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    Published on: February 9, 2015

    by Kevin Coupe

    Business Insider reports that that new numbers suggest that Amazon's video streaming service may be more popular that Netflix.

    The story says:

    "The research firm Consumer Intelligence Research Partners (CIRP) just released a study showing that people stream video content on Amazon as much as (or more than) on Netflix, thanks to Amazon's decision to offer both a subscription and single-pay service in the same place.

    "Amazon's magic is that people who subscribe to Prime - the company's $99-a-year service that comes with two-day free shipping and the ability to stream thousands of free movies and TV shows - will also buy movies and shows from Amazon that are not listed as free."

    The story goes on: "Netflix members view video 12.7 times per month, iTunes users buy or rent video 4.9 times per month, and Amazon Prime members view free Prime video 8.3 times per month.

    "If Amazon offered only its subscription service, Netflix would still be the king of streaming video content. But it doesn't. If you factor in CIRP's finding that Prime users also buy or rent content from Amazon Instant Video 5.1 times per month, Prime members view video on Amazon 13.4 times per month — more than Netflix."

    This is a great example of a private label battle, as two companies spend a ton of money on differentiated content as a way of finding a differential advantage.

    What's also interesting is something else - the fact that a lot of people have both and use both ... it all depends on what they're looking for at that particular moment.

    A lot of us also have, in addition to both Amazon and Netflix, on-demand services from our cable providers. In my case, I also have Apple TV. This past weekend, when we wanted to watch Boyhood at home, we had lots of options.

    It's no wonder that Blockbuster and most of the independent video rental businesses have gone belly-up. It was, on Saturday night, an Eye-Opener.
    KC's View:

    Published on: February 9, 2015

    The Wall Street Journal has a piece comparing AmazonFresh, FreshDirect and Instacart, three grocery delivery services available to New York City residents (though AmazonFresh isn't available to everyone yet).

    You can read the entire anecdotal analysis here, but essentially it comes down to this...

    • "Amazon’s new service, no surprise, manages to be completely terrifying in its omnipotence. The AmazonFresh inventory includes more than 500,000 items. If you want to include a lawn-mower blade or a used copy of “The Fountainhead” with your grocery delivery, you can do that." But, the reporter says, "my AmazonFresh experience was glitchy. First, the site was missing some basics you’d expect at any New York grocery, including a liter of seltzer or tin of Café Bustelo, the world’s greatest coffee.

    "Searches of the massive inventory, meanwhile, can yield oddly irrelevant results. A coffee query, for example, turned up the Declaration of Independence and an apron.

    "I opted to have my order quietly left at my door before 7 a.m. But when my bell rang at 7:06, two large, chipper delivery guys barreled into my hall bearing brightly colored AmazonFresh totes." Amazon says that the experience was not typical.

    • "FreshDirect delivered the kind of faultless performance you’d expect from an old pro. The site was glitch-free and offered more of my preferred brands. The delivery arrived without incident."

    But, she writes, "FreshDirect’s prices are, I’m sorry, berserko. The basket of groceries that cost $52 at the Key Food and $60 through AmazonFresh cost $70 at FreshDirect, plus a $5.99 delivery fee ... FreshDirect Chief Consumer Officer Jodi Kahn says the service’s prices are generally comparable to the city’s supermarkets.

    "FreshDirect is a good value, she adds, because its in-house bakery and partnerships with local farms, fish and meat purveyors provide food that’s several days fresher than what you’ll find in grocery stores."

    • "My favorite service was Instacart. Rather than shipping out of a centralized warehouse, Instacart has contract workers assembling orders at neighborhood supermarkets. It aims to deliver within two hours for $3.99 or within an hour for $5.99.

    "Shoppers have their choice of stores. In my corner of Brooklyn, for example, Instacart customers choose from the local Whole Foods , Fairway Market , Key Food or Costco . And you don’t need a club membership to shop at the Costco.

    "The service partners with each supermarket to display the store’s inventory online, and its prices are the same as you’d find inside the store ... The experience was easy and error-free."
    KC's View:
    New York City is a unique case because a) it's had home delivery for centuries, and b) there is enormous population density. But this is instructive ... and indicative of why everybody has to be in the home-delivery or click-and-collect game. (Or have one helluva powerful reason why not.)

    Published on: February 9, 2015

    A report from City AM in the UK says that Tesco has sent emails to some 5,000 of its suppliers "demanding price cuts due to the fall in commodity prices, and told those who refused to comply it may no longer support their products." In other words, their products could be removed from Tesco's store shelves.

    The move by Tesco comes as "prices for commodities in Europe such as sugar and corn have fallen in line with oil prices in recent months," dropping precipitously.

    It also occurs as Tesco is facing a new investigation by Britain’s Groceries Code Adjudicator, who has said that there may be evidence that Tesco deliberately and illegally delayed payments to suppliers in a systematic fashion. And that is on top of other probes being conducted into Tesco's admitted overstatement of revenues and understatement of costs as a way of puffing up its books.
    KC's View:
    I have no idea of what may legal and illegal, especially in the UK. But I wonder if there is a point at which some of this stuff actually helps Tesco's image, creating the perception that it is serving as an advocate for the shopper and not a sales tool for suppliers, and has as its goal lower prices that will allow it to be more competitive with the likes of Aldi.

    Of course, that argument sort of falls apart if Tesco's intention is to get lower prices from suppliers as a way of plumping up its margins. But to be clear, there is a difference between bullying and advocacy.

    Published on: February 9, 2015

    Advertising Age reports that as Staples attempts to engineer a $6.3 billion acquisition of Office Depot as a way of consolidating its competitive position, it also is launching a new national ad campaign "showing how it helps small business customers achieve success in affordable ways."

    The ads use a spokesman dubbed "the Staples guy" and is "an extension of Staples' rebranding effort from last year.

    "We relaunched the Staples brand in 2014 with our new 'Make More Happen' tagline to showcase our expanded product assortment," Frank P. Bifulco Jr., executive VP-global marketing at Staples, tells Ad Age. "The new 'Make More Happen' campaign highlights the ways Staples and our associates help small business customers."
    KC's View:
    If Staples is going to be competitive - even if the federal government allows the Office Depot acquisition to go through - it is going to have to continue to find ways to appeal to its core audience and expand its relevance.

    Published on: February 9, 2015

    Bloomberg reports that Tesco, which is looking to sell of its Dunnhumby data analysis unit, may have to lower the price if it is going to find a buyer.

    According to the story, "the potential buyers are concerned the 2 billion pounds ($3 billion) Tesco is asking for the operation is too much because once Dunnhumby stops being part of Tesco, Britain’s biggest retailer, it risks becoming less attractive to companies such as Coca-Cola Co. and Procter & Gamble Co., the people said. Dunnhumby provides data on the buying habits of 700 million shoppers worldwide."

    Tesco's new CEO, Dave Lewis, is engaged in a cost-cutting and asset sale strategy that he hopes will revive the company's financial fortunes. However, he also has said that he will not run a "fire sale" of assets that would result in them being sold at below-value prices.
    KC's View:
    Hard to believe that Dunnhumby becomes less attractive once it can be expanded to other retailers and suppliers ... but maybe I have a fundamental misunderstanding of how this market works.

    Published on: February 9, 2015

    The The Raleigh News & Observer has a fascinating story about what it calls the North Carolina "pork-to-Japan pipeline," which, it says, "is a prime example of how the global marketplace shapes North Carolina far beyond the potent Research Triangle Park. Late last year, in a decade-long trend, pork from North Carolina jumped ahead of tobacco as the state’s top direct export to Japan — topping $250 million.

    "North Carolinians no longer manufacture as many tables, towels or bluejeans as they once did. But the world buys the state’s food, which generates jobs and income. That has helped cement agriculture as a leading state industry that accounts for almost one of every five paychecks."

    It is worth reading here.
    KC's View:

    Published on: February 9, 2015

    The Chicago Tribune has a good story about how modern consumers expect more from their appliances these days - they want form as well as function, they want everything to be connected, and they want to be able to run everything from their smartphones.

    It offers a nice selection of examples here, including smoke alarms, musical shower-heads and even tea kettles that all give new meaning to 'the connected home."
    KC's View:

    Published on: February 9, 2015

    • The National Grocers Association (NGA) this weekend, at its annual show in Las Vegas, presented Roger Collins, CEO of Harps Food Stores in Arkansas, with the Thomas K. Zaucha Entrepreneurial Excellence Award.

    In addition, Jason Cooper, director compliance & government relations for Brookshire Grocery Co., Tyler, Texas, was presented with the Clarence G. Adamy Great American Award; Trig Solberg, chairman of T.A. Solberg Co., was given the Thomas F. Wenning Pinnacle PAC Award; and Ronald Graff Jr., VP store operations for Columbiana Foods Giant Eagle,was presented the NGA Spirt of America Award.


    • The Wall Street Journal reports that "Campbell Soup Co. started selling the first line of organic soups under its namesake brand, seeking to boost lackluster soup sales and broaden its push into the fast-growing natural-foods segment. The Campbell’s Organic line is composed of six soups - including Chicken Noodle and Creamy Butternut Squash - five of which are also gluten-free."


    • The organic and natural food grocery store Earth Fare announced that it will open its first Michigan store, in Portage, on February 25.

    The announcement notes that Earth fare "markets itself as the provider of the freshest produce, seafood and meats, and it touts its scratch-baked organic breads, made in-house deli options and knowledgeable staff. Its stores are full-service supermarkets that also sell frozen food, dried goods, beer, wine, vitamins and herbal supplements."
    KC's View:

    Published on: February 9, 2015

    • Allen I. Bildner, the former chairman/CEO of Kings Super Markets who was an early advocate of the power of fresh foods and "meal solutions" in the supermarket, has passed away. He was 89.

    After selling the company to Marks & Spencer in 1988, Bildner was active in the founding and building the extraordinary US Holocaust Memorial Museum in Washington, DC.


    • Dean Smith, one of the winningest coaches in college basketball, who won two national titles and sent more than 50 players to the NBA, including Michael Jordan, has passed away at age 83. Smith, the various obituaries note, used his influence as a North Carolina icon to champion civil rights causes in the sixties, and recruited his college's first black scholarship athlete, Charlie Scott, in 1966.
    KC's View:

    Published on: February 9, 2015

    In ruminating last week about the investigation into herbal nutritional supplements, i wrote:

    I'm just wondering ... what might be the overlap between the population that believes in and trusts in supplements, and the populations that does not believe in vaccinations.

    One MNB reader responded:

    As a former CMO of a couple of nutritional-supplement companies, I think you're on very solid ground here.  There seems to be a substantial overlap between religious-fanatics and heavy-users of supplements.  The medical-industry/drug company cartel is out to kill us (e. g., with vaccines).  Anything man-made is evil.  Anything "natural" is provided by supernatural forces and thereby good (e. g., supplements).  Their bodies are their temples, and no product of Intelligent Design belongs inside them.

    Another MNB reader wrote:

    I find it interesting that no one is talking about the unvaccinated illegal immigrants that the President allowed and encouraged to come to our country earlier this year. This is what we get when political correctness is our first priority.

    It also is what you get when the first thing the government hands all these illegal immigrants is a voucher that gets them into Disneyland, where they get to run around and infect the rest of us. Dammit! It is just the liberal media that's trying to infect our minds with the notion that it is anti-vaccination conspiracy theorists that are creating this problem, as opposed to illegal immigrants.

    Cut off those Disneyland vouchers, and the problem goes away.




    On another subject that keeps coming up on MNB, a reader wrote:

    A note about hotel fees in general.  Last year, I was driving to an event in Chicago.  I spent the night before I arrived in a very inexpensive roadside motel -$65/night.  The phone, internet, breakfast and parking were free.  In Chicago, I stayed at one of those very upscale hotels on the pricey end of Michigan Avenue - $295/night with the event discount of about 15%.  Phone was $1.95 for the first 5 minutes.  Internet was $19.95 per day.  Breakfast was $25 plus tip.  Parking was $65/night.  Bellboy who insisted on carrying my very light overnight bag to my room required a tip, too.  I’ll forgo commenting about the very misleading room service charges and fees.  Odd that a place charging so much for a room needs to tack on so much for the extras, too.




    On the subject of Target focusing more on small stores in the coming year, one MNB reader wrote:

    It's been interesting to watch Target's struggle to find it's toehold in the market. 

    A few years back (can't remember how long ago) Target made the decision to change their marketing focus and water down their style and branding. They had great ads and a nice store experience (merchandising) that made you feel 'cool' to shop there, but that changed. They became just another retailer competing on price with the Walmarts and Amazons of the marketplace. It was about that time that my shopping with them plummeted. Their stores were messy, their merchandising weak and the quality of their products (they did away with a number of brands I bought and went heavily into their hideous 'up and up' brand) went down. 

    They are now just another place to buy toilet paper and batteries to me. Heck, I find myself stopping at Walgreens instead just because it's more convenient and I sure as heck don't love them, but meh, who cares? 

    When I want fun style and hip things now I shop local or shop online at retailers like Fab.com or Etsy. 

    Of course, I'm just one person who used to spend hundreds of dollars at their stores each year and shopped at least once a month. Now I stop maybe every quarter and if they're lucky I spend $75.


    There have been a number of stories in the media about how Target is currently featuring a line of products inspired by the book and about-to-be-released movie Fifty Shades of Grey, such as massage oil, a blindfold set, lubricant, and a vibrating love ring.

    Wonder what that'll do for Target's image? And sales?




    On another subject, an MNB user wrote:

    Sprouts is a serious competitor in that it is attracting a good number of people like myself who do not go to health food stores.  They have pretty good prices on certain meat products, most produce items and bakery goods.  That is enough to draw people into the store.  They generally undercut Fry's (Kroger's) on most produce items.

    I am so impressed with retailers like Sprouts and Fresh Thyme, which seem to have identified a really powerful niche, appealing to Whole Foods customers who do not have Whole Foods bank accounts. Whole Foods, to be sure, needs to take these folks very, very seriously.




    Regarding RadioShack's bankruptcy, one MNB user wrote:

    What a shame. I remember when Radio Shack used to actually sell radios (audio equipment). Some pretty nice gear,at that. But they lost their vision and became just another cell phone store. How could anyone think this company could survive having tossed aside their old customer base to sell cell phones and radio control (rc) toys? So who wants to buy them...another cell phone company. Ugh!
    KC's View: