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    Published on: October 13, 2014

    In the digital age, "open 24 hours" apparently has real meaning.

    The Washington Post reports that a new Google/Ipsos study shows that "one-third of all shopping searches take place between 10 p.m. and 4 a.m."

    In addition, the Post reports, "Twenty-six percent of shoppers said they would start their holiday shopping research before Halloween. More than 50 percent said they’d begin before Thanksgiving."

    Furthermore, "Many retailers have been investing heavily this year in what's knows as an 'omnichannel' strategy, which focuses on offering customers an integrated digital and in-store shopping experience.  The Google/Ipsos study offers some evidence that this may be a worthwhile investment: A large share of shoppers — 75 percent — say they’ll be using their smartphones during their shopping excursions to brick-and-mortar stores."

    Which all just goes to show … the effective retailer in 2014 and beyond has to be where the customer wants it, when the customer wants it, how the customer wants it, selling the right products at prices that seem appropriate.

    The word "omnichannel" may scare people.

    How about just being "relevant"?
    KC's View:

    Published on: October 13, 2014

    The Financial Times reports that Sears-owned Kmart "has become the latest retailer to fall victim to a cyber attack, saying that it had lost credit and debit card data," and has reported that while it knows that the breach "probably started in early September," it does not know the extent of the breach.

    According to the story, "The news comes soon after it was revealed that cyber attacks are costing companies almost double the amount they were four years ago – as businesses find they have to spend more on informing customers, cleaning up their computer systems, and coping with disruption to their trade." The Kmart breach is said to be along the same lines of hacking incidents that affected companies such as Home Depot and Target.

    The FT story notes that Kmart's president, Alasdair James, says that "he cyber breach was detected on Thursday and was being investigated with the help of a leading security company, federal law enforcement agencies and banking partners," and that Kmart's systems were breached by malicious software that is “undetectable by current antivirus systems."
    KC's View:
    The good news is that the extent of the Kmart breach is likely not to affect nearly as many customers as the other breaches, for the simple reason that pretty much nobody shops at Kmart anymore.

    The bad news is that, based on the way Kmart operates, its idea of computer security probably is to post four guys with bayonets outside a room full of IBM mainframes, and its idea of antivirus procedures is to take four aspirins.

    I'm not kidding here.

    There was a Crain's Chicago Business story over the weekend about the disaster that is Kmart, reporting that "The once-venerable retailer had been foundering for years when Sears CEO Edward Lampert plucked it out of bankruptcy in 2002 and merged it with Sears in 2005. But the chain's performance has worsened in recent quarters because of increased competition and Mr. Lampert's refusal to pump money into Kmart's 1,077 stores … Kmart's sales will sink to around $12 billion this year, compared with about $18 billion at Sears stores, according to estimates by Gary Balter, a New York-based analyst at Credit Suisse … Some perspective: In 2000, Kmart Corp. had nearly $36 billion in sales, while Sears Roebuck & Co. generated $40 billion."

    In other words, Kmart and Sears are suffering from a near total lack of relevance.

    Published on: October 13, 2014

    The Tampa Bay Business Journal reports that at last week's Raymond James Women's Symposium in St. Petersburg, Sallie Krawcheck, described as a "Wall Street veteran" who now is chairman of Ellevate, a professional networking organization for women, pushed back against comments last week by Microsoft CEO Satya Nadella in which he suggested that women should trust the system to reward them fairly and not push for raises.

    "Ask for the money, ask for the money, ask for the friggin' money," she told the symposium audience.

    According to the story, Krawcheck "cited statistics that show women as a group make 77 cents for every dollar men make. She also shared an example of two equally qualified workers, one male and one female and both eligible for a 5 percent pay hike. Too often, she said, the man is likely to get 7 percent while the woman gets 3 percent."

    In addition, Krawcheck told the audience that a diverse workforce tends to be one that avoids groupthink, and therefore is smart business.

    She stressed the need for more diversity of all kinds in the workplace and on corporate teams. "A diverse business team outperforms a smart team," she said.''
    KC's View:
    We're on a roll there this morning. Beyond the immediate goal of making sure that women demand to be paid what men are being paid for the same jobs, the larger lesson is that diversity makes a business more relevant to the markets it is trying to serve.

    That's right. More relevant.

    (See a pattern in this morning's stories…?)

    Published on: October 13, 2014

    There is a thought-provoking piece in The New Republic to which I was referred by MNB reader Frieda Caplan, about whether or not we need a new definition of the concept of "monopoly" in the age of Amazon.

    "Without the constraints of brick and mortar," the story says, Amazon "considers nothing too remote from its core business, so it has grown to sell server space to the CIA, produce original televisions shows about bumbling congressmen, and engineer its own line of mobile phones.
    And as it amasses economic power, it also acquires greater influence in the cultural and intellectual life of the nation."

    However, "in confronting what to do about Amazon, first we have to realize our own complicity. We’ve all been seduced by the deep discounts, the monthly automatic diaper delivery, the free Prime movies, the gift wrapping, the free two-day shipping, the ability to buy shoes or books or pinto beans or a toilet all from the same place. But it has gone beyond seduction, really. We expect these kinds of conveniences now, as if they were birthrights. They’ve become baked into our ideas about how consumers should be treated.

    "These expectations help fuel our collective denial about Amazon. We seem to believe that the Web is far too fluid to fall capture to monopoly. If a site starts to develop the lameness of an AltaVista or Myspace, consumers will unhesitatingly abandon it. But while that meritocratic theory might be true enough for a search engine or social media site, Amazon is different. It has a record of shredding young businesses, like Zappos and, just as they begin to pose a competitive challenge. It uses its riches to undercut opponents on price—Amazon was prepared to lose $100 million in three months in its quest to harm—then once it has exhausted the resources of its foes, it buys them and walks away even stronger."

    Maybe too strong, too powerful, and too influential in the business and cultural life of the nation.

    This is really worth reading, and you can see it in its entirety

    KC's View:
    I don't want to push this whole "relevance" theme too far, but in a lot of ways what the story is arguing is that Amazon has managed to avoid examination of its business practices in part because it has made itself so relevant to consumer behavior that one cannot imagine being without it.

    It is a fascinating piece, and I'm really grateful to Frieda for forwarding it to me. To be honest, just reading it was like experiencing its arguments first hand. My head kept telling me that the article made a lot of sense, but my heart kept arguing that it's going to be okay, because it is Amazon, and Amazon is different…

    But I think what we've learned lately is that Amazon really isn't different. Not really, or at least not in some of the ways that count. And I've been arguing here for some time that I think some of its actions - especially the way it has dealt with Hachette and Disney when they could not come to terms over price - seemed to dare the feds to launch an investigation. I think there is some hubris there, and I worry that Amazon will fly too close to the sun…

    Published on: October 13, 2014

    Business Insider has a story saying that Walmart employees are "furious" over changes to its health insurance policies, as the company announced last week that it will cease offering coverage to part-time employees working less than 30 hours per week.

    Some excerpts:

    - "'Most of the employees where I work are struggling as it is and to take away more of the very meager benefits we get is atrocious,' said one associate who works at the West Point, Mississippi Wal-Mart store…"

    - "A part-time worker at the Wentzville, Missouri store said, 'While this is a cost cutting [move] for Wal-Mart, is it a slam in the face for employees. Just another thing they are taking away from them.' She said she works two jobs and has a health insurance plan with her full-time employer, so the changes won't affect her directly. 

    "But she's concerned about how this will impact her co-workers who are 'barely — and I mean barely — keeping their heads above water, even after working for Wal-Mart for almost 20 years,' she said."
    KC's View:

    Published on: October 13, 2014

    • The Wall Street Journal reports that Dollar General and Family Dollar have both received "requests for additional information from the Federal Trade Commission (FTC)" regarding the unsolicited bid by Dollar General to buy its smaller competitor for $9.1 billion. Family Dollar continues to maintain that it wants to be acquired by another competitor, Dollar Tree, for $8.5 billion, saying that the Dollar General bid is likely to run into too many antitrust and regulatory issues to make it viable.

    Dollar General has said it would be willing to divest as many as 1,500 stores to make the acquisition work, and has pledged to pay a reverse termination fee of $500 million if the merger falls apart because of antitrust issues.
    KC's View:

    Published on: October 13, 2014

    …will return.
    KC's View:

    Published on: October 13, 2014

    In Week Six of National Football League action…

    New England 37
    Buffalo 22

    Carolina 37
    Cincinnati 37

    Pittsburgh 10
    Cleveland 31

    Green Bay 27
    Miami 24

    Detroit 17
    Minnesota 3

    Denver 31
    NY Jets 17

    Baltimore 48
    Tampa Bay 17

    Jacksonville 14
    Tennessee 16

    San Diego 31
    Oakland 28

    Washington 20
    Arizona 30

    Chicago 27
    Atlanta 13

    Dallas 30
    Seattle 23

    NY Giants 0
    Philadelphia 27

    In the National League Championship Series, the St. Louis Cardinals defeated the San Francisco Giants 5-4 in a thriller last night, leaving the best-of-seven series tied 1-1.

    Meanwhile, the Kansas City Royals hold a 2-0 lead in their best-of-seven AL Championship Series against the Baltimore Orioles.
    KC's View:

    Published on: October 13, 2014

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    KC's View: