retail news in context, analysis with attitude

Published on: October 30, 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.

Sometimes, these commentaries come to me pretty quickly, because inspiration strikes. Sometimes, it takes a little longer, just because I need to clarify my thoughts before I speak the words. And sometimes, I know exactly what I want to say … but I delay because I want to make sure I don't lose my cool.

This is one of those times.

As regular readers of MNB know, one of the issues we talk a lot about here is diversity. I think that in any consumer-driven company, it makes sense of have management and leadership that reflects the diversity of the shoppers. I'm talking about age, gender, sexual orientation, ethnicity … whatever. As I've often said, we live in a "Mad Men" obsessed world, but the culture looks a lot more like 'Modern Family."

The most recent story that focused on the need for diversity was just last week, when it was announced that when the acquisition of Safeway by Albertsons is completed, two of the most senior female execs at Safeway will be leaving. The senior leadership, it appears, is made up primarily of middle-aged white guys … and, as I've pointed out, they're probably really only middle aged if they live to the average age of 110.

The problem is that some people - I like to think it is a minority - believe that this whole diversity thing is nonsense. Like the CEO of Microsoft, they believe that women, for example, ought to keep their noses down, work hard, and never ask for raises, never demand to be paid the same as men, and be willing to acknowledge the fact that they have other priorities than men and never will be willing to work as hard to achieve their professional goals. And if they demand fair treatment and equal opportunities, they are somehow suspect, especially if they seek outside remedies because they cannot get satisfaction inside their companies.

I think this is a crock. (And that's the polite term for it.) Sure, it'd be pretty to think that the workplace is essentially a fair and equitable place where achievement and dedication are rewarded without any other considerations. But it simply ain't so. I think we're getting closer, but we're not there yet. And the people who think we ARE there, inevitably, are the middle-aged white guys who either instinctively want to protect their turf or are better at self-congratulation than sensitivity to the world around them.

But then, I get an email like this one, referring me to a recent Fortune article on the 50 most powerful women in business … and saying the following:

"Great article you should read.  None of these women needed to litigate, legislate or fornicate their way to the top."

You gotta be kidding me.

Now, I'm not going to tell you who sent me this email, though the man who wrote it probably would be happy to have his name mentioned here. Hell, he's probably happy to have his name uttered anywhere. The good news is that he's not in the human resources end of the business.

But I find that email so incredibly offensive that it almost is impossible for me to know where to start.

First of all, nobody suggested that anyone has or should "litigate, legislate or fornicate" their way to the top, or even the middle for that matter.

I'm not a litigious person by nature, but I'm smart enough to know that some things need to be litigated. I don't believe that government can solve all our problems, but I'm old enough to know that sometimes we do need laws to make sure that everybody has the same rights. Do I think that sometimes courts and legislatures can be overused, and that sometimes people take advantage of their situations and want something for nothing? Sure. But somehow when a white guy does that, he's crafty, ambitious and motivated. When women do it, they're manipulative and bitchy. But the idea that this clown - and I say that with apologies to actual clowns everywhere - would equate legislating and litigating with fornicating … well, I think that tells you everything you need to know about his view of the world. Essentially, he's fornicated up. If you get my meaning.

I can only hope that as my daughter embarks on her professional life, she will work for people who will afford her all the opportunities and chances that they would give anyone else. That they are nurturing, respectful and challenge her to be better and more brilliant every day. Heck, I hope the same for my sons. Not all their bosses will be thus, but I hope they get their fair share. And I hope none of them will have to deal with people such as this neanderthal - and I say that with apologies to all actual neanderthals - who bring such antiquated mindsets to the workplace.

One other thing. We all know people who think like this moron. (And I say that with apologies to all actual morons.) I would suggest that in an age of social media, companies cannot run the risk of having attitudes like these associated with them, that they cannot afford to be alienating constituencies on which they depend for workers, customers and business partners.

I'm not saying that we all have to be politically correct. But I am saying that we live in a complex, complicated and increasingly transparent world, and we may want to make sure that we're being represented in the marketplace by people who are inclusive, appropriate and respectful. And not idiots. (And I say that with apologies to all actual idiots.)

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

Published on: October 30, 2014

by Kevin Coupe

Tim Cook, the CEO of Apple, has written an essay in the new Bloomberg Businessweek in which he acknowledges what has been an open secret at Apple, that he is a gay man.

In doing so, he becomes the highest profile gay person to be running a public company in the US.

Saying that he has long maintained a high level of personal privacy, Cook writes that this desire has held him back from "something more important."

Cook continues:

"For years, I’ve been open with many people about my sexual orientation. Plenty of colleagues at Apple know I’m gay, and it doesn’t seem to make a difference in the way they treat me. Of course, I’ve had the good fortune to work at a company that loves creativity and innovation and knows it can only flourish when you embrace people’s differences. Not everyone is so lucky.

"While I have never denied my sexuality, I haven’t publicly acknowledged it either, until now. So let me be clear: I’m proud to be gay, and I consider being gay among the greatest gifts God has given me.

"Being gay has given me a deeper understanding of what it means to be in the minority and provided a window into the challenges that people in other minority groups deal with every day. It’s made me more empathetic, which has led to a richer life. It’s been tough and uncomfortable at times, but it has given me the confidence to be myself, to follow my own path, and to rise above adversity and bigotry. It’s also given me the skin of a rhinoceros, which comes in handy when you’re the CEO of Apple."

Cook says, "I don’t consider myself an activist, but I in the US.realize how much I’ve benefited from the sacrifice of others. So if hearing that the CEO of Apple is gay can help someone struggling to come to terms with who he or she is, or bring comfort to anyone who feels alone, or inspire people to insist on their equality, then it’s worth the trade-off with my own privacy … The company I am so fortunate to lead has long advocated for human rights and equality for all. We’ve taken a strong stand in support of a workplace equality bill before Congress, just as we stood for marriage equality in our home state of California. And we spoke up in Arizona when that state’s legislature passed a discriminatory bill targeting the gay community. We’ll continue to fight for our values, and I believe that any CEO of this incredible company, regardless of race, gender, or sexual orientation, would do the same."

And, he concludes:

"When I arrive in my office each morning, I’m greeted by framed photos of Dr. King and Robert F. Kennedy. I don’t pretend that writing this puts me in their league. All it does is allow me to look at those pictures and know that I’m doing my part, however small, to help others. We pave the sunlit path toward justice together, brick by brick. This is my brick."

You can read the entire essay here.

At the end of the day, Cook's sexual orientation - whether he is proud of it or not - will have little impact on whether Apple's computers and smart phones are better and/or more successful than anyone else's. Cook's legacy will depend not on his sexual orientation, but on how he shepherds and nurtures the company that Steve Jobs bequeathed to him.

But make no mistake, this is a statement of real import. Because Cook's decision to be open about his sexual orientation will resonate for many people who feel that they are discriminated against, whether overtly or covertly. It will give them courage, and someone with whom they can identify, to whom they can relate.

Make no mistake. It is a lot easier for a multimillionaire CEO to be honest about his sexuality than it is for a lot of other people. But he's right. Paths are built brick by brick.

We should all identify with Tim Cook … with his belief in human rights and equality, and willingness to throw Apple's considerable heft into battles when and where it matters.

It is an Eye-Opener.

Published on: October 30, 2014

FierceRetail reports that CurrentC, the mobile payments system that is positioned to compete with Apple Pay, has already been hacked, even as it is being tested only in select Minnesota retailers.

The Merchant Customer Exchange (MCX), the consortium behind CurrentC, released a statement that said, in part, "Within the last 36 hours, we learned that unauthorized third parties obtained the e-mail addresses of some of our CurrentC pilot program participants and individuals who had expressed interest in the app. Many of these email addresses are dummy accounts used for testing purposes only. The CurrentC app itself was not affected.

"We have notified our merchant partners about this incident and directly communicated with each of the individuals whose email addresses were involved. We take the security of our users' information extremely seriously. MCX is continuing to investigate this situation and will provide updates as necessary."

At the same time, the New York Times reports that the backers of the Merchant Customer Exchange, which has been developing CurrentC, say they are open to adopting the same technology being used by Apple Pay.

The focus at CurrentC to this point has been on QR code technology, while Apple Pay has used Near Field Communication technology.

“I think there’s been a mistake made here, and that is focusing on the technology instead of what business or consumer problem you’re trying to solve,” Dekkers Davidson, CEO of the Merchant Customer Exchange, tells the Times.

Meanwhile, Time has a piece about the growing battle between Apple Pay and CurrentC, which broke out into the open last week when several retailers involved with MCX decided to disable Apple Pay technology in their stores. CurrentC, the story says, is "seen by many as having been designed more to benefit merchants than consumers. It’s certainly less user-friendly and probably less secure than Apple Pay, but it will help merchants sidestep the much-hated fees they have to pay every time a customer swipes a credit card. CurrentC is also just less cool than Apple Pay - from a tech obsessive’s perspective, it looks like a budget sedan to Apple Pay’s Tesla Model S."

However, Time also notes that companies like Walmart - which is one of the companies driving CurrentC - are not worried about tech obsessives … that they are more concerned about having technology that is relevant and user-friendly for their customers.

Published on: October 30, 2014

The Wall Street Journal this morning reports on a new Silicon Valley-based startup called Deliv, which is offering same-day delivery services for stores and malls around the country.

According to the story, "Deliv has reached agreement to offer its delivery operation out of new malls like the Beverly Center in Los Angeles—  bringing its total to 30— and will be begin operations in Seattle, Houston, Washington, D.C., and Northern New Jersey, said Chief Executive Daphne Carmeli. It already offers same-day delivery at several sites in San Francisco, San Jose, Calif., Chicago and Los Angeles."

The offering takes two forms - retailers can use it to deliver products bought in-store or via their websites, or consumers can use it "to drop off their merchandise at booths or with mall employees for delivery at set times so that they can continue shopping." Deliv charges on a per-address basis, not per-package.

The Journal notes that "Deliv’s expansion follows Google’s recent moves to offer its Google Express same-day delivery service in more stores and cities; while Amazon.com is preparing its first brick-and-mortar locale for quicker drop-offs within Manhattan … Amazon has driven much of the interest in same-day delivery by opening a growing number of warehouses near urban centers, as well as the recent expansion of its Fresh grocery service to Brooklyn. A crop of startups and established companies offer same-day delivery as well, including eBay, Wal-Mart, Postmates and Instacart."

Published on: October 30, 2014

The Cincinnati Business Courier reports that "Kroger Co. is aggressively going after online supermarket sales and isn't worried about a battle looming with competitors like Amazon."

At an investor conference this week, Kevin Dougherty, Kroger's group vice president of digital and Vitacost, made the following observations about Amazon:

"We're not fixated by it. A decade ago, we decided we have to play our game and focus on our strengths. They may succeed, but what we do has worked for decades, and I'd want to bet on that being sustainable."

The story also notes that "Kroger is also about to launch an online click-and-collect service in Cincinnati that allows customers to order online and pick up their groceries at the store." The service will build on learnings from Harris-Teeter's online business, and Dougherty said Kroger is "putting processes in place to make it more efficient. You'll be underwhelmed by the visual experience, but it's designed to help customers get through a big-basket shopping experience quickly and efficiently."

Published on: October 30, 2014

• CityWire reports that "Walmart Savings Catcher, a mobile app that compares local sale prices of branded grocery items within a particular region, is being expanded to include toys and perhaps other merchandise for the upcoming holiday season."

The story says that Walmart points to Savings Catcher as a big success, and that "consumers have widely adopted the program with 33 million receipts scanned as of early October and more than $2 million returned to customers using the app since it was rolled out nationwide in August. 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.

Published on: October 30, 2014

The New York Times reports that in the UK, the Serious Fraud Office has launched a criminal investigation into account irregularities at Tesco, where it has been acknowledged that the company and its former senior executives deliberately obfuscated its actual financial condition and issued and misleading financial statements. The company has disclosed that the early booking of revenue and delayed recognition of costs resulted in an overstatement of profit projections by more than $400 million (US), which has led to the stepping down of eight executives and the resignation of the company's chairman as both internal and governmental investigations proceed.

Tesco already was being investigated by the Financial Conduct Authority, the UK's top financial watchdog, but the criminal probe now will supersede it. And, Tesco has launched an internal probe into the accounting issues, while at the same time suspending some eight executives while not accusing anyone of fraud.

Published on: October 30, 2014

• The 15-store Woodman's grocery chain is suing Clorox Corp., the Associated Press reports, charging that "Clorox will only make large packs of products available to warehouse clubs, including Costco and Sam's Club. The Janesville-based company claims that's a violation of a federal law, the Robinson-Patman Act, which prohibits anti-competitive practices, including price discrimination."

The story says that Clorox is prepared to defend its policies, which in this case meant putting Woodman's into a different channel category than Costco and Sam's, which providing with different assortment choices. "We believe this lawsuit is without merit and intend to vigorously defend against it," says Kathryn Caulfield, Clorox's vice president of global corporate communications.


• The Food Marketing Institute (FMI) said yesterday that it has formed a business alliance with research firm Technomic designed "to offer food retailers concrete information on the growth opportunities for the fresh prepared food area of retail stores."

According to the announcement, "FMI and Technomic will launch the initiative in November, 2014, that will begin to evaluate product sales, staffing, rates, space allocation, merchandising and other strategic measures. The partnership will also offer an interactive, online tool that allows retailers to objectively evaluate how effectively they manage their prepared food programs, and white papers to analytically explore the trends."

Published on: October 30, 2014

• The Seattle Times reports that Lisa Utzschneider, vice president of global-advertising sales at Amazon Media Group, is leaving the company, probably to move to Yahoo. She will be succeeded by Seth Dallaire, who has been vice president of North American advertising sales for Amazon Media Group.

The story notes that Utzschneider was instrumental in building Amazon's ad business into one that generates close to $1 billion in annual revenue.

Published on: October 30, 2014

MNB reader Jeff Folloder had the following thoughts about the reasons Apple decided to stop manufacturing the iPod Classic:

I find it wholly preposterous that the iPod Classic was discontinued for not being able to source a 160G hard drive.  Seriously? I have a 256G flash drive on my key chain that fits in a much smaller space, is faster that the 4200 rpm of the old drive, is solid state and contains no moving parts, likely costs less (under $35, delivered from Amazon) and certainly uses far less power (read: increased battery life for the iPod).  The cynic in me would find it easier to believe that Apple was merely forcing folks down the multi-function purchase path of an iPhone instead of an old fashioned "record player."




We got a lot of email yesterday regarding Kate McMahon's column about the "pumpkinization" of America … with most of it disagreeing with her opinion that eventually the pumpkin trend will play itself out. One typical email:

I don't think the ceiling has been reached on all things pumpkin. Nostalgia is a powerful marketing tool these days. And although I do not actually enjoy all products that have a pumpkin flavor to them, I do enjoy the treasure hunt aspects of it, as I do enjoy pumpkin a great deal. You highlighted Trader Joe's as a shining example of that. I would agree with your take if the pumpkin phenomena was a year round thing, but it's seasonal as in temporary, and something I always look forward to when Fall rolls around. If it were year round I think we would see over-saturation, and the whole novelty would grow tired rather quickly.




And, on another subject, an MNB user wrote:

Kevin—If it weren’t October, I surely would have thought this piece qualified for an April Fool’s piece.  "Fat Girls’ Costumes” for Halloween?  Really?  I can’t even believe there was a person at Walmart, or anywhere, who found this appropriate.  Surely this falls in the category of “what were they thinking?”.

Agreed.

Published on: October 30, 2014

In the seventh and the deciding game of the 2014 World Series, the San Francisco Giants - on the back of pitcher Madison Bumgarner, who threw five innings in relief, giving up just two hits - defeated the Kansas City Royals 3-2, earning their third championship in five years.