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: November 12, 2014

    by Kate McMahon

    Just one look, that’s all it took, for a 16-year-old Texas Target bagger to topple Justin Bieber as America’s teen heart throb and out-trend Ebola and the midterm elections.

    Actually, it was just one tweet … but I couldn’t resist borrowing the lyric from the R&B song to sum up the viral phenomenon that is #AlexFromTarget.

    In the span of 48 hours, Alex LaBeouf went from a cute guy working the checkout lane in Target’s Frisco, Texas, store to an internet sensation and guest on The Ellen DeGeneres Show. His Twitter following skyrocketed from 114 (total) to 733,000 (and counting).

    It’s further proof that even the most random meme can spread like wildfire on the internet, and no there’s no demographic that can fan the flames quite like teenage girls with a major crush on a boy with Bieber-like bangs.

    For Target, still seeking to regain consumer confidence after last December’s massive credit breach, it was an unexpected shot of positive P.R. just before the holiday shopping season.

    Which begs the question – what’s next for the boy and the Minneapolis-based big box retailer?

    So far, I think Target has handled Alex-mania well. A store manager first alerted Alex that two enamored girls had posted a photo of him in Twitter with his nametag, and the 800,000-plus retweets began. When a marketing start-up called Breakr attempted to take credit for Alex’ “overnight” stardom – prompting a full round of “Alex is a hoax” headlines – Target quickly responded, saying, “We value Alex as a team member and from the first moment we saw this photo beginning to circulate, we shared that the Target team was as surprised as anyone. That remains the truth today. Let us be completely clear, we had absolutely nothing to do with the creation, listing or distribution of the photo.”

    My guess is the Target social media team was wishing there was a playbook for this -- run with it or ignore it? I think their next move was the smartest – a short tweet with just the right tone:
    “We heart Alex too!” with a picture of his nametag.

    That generated 30,000 retweets and 43,000 “favorites” on the Target Twitter feed. By comparison, a toy sale tweet the previous day prompted 112 retweets and 150 favorites.

    Social media experts and branding gurus have plenty of opinions on what Target should do next.

    I think there’s a prime opportunity to use social media to further the store’s “Target team member” model.

    In the interview with Ellen DeGeneres, Alex came across as a really nice, kind of goofy kid still blindsided by his sudden celebrity. When DeGeneres asked if he had any other talents, such as singing or dancing, he replied “No, but apparently I bag groceries well.”

    Exactly. And that’s important. Ask anyone whose bread has been smushed by a gallon of milk. And the person bagging groceries is a shopper’s last touchpoint with a store.

    In addition to Alex, Target could highlight the other employees who are on the front lines of customer service, as well as those behind the scenes making sure there are enough Elsa and Anna “Frozen” dolls on shelves for the holidays or snow shovels and handwarmers for those already blasted by winter in the Midwest. It seems to me that this could be the basis of a really smart promotional campaign, both in mainstream and non-traditional media.

    What’s the broader business lesson here?

    Simple. Your company, your employee, or your product can go viral on the internet in minutes. It may be a photo, or a comment, but it can reach thousands in seconds and there is little you can do to control it.

    What every retailer, producer or service provider must do is always track what is happening in social media and be prepared to move quickly and react responsibly – whether is a photo of a cute bagger named Alex or reports of a massive credit card breach. Just one tweet, that’s all it takes.


    Comments? As always, send them to me at kate@morningnewsbeat.com .
    KC's View:

    Published on: November 12, 2014

    Check out this clever YouTube video from IKEA, which speaks to the advantages of an actual paper catalog.

    It is a great example of how a smart company can turn conventional arguments on their heads, and do so with a great deal of humor.

    It is an Eye-Opener. (And thanks to the MNB reader who passed it along…)

    KC's View:

    Published on: November 12, 2014

    Golub Corporation-owned Price Chopper announced yesterday that it plans to convert the entire chain to a new banner concept dubbed Market 32, which incorporates learnings from the Market Bistro concept store opened earlier this year in Latham, New York.

    The Market Bistro store was covered in MNB here. The Market 32 stores will have "expanded food service options, an enhanced product mix and a re-emphasis on customer service," according to the company.

    “Market 32 represents the next leap forward for our company.  We have evolved from the Public Service Market to Central Market to Price Chopper by responding to customers’ changing needs over time and Market 32 is the next natural progression for us,” said Neil Golub, Price Chopper’s executive chairman of the board. 

    Jerel Golub, Price Chopper’s president and CEO, added, "This is not merely about beautifying our Price Chopper stores.  It is a complete refocus of our company on the core values that our customers are looking for in a store.  We will be re-engineering nearly every facet of the store, beginning with the name but extending into our marketing, product selection, services offered and customer focus. Our investment in this transformation reflects not only the position of strength from which we take this calculated risk, but our determination to set a new and higher more customer-focused standard that will engage and inspire shoppers for decades to come.”

    The company said that "Market 32 stores will begin rolling out across the chain’s six-state footprint this spring … Initially, three Price Chopper stores are being converted into Market 32 stores:  Shopper’s World in Clifton Park, N.Y.; Wilton, N.Y.; and Pittsfield, Mass.  The first 'ground up' Market 32 will be built in Sutton, Mass. beginning on November 12, 2014.  A second wave of conversions will begin over the next 18 months and encompass another 10 to 15 stores.  More than half of the 135-store chain will be converted within five years. In total, the investment in this phase of the evolution will be more than $300 million."
    KC's View:
    "Calculated risk" is right. It isn't like Price Chopper is changing everything overnight, but it is making the calculation that in the long run, it is worth making the shift from a time-tested banner to an entirely new one … that this shift will allow it to be more competitive, more relevant, and, in the end, more profitable. The logo being circulated by the company does include the phrase "by Price Chopper." But I suspect that over the long term, as people become more familiar with the Market 32 name, the Price Chopper reference will gradually be retired.

    It should be noted here that even as the announcement of the new format was being made in upstate New York, there was some carping about the decisions being made by the company. I got an email from a former Price Chopper employee who asked not to be identified by name, that said, in part:

    I don't recall seeing much written or reported by you about their layoffs this past summer.  Many of us in this group of 80 worked hard on the Market Bistro store and this new brand strategy. 

    Hearing about a $300 million branding investment from a company that justified jettisoning over 140 employees in 2 years due to tough competition, the recession and the rising cost of doing business is painful.  Especially when told by the company that they can longer afford your salary, benefits and pension.

    I realize the risk in poking at this wound, but needed to point out the human toll and hardship many are still enduring that could have been avoided.

    I ask that you please do not use my name and nor do I expect or ask that you bring this up in your column.  I only point this out in the interest of balance and perspective.


    Well, of course I'm going to bring this up … an email like this practically demands that I do so.

    At the risk of appearing heartless, I do think that it is possible for a company to decide to invest $300 million to rebrand itself while at the same time deciding - regretfully - that labor costs needed to be cut. Sometimes, in order to invest in the company and, yes, even the employees, changes have to be made and hard decisions have to be implemented.

    I know the Golubs a little bit, and I don't think they're heartless people, not by a long shot. And I'm also not surprised that those who were let go might feel some bitterness about the developing circumstances, that there might be some still-open wounds.

    "Compete" is a verb. Calculated risks have to be taken. Efficiency and effectiveness have to be balanced.

    I think this is an interesting, even daring, move by a company that was founded in 1932, and still is working to make sure it remains relevant and competitive.

    Published on: November 12, 2014

    The New York Times this morning reports that last month, Walmart issued an "urgent agenda" memo to managers around the country, "pushing them to improve performance on 'Chilled and Fresh' items in its dairy, meat and produce departments, part of an effort by Walmart to stem long-sluggish sales. It also reflected customer complaints that Walmart has received in recent years as it has expanded offerings of organic foods and produce, often at cheaper prices than its competitors … the memo reminds managers that their No. 1 concern must be sales. For the last 18 months, Walmart’s sales have been sluggish in stores open at least a year. The memo also urges managers to reduce backup inventory to trim costs, and warns them not to exceed budgets for their stores."

    However, the memo also "warns managers not to exceed the weekly hours assigned to their stores. It tells managers to examine whether they are assigning employees too many hours or overtime beyond what the company had budgeted."

    According to the story, "The memo, marked 'highly sensitive,' tells Walmart marketing managers to make sure that the company’s 4,965 United States stores discount aging meat and baked goods to maximize the chance that those items will sell before their expiration dates. The memo - leaked for public use by a Walmart manager unhappy about understaffing - also tells stores to be sure to 'rotate' dairy products and eggs, which means removing expired items and adding new stock at the bottom and back of display cases.

    "In discussing produce, the memo tells managers to 'validate that stores are fully executing on ‘Would I Buy It?’ ' — a plea to make sure that every store removes moldy or rotting fruits and vegetables."
    KC's View:
    When it comes to how to deal with fresh foods, the memo makes absolute sense - Walmart is simply encouraging its people to do what needs to be done in any competent food store.

    But it gets dicey when Walmart also warns managers not to spend any more money on the labor that may be necessary to get the job done.

    The Times notes that "one assistant store manager in the South, who insisted on anonymity for fear of retaliation, said the company was refusing to let him add more employee hours to complete needed daily tasks, like discounting older meat or eggs. As a result, he said his store had been forced to throw out far more milk, eggs and produce than in previous years."

    And it also quotes the always reliable and perceptive Burt P. Flickinger III as saying, “Labor hours have been cut so thin, that they don’t have the people to do many activities. The fact that they don’t do some of these things every day, every shift, shows what a complete breakdown Walmart has in staffing and training.”

    The thing is, there is no law that says a retailer cannot be both effective and efficient. But the Walmart case demonstrates that especially as it tries to improve its reputation and build sales in fresh foods, it needs to give far more attention to being effective than just lip service. In the end, that's what the memo is. Lip service. It remains to be seen whether Walmart will actually give its people the tools with which they can do the job.

    Published on: November 12, 2014

    The Journal Sentinel reports that "competition in southeast Wisconsin's already hypercompetitive grocery market is set to ratchet up another notch next summer when Meijer opens its first grocery/general merchandise supercenters in the region," with plans to eventually expand across the state, which will be the sixth in which it operates.

    According to the story, Meijer "plans to open its first Wisconsin stores in Wauwatosa, Oak Creek, Grafton and Kenosha in 2015. Those stores will be followed with locations in Waukesha, Greenfield and Sussex in 2016. The company is also considering a store in Janesville."

    "It's a big deal for us. We've been in the five (states) for, what, 20 years now," said Hank Meijer, third-generation family co-owner, co-chairman and CEO of the 213-store chain. "It's been a long time since we've opened up a new frontier for our company."

    The story frames the competitive situation this way: "Expect Meijer, Wal-Mart Stores Inc. and Pick 'n Save to battle fiercely for food dollars in Milwaukee, market watchers say. The presence of local grocers with loyal followings, including Sendik's and Woodman's, makes the situation all the more competitive. Add in ultra-low-price competitors such as Aldi — not to mention the likes of drugstores and home improvement warehouses that sell food — and you have what amounts to one massive food fight brewing."
    KC's View:

    Published on: November 12, 2014

    Bloomberg reports that Sears Holdings is pursuing a strategy in Florida that could hint at the company's long term plans as it seeks some level of profitability and consumer relevance.

    According to the story, Sears plans to "convert its location in Aventura, Florida, into an open-air development that includes dining, other retailers and a scaled-down Sears store. The project, called Esplanade at Aventura, also will contain a hotel and offices."

    The strategy, Bloomberg writes, "fits with Sears’s strategy of squeezing more value out of its extensive real estate holdings."
    KC's View:
    Based on Sears' track record for unerring good taste and an instinctive sense of what the American consumer wants and needs, I'm sure that the retailers in the development will include Circuit City and RadioShack, the restaurants will include Bennigan's and the Ground Round, and the hotel will be a Howard Johnson's.

    Published on: November 12, 2014

    The Associated Press reports that the "sleepy central Massachusetts town" of Westminster (population 7,700) is considering legislation "that could make Westminster the first municipality in the United States to ban sales of all tobacco products within town lines."

    According to the story, "Town health agent Elizabeth Swedberg said a ban seemed like a sensible solution to a vexing problem. 'The tobacco companies are really promoting products to hook young people,' she said, pointing to 69-cent bubblegum-flavored cigars, electronic cigarettes and a new form of dissolvable smokeless tobacco that resembles Tic Tac candies. 'The board was getting frustrated trying to keep up with this'."

    Local retailers oppose the legislation, saying that it would hurt overall sales by banning a legal product.
    KC's View:
    I'm torn on this one.

    Tobacco is legal. And I feel for the retailers who say that it represents a significant percentage of their sales. (Though I'm a little surprised by how much. Five percent? Really? Where are they, Eastern Europe?)

    But on the other hand, I am totally sympathetic to efforts to drive down tobacco sales and consumption as much as possible. (This falls within the parameters of my standard tobacco-executives-will-burn-in-their-own-special-circle-of-hell argument.)

    This strikes me as different from the CVS decision not to sell tobacco, which had at least its PR roots in branding.

    And in the end, I'm not sure prohibition works.

    Published on: November 12, 2014

    • The Cincinnati Enquirer reports that "Kroger’s Dillons chain is selling four stores in Springfield, Missouri and exiting that market … Kroger will sell the stores to Price Cutter, a Springfield-based employed-owned company that operates 48 stores in Missouri, Oklahoma and Kansas … The move will leave Kroger with only 11 stores in Missouri."

    Terms of the deal were not disclosed.


    • In the UK, Sainsbury CEO Mike Coupe (no relation to the Content Guy, as far as we know) is quoted in the Telegraph as saying that the company is undergoing a “once-in-a-generation” change and plans to shelve its plans to build new stores. Coupe is quoted in the story as saying that only 75 percent of the company's units are in the "right locations and are of the right size for our food and non-food offer."

    Coupe says that the company has "examined every aspect of our business and we have good foundations for future growth in our supermarket and convenience estates, our online and non-food businesses and in Sainsbury's Bank. However, we need to make sure that we are investing in the right areas and by reducing our costs and capital expenditure we are ensuring that we have the resources to enable us to do so."

    The statements came as Sainsbury announced a pre-tax loss quarterly loss that was the equivalent of $459 million (US).
    KC's View:

    Published on: November 12, 2014

    • The New York Times reports that Ed Park, hired by Amazon to be its senior editor and given his own publishing imprint as the company looked to expand its literary and publishing aspirations, is leaving the e-commerce giant.

    The Times notes that it seemed a mismatch from the start, since "Park — a member of New York’s literary elite who had worked for the Poetry Foundation, co-founded a literary magazine and edited The Village Voice’s literary supplement — seemed ill suited to Amazon’s algorithm-driven business."

    According to the story, Park "is leaving the imprint to join Penguin Press as an executive editor. His departure reflects the challenges that Amazon faces in a publishing ecosystem that largely views the online retailer as a rapacious competitor. Most bookstores — having been undercut by the giant retailer — refuse to carry books published by Amazon, a major hurdle as the company courts authors and agents … Park said that the battle between Amazon and publishers was not the main reason for his departure, but he allowed that it was one of several factors that made the job difficult and ultimately led to his decision to leave."

    And, the Times writes that "his defection comes as Amazon is struggling to maintain its standing with writers and agents as hostile pricing negotiations drag on with the publisher Hachette, and a growing group of prominent authors are lobbying the Justice Department to investigate Amazon for antitrust violations."
    KC's View:

    Published on: November 12, 2014

    Yesterday, Michael Sansolo had a column in which he talked about how a simple mistake led to the invention of Corning Ware … and how this illustrates the importance of a) making mistakes, and b) using them as a way to broaden our horizons.

    Which led one MNB user to write:

    Michael, you missed a big opportunity not to plug Sesame Street's Song, "Everyone Makes Mistakes", originally sung by Big Bird … They go well with your story today. Not to be too presumptuous but IMHO you made a mistake too!

    This reader included the lyrics to "Everyone Makes Mistakes" in his email, but we thought we could go him one better … so, at right, the original "Sesame Street:" rendition.

    Enjoy.

    KC's View: