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    Published on: October 23, 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 coming to you from Manchester, New Hampshire … it is the middle of the night as I record this, but I'd rather be outside than inside my room with the TV on … because if you spend any time watching TV here, you're going to see political advertising for both Massachusetts and New Hampshire, and you're probably going to want to take a shower, no matter what your political preferences happen to be.

    I'm here because I spent the day at the New Hampshire Grocers Association annual conference, during which I had the opportunity to do two sessions - including what I like to think was a Socratic discussion with the audience about lessons to be learned from the recent Market Basket situation … or whatever you want to call it.

    My goal was not to rehash the various parts of the Market Basket story, mostly because I'm reasonably sure that it is a lot more complicated than could be examined in 45 minutes, and that neither the Artie T. nor Artie S. sides can be labeled as purely sinners or saints. Though I do think it is fair to say that Arthur T. Demoulas's side played the PR game a lot better … which was part of another session I did on crisis management.

    But the main point of our discussion was the importance of the people on the front lines … for whatever reasons, and there surely were many, they felt invested in Artie T's vision for Market Basket, and they communicated that successfully to both customers and the media.

    While there was a lot of high drama at Market Basket, the chain is not alone in believing that the people on the front lines are the most important part of a customer-facing business. That's certainly the attitude at a place like Dorothy Lane Market … and at places as different as WinCo and Zappo's and Costco. I think in just the past few weeks we've seen evidence that this is the way they feel at places like Ikea and The Container Store. My friend Jim Donald, who has been CEO at Pathmark, Starbucks and now Extended Stay Hotels, has made this a core value in every company he has led - making sure that the people dealing with customers understand the mission and the vision, and feel totally invested in both … to the point that he communicates constantly with them, offering news, pep talks and soliciting their opinions and feelings.

    Here are the questions I posed to the New Hampshire Grocers:

    "Do your employees feel like an investment/asset or a cost? And what are you doing to encourage those feelings? And if you are making them feel like a cost, what should you be doing differently?"

    There will be those who will say that not every retail business needs to have smart, committed, invested and, yes, appropriately compensated people on their front lines, that not every retail business needs such a thing.

    But to be honest, I think that's malarkey. I think that every business is better with great people, and that every business ought to be invested in making sure its people are great.

    You may disagree. But that's what is on my mind, and as always, I want to hear what is on your mind.

    KC's View:

    Published on: October 23, 2014

    by Kevin Coupe

    This morning's Eye-Opener is brought to you by Barnie's CoffeeKitchen…

    There is an intriguing story in the New York Times Magazine this Sunday about an unusual study that looked into the psychology of age - or whether, in fact, one is only as old as one feels.

    An excerpt:

    "One day in the fall of 1981, eight men in their 70s stepped out of a van in front of a converted monastery in New Hampshire. They shuffled forward, a few of them arthritically stooped, a couple with canes. Then they passed through the door and entered a time warp. Perry Como crooned on a vintage radio. Ed Sullivan welcomed guests on a black-and-white TV. Everything inside — including the books on the shelves and the magazines lying around — were designed to conjure 1959. This was to be the men’s home for five days as they participated in a radical experiment, cooked up by a young psychologist named Ellen Langer.

    "The subjects were in good health, but aging had left its mark … Before arriving, the men were assessed on such measures as dexterity, grip strength, flexibility, hearing and vision, memory and cognition — probably the closest things the gerontologists of the time could come to the testable biomarkers of age … The men in the experimental group were told not merely to reminisce about this earlier era, but to inhabit it … From the time they walked through the doors, they were treated as if they were younger. The men were told that they would have to take their belongings upstairs themselves, even if they had to do it one shirt at a time."

    When their stay was completed, the story says, the men were tested again. "They were suppler, showed greater manual dexterity and sat taller … Perhaps most improbable, their sight improved. Independent judges said they looked younger."

    The experience was called "the counterclockwise study," and the conclusion was simple - that far from being on separate tracks, the mind and the body are, in fact, inseparable and intertwined.

    Go figure. To a great extent,you really are only as old as you feel.

    Which sounds like a study - not to mention a marketing approach - tailor-made for a Baby Boom generation that has adopted the notion that sixty is the new thirty, seventy is the new forty, and eighty is the new forty-one.

    It is fascinating piece, exploring both the conclusions and the controversies, and an Eye-Opener ... that you can read in its entirety here.
    KC's View:

    Published on: October 23, 2014

    The Financial Times this morning reports that Tesco chairman Sir Richard Broadbent plans to step down at a still-to-be determined date. He said earlier today that the accounting scandal that has roiled the company is “a matter of profound regret," and that he will "prepare the ground to ensure an orderly process for my own succession."

    Meanwhile, the New York Times reports that Tesco said that "it had overstated profits by £263 million, or about $423 million, slightly more the company had revealed last month. The company, hobbled by eroding sales and the profit scandal, also revealed for the first time that the accounting irregularities stretched back further than it had first disclosed. It said that £118 million of the shortfall related to the first half of this year, with another £145 million linked to the past two years."

    And Reuters writes that Lewis said "he could no longer provide a full-year profit forecast because he did not know the scale of Tesco's problems or how much it would cost to rebuild the world's third largest grocer."

    The Times confirms that the discrepancy in Tesco's books comes from booking promotional income from manufacturers too early while pushing costs out too far into the future as a way of making the company's financial situation look better than it was.

    FT reports that "Dave Lewis, Tesco’s new chief executive, would not comment on whether the overstatement had been the result of error or deliberate action. He said, however, there was 'evidence that no one made any financial gain from the situation.' He added that no bonuses had been paid to executives in the three years over which the mis-statement had taken place.

    "Nevertheless, Mr Lewis said that severance payments – together worth millions of pounds – to Philip Clarke, ousted as chief executive in July, and Laurie McIlwee, who resigned as finance director in April, were being withheld until the conclusion of an investigation into the matter by the Financial Conduct Authority."

    Eight senior managers have been suspended from their roles pending the completion of the investigation.
    KC's View:
    The general feeling from most of an analysis I've read seems to be that while Tesco seems to acknowledging its problems, there still seems to be no real plan for how to proceed in the future. I'm not sure if that is entirely fair - after all, it is hard to plant new stuff until you've cleared away the old, dying foliage. (At least, I think that's the case. I know nothing about gardening or agriculture. But this seems like a metaphor that would make sense…)

    Still, the folks at Tesco can't fix these problems too quickly. This seems like such an utter failure of management and a collapse of any sort of ethical culture … and it is refreshing to see that departed executives such as Clarke and McIlwee forced to take some level of accountability. I'm not sure if Tesco has any sort of stick when it comes to former CEO Sir Terry Leahy, but it certainly seems to me that he ought to feel some of the pain as well, because he helped to build this house of cards.

    Published on: October 23, 2014

    The Washington Post reports this morning that Walmart-owned Sam's Club plans to open "a private health insurance exchange for its members, a move that is aimed at providing the small-business owners that are its core customers with a way to offer affordable insurance coverage to their employees … Sam’s hopes its offering will be a popular alternative to the public insurance marketplaces that were created as part of the Affordable Care Act.  The state small-business exchanges, often called the SHOP exchanges, have so far failed to meet their enrollment goals in many states. Some critics of the health-care law have questioned whether it would encourage small businesses to drop health insurance for their employees altogether.  With its new private exchange, Sam’s Club seems to be gambling that small businesses will remain committed to providing affordable insurance for their workers."

    The new exchanges will be available in 18 states where Sam's does business.

    The Post reports that "one of Sam’s Club’s chief rivals, Costco, already offers a private insurance marketplace that is geared at individual shoppers. The Sam’s Club marketplace is different in that it was designed specifically to appeal to small-business owners, although individual members could potentially sign up for it."

    The story also notes that Sam’s announced Wednesday "that it was launching new services for small business owners to outsource their payroll capabilities and legal needs."
    KC's View:
    The Post story makes me think that the next big retailing trend will be one that Apple actually has been utilizing for years, and that Amazon certainly has been pursuing in recent days - the notion of creating an eco-system to which consumers become committed, even addicted.

    Here's the passage that got me thinking this way:

    "The launch of the exchange is the latest effort from a major retailer to offer a service that pushes beyond the industry’s traditional business of selling goods. Sam’s Club, which is a division of Wal-Mart Stores Inc., says its private insurance marketplace is part of a broader attempt to build customer loyalty in an era when other membership programs, such as Amazon Prime, threaten to take a bite out of its business."

    That's what retailers need to do, at some level - create an eco-system that keeps shoppers coming back over and over, both seeking and accepting new connections.

    Published on: October 23, 2014

    Advertising Age reports that Macy's is working with Google to cater to what it calls "omni-shopping behavior" by consumers.

    According to the story, beginning next month Macy's shoppers will be able to "search for an item on their phone and see what's stocked at their nearest Macy's location. Alongside the images are product details like price, size and color, directions to the store, and a link to the item on the retailer's website. The program works with Google's proximity marketing platform in an effort to drive sales in stores and online during the biggest shopping season of the year."

    Jennifer Kasper, group VP-digital media and multicultural marketing at Macy's, tells Ad Age, "We know that we have great opportunity to build a longer, more loyal relationship with them if we are successful in communicating … and encouraging discovery."
    KC's View:
    Here's an interesting statistic that I think deserves highlighting - that Macy's has discovered, based on tests in San Francisco, that every dollar it invests in search is rewarded with six dollars worth of purchases. "By focusing on smartphones users," the story says, "the brand hopes to capitalize on the number of people who search for products before, during and after shopping trips."'

    Published on: October 23, 2014

    Advertising Age reports that Walmart has brought on a new ad agency with the goal of creating new advertising programs that will cast it as an underdog - or, to put it another way, a David doing battle with Goliaths.

    CMO Stephen Quinn says that the company used to be "very comfortable in David's skin, slaying these retail giants. But one day we woke up and we were actually Goliath. So the whole goal of the past decade has been trying to get ourselves back into the role of David."
    KC's View:
    Well, good luck with that. I'd like to fly like Superman, but I think I have about as much chance of doing that as Walmart has of making itself into an underdog.

    Published on: October 23, 2014

    • The Tampa Bay Business Journal reports that "Publix Super Markets Inc. is on an apparent buying spree of Florida shopping centers. The Lakeland-based grocer in recent weeks has closed on two centers in the Orlando area: The $14.3 million acquisition of East Towne Center in Clermont and a $24.8 million buy in Winter Park."

    While Publix apparently only owns about 20 percent of the real estate that it occupies, the story says, "as landlord, Publix gets to control the tenant mix of the shopping center. That's key as Publix — and its competitors — focus heavily on the fast-growing prepared food segment of the grocery business. As landlord, Publix can decide which food concepts it will allow in its center — and keep out any potential competitors."


    • The Grand Rapids Business Journal reports that Meijer has completed the roll-out of its Ready! for You program at each of its 213 stores.

    The story notes that "the program features Ready! for You-branded meal displays that combine food items from various manufacturers into ready-to-go meals for a family of four. Customers can taste what's on display at weekly sampling demos.

    "As part of the initiative, Meijer is creating online videos with 'quick and simple' food ideas and posting Ready! for You recipes for breakfast, lunch and dinner on its Pinterest boards."
    KC's View:

    Published on: October 23, 2014

    Reuters reports this morning that Procter & Gamble announced that "the head of its North American business, Melanie Healey, will retire next June, as the company puts together a new leadership team in an effort to revive sagging sales growth and gain market share.
    Healey, once widely considered to be a potential successor to current Chief Executive A.G. Lafley, will be succeeded by Carolyn Tastad, who is currently P&G's global customer development officer."
    KC's View:

    Published on: October 23, 2014

    …will return.
    KC's View:

    Published on: October 23, 2014

    In Game Two of the 2014 World Series, the Kansas City Royals bounced back to defeat the San Francisco Giants 7-2, tying the best-of-seven series at 1-1. The series now moves to San Francisco's AT&T Park, where it will resume tomorrow night.
    KC's View: