after the segment of the market that wants to use a tablet as a workstation, instead of toting around a laptop. In other words, it’s the same audience that Microsoft has tried to court with its Surface tablet … But modeling the new Kindle after the Surface is questionable, as the Surface has hardly flown off the shelves. Microsoft took a $900 million write-down on unsold Surface RTs last year."

    • "The Kindle Fire HD Kids Edition … aims for the opposite end of the market.

    "For $149, Amazon offers an updated 6-inch Kindle Fire HD tablet with front-and-rear-facing cameras, an improved display and a better microprocessor. It also comes in an array of pretty colors, much like Apple’s iPods.

    "The hook, however, is the guarantee that comes with the device. If your child breaks the tablet, Amazon will replace it for up to two years. The shockproof rubber case that comes in the package will probably help protect against that, too. The device also allows for full access to 'FreeTime Unlimited,' Amazon’s child-friendly section of videos, apps and games."
    KC's View:
    Amazon probably is smart to try getting a head-start on the holiday shopping season, but it remains to be seen whether it is going to make the kind of tablet computer inroads that it hopes to achieve. I love my Kindle app, but I prefer to use it on my iPad … with one exception. When one is outside, the iPad is unreadable because of glare, and our Kindle is far more usable.

    I still wonder if perhaps Amazon has been a little too overt in its plans to get Kindles in people's hands so that they'll buy stuff from Amazon. I always knew that was the plan, but these days it seems a little too obvious. it is almost as if Amazon has gone from "wanting to make it easier for people to buy stuff" to "we need to make more sales," and the shift does not work to its benefit.

    Published on: September 18, 2014

    Advertising Age reports this morning that PepsiCo CEO Indra Nooyi is saying that her company, a major sponsor of the National Football League (NFL), continues to support NFL Commissioner Roger Goodell in the wake of the spousal and child abuse accusations against a number of players that have roiled the league.

    Her statement reads as follows:

    "I am a mother, a wife, and a passionate football fan. I am deeply disturbed that the repugnant behavior of a few players and the NFL's acknowledged mishandling of these issues, is casting a cloud over the integrity of the league and the reputations of the majority of players who've dedicated their lives to a career they love. When it comes to child abuse and domestic violence, there is no middle ground. The behaviors are disgusting, absolutely unacceptable, and completely fly in the face of the values we at PepsiCo believe in and cherish.

    "Given PepsiCo's long-standing partnership with the NFL, I know Roger Goodell. We have worked together for many years. I know him to be a man of integrity, and I am confident that he will do the right thing for the league in light of the serious issues it is facing.

    "Over the past several days, it is increasing apparent that the NFL is starting to treat these issues with the seriousness they deserve. Hiring former FBI Director Robert Mueller to conduct a thorough investigation is a positive step, as is hiring three prominent women with significant, relevant expertise and assigning another, who is an NFL official, to help shape its domestic violence policies. These individuals must now be given the necessary time to review all relevant facts so that corrective actions can be taken, and well-tailored and effective policies against domestic violence and child abuse can be implemented immediately.

    "The reality for Commissioner Goodell and the NFL is that they now have an opportunity to effect positive change with the situation presented to them. I urge them to seize this moment. How they handle these cases going forward can help shape how we, as a nation, as a society, and as individuals treat domestic violence and child abuse."

    Advertising Age reports that "Ms. Nooyi's statement came after a Bloomberg news story raised questions about the relative silence of three female CEOs of major sponsors, including Ms. Nooyi, General Motors CEO Mary Barra and Campbell Soup Co. CEO Denise Morrison. The story stated that 'several female activists are pushing the three CEOs to speak out' on the Ray Rice domestic abuse case. But the story also noted that other women said it is 'unfair to hold female bosses to higher standards'."
    KC's View:
    With all due respect, I just don't understand this statement.

    Goodell may be a man of integrity, but he doesn't seem to have a clue about how to handle this problem, and he's been missing-in-action when it comes to being front-and-center, except for one TV interview. And while the NFL indeed may be starting to treat these issues seriously, that is damning the league with faint praise - there is something patently ludicrous about the NFL needing an elevator videotape to prompt it to action. Spousal and child abuse is assault. It is being committed by people who think they can do whatever the hell they want, and have been taught that they are immune from criticism by a college sports system, professional sports business, and media culture that has put them on a pedestal they do not deserve.

    Yes, the NFL should be judged by how it deals with these cases moving forward. But it also must be judged by how it has dealt with them in the past. By that standard, the league and its owners get a failing grade.

    It is true, I think, that female CEOs ought not be held to a higher standard than their male counterparts. But the whole damned lot of them need to be held to a higher standard overall.

    I'm sure the Nooyi statement was designed - by committee - to sound thoughtful. To me, it sounded mealy mouthed.

    BTW … there was a story in Variety this week that points to an additional problem for the NFL:

    Just as countless parties are tackling it over its handling of the recent Ray Rice controversy, its recent disclosure that its players are more likely than the general population to sustain severe brain injuries, and the news that Minnesota Vikings player Adrian Peterson has been indicted on charges of child abuse, the NFL may have to contend with something potentially even more devastating.

    Younger viewers are walking away from broadcasts of its games.

    The average audience between 18 and 49 for NFL broadcasts across CBS, Fox, NBC, ESPN and the NFL Network has declined by about 10.6% over the last four seasons, according to Nielsen data prepared by Horizon Media, to about 7.7 million in 2013 from about 8.62 million in 2010. Meantime, male viewers between 18 and 24 watching the sport have also fallen off, tumbling about 5.3% in the same time period, to approximately 847,000 in 2013 from 894,000 in 2010.

    I wonder to what extent younger viewers - who may see spousal and child abuse as remnants of another time, and not reflective of their world - will see the current NFL troubles as just another indication that the sport is not relevant to their lives.

    Published on: September 18, 2014

    Reuters reports that the US Department of Agriculture (USDA) yesterday "gave final approval to new genetically modified corn and soybeans developed by Dow AgroSciences that, while heavily criticized by environmentalists and some farmers, are portrayed by Dow as an answer to weed resistance problems that limit crop production.

    "Approval of the specialty corn and soybeans to be sold as part of a branded 'Enlist Weed Control System' means the traits could be on the market for the 2015 U.S. planting season, according to Dow AgroSciences, a unit of Dow Chemical.

    "Dow is still awaiting approval from the Environmental Protection Agency for Enlist herbicide, which the genetically altered Enlist corn and beans are designed to tolerate."

    “Enlist will help farmers increase their productivity to meet the growing demand for a safe and affordable food supply,” Tim Hassinger, president of Dow AgroSciences, said in a statement.

    But Marcia Ishii-Eiteman, senior scientist with Pesticide Action Network (PAN), had a different take: "The USDA approval of Enlist after such a fundamentally flawed review process is a slap in the face to farmers. Thousands of farmers have warned USDA of the crop damage, economic losses and health risks they will face from pesticide drift, if these 2,4-D resistant seeds hit the market."

    PAN has said it may file lawsuits to prevent Dow from going ahead with its plans.
    KC's View:

    Published on: September 18, 2014

    In a message posted on the Apple website, CEO Tim Cook has addressed consumer worries about personal privacy issues, talking about the things Apple is doing to protect its customers.

    "A few years ago, users of Internet services began to realize that when an online service is free, you’re not the customer," Cook writes. "You’re the product. But at Apple, we believe a great customer experience shouldn’t come at the expense of your privacy.

    "Our business model is very straightforward: We sell great products. We don’t build a profile based on your email content or web browsing habits to sell to advertisers. We don’t 'monetize' the information you store on your iPhone or in iCloud. And we don’t read your email or your messages to get information to market to you. Our software and services are designed to make our devices better. Plain and simple.

    "One very small part of our business does serve advertisers, and that’s iAd. We built an advertising network because some app developers depend on that business model, and we want to support them as well as a free iTunes Radio service. iAd sticks to the same privacy policy that applies to every other Apple product. It doesn’t get data from Health and HomeKit, Maps, Siri, iMessage, your call history, or any iCloud service like Contacts or Mail, and you can always just opt out altogether."

    Cook pledges in the message that Apple will continue to heighten its security protocols, and to communicate regularly with customers about how they are empowered to make their own decisions. The message is linked to an Apple site designed to allow users to customize their security.

    And, in the message, Cook adds: "I want to be absolutely clear that we have never worked with any government agency from any country to create a backdoor in any of our products or services. We have also never allowed access to our servers. And we never will."
    KC's View:
    I think that one part of Cooke's statement definitely bears repeating…

    We don’t build a profile based on your email content or web browsing habits to sell to advertisers. We don’t 'monetize' the information you store on your iPhone or in iCloud. And we don’t read your email or your messages to get information to market to you. Our software and services are designed to make our devices better. Plain and simple.

    I think that's what consumers want, especially as privacy concerns gain traction. And I think that approach is one that ought to be adopted by more companies.

    I'm consistently amazed by how many emails I get from advertisers that clearly have gotten my address from companies with which I have done business. I tolerate it, because of the business I'm in - after all, I write about this stuff. But if I were just an average consumer, I'd be outraged.

    Published on: September 18, 2014

    Bloomberg reports that Wal-Mart de Mexico is under investigation there because of allegations that one of its stores hosted a cockfight. The story says that "Walmex faces fines of as much as 96,000 pesos ($7,250) if found responsible, said Jose Luis Hernandez, commercial director of the city of Boca del Rio, where betting on fighting roosters is illegal. A Walmex spokesman, Antonio Ocaranza, said the roosters weren’t armed with blades, no betting took place at the store and no birds were harmed."
    KC's View:
    So let me get this straight. The roosters were fighting, but they didn't use weapons and none of the roosters got hurt?

    So did they use Marquess of Queensberry Rules? Sounds like a classic non-denial to me.

    It also sounds like Antonio Ocaranza may have a job waiting for him at the NFL.

    Published on: September 18, 2014

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

    • The New York Times reports on a new study from the Weizmann Institute of Science in Israel suggesting that "artificial sweeteners may disrupt the body’s ability to regulate blood sugar, causing metabolic changes that can be a precursor to diabetes.

    The story notes that "previous studies on the health effects of artificial sweeteners have come to conflicting and confusing findings. Some found that they were associated with weight loss; others found the exact opposite, that people who drank diet soda actually weighed more.

    "Some found a correlation between artificial sweeteners and diabetes, but those findings were not entirely convincing: Those who switch to the products may already be overweight and prone to the disease."

    Indeed, some critics - including some from the Harvard School of Public Health - have said that while the new study is interesting, the results hardly are conclusive.

    Not conclusive, maybe, but worrying. I have to admit that I'm rather happy that I've given up diet soft drinks and have moved almost exclusively to water. I figure that, especially as I get older, the less of this stuff I put in my body the better.

    Bloomberg reports that Costco has said that beginning on January 1, 2015, its Canadian stores will no longer accept the American Express card.

    According to the story, "AmEx, the biggest U.S. credit-card issuer by purchases, was the only credit card accepted at Costco stores, and has worked with the warehouse-club chain to issue co-branded cards. U.S. stores will continue to accept AmEx." Costco said it will "have information on new payment options soon."

    • The Los Angeles Times reports that "American adults are increasingly consulting food labels, eating less fat and downing more fiber, according to a new report from the U.S. Department of Agriculture's Economic Research Service."

    The story goes on: "The report may be welcome news to those concerned about the nation's obesity epidemic, but the restaurant industry might not relish the findings. Many of the improvements in the American diet are a result of driving past the drive-thru: 'Reduced consumption of food away from home (such as food from restaurants and fast food) accounted for 20 percent of the improvements in diet quality,' the report found.

    Can I get an "Amen"?
    KC's View:

    Published on: September 18, 2014

    • McDonald's has named Fred Ehle, formerly VP-brand management at homebuilder Pulte and described by Ad Age as "an agency veteran, having worked at VSA Partners, Leo Burnett and FCB," as its first VP-customer officer.
    KC's View:

    Published on: September 18, 2014

    Yesterday, Kate McMahon wrote a column about shoe company Nine West, reporting that "in its new store displays and print and social media campaign, the brand is touting shoes for specific occasions, including 'Starter Husband Hunting' (leopard print heels paired with an arrow and target) and 'Drunch' (for drunk at lunch). Another ad shows a woman with a pair of flip-flops tucked into a Nine West tote for the 'Anticipatory Walk of Shame' home after a night spent elsewhere."

    Kate commented, in part:

    The circa 2014 single working women I know don’t spend their days plotting to snag a first husband, boozing it at lunch or feeling “shamed” after a evening out. Rather they are focused on career advancement, working through lunch and owning their personal/lifestyle decisions … Does the term “working mother” mean anything to Nine West? When women make up 47% of the work force, and four in 10 American households with children under age 18 now include a mother who is either the sole or primary earner for her family? Multi-tasking stay-at-home mothers don’t view the start of kindergarten as a vacation requiring high heels, either.

    While the company says it is comfortable that the messages reflect its customer base's concerns, Kate argued that, in fact, it is offensive - and that Nine West clearly is out of touch and guilty of condescension.

    One MNB user wrote:

    I totally agree with your take on the Nine West shoe ads. I found this appalling! And BTW, I am absolutely certain I am not their target demographic, but I have nieces and a daughter who would be. One is a student and one is a civil engineer. Knowing them as I do, I think neither would find these anything less than insulting. Unless they are catering to dim witted, shallow and immature females, they are really at risk of alienating many. But the fact that they can’t find any internal detractors is very telling about their culture; are they sincerely being asked or are they afraid of senior management’s willingness to listen?

    From another reader:

    Is Nine West owned  by NFL stockholders?   Seems to have that same  male old-fart anti-female 'tude.

    MNB reader Billie Brooks wrote:

    I often wonder what gender and age group develops these campaigns.  Are they not in touch with their customers? Did they test this marketing idea with real women?  I see this same “mistake” when retailers assume who their customers are without using any real data.  Creating buzz may be what Nine West is trying to accomplish when they should focus on creating loyal customers.  I, for one, am not easily offended but may look at other brands next time I go shoe shopping (which is quite often).

    We also continue to get email about the NFL situation, including this one:

    For the last week I personally have struggled with the explosion relating to the NFL and domestic abuse (women & child).  Having been raised in a abusive home, then in an abusive marriage, it’s not just NFL related.  Unfortunately, abuse has been going on for way to long in our society in general.  It does bring it to a larger awareness which in part is about the only positive thing about it.  However, until we change as a society, community, and laws these acts will continue.

    Where is the blame on the hotel in which this happened and why was it not reported? Why did she not report it (was she too scared)?  Once it’s reported, the said person is arrested (male or female for it goes both ways).  Next step the abused person has to spend money in which a lot of cases they do not have to file for a restraining order.  Let me tell you, the paper does not keep them away and by the time they show back up at your door, beside your car, at your employment, etc.  if you are able to call police, which most times you are not, by the time they arrive, you are already beaten again and hopefully not left for dead.  Kids get abused and then allowed to see said parent with CPS; this didn’t and has not stopped them from killing or injuring everyone involved including the CPS staff.

    We need stronger laws and people need to be held responsible not matter a million dollar football star to the everyday person that maybe sitting next to you in an office.  It has been a message from the NFL for many years however, just a slap on the wrist for whatever crime and they are back to playing.  Look at the recent history…animal abuse, child abuse, drunk driving and even death to team mates.  All get to continue living large, making big bucks and the children who see this grow up to think that there is no consequences so the cycle continues. 
    I do believe in second chances, fine if you want them to play, work, or move on then keep a tight watch on them, pay them a min salary and the rest of the nice chuck of money needs to go to benefit said justice for the crime they have done.  I’m sure the Women Shelters, CPS, Animal Shelters, etc. could and would make better use of the income and will also show that this will not be tolerated PERIOD!

    Regarding the statement from Anheuser-Busch saying it is "concerned" about the issues enveloping the NFL, one MNB user wrote:

    Hum, one’s got to wonder if anyone at Anheuser-Busch ever thought of the correlation between domestic violence and alcohol?
    KC's View: