retail news in context, analysis with attitude

Published on: February 4, 2015

by Kate McMahon

While there is only one snow-delayed victory parade scheduled to take place today, the New England Patriots weren’t the only winners in Super Bowl XLIX.

Twitter, Facebook, NBC and a diverse cross-section of advertisers continue to bask in the thrill of victory. On the flip side, a controversial Nationwide insurance commercial is still being scrutinized alongside Seattle’s last, calamitous play-call.

In addition to historic TV ratings, the Sunday night game set Super Bowl
records on Twitter and Facebook. The closely contested match-up generated 28.4 million tweets – 3.6 million more than last year – and some 65 million Facebook users shared 265 million posts, links and comments during the game.

Advertisers that shelled out $4.5 million for a 30-second spot can thank social media for keeping their brand in the conversation long after the last snap, or in the Seahawks’ case, the final crushing interception.

Back in the day, Super Bowl ad was just that – a one-time commercial aired during television’s biggest spectacle. Now many of the ads are previewed, reviewed and replayed everywhere before the big game. And even pulled before airing, as was the case with the GoDaddy spoof of the Budweiser puppy love commercials. (While I typically find GoDaddy’s standard sexist ads offensive and boorish, I would agree with Content Guy that this commercial was actually funny and on point.)

Today, social metric analytics can pinpoint which ads were buzz-worthy, for better or worse.

Not surprisingly, the warm-and-fuzzy Budweiser lost-puppy-rescued-by-Clydesdales ad was the most shared spot online, most popular on TiVo, and voted best national Super Bowl commercial by viewers on Hulu’s AdZone. By mid-day yesterday, it had a stunning 24 million views on YouTube.

The #bestbuds commercial was eclipsed in one category by Always’ #LikeAGirl campaign, which generated the most social action with 408,000 mentions during the game, according to the firm Amobee. Even though the girl-empowering video debuted on YouTube (and MNB) last year, the Twittersphere celebrated its introduction to a national TV audience. I completely agree.

Also feelin’ the love from viewers: McDonalds, CocaCola, Skittles, Fiat, Dove for Men and Doritos.

The buzz kill of the night award went to Nationwide for what is being called the “dead kid” ad. The safety awareness promo, featuring a young boy listing all of the life events he will miss due to a preventable childhood accident, generated over 230,000 social mentions during the game. Almost two-thirds were negative, a quarter neutral and just 12% positive.

Nationwide defended the ad, saying it was meant to promote the company’s Make Safe Happen program and thousands of consumers went to its website during the game.

"We're not sorry. We did not set out to bum people out who were watching the Super Bowl," Matt Jauchius, chief marketing officer at Nationwide, told USA Today. "This conversation (about child safety) was not taking place before Sunday. If the commercial saves one child's life, it's worth it."

I think there are two takeaways here. One: If Nationwide can turn this into a real conversation, drive consumer awareness and affect change, then airing the ad was worth all of the social media blowback. It is actually a huge opportunity in spite of the negativity.

Two: Social media has changed the way we watch the Super Bowl - and shop and communicate. Retailers, marketers and service providers that do not embrace these fast-changing platforms to connect with consumers are clearly making the wrong play-call.

Comments? As always, send them to me at kate@morningnewsbeat.com .

Published on: February 4, 2015

by Kevin Coupe

This story has nothing to do with business. But it certainly is an Eye-Opener.

It was announced yesterday that Harper Lee will have a new novel, "Go Set A Watchman," coming out in July.

What's remarkable about that is that it just her second novel to be published. The first was "To Kill A Mockingbird," which came out in 1960, won the 1961 Pulitzer prize for fiction, and was turned into the successful movie of the same name in 1962, starring Gregory Peck. "To Kill A Mockingbird" is one of the most successful books ever published, having sold more than 40 million copies in various formats.

Ironically, "Go Set A Watchman" was written first ... but Lee's publisher suggested she rewrite the story from a different perspective. Lee, now 88, did not know the original manuscript still existed until it was found in an archive.

I checked, and "Go Set A Watchman" already is the number one best-selling book on Amazon.

Published on: February 4, 2015

Bloomberg reports that "Amazon.com Inc., aiming to bolster its brick-and-mortar operations, has discussed acquiring some RadioShack Corp. locations after the electronics chain files for bankruptcy, two people with knowledge of the matter said."

According to the story, Amazon would use the stores as showcases for its hardware, as well as for pickup and drop-off centers for its online shoppers.

The Bloomberg piece says that "The possible move, discussed as part of RadioShack’s looming trip to bankruptcy court, would represent Amazon’s biggest push into traditional retail. Amazon joins other potential bidders, including Sprint Corp. and the investment group behind Brookstone, in evaluating RadioShack stores, people familiar with the situation said. RadioShack has more than 4,000 U.S. locations and is moving toward a deal to sell a portion and close the rest, according to some of the people. Sprint has discussed buying 1,300 to 2,000, they said."

Published on: February 4, 2015

The New York Times reports that the New York State Attorney General is accusing GNC, Target, Walgreens and Walmart "of selling fraudulent and potentially dangerous herbal supplements and demanded that they remove the products from their shelves."

The story says that the AG's office says it "conducted tests on top-selling store brands of herbal supplements" at the retailers "and found that four out of five of the products did not contain any of the herbs on their labels. The tests showed that pills labeled medicinal herbs often contained little more than cheap fillers like powdered rice, asparagus and houseplants, and in some cases substances that could be dangerous to those with allergies."

According to the Times, which broke the story, "Industry representatives have argued that any problems are caused by a handful of companies on the fringe of the industry. But New York’s investigation specifically targeted store brands at the nation’s drugstore and retail giants, which suggests that the problems are widespread ... The Food and Drug Administration has targeted individual supplements found to contain dangerous ingredients. But the announcement Monday was the first time that a law enforcement agency had threatened the biggest retail and drugstore chains with legal action for selling what it said were deliberately misleading herbal products."

The Times reports that Walgreen said it would immediately remove the offending products from its stores nationwide, even though the investigation only affects stores in New York. Walmart said it would reach out to its suppliers to determine appropriate next steps. GNC said it would cooperate with the investigation but stands behind the products. Target did not comment on the charges.

The long and detailed Times story can be read here.

Published on: February 4, 2015

The New York Times reports that informed sources say that "Staples is in advanced talks to buy Office Depot, potentially uniting two of the biggest names in world of pens, paper clips and yes, staples ... Pressure for the combination has come from Starboard Value, the activist hedge fund, which owns about 10 percent of Office Depot and 6 percent of Staples.
Starboard Value has publicly called on both companies to merge to better compete against the likes of Walmart and Amazon."

Office Depot, of course, acquired OfficeMax in 2013. Any attempt by Staples to merge with Office Depot would certainly draw the attention of antitrust regulators.

in its analysis of the story, Bloomberg observes that "a merger of Staples Inc. and Office Depot Inc. may help them weather the competition from online and big-box retailers in a way that RadioShack Corp. couldn’t. The three companies were all hit hard in the past decade by discount-offering giants such as Amazon.com Inc. and Wal-Mart Stores Inc. Their fates diverged this week. RadioShack is preparing to file for bankruptcy protection, while the other two -- in a less dire situation -- are considering combining."

Published on: February 4, 2015

Twin Cities Business has a piece about the burgeoning supermarket competition in the Minneapolis/St. Paul marketplace. Established area retailers such as Lunds/Byerly's, Kowalski's, Trader Joe's, Cub Foods and Whole Foods continue to grow. Plus Hy-Vee is coming to town later this year, and there are smaller players with their eyes on the market, including Fresh Thyme Farmers Market, Lucky’s Market and Earth Fare.

"Three factors appear to be fueling the recent feeding frenzy," the story says. "First is that the region had a slight shortage of stores compared with national averages ... Second is a national trend for shoppers to spread their loyalty around. In 2014, 9 percent of shoppers indicated they had no single regular grocery store—triple that of recent years, according to the Food Marketing Institute’s (FMI) 2014 Grocery Shopper Trends Report. The trend is driven by changing shopping patterns of millennials."

Third, the story says, "is a convergence of demographic, employment, housing and values changes in recent years. The result: Despite ever-busier lifestyles, more grocery shoppers purchase what they need for the day, or the next day, instead of for a week or two at a time. They’re also looking for more perishable fresh produce and healthy pre-made foods they can buy and eat on location."

The upshot: to some degree, many shoppers are in play every day, subject to being lured by the retailer that best identifies - and proves - itself to be relevant to their needs.

Published on: February 4, 2015

In Minnesota, the Star Tribune reports that Target has announced that in 2015 "it will open nine smaller-format stores and six big-box stores."

The story notes this represents a shift in strategy for Target: "Of the 16 new stores it opened last year, only one was a small store: the first 20,000-square-foot TargetExpress store in the chain."

It is the same shift in which Walmart has engaged. "In the last year, it opened about 240 smaller format stores compared to 120 supercenters," the Star Tribune writes. "Its executives have told investors to expect that trend to continue this year."

Call this the Cornell effect: "Smaller store formats have been of particular interest to Target CEO Brian Cornell, who has pointed to TargetExpress and CityTarget as engines for future growth, especially as the retailer closes the chapter on Canada. After initially viewing Canada as a bright prospect for growth, Target will soon close its 133 stores north of the border after sustaining about $2 billion in losses there in less than two years.

"While Target is accelerating its growth of smaller stores, it has slowed overall new store openings. This last year, it closed more stores than it opened."

Published on: February 4, 2015

Reuters reports that Tesco has agreed to pay its deposed CEO, Philip Clarke, the equivalent of $1.83 million US, and its former CFO, Laurie McIlwee, the equivalent of $1.5 million US - payments that were due them after leaving the company, but that were being held up pending the internal investigation into a misstatement of costs and profits.

Clarke was fired last July; McIlwee resigned last April.

According to the story, "Tesco said it was contractually committed to make the payments unless it could legally establish a case of gross misconduct. 'The company has taken legal advice and has concluded that it does not have the basis for continuing to withhold the payments,' it said. 'Accordingly, the board considers that defending costly claims for the payments would not be in the company's best interests'."

Published on: February 4, 2015

• The Tampa Bay Business Journal "Sprouts Farmers Market Inc. is once again actively looking for sites in the Tampa Bay region, according to real estate brokers and developers ... Sources say the grocer is telling them it is interested in multiple stores in this market and would like to have stores here open by 2016 or 2017."

The story notes that "the Phoenix-based organic grocery has previously looked for sites in the area, but pulled back last summer, telling brokers and developers that the company was waiting to see how its new stores in metro Atlanta performed before expanding into Florida." Now, it seems, Sprouts has seen enough to move forward.


• United Press International reports on how "sales of hard liquor, especially whiskey and tequila, rose in 2014 with spirits continuing to edge out beer at U.S. bars and liquor stores.
Hard liquor accounted for 35.2 percent of the market in 2014, up from 34.7 percent a year earlier, the Distilled Spirits Council of the United States or Discus reported Tuesday.

"While beer remains the most popular alcoholic beverage in the country, its share fell to 47.8 percent, while wine sales remained flat at 17 percent. Beer's market share, 56 percent in 1999, fell below 50 percent in 2010 and has continued to inch downward."


• Bloomberg reports that JM Smucker Co. will acquire Big Heart Pet Brands for about $3.2 billion, "gaining a roster of brands that includes Meow Mix, Milk-Bone and Kibbles ’n Bits." The deal is expected to close later this year.


• Reuters reports that Dollar Tree is saying that it may have to sell off more stores than the original "fewer than 300" that it said it would need to divest for antitrust reasons with its acquisition of Family Dollar. The story says that the Federal Trade Commission (FTC) is reviewing more than 500 stores, and that it may identify additional locations to be divested.

The story notes that "Family Dollar shareholders approved Dollar Tree's $8.5 billion cash-and-stock offer last month, scuppering a higher hostile offer from Dollar General. The deal remains subject to FTC approval, expected by the end of March."

The higher Dollar General bid was rejected at least in part because of the number of stores that would have had to been sold off.

Published on: February 4, 2015

• Target Corp. yesterday named Mike McNamara, the former Tesco CIO, to be its new chief information officer. He replaces Bob DeRodes, who took the job last May as the company struggled to deal with a massive data breach in 2013, but only did so on a short-term basis while a search continued to a longer term solution.


• Weis Markets announced that Adam Edwards has joined the company as director, information security.  Edwards most recently was director of information security at the University of Scranton. Previously, he worked in information security positions at Rent-A-Center and Lowe’s.

Published on: February 4, 2015

On the subject of the Super Bowl, one MNB user wrote:

While not a football fan, I was on Seattle’s side – but my group of watchers was far more taken aback by the brawl that ensued once all was lost. Yeah, it’s sad to lose, but that was the real buzzkill.
 
NFL players hitting each other instead of women or children is an improvement only in the technical sense.



And regarding the commercials, another reader wrote:

I agree with you 100%. I'm a die-hard animal lover and laughed out loud at the GoDaddy commercial. But then again, I'm in marketing.

MNB reader Tom Devlin wrote:

I know this may be too late but I have been a critic of McDonalds but to be honest I give them credit and actually enjoyed their love commercial… in fact, in these very tough times from the economy to Isis, I think advertising that makes people chuckle even for 30 seconds are going to win….. While it is not my third place, Mickey D’s does have childhood memories for so many people…  I give McDonalds credit for going this route, they need to change it up and for that I can not criticize them… 

As far as the Harry Cha[pin song, scary I thought the exact same thing about how he died when the commercial was shown.




MNB reader Scott Rickhoff sent me an email weighing in on issue that hasn't yet come up on MNB...until now:

Anti Vaxxers:  If my kid can’t bring peanuts to school, they yours shouldn’t bring measles.

Oh, good. Get me involved in this particular controversy. I don't make enough trouble for myself?

Okay, here goes ... I am astounded by the level of mistrust that so many people seem to have for science, the disregard they seem to have for public health, and how fast they are going to plunge us back into the 1950s. I suppose there is no way to mandate that people vaccinate their kids, but maybe kids ought to be vaccinated before they're allowed into public schools. (Will they start requiring vaccinations at Disneyland? Maybe...)

What really is amazing is that in 2016, childhood vaccinations may well be a political issue.




Had a story yesterday about Jack in the Box launching a new, upgraded "Buttery Jack" burger as a way of nudging its experience up-market.

I commented, in part:

I have to be honest here. I don't have a Jack in the Box anywhere near me, so I can't sample the new products anytime soon. And it's been a while since I've been to a Jack in the Box; it's probably been since college, and I have a vague memory of the milkshakes there being an inexpensive hangover cure.

That said ... I have to wonder if this is the kind of move that McDonald's needs to make. Under five bucks may be a top-tier price in the fast food business, but it seems reasonably affordable as an upscale option ... and a focus on taste strikes me as the best way to go in such a competitive marketplace.

MNB reader George Denman responded:

Jack in the Box recently opened two locations here in Cincinnati and I drive by one every day. Each time I have looked at the site and say to myself, “why go there for another mediocre burger”. But this new menu has changed my mind and I am stopping on the way home. Now if only Five Guys would have a drive through….

And another reader chimed in:

It’s interesting that Jack in the Box is moving “its dining experience a notch more upscale . . .”  Didn’t they try that a few years ago?  I remember them opening a restaurant called JBX that was supposed to be a more upscale, sit-down, experience.  We had one here in Boise (we may have been a test market?).  But the venture failed.  I would love to be a fly on the wall in their headquarters to hear what lessons they learned and how they will approach this new culture change differently.

It so happens that I am currently in Indianapolis, and on the way to the hotel from the airport, I spied a Jack in the Box. I was hungry. So I figured, what the hell.

I ordered a $4.49 Classic Buttery Jack, with "creamy tomato sauce, green leaf lettuce, fresh tomatoes and Provolone cheese," served with melted garlic-herb butter on a bakery-style signature bun. And I can report that it was ... definitely mediocre. The burger itself was kind of tough, and the garlic-herb butter sort of overwhelmed the whole meal; it took a vigorous brushing of my teeth to get the taste out of my mouth. No threat to In-n-Out, or Shake Shack, or even Five Guys, at least IMHO.




Finally, I wrote yesterday about Amazon's college marketing plans with a reference to Thornton Melon, and wondered whether Jeff Bezos can do a Triple Lindy.

MNB reader Mike Franklin responded:

This is a natural and easy transition for Amazon…unlike the Triple Lindy, which has been completed only twice, by one person…and may very well likely be outlawed by the NCAA as too dangerous for athletes.

MNB reader Gary Loehr wrote:

I'm sure Bezos can do a Triple Lindy, but if he gets caught he'll be on double secret probation.

Wow...he worked two college movies into the same sentence. I'm impressed.

Another MNB reader wrote:

Flunk me?  Flunk you!

And, a serious response from MNB reader Andy Casey:

Definitely a win, particularly long term.  For most students, making the transition from college to the real world involves changing everything about their life – clothes, living arrangements, geography – all of which require new things and purchases.  Amazon has the ability to make this transition seamless as students move into the work phase of their lives as well as truly assess and manage the lifetime value of these customers to their business.  This generation is perhaps the first with large scale potential to be customers of a single retailer for their entire lives, regardless of where they live in the world.  Offering new students a free semester or even a year of Prime could pay huge dividends both short and long term.