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    Published on: November 18, 2014

    by Michael Sansolo

    To paraphrase Mark Twain, There are three kinds of falsehoods in this world: lies, damn lies and statistics.

    The problem is we all rely heavily on the last one and have to keep a wary eye on all the ways simple numbers can mislead us. We got a few interesting examples of this in MNB Monday, when Kevin skeptically quoted studies finding how few American claim to shop on Thanksgiving.

    As he correctly point out, if the stat seven percent - is correct, who were all those people at the stores last year?

    That’s hardly the worst statistic I’ve seen lately. In a recent study, Americans were asked about the current unemployment rate. The response should shock you: 32%. Now you may believe the official rate of 5.9% is slightly off or fails to properly count those who have given up looking or have taken jobs that are well below their skill levels. But 32%? Honestly!

    If that were the case we’d be referring to the Great Depression in nostalgic terms. (And this isn’t a uniquely American issue. The same survey found an even great exaggeration among Italians.) And, to be fair, this US study was an outlier, suggesting numbers far higher than other, similar surveys.

    The quandary is figuring out what’s real and what people think is real. MarketWatch has an interesting article about the problems with surveys explaining that Americans way overestimate the rate of teen pregnancies and the size of the immigrant population, while underestimating things like the percentage of folks who vote or are of Christian faith.

    But the unemployment number is especially troubling.

    Looked at one way it would send a clear message to the food industry that the country remains far more pessimistic about the current economy and would easily explain the continued emphasis on frugality and cost cutting.

    But looked at another way, it would make us wonder if shoppers really have a good sense of the current economic state of affairs, which casts into doubt whether we market to their perceptions or realities.

    Either way there is no definitive answer and that’s why surveys, while so incredibly valuable, have to always be viewed in context. Far too often the survey is skewed by the way questions are posed, the purity of the sample or any number of factors. That's why it is so important that we understand that sometimes numbers can only help us if we find out a way to put things into perspective.

    Keep in mind also that surveys can only tell us about what people already know. There’s a famous example that if people in the 1890s were asked to identify quicker modes of transportation they would have likely answered faster horses. They couldn’t select cars because they were unaware of them.

    In the same way, all of us were unaware of smartphones, social media and countless other innovations until they became realities. Innovations by their nature change the playing field and shift what consumers want or need to have.

    So yes, survey away. Keep asking questions and keep mining those reports for insights because they can be found.

    But at the same time, keep your cynical antenna high because what people say and what they do can be two very, very different things.


    Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com . His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available on Amazon by clicking here. And, his book "Business Rules!" is available from Amazon by clicking here.
    KC's View:
    If I may … I think that something else is at work when people say things like they believe the nation's unemployment rate is 32 percent (and again, as Michael points out, this is one survey, not a trend among most surveys). I think the explanation can be found in the work of David Brooks and Pete Hamill.

    It all comes back to our old friend, epistemic closure. We first referred to this phrase two years ago after it was uttered by New York Times columnist David Brooks, defining it as being so hemmed in by your own belief system that you are unable or unwilling to accept anything other than what you believe as being possible or factual ... it is the opposite of "empiricism," which is defined as the practice of relying on observation and experiment.

    Pete Hamill's contribution is a phrase that I often quote here on MNB: "Ideology is a substitute for thought."

    People on both sides of the political and cultural aisle often are so locked into their own views of the world that it skews their views, their logic and their statements. It doesn't surprise me that one-third of the population would say that the unemployment rate is so high simply because it falls within their ideological perception of the world … and I am sure that one-third of the population on the other end of the spectrum would say something equally outrageous and inaccurate because of their own ideologies.

    They'd all be sure. They'd all be wrong. They'd all be guilty of epistemic closure.

    So let me echo Michael's suggestions. Listen to the consumer. Pay attention to the numbers. But we have to keep an open mind, keep things in context.

    Call it empiricism. Or maybe just common sense.

    Published on: November 18, 2014

    by Kevin Coupe

    I often use my own career as an example for how and why people and companies have to adapt to changing circumstances, and even stay ahead of the pace of change.

    I started out in 1978 as a daily newspaper reporter. (As did Michael Sansolo, by the way. For the same newspaper chain, 10 miles apart, as it happens, though we did not know each other at the time.) But as things progressed, I wrote for magazines, ran the editorial side of a prominent B2B video program (Retail Insights, which some of you may remember), and eventually found myself on the Internet. My standard joke is that before I'm done, I'll probably be delivering some iteration of MNB via hologram.

    However it all plays out, I'm just glad I got out of the newspaper business. It didn't pay very well (my first-year salary was $6,800 … which was peanuts even in 1978), and technological shifts clearly have made many traditional newspapers irrelevant. (Not all. But many.)

    But I was never so glad to be out of the newspaper business as I was yesterday, when I read on Slate that the Orange County Register actually was asking reporters and editors also to deliver the news, via Sunday paper routes - and paying them for their efforts via gift cards. (According to the Register, "A full route - which averages about 500-600 newspapers - earns $150 in Visa gift cards. A smaller route will earn a $100 Visa gift card. As a novice, sorting papers and delivering a route typically requires between 3-6 hours to complete, depending on the route and number of papers you are transporting…")

    Now, to be fair, this doesn't appear to be part of some business master plan. In fact, the Register ran into contract problems with its usual distributor and needed to take stopgap measures until new arrangements could be made.

    "The mood in the newsroom at the Register can’t be good," Slate writes. "The paper’s parent company - Freedom Communications - has fallen on hard economic times, resulting in layoffs and lawsuits. In September, the beleaguered company even sold the Register’s headquarters for $27 million…"

    It is yet another Eye-Opening example of how and why we all need to be attuned to the economic, cultural, political and demographic shifts that can remake the business environments in which we all work. If we're not paying attention, we can find ourselves delivering newspapers in a tablet computer/smartphone world … which is not exactly a sustainable business path.
    KC's View:

    Published on: November 18, 2014

    The Wall Street Journal reports on a new study from Experian Marketing saying that "over 90% of marketers said their holiday marketing campaigns would include the use of email marketing … Inboxes in the U.S. are already experiencing the influx. The volume of holiday email campaigns from multi-channel retailers is up 27% this year, the company said."

    Indeed, "Experian Marketing said its ongoing consumer research shows that about 71% of online adults say they are influenced by promotional emails to take some sort of action and about 40% say they’re influenced to make a purchase."

    The study says that email will be used this holiday season far more than any other communications tool, including social media, mobile, print, direct mail, radio and television.
    KC's View:
    It is interesting to note that while 91 percent of marketers say they will use email, only 15 percent say they'll use TV, 17 percent will use radio, and 28 percent will use direct mail and print advertising. The numbers only get better as the vehicle gets more targeted.

    The message is simple - broadcasting, however you define it, is making less and less sense in an age when you can and should target customers with relevant messages.

    Published on: November 18, 2014

    City AM in the UK reports that analysts there are suggesting that "supermarkets need to dramatically scale down their store estates if they want to stop haemorrhaging sales and return to growth … In a research note published yesterday, Goldman Sachs said Sainsbury’s, Tesco and Morrisons must cut space by around 20 per cent by 2020 in order to survive in today’s tough retail landscape, where discounters Aldi and Lidl are grabbing a greater share of the market and online shopping is proving ever-more popular."

    The story notes that while all the four major supermarket chains are investing substantial sums in price cuts to compete with the discounters,but that analysts believe that this will be enough to achieve any sort of sustainable profitability.
    KC's View:
    At some level, I wonder if US retailers ought to be paying attention to what's going on in the UK, anticipating that the same thing easily could happen here. If many US retailers are equally vulnerable, maybe they ought to start thinking about how to get ready to deal with it now.

    There's no such thing as the unassailable advantage. (That, you won't be surprised to learn, is rule # 30 in Retail Rules! 52 ways To Achieve Retail Success, my new book, available on Amazon.com.)

    Published on: November 18, 2014

    • Ahold management this week is laying out its expectation that the total company e-commerce sales will reach $1.7 billion (S) this year, and hopes to reach $3.1 billion in 2017 by making a $75 million (US) investment in its various online retail brands, including Peapod in the US.

    The company said in a statement that "to stay in the forefront of omni-channel retail, Ahold has invested in technology, marketing and online capabilities. Following the acquisition of bol.com in 2012, the company now employs over 1,000 IT experts, based in four technology hubs in the U.S. and the Netherlands."
    KC's View:
    I think that Ahold's investment in e-commerce will, in the long run, be seen as the smartest thing that the company's leadership ever has done. It is an investment not just in technology, but in the future.

    Published on: November 18, 2014

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

    • The Boston Globe reports that "Rhode Island-based CVS Health, operator of Minute Clinics and the country’s second-biggest drugstore chain, is planning to open a technology development center in Boston this winter." The goal of the new center will be to continue to develop what the company calls a "digital enablement of health care" that is both "seamless" and "customer-centric."

    I'd settle for shorter paper receipts or a loyalty program that actually was designed for ease of use, rather than just the perception of savings that many people don't actually get.
    KC's View:

    Published on: November 18, 2014

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

    • The St. Louis Business Journal reports that "Schnuck Markets Inc. has completed the leadership transition that began earlier this year, with Todd Schnuck at the helm and a non-family member in the highest position inside the family-owned company so far.

    "This week Todd Schnuck, current Schnucks CEO, added the title of chairman, taking that post from his brother Scott Schnuck. The change completed a succession that began in March, when Todd took the CEO role from Scott. Scott Schnuck now serves as chairman of the company's executive committee.

    "As part of the same leadership transition, this week Anthony Hucker, who became chief operating officer of Schnucks in March, is now president as well as COO. That makes Hucker the first person outside the Schnuck family to hold that post and the highest ranked non-family executive to serve at the grocery chain."


    • The USC Marshall School of Business Food Industry Executive Program said yesterday that it has named Kevin Curry MBA ’92, as the Food Industry Executive-in-Residence for 2015. Curry is senior vice president of sales, marketing, advertising and merchandising for Raley’s Supermarkets."

    The announcement notes that "each year, the Food Industry Executive Program selects a Food Industry Executive in Residence;" Curry has worked for a variety of retailers during his career, including Alpha Beta, Lucky, Albertsons, Safeway and Raley’s.

    Great gig. Lucky guy.
    KC's View:

    Published on: November 18, 2014

    A week ago, we featured a photo that was sent to MNB by a reader of a bank of empty pay phone stalls at an airport, offering a stark and visual reminder of change's impact. (The original story is here.)

    Now, the Associated Press has a story about how to make lemonade out of lemons … New York City has announced a new plan called LinkNYC that will convert as many as 10,000 pay phones in the the five boroughs with mobile hotspots, charging touch screen stations for cellphones and tablet computers, and "touch screens for users to access city agencies and digital displays for advertising and announcements."

    New York City Mayor Bill de Blasio tells the AP that "the plan wouldn't cost city taxpayers anything. He said the money to cover the cost would come through revenues from the advertising. The city said the advertising revenue would bring in $500 million over the next 12 years."

    The only pay phones left, the story says, "would be three booth-style pay phones on the Upper West Side that would be preserved as pieces of New York City history."
    KC's View:

    Published on: November 18, 2014

    …will return.
    KC's View:

    Published on: November 18, 2014

    In Monday Night Football, the Pittsburgh Steelers defeated the Tennessee Titans 27-24.
    KC's View: