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    Published on: January 8, 2015

    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 have some thoughts in this first FaceTime of the new year about the resolutions that I think marketers ought to be making for the new year. Now, I'm not particularly big on resolutions, so let's call them something else: strategies and tactics.

    Here are six suggestions.

    Authenticity. Now, this is a term that gets tossed around a lot, and I suspect that a dozen teams of consultants would come up with a dozen definitions, and charge you a lot for the information. So let me give you my simple definition, and I won't even charge you: Figure out who or what you are, and then be it. It is that simple, and that difficult - you have to figure out what your essential value proposition is, and then work that for all it is worth. Everything you do has to support that authenticity ... or it won't be authentic.

    E-commerce. Again, there will be lots of stories and studies about this, but I don't think it requires a Master's degree to understand that the next generation of shoppers has a fundamentally different approach to obtaining products and services than most of us. It isn't monolithic, it requires constant monitoring, and it can be influenced. But as I said in a different context earlier this week, retailers and manufacturers have to understand that offering some sort of e-commerce option to consumers is about as important as having bar codes on the products and scanners at the front end. if you don't have them, you risk looking irrelevant. Hell, you risk being irrelevant.

    Celebrate the front lines. I don't care what kind of retailer you happen to be. The people working in your stores are your most important and differentiating asset. Treat them that way. Find a way to make them feel like they are an asset, not a cost. In fact, make sure that they actually are an asset ...

    Define your differences. If it is true that 90 percent of what is in your store can be found in any competitor's store, then you'd better make sure that the other 10 percent is special. Really special.

    Trackability, traceability, and transparency. I think that this is what people want and expect, even if they don't know it or cannot put it into words. If you are a retailer, you are responsible for everything you sell. So do what you need to do to know everything you can about the products you sell, and then communicate your knowledge, confidence and approach to your shoppers. Remember the old Latin proverb: Trust, like the soul, never returns once it goes.

    Finally ... Tell your story. Again and again and again. If people walk into your store or pick up your product and don't instantly know that it is uniquely yours ... if they don't know your story well enough to tell other people about it, then you are missing an enormous opportunity.

    At least, that's my story ... and I'm sticking to it. As always, I want to hear your story.

    KC's View:

    Published on: January 8, 2015

    Bloomberg reports that Tesco CEO Dave Lewis has announced a series of moves designed to help drag the troubled company out of the crisis in which it has created for itself through a series of profit warnings and an accounting scandal linked to an overstatement of revenues and an understatement of costs as a way of making its books appear healthier than they were.

    Lewis said this morning that Tesco will close 43 of 3300 British stores, saying they are unprofitable with little likelihood of turning around. In addition, the company will cut its 2015 capital budget to the equivalent of $1.5 billion (US), less than half the 2014 figure.

    And, the story says, "Lewis said he’s also scrapping a number of store-development projects as part of a 'significant revision' to the grocer’s expansion plans as it focuses on the fastest-growing areas in food retailing -- online and convenience stores ... The CEO will also end decades of history by moving Tesco’s head office about 15 miles to the grocer’s site in Welwyn Garden City, southeast England. Tesco has been based in Cheshunt since 1973."

    Changes to Tesco's management structure are designed to eventually save the company the equivalent of $350 million (US) a year.

    Bloomberg writes that "The grocer also announced the sale of the unprofitable Blinkbox movie-streaming service to TalkTalk Telecom Group Plc for an undisclosed price. The divestments are the 'first steps in strengthening the balance sheet,' Tesco said, leaving open the possibility of further disposals. Some analysts said they expected sales or partial spin-offs in Asia, though Lewis said he was committed for now to keep 'all operations we have overseas'."

    One of those divestitures is likely to be its Dunnhumby data-analytics business, which could be worth as much as $3 billion (US); it also is possible that Dunnhumby could be spun off in an IPO. Goldman Sachs has been hired to “explore strategic options” for Dunnhumby.

    The Bloomberg story also says that Tesco has named Matt Davies, CEO of car parts retailer Halfords, "to run its U.K. business and lead a revival amid a competitive onslaught from German discounters Aldi and Lidl."

    Same-store sales at Tesco's UK stores were down 0.5 percent during the Christmas season; while the numbers were down, the performance was a lot better than during the previous three months, when same-store sales were down 4.4 percent.
    KC's View:
    Still lots of work to do, but it sounds like a beginning. Closing 43 out of 3300 stores doesn't sound like such a big deal, but I suspect it probably is just the beginning.

    I also think it seems likely that there will be more repercussions from the accounting scandal. It isn't just money ... there are real questions about the Tesco culture that appears to have countenanced the kind of misstatements that were being made. And those may be harder to deal with than a few unprofitable stores.

    Published on: January 8, 2015

    Dunkin' Donuts said yesterday that it plans to open more than 1600 stores in China - up from the 16 currently operates there.

    According to the Associated Press story, Dunkin "entered into a master franchise agreement with Golden Cup Pte. Ltd. The group is a joint venture between Jollibee Worldwide Pte Ltd., based in the Philippines, and Jasmine Asset Holding Ltd, a unit of RRJ Capital Master Fund II, L.P ... A year ago, Dunkin’ Donuts also announced a separate agreement with Fast Gourmet Group to develop more than 100 stores in eastern China. And on Monday, the chain said it signed a franchise agreement to open more than 100 locations throughout Mexico."
    KC's View:
    It is all part of Dunkin's continuing efforts to broaden its global footprint, in part to keep up with Starbucks. The AP piece notes that "Dunkin’ Donuts ended the most recent quarter with about 3,200 international locations. In the U.S., it had about 8,000 locations, giving it more than 11,100 locations. The chain has been expanding domestically as well, and recently opened its first traditional location in Southern California.

    "Starbucks Corp. had more than 19,700 locations around the world at the end of its most recent quarter."

    Published on: January 8, 2015

    A federal judge in California has struck down the state's ban on foie gras, which was implemented in 2012 because of concerns that the process of making foie gras - made from the liver of fattened ducks, it often requires ducks to be force-fed through a tube placed in their esophagus - is cruel.

    The Wall Street Journal writes that "A group including two out-of-state foie gras producers and a California restaurant business sued the state in federal court in 2012 saying the ban caused them to lose millions of dollars in sales. They argued that the federal Poultry Products Inspection Act pre-empts California’s ban because it prevents states from imposing 'ingredient requirements' that interfere with commerce. This week the court agreed, finding that the federal law 'expressly pre-empts' the state ban."

    The California Restaurant Association released a statement praising the ruling, saying that it was “a great day for consumers who don’t want to be told by a finger-wagging state what to eat.”

    The office of the California Attorney General said that it was reviewing the ruling. People for the Ethical Treatment of Animals (PETA) said that it was confident the ruling would be reversed on appeal.
    KC's View:
    I have to admit that this is one of those stories about which it is hard for me to get too excited - I don't like liver, don't like foie gras. But I also have to say that all the descriptions of how they feed the ducks to get foie gras kind of make me queasy ... and so I was sort of cheered by the ban.

    This debate and legal fight will no doubt continue. But my feeling is that we can do better than this ... there's got to be a more humane way to get food than this.

    Published on: January 8, 2015

    The Wall Street Journal reports this morning that "the AFL-CIO is ratcheting up its battle to raise pay for America’s low-wage workers, in part by conducting a series of state-based summits about low wages and holding politicians accountable who fail to make the topic a central focus.

    "AFL-CIO President Richard Trumka announced the ramped-up efforts on Wednesday at the union federation’s first-ever national summit on raising wages, where Sen. Elizabeth Warren and Labor Secretary Tom Perez delivered speeches to a mix of union activists, think tank officials, academics and others."

    The story goes on to say that "Trumka said Wednesday’s summit in Washington is about Americans sharing the wealth that they’ve collectively created, and will be followed by similar events in the first four presidential primary states of Iowa, Nevada, New Hampshire and South Carolina. The summit in Iowa will be up first this spring, he said.

    "In addition, the group  will expand its 'Raising Wages' campaign beyond the five Southern cities it has focused on to date, spreading it to Atlanta, Washington, St. Louis, Philadelphia, Minneapolis, San Diego and Columbus,Ohio. The organization will work with its community partners and affiliates."
    KC's View:
    Expect this debate to continue ... especially because we're coming up on a Presidential election year (albeit a year from now, though you'd never know it from all the coverage).

    Published on: January 8, 2015

    • The New York Times has an interesting story this morning about alliances being created between online and bricks-and-mortar retailers as a way of giving each what they need to bolster their relevance.

    In this case, the physical retailer in the Massachusetts jewelry retailer Long's and the e-tailer is Ritani, described as "a privately held company that designs and makes engagement rings for independent jewelers in the United States and Canada."

    According to the story, the deal "enabled customers from the Boston area who shop on the Ritani site to have their jewelry delivered to Long’s store, at which point the customer could review the ring and decide to exchange it or even return it.

    "To give Long’s an incentive to serve customers who come in to pick up rings they have already paid for, the store is given a small percentage of all sales closed in the Boston area, since Long’s had been Ritani’s exclusive retailer in the area for the last 10 years. The retailer also earns performance incentives for selling additional Ritani products over the counter."

    The story notes that "Aida Alvarez, senior vice president for merchandising and marketing at C.D. Peacock, a 178-year-old jeweler with four stores in the Chicago area, said her company’s two-year-old partnership with Ritani had already paid off. She said 84 percent of the customers who visited her stores to pick up Ritani products had come back for either a service call or to buy something new, from wedding bands to birthday presents."

    You can read the entire story here.
    KC's View:

    Published on: January 8, 2015

    Internet Retailer reports about how Target is piloting a Curbside mobile app at 11 stores in California, allowing " shoppers to go to Target to pick up their purchases without leaving the car.

    "Consumers download the free app, select which Target store they would like to shop from, select and pay for the products they want via the app and choose in-store pickup. Prices are the same in the app as on Target’s web site and the items offered reflect the selected store’s inventory available for store pick-up. The app won’t display items that are out of stock."

    There is no cost to shoppers for using Curbside.

    The story notes that Target says it has seen "good adoption” and that, while early, the test is "going well."
    KC's View:

    Published on: January 8, 2015

    • The Wall Street Journal reports that "the US Postal Service said it delivered roughly 524 million packages during December, an increase of 18% from a year earlier, exceeding its expectations," which had been that it would deliver 450-470 million packages during the period.

    The story says that "the USPS’s package business has been a bright spot, with more than 20% growth over the past five years. But the agency is still in financial trouble, thanks in large part to a mandatory prefunding requirement for retiree benefits that cost it about $5.5 billion annually and has triggered chronic losses."
    KC's View:

    Published on: January 8, 2015

    • Seattle-based Bartell Drugs announced that it has hired Brian Unmacht, formerly the COO and interim CEO at outdoor gear retailer REI, to be its new president. Unmacht has been a member of Bartell’s board of directors since 2011.


    • The Cleveland Plain Dealer reports that the JM Smucker Co. "is searching for a new president of its Consumer Foods division after the unexpected resignation of Paul Smucker Wagstaff last month. Wagstaff, a great-great-grandson of company founder Jerome Monroe Smucker who had spent nearly 19 years at the company, resigned Dec. 5 from the board of directors and from his role as president of U.S. retail consumer foods."

    Wagstaff reportedly left for "personal reasons," though the company said there were no health issues involved.
    KC's View:

    Published on: January 8, 2015

    ...will return.
    KC's View: