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: February 17, 2015

    by Michael Sansolo

    Among the greatest challenges facing any business today is delivering on the promise of its brand and understanding that the brand might not mean the same to every consumer. With that in mind we have to take a short visit to a very odd couple: celebrity chef Gordon Ramsay and performer Britney Spears.

    First some background. My 28-year-old daughter, knowing I was heading to Las Vegas for business (the National Grocers Association show), made a specific request for her birthday gift this year. She wanted to reconnect with her favorite star of her tween years - Britney Spears. Although I knew this was fraught with peril, I agreed to both take and accompany her.

    I was truly worried because Spears was the singer whose music most nauseated me during a period of household discord. Hit me baby one more time indeed.

    Once in Las Vegas my daughter started working her agenda beyond the show. As we are both fans of Gordon Ramsay’s "Kitchen Nightmares," we decided we had to visit one of his three restaurants, choosing BURGR (that’s the spelling).

    Ramsay clearly understands his special challenge. His shows have taught us what to look for, avoid and criticize in a restaurant, so we knew we had to examine everything in much the way Ramsay does to those on his show. In other words, his brand was really on the line.

    We gave it a rave review. The décor was inviting and eye-catching. The menu varied, but not overwhelming. The wait staff was attentive, but not suffocating and we even liked innovative touches such as the use of networked iPods to gather customer feedback.

    But the star was the food. Although we just ate burgers, we were impressed. Sarah and I ordered different items and were amazed at the special touches. For example, her burger came with arugula and mine with butter lettuce. A small touch of course, but it showed attention. The two ketchups we were given had special flavors and even the bun was unique.

    In short, Gordon Ramsay succeeded.

    Britney Spears promised to be more challenging.

    As you can gather, I’m not a huge fan of hers, but then again, not every brand is made for every consumer. It became extremely clear to me once the show began that of the 4,600 in attendance I could not find five people older than me. (My daughter counted only two.)

    But Britney knows her key fans and therefore knows her brand. For example some costumes from her early videos are on display and the fans (Sarah included) line up to take their selfies. Once in the theater, the fans are encouraged to use Twitter to share those photos and the tweets end up on the large screens next to the stage.

    Then came the concert. Seriously, I have no idea if Britney can actually sing, but she sure understands two things: Las Vegas shows need a lot of energy and her fans are completely devoted to her - exceptionally so, I think, because they know how high she soared and how far she fell. It was more than them singing along to every song, it was how they danced with her, cheered every step she took and showered her with an emotion that was almost overwhelming.

    When I asked Sarah for a one-word review after, all she said was: excellent!

    Here’s the thing: I don’t think Britney cared that I was part of that crowd. I’m not her core customer and never will be. I think what she (and the show’s producers) understand is that she talks to a different generation. That her presence in Las Vegas draws a different and much younger crowd than, say Rod Stewart, who was performing just a few hotels away.

    In many ways, the future of Las Vegas might hinge on attractions like Britney Spears, who may be scorned by Baby Boomers, but tug at the heartstrings of our children.

    In other words, she, like Gordon Ramsay, gets branding in a way that we need all consider.

    But first I have to listen to lots and lots of Springsteen. I have all the wrong songs stuck in my head!

    Michael Sansolo can be reached via email at . 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:

    Published on: February 17, 2015

    by Kevin Coupe

    I love writers.

    Perhaps it is because I'd like to think of myself as being part of the clan. But I've always enjoying talking to writers, and reading about writers. My favorite Stephen King book of all time, believe it or not, is "About Writing." When I've had the chance to interview people like Robert B. Parker, Ace Atkins, Bob Morris, and Reed Farrel Coleman, I've leapt at the opportunity. First of all, they know how to spin a yarn, which makes it easy to write about them. Second, I love the genre in which they all work. Finally, I just hope a little bit of their talent will rub off on me.

    I wish I'd had the chance to meet Elmore Leonard; by the way, his "10 Rules of Writing" is one of the best books of its sort out there. And if I could meet any working writer out there today, it would be Michael Connelly. (I think my literary biases are showing here...) I've actually become friends with Bob Morris, who is a wonderful Florida novelist and travel writer who ought to be a lot more famous than he is; he's also an adjunct faculty member at Rollins College, and so I'm modeling that part of my career on him as well.

    I tell you all this because I've spent a good part of my weekend reading about David Carr, the terrific New York Times media columnist who collapsed at his newsroom desk last week. He was 58, and had lived a complicated and fascinating life. (I told you this last week, and I'll repeat it. His "Night of the Gun," a memoir about his drug addiction, is an amazing book. You should read it. Immediately.)

    Just hours before he passed away, Carr actually was on stage, moderating a panel discussion with filmmaker and journalist Laura Poitras, who is nominated for a best Documentary Oscar for Citizenfour, whistle-blower Edward Snowden, the subject of her film, who participated by satellite feed, and journalist Glenn Greenwald, who has written extensively about Snowden and the culture of surveillance.

    I love the notion that he was working and engaged right until the end. That's not a bad way to go - spend an hour in front of an audience, then go back to the desk to write something, and then die. (Though I'd rather do it at 98, not 58, and I'd rather die of old age than advanced lung cancer, which got Carr.) I think that is an important lesson about how to live and how to work.

    With all the praise of Carr's writing - and he was a fabulous writer - one of the things that should not be overlooked is that he also was a first-rate thinker. He was able to see the collision between old media and new media in a clear-headed way, and appreciate both for their advantages and decry both for their shortcomings. There seemed to be little ideology about his approach to thinking and writing, which allowed him to cut through the clutter and get right to the heart of the matter, always smart, never sentimental, but also willing to feel for his subjects as well as think about them. That's a rare gift. Also an important life and business lesson that we all should take to heart and mind.

    In retailing, a subject we focus on a lot here on MNB, that same sort of collision is taking place - between old ways of doing business and new ways of doing business. It seems to me that we all have to bring that same sort of intellectual clear-headedness to this subject, without sentiment but not without feeling.

    There have been a lot of great David Carr quotes circulated online over the past few days, but one of them really grabbed me. It is specific to what I do for a living, so I printed it out and put it right above my desk where I can see it each morning. But it also has broader implications, because it speaks to how critical it is to keep at it, keep at it, keep at it.

    At least for me, it is an Eye-Opener:

    Keep typing until it turns into writing.
    KC's View:

    Published on: February 17, 2015

    The Nashville Business Journal has a story about an appearance that Marcus Osborne, vice president of health and wellness payer relations at Walmart, made before the Nashville Health Care Council, at which he spoke about the company's consumer health care strategy.

    Osborne described the company's efforts in this segment as "under-developed," but said that its development of consumer clinics is a fast growing initiative with enormous potential. Walmart's early efforts in this area focused on outsourcing the clinics to third party providers, but, Osborne said, there was little evidence that they were having much impact on either community health or costs.

    "So now Wal-Mart has shifted to a more complete primary care model, minus X-ray machines and other advanced diagnostic tools," the Journal writes. "Even without those capabilities, consumers can get about 80-90 percent of their needed primary care at a Walmart clinic, Osborne said.

    "It's another example of consumers being smarter than you think, he said, and also wanting something different than what thought leaders assume ... Consumers engage with the health care system how they want, not how you want them to, Osborne said, and figuring that out is key to building successful new models."
    KC's View:
    One of the interesting things about Osborne's comments is that he concedes that the next big challenge in this area will be figuring out how to market health clinic services to millennials and their younger siblings, who are likely to have different demands and expectations of their health care option. (A stronger mobile or telehealth component, for example.)

    That strikes me as an intelligent way of approaching this category - recognizing that as much as the rules of the game have changed, they are almost certainly going to change again, and sooner than expected.

    Published on: February 17, 2015

    The New York Times reports that the move by online travel booking company Expedia last week to acquire Orbitz, one of its brethren in the online travel space, for $1.3 billion, suggests that the company believes that it needs to gain size and clout if it is going to be able to compete with the much larger Priceline ... especially since big companies such as Google, Amazon, and smaller startups such as Hipmunk, either are making or planning inroads in the category.

    According to the Times, "Since the summer, Expedia has announced deals for Travelocity and of Australia. And in a conference call with analysts, the company hinted that its deal-making streak may continue as it seeks to bolster its barriers against competitors."

    While Priceline may be bigger, the Times writes, it "has made only a few acquisitions that give it entry into new areas, like restaurant reservations with the purchase of OpenTable last year ... Expedia has shown more willingness to buy up brands to gain scale. Acquiring Orbitz will bring not only that company’s namesake brand but also CheapTickets and HotelClub, as well as the corporate travel site Orbitz for Business. Those brands will be joining a stable that already includes well-known names like, Hotwire and Trivago."
    KC's View:
    The basic lesson here is that even disruptive companies, if they're smart, see the possibility that somebody else is going to come in and disrupt their business model. In this case, Expedia is making the gamble that by getting bigger and with greater clout, it can stave off the challengers. Only time will tell whether this is the right strategy .... or whether some smaller company might come in and turn that size into a handicap.

    Published on: February 17, 2015

    In the UK, the Sunday Telegraph reports that Tesco may eliminate as many as 10,000 jobs as it seeks lower costs and greater profitability.

    While Tesco is not commenting on the report, the paper says that the cuts will mostly come from the head office and stores that are being closed, though there likely also will be cuts through an overhaul of store management infrastructure, with some bureaucracy being eliminated.

    In a related report, Sky News is saying that Tesco has approached Archie Norman, the former chairman/CEO of Walmart-owned Asda Group, to replace Richard Broadbent as chairman; Broadbent announced his intention to step down once the new management team was in place and a successor had been named.
    KC's View:
    Nothing wrong with cutting bureaucracy if it makes you more effective. But, I'm reminded of the old saw that "you can't cut your way to prosperity" ... and I think that it is at least possible that Tesco may be thinking that it can.

    If these cuts bring down costs but also hurt the availability of products and services, the net result will be a lost and a continuing fall from favor among UK shoppers.

    Published on: February 17, 2015

    USA Today reports that over the weekend, the Federal Aviation Administration (FAA) unveiled "its long-awaited proposal for governing small commercial drones, setting a plan for remote-controlled aircraft to share the skies with passenger planes.

    The USA Today report notes that Paul Misener, Amazon's vice president for global policy, "said the FAA's proposed new rules 'wouldn't allow Prime Air to operate in the United States.' Prime Air is the name of Amazon's developmental program for drone delivery."

    However, Misener also said that Amazon remains "committed to realizing our vision for Prime Air and are prepared to deploy where we have the regulatory support we need." Which means outside the US; the story notes that "several other countries including Canada, the U.K. and Denmark are using drones commercially."

    The story says that "the FAA proposal would allow drones weighing up to 55 pounds to fly within sight of their remote pilots during daylight hours. The aircraft must stay below 500 feet in the air and fly less than 100 mph. People flying drones would need to be at least 17 years old, pass an aeronautics test and be vetted by the Transportation Security Administration, but a certificate wouldn't require the flight hours or medical rating of a private pilot's license."

    A six month comment period now commences, though the story says it could take as long as 18 months before final rules are issued. While there are concerns about drones could affect commercial air traffic or create terrorism issues, drone advocates have suggested that if the US does not move quickly to both regulate and create an environment for drone development, there is a considerable risk that the industry could move abroad.
    KC's View:

    Published on: February 17, 2015

    • In an email to its Savings Catcher customers last week, Walmart informed them that some of the parameters of the program are changing.

    "Beginning February 14, 2015, we are removing some departments consisting mostly of items that do not have a like for like match at other retailers, such as produce and bakery items," the email said. " Additionally, we are limiting our comparisons to offers of other mass market retailers, grocery and dollar stores, removing comparisons with drug stores.

    "Thanks again for using Savings Catcher and shopping with us," the email continued. "We are dedicated to providing customers like you with Everyday Low Prices. It's a mission we're proud of and we'll continue to work hard to deliver for you."
    KC's View:
    I never think it bodes well for a savings program when a company starts cutting back on the number of items affected by the program ... it always feels that the retailer is backing down rather than doubling down. Which makes me wonder if the retailer actually is committed to the tactic and program.

    Published on: February 17, 2015

    Interesting piece in the Washington Post over the weekend suggesting that "the strategies of some of America’s largest packaged foods companies appear to be running up against their shelf life." Tough and in some cases disappointing years for some CPG companies have in part occurred because these businesses "have had a variety of headwinds to contend with recently, including a strong dollar that has made their products more expensive abroad and the high price of cheese and beef."

    A bigger, and more long-term issue is the fact that consumer "eating habits are changing, and they have been having a hard time keeping up."

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

    Published on: February 17, 2015

    • The Birmingham Business Journal reports that Shipt, described as "a local delivery service," has "expanded its services by launching a same-day delivery service for groceries.

    "Shipt, which also delivers online retail purchases, is establishing a team of delivery 'pilots' that will take grocery orders, pick them up from the nearest Publix, and then deliver them to customers within the Birmingham area ... There is no limit to the quantity of items delivered, and orders can include a wide array of grocery items that total more than $35. By purchasing a MemberShipt, customers receive unlimited grocery deliveries for an annual fee of $99."

    The story goes on to say that Shipt "will deliver groceries from any of the 14 Publix locations in the greater Birmingham area to downtown Birmingham, Homewood, Mountain Brook, Vestavia and the U.S. 280 corridor, as well as surrounding cities of Hoover, Alabaster, Gardendale, Helena, Pelham and Trussville."
    KC's View:

    Published on: February 17, 2015

    • The National Retail Federation (NRF) has released its official 2015 forecast, "projecting retail industry sales (which exclude automobiles, gas stations, and restaurants) will increase 4.1 percent, up from the 3.5 percent growth seen in 2014. NRF also announced ... it expects non-store sales in 2015 to grow between 7 and 10 percent. The 4.1 percent increase would mark the biggest annual growth since 2011 when retail sales for the year increased 5.1 percent."

    • The New York Times reports that the US Department of Agriculture (USDA) has "approved the commercial planting of genetically engineered apples that are resistant to turning brown when sliced or bruised. The developer, Okanagan Specialty Fruits, says it believes the nonbrowning feature will be popular with both consumers and food service companies because it will make sliced apples more appealing. The feature could also reduce the number of apples discarded because of bruising."

    However, there are elements within the apple industry who fear that a GMO apple will hurt the industry as a whole by creating concerns about biotech's influence; there also are fears that the new apple could hurt overall exports to countries that have banned or take a dim view of GMOs.

    • The Chicago Tribune reports that Mondelez International has announced its acquisition of Enjoy Life Foods, a private snack company that is known for its allergen- and gluten-free snacks. Terms of the deal were not disclosed.
    KC's View:

    Published on: February 17, 2015

    • The Wall Street Journal reports that ConAgra has named Sean M. Connolly, the former CEO of Hillshire Brands before its sale to Tyson, to be its new CEO. He replaces Gary M. Rodkin, who announced last year his planned retirement.
    KC's View:

    Published on: February 17, 2015

    • The Financial Times reports the passing of Michele Ferrero, Italy's richest man, at the age of 89. Ferrero's major claim to fame: he as the creator of Nutella.

    FT writes:

    "Ferrero, who created Nutella, Tic Tacs and Kinder Eggs, was in many ways the Willy Wonka of real-life chocolatiers, with a personal mythology that evokes the protagonist in Roald Dahl’s children’s tale. At home in his personal laboratory in northwest Italy, the legend goes, Mr Ferrero took five years to discover how to bend the wafers that go into his Ferrero Rocher chocolates.

    "Publicity shy Ferrero spoke in the dialect of his native Piedmont region and died having never given a newspaper interview. Yet while avoiding the world’s gaze, he built a multinational company with revenues in 2013 of €8.1 billion that competed with Nestlé, Mondel z and Kraft."

    The story suggests that while Ferrero was adamant about not selling the company, it seems likely with his passing that new management, led by his son, will receive a number of unsolicited and sizable offers.
    KC's View:

    Published on: February 17, 2015

    Got a number of emails over the weekend about Friday's Eye-Opener, comparing Bob Simon of CBS News and Brian Williams of NBC News. The piece said, in part:

    It occurred to me that in life, as in business, there are show horses, and there are work horses. We all have the choice of which kind of person we want to be, or what kind of legacy we want to leave behind. The comparison of Bob Simon to Brian Williams, it seems to me, sort of brings the choice into sharp relief.

    The Eye-Opener was offered as both a text version and a video version that was recorded as I was driving the back roads of Connecticut.' Which prompted one MNB reader to write:

    I was in retail for 20 years and was a subscriber to your MNB for about the last 5 of those 20 years. Since that time I have been in the manufacturing industry, however I still read MNB faithfully and have enjoyed it immensely applying much of the information to the manufacturing industry for the last five years!  I can tell you I’ve never responded to any of your opinions but this one really grabbed me….Having two children, one a recent college graduate and the other graduating this spring, I thought this particular eye-opener would have been a perfect lesson to them, as they begin their careers, on honesty and integrity and how important the two are in shaping who they become. My only problem with this and sharing it with them is that this video blog is being done while you are driving!!!

    Kevin, shame on you! I am constantly preaching to them about inattentive driving so now I am grappling with if I share this with them, while a wonderful and powerful message, am I also condoning blogging/texting/video recording/talking on the phone and driving?  Have a great weekend Kevin and I hope this is an Eye-Opener!!!

    From MNB reader Tom Redwine:

    You made some good points on your video commentary today regarding workhorse vs. showhorse. Your best point might well have been made unintentionally.

    You were talking about a guy who was killed in a car accident while you were driving a car and recording a video on your phone at the same time. I don't know the details of Mr. Simon's death, I just hope it wasn't due to a distracted driver. 

    I'm very glad nothing happened to you during your drive. (Gotta admit I was a bit tense watching it.) Next time, would you mind pulling over and stopping to record instead of driving on? I'm sure there are several other readers (and probably even a certain Mrs. Content Guy) who would appreciate that.

    And MNB reader Jim Swoboda wrote:

    Driving WHILE filming and remembering Bob Simon….Really?  Just might be a bad message to do that while DRIVING!   Just saying.

    Fair enough.

    I sort of viewed it as like having a conversation with a passenger while driving - we've all done that, right?  (I just had 30,000 passengers...)

    Just for the record, I never took my eyes off the road ... I hit the record button on the camera while stopped, and pulled over before stopping it. I never touched the iPhone while the car was moving.  So I never viewed it as being unsafe...though some of that was not obvious because I edited the video later...

    But I do appreciate your concern.

    Interestingly, MNB reader Todd Hale had the opposite reaction:

    Kevin:  really liked your piece this morning.  The driving video was a nice touch too.  Are you are Michael going to do a race on Top Gear next – I think it would be a real hoot!

    I don't think Top Gear is in our future. Though I did take a three-day Skip Barber racing course years ago, and turned it into a column about leadership and management.

    If anyone is interested, that column can be found here.

    Another MNB reader had a problem with the column ... but it had nothing to do with the driving:

    Big fan of your site, but Bob Simon/Respected Journalist is to Brian Williams/Disgraced Journalist as Dean Smith/Respected Coach is to Jerry Tarkanian/Disgraced Coach? I’m not sure why you felt the need to go there days after the man died? All basketball success aside, which Tarkanian had plenty of, you don’t know what kind of relationship he maintains with his former players and the role he played in their lives.
    His former player, Larry Johnson said to the NY Daily News, “You’ll hear guys talk all the time about coaches being a father figure. Well I’m 45 years old and I’ve never met my father. I consider Jerry Tarkanian my father.” And he added, “He took chances on players when no one else would…Coach cared about them. He wanted to help them. He wanted us to make something of our lives and get to a different level. Not just for basketball but in life.”
    It’s really not a fair comparison to make, and it’s especially harsh when the man isn’t even in the ground yet. You can do better than that.

    Point taken.

    I certainly did not mean to diminish Tarkanian's achievements on the basketball court ... my point was that it strikes me that Dean Smith used his influence in ways that transcended the basketball court and bled over into public policy and social progress. Some people transcend their roles and some do not.

    Another reader chimed in:

    As a loyal Tar Heel and NC native who grew up knowing I was going to go to Carolina and play basketball for “Clean Dean” (aka Coach Smith) -- but whose talent and high school freshman growth spurt let him down – I have been a huge fan of the man all my life. As a wannabe basketball player and a friend of a few who did make the team, I actually got to be in the great man’s presence a few times. He was just as engaging and personal with anyone he talked to as he was with his players. But his players and the reputation of his team and school were the things that mattered most to him.

    I always joked that Coach Smith could be governor of NC anytime he decided he wanted to be. But that he viewed coaching the Tar Heels as a much more important job. In truth, it probably wasn’t so much a joke as the truth. He could have been anything he wanted to be in NC, the people loved him that much. And the great majority of them only knew him by reputation.

    I’m biased as a UNC grad of course. There are obviously other great coaches in the state’s history with Vic Bubas and Coach K at Duke, Norm Sloan and Jim Valvano at NC State.  And you can’t leave out Bones McKinney at Wake Forest. And Roy Williams will earn his place, current “gradegate” notwithstanding. (BTW, I’ve heard the assertion that “gradegate” is what finally killed Dean – but in truth he has been ill for years.) We’ve been blessed with a rich basketball history on tobacco road, but more importantly, we have been blessed with some tremendous mentors and role models.
    Thank you for mentioning Coach Smith in your column today.

    KC's View: