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    Published on: February 19, 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, Kevin Coupe here, and this is FaceTime with the Content Guy, coming to you this week from Southern California where, I'm pleased to say, the temperatures definitely are not way below freezing and there isn't any snow un the ground. In other words, it is nothing like home.

    While I've been here, I've been thinking about the move by Haggen into California as it grows from just 18 stores to more than 160 ... a result of it acquiring stores being divested because of the Albertsons acquisition of Safeway. Now, I'm not here today to pass judgement on the deal, or to prognosticate one way or the other ... suffice it to say that there are people out there who think that Haggen can be successful in its new strategy, and people who are, to put it mildly, skeptical.

    What I do want to talk about is one of the rules from my "Retail Rules" book - the one about the most important people in any retail organization being the ones on the front lines. It is my sense, from having talked to a bunch of retailers, is that Haggen is very interested in building its front line bench as it expands, that it doesn't want to limit itself to just the folks it inherits from Albertsons and Safeway. if you are a retailer with good people working for you, those people may be in play right now. They may be getting calls from headhunters. They may be sending out resumes. And you may be about the lose some important assets.

    What does this mean? Well, for one thing, I think it means that if you want to keep these people, it is time to start showing some appreciation. I'm not talking about money here, though, of course, that's important. No, I'm talking about all the other things, tangible and intangible, that lets people know that they are important, even critical, to your team. That they are an investment, not a cost. That you want them to feel invested in your company. That they are critical to your company's future.

    If they don't feel that way, they may decide to go elsewhere, to someplace where they think they may.

    And then the dominoes will continue to fall, because you're going to have to replace those people. Which will put even more people into play. (From a selfish point of view, by the way, I'm okay with this. MNB has a terrific executive search firm as a sponsor, and while I have no idea if they've been part of all this movement, I suspect they might be seeing some business out of it all. Which will make them happy. If they're happy, I'm happy.)

    Y'know that old expression about how it is easier to keep an existing customer than to get a new one? I wonder if there is a corollary to that rule - that it is easier to keep a great employee than to find that next great employee.

    This may be the moment to make some important decisions about the future of your company. Because there are other companies out there making important decisions about the future of theirs.

    That's what is on my mind this Thursday morning. As always, I want to hear what is on your mind.

    KC's View:

    Published on: February 19, 2015

    by Kevin Coupe

    John Oliver strikes again.

    On his "Last Week Tonight" show last Sunday, Oliver took aim at the tobacco industry, specifically Philip Morris International, accusing it of using the threat of lawsuits against poor nations that have attempted to more tightly regulate the cigarette business in an effort to reduce consumption and improve the health of their populations.

    As usual, the Eye-Opening delivery is a little profane, very funny, and pretty much on target. And you can see it at right. (If you are at work or watching where kids are nearby, be warned ... the language can get a little rough.)

    As a matter of fairness, it should be pointed out that Philip Morris International had a problem with the segment, arguing, in part that "'Last Week Tonight with John Oliver' is a parody show, known for getting a laugh through exaggeration and presenting partial views in the name of humor. The segment includes many mischaracterizations of our company, including our approach to marketing and regulation, which have been embellished in the spirit of comedic license."

    “While we recognize the tobacco industry is an easy target for comedians, we take seriously the responsibility that comes with selling a product that is an adult choice and is harmful to health."

    For the record, I added the italics. For emphasis.

    And I just think I'm going to plan on devoting one Eye-Opener piece a week to John Oliver, who just got HBO to extend his show through the 2017 season.

    Yippee.

    KC's View:

    Published on: February 19, 2015

    Consumer data collection and analysis form dunnhumby is out with a new global multichannel shopping analysis, concluding that while "multichannel grocery shopping is surging across the globe," there remain "particular challenges in the U.S. preventing the market from reaching the same level of development as elsewhere."

    According to the report, "dunnhumby’s research ... shows how important physical stores are in the U.S. when it comes to gaining consumer acceptance for new products. Some 26% of U.S. shoppers consider household items an important category for online shopping, but just 8% say it is likely they would buy a product for the first time in this category online. In comparison, 36% of consumers in China would be likely to buy a new household product online.

    "Online performance is also shown to be affected by how a brand’s audience matches the typical online shopper – generally younger, affluent consumers with young children – as well as brands’ understanding and response to the path to purchase in their category, including how consumers use search, search terms and favorites accordingly."

    One of the main drivers of online shopping, the report says - "the birth of a new child (is) a primary driver of an increased propensity to buy online."
    KC's View:
    While I am loathe to doubt research done by dunnhumby, I guess I would take issue with the notion that the trends it detects in the US are likely to persist ... because I am completely convinced that we can't even begin to guess the extent to which the next generation of shoppers may want to avoid going to the store because a) they have other things to do, or b) the store has done very little to convince them that it is the first, best option.

    Online shopping won't always be the first, best solution to whatever acquisitive needs and desires they may have. But it often will be, and bricks-and-mortar retailers are going to have to redouble their efforts to make the store a legitimate and even preferable options.

    Ironically, Arizona Republic has a report about how Walmart isn't the only grocery store in the state to be testing a click-and-collect model.

    "While there are no immediate plans for the Valley," the story says, Kroger "is testing a program that's been successful in other parts of the country." And "Safeway offers grocery delivery, for a fee."

    Bashas', however, is resisting; it used to, "but discontinued it, adding that there are no plans right now to revive that service."

    "Home delivery and order-ahead programs aren't for everyone," Bashas' spokesman Rob Johnson tells the paper. "When it comes to groceries -- and particularly things like produce and meat -- customers like to pick out their own items. They like to thump the watermelon, choose from several packages of steaks, look at date codes, read ingredients labels, etc."

    I have to be honest here. I think watermelon thumping is overrated. In fact, I'd go so far as to suggest that most people have no idea what they're looking for when they thump watermelons. And a strong online retailer that says something along the lines of, "leave the thumping to us," will be seen by many as making a persuasive case ... and many of us will be happy to check out expiration dates and ingredient labels online.

    Published on: February 19, 2015

    Fortune reports on how most retailers would avoid any sort of public connection to books or movies with strong sexual themes, feeling that their reputations might be tarnished ... but that such concerns seem to have gone completely out the window now that the film Fifty Shades Of Grey has reached theaters. The movie, in case you've been living in a cave, is based on a best-selling novel (it sold more than 100 million copies), and since it was released has been breaking box office records.

    "Sales figures like those make it mainstream by default," the story says, "so lots of companies want to ride its coattails to profit and glory."

    For example...

    • "It’s hard to imagine what a rigorous churchgoer like Sam Walton would have made of the 'Fifty Shades of Grey: Gourmet Gift Basket', which can be yours for $69.99. According to the website, 'chrome-plated metal double lock handcuffs' and a 'black gift box hand-tied with rope' accompany the bubble bath and candies found therein."

    • Or, there's the Vermont Teddy Bear Company, which offers the “'Fifty Shades of Grey Bear,' which comes dressed in a business suit and holds a pair of handcuffs and mask for his Valentine/captive, all for just $89.99." (It was a top Valentine's Day seller for the company.)

    • Or Sears, which is selling the “'Bling Jewelry 925 Silver ‘50 Shades of Grey’ Inspired Freedom Handcuff Dangle Bead'. Other than the handcuff motif, it’s hard to see what this item actually has to do with the movie or the book, but hey, Sears has to make up for losing Land’s End somehow."

    (These are, by the way, some of the tamer offerings...)
    KC's View:
    Hard to imagine how precisely these companies decided to rationalize decisions that seem totally out of character ... but then again, I am reminded of what Jeff Goldblum's character says in The Big Chill - that rationalizations are more important than sex ... just try getting through the day without one rationalization.

    BTW...maybe it is my age, but I'm most amused by the fact that the American Association of Retired Persons (AARP) published a Valentine’s Day gift guide inspired by Fifty Shades of Grey. Sometimes, I guess, the old grey mare is is exactly what she used to be...

    Published on: February 19, 2015

    Bloomberg reports that when a menswear version of Fashion Week takes place in New York City this summer, plastered all over the catwalks will be an unlikely name - Amazon, which, through three of its fashion sites (Amazon Fashion, East Dane and MyHabit) will sponsor the event.

    The story notes that in recent years, Amazon has "pushed to enter the world of designer fashion, selling clothing, shoes, handbags, and accessories from pricey brands with luxe reputations. Amazon reportedly also signed a multiyear deal last week to sponsor India Fashion Week, according to Women's Wear Daily ... the company has hired Barneys New York fashion director Julie Gilhart as an adviser, sponsored the 2012 Met Gala, and opened a 40,000-square-foot photography studio in Brooklyn. (The company plans to open an even bigger one in London.) And Amazon hosts events for students from such leading fashion schools as the Fashion Institute of Technology and Parsons the New School for Design."
    KC's View:
    One of the interesting things about this story is that it points out how, when it comes to fashion, Amazon actually has had to change its general approach to online retailing. In most categories, Walmart has thrived on being "the everything store," but in fashion, it has had to act more like a curator, picking and choosing carefully and hoping that it is not making the wrong bets in a segment where fashion can be fickle.

    And, the piece points out,  in his 2013 book, “The Everything Store: Jeff Bezos and the Age of Amazon,” author Brad Stone quotes Amazon founder Jeff Bezos as frequently saying, “In order to be a two-hundred-billion-dollar company, we’ve got to learn how to sell clothes and food.”

    Published on: February 19, 2015

    KCRA-TV News reports that West Sacramento, California-based Raley's has announced that "it will no longer sell tobacco products at its stores in an effort to raise awareness about health and wellness ... The grocery store chain has decided to remove tobacco products from its stores and already stopped ordering tobacco products earlier this month ... Raley's added that its decision was not based on any governmental pressure or reward."

    In a statement, the company said that ""This is not a decision that we've taken lightly ... At Raley's, we are committed to infusing life with health and happiness, and removing tobacco products is another example of that commitment."
    KC's View:
    Good for them.

    I suppose cynics will suggest that tobacco sales and profits probably were trending down anyway, which made this an easier decision. And that may be true.

    But the fact remains that if you are going to make any sort of health and wellness argument, it is really hard to have any sort of credibility if you sell crap like this.

    How did Philip Morris put it? Oh, yeah ... they called it an "adult choice" that is "harmful to health".

    For the record, I added the italics. For emphasis.

    Published on: February 19, 2015

    • The Associated Press reports that the US Equal Employment Opportunity Commission (EEOC) has found that Walmart discriminated against a married lesbian couple when it refused to provide spousal health coverage that it was making available to heterosexual married couples.

    While Walmart did begin making such coverage available to same-sex couples in 2014, this case took place in 2008 - four years after the Commonwealth of Massachusetts made it legal for the two women to be married, which they were.

    According to the story, the EEOC has ordered Walmart "to work with Jacqueline Cote of New Bedford, Massachusetts, who hopes the determination will help her pay off $100,000 in medical bills;" the EEOC said that Cote "was treated differently and denied benefits because of her sex." Cote's spouse, Diana Smithson, has been battling cancer.

    "While we disagree with the finding of reasonable cause, we have notified the EEOC of our willingness to meet with them and Miss Cote to discuss resolving the matter," Walmart spokesman Randy Hargrove tells the AP.

    Ironically, the two women met while both were working for Walmart, though Smithson left the company in 2007 to take care of Cote's elderly mother.
    KC's View:
    I'm sure that somewhere in the Walmart bureaucracy, as in many corporate bureaucracies, somebody decided that not providing a same-sex couple access to health insurance made economic sense ... never dreaming that when Massachusetts made same-sex marriage legal it would be the first of 37 states, plus the District of Columbia, to legalize such unions, and that more than 70% of the population eventually would live in jurisdictions where same-sex couples can legally marry.

    I don't know about you, but when I first saw this story on the AP wires, I had to go check the date. Massachusetts made this decision in 2004? Really? Eleven years ago?

    In some ways, it seems like a movement that started a lot more recently than that. Though in others, fair to say, it seems like same-sex marriage has been acceptable to the vast majority of the population for much longer.

    This probably seemed to someone in the Walmart organization like the smart play. Today, of course, most young people probably would be shocked that same-sex marriage was ever a social issue.

    It is easy for me to say since it isn't my money, but I think Walmart ought to settle this quick, settle this as generously as it can and still be fiscally prudent, and move forward ... acknowledging that its view of the future all those years ago was just a little bit inaccurate.

    Published on: February 19, 2015

    Salon reports that the UK division of Krispy Kreme "has officially apologized after advertising their short-lived 'KKK [Krispy Kreme Klub] Wednesdays' promotion for their Hull location. Apparently, people outside the U.S. — including the representatives from Krispy Kreme’s British headquarters who approved the promotion — are unfamiliar with the Ku Klux Klan, a white supremacist organization known for grotesque violence primarily against black people."

    “Krispy Kreme apologizes unreservedly for the inappropriate name of a customer promotion at one of our stores,” a spokesperson said. “The promotion was never intended to cause offense. All material has been withdrawn and an internal investigation is currently underway.”
    KC's View:
    Hopefully they'll also discontinue Noontime Neo-Nazi specials as well...

    Published on: February 19, 2015

    • The Wall Street Journal reports that "consumer craving for healthier and more natural ingredients is spreading even to junk food, with Nestlé SA saying it will remove artificial flavors and colors from its Crunch and Butterfinger candy bars and other chocolates in the US ... The changes will take effect by the end of the year.

    "The move makes Nestlé USA, a unit of Switzerland-based Nestlé with about $10 billion in sales, the first major U.S. candy manufacturer to remove such artificial ingredients—though others are working on similar moves."
    KC's View:

    Published on: February 19, 2015

    Reuters reports that "Kraft Foods Group Inc named James Kehoe, the chief financial officer of Canadian apparel maker Gildan Activewear Inc, as its CFO as part of a management shakeup under new Chief Executive John Cahill.

    "Kehoe, who had spent more than two decades at Kraft before joining Gildan, was the Canadian company's CFO for less than two months ... Kehoe will take over from Teri List-Stoll, who steps down on Feb. 28."
    KC's View:

    Published on: February 19, 2015

    ...will return.
    KC's View: