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    Published on: February 26, 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.

    I talk a lot here on MNB about the importance of the people who are on the front lines of any retail experience. As important as it is to have relevant merchandise and a compelling shopping experience, it is even more important to have people working in the store who believe in the mission, who engage with shoppers, who make you feel like there is some sort of personal connection taking place, not just a transaction.

    Last summer, I was walking around Newport Avenue Market with co-owner Lauren Johnson, and out of the blue a customer came up to us and inquired about an employee who had been ailing. They had a long chat about her, and I remember thinking to myself that at some level, these was emblematic of what happens in a one-store independent.

    But it is not just one-store independents. On this cold day in February, I am standing in front of my local CVS. And when I say local, I mean local ... I live about a quarter-mile from here, and my office is actually right next door. Last week, while traveling on the west coast, I heard through the grapevine that Gail Hadsell, one of the checkout folks at CVS, had passed away after a long bout with cancer. She was 68.

    Now, I didn't really know Gail. I had no idea how old she was, didn't know she was sick. What I did know was this - whenever I stepped up to her checkout, she'd greet me with a smile, call me by name, inquire about my wife and kids, ask me how business was. She was conversational enough that somehow we ended up talking about MorningNewsBeat and our book, "The Big Picture," and I gave her a copy, just because she seemed interested.

    It is people like Gail who make the difference between just a standard store experience and one that is exceptional. It is that simple. She was a resource that they will not be able to replicate in there.

    It doesn't matter whether you are a one-store operation or a chain with thousands of stores. It really al comes down to the same thing - how do I feel when the transaction takes place. People like Gail make you feel good, are are worth far more than the items that get listed every year in annual reports and get announced at shareholder meetings.

    I hope that CVS somehow let Gail know that while she was alive and working in the store, making a difference. Hell, I wish I'd told her.

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

    KC's View:

    Published on: February 26, 2015

    by Kevin Coupe

    Sometimes, a story just shouts out to be converted to an "Eye-Opener."

    Like the piece yesterday in the Daily Beast about new anecdotal evidence that men and woman actually do have different eating habits.

    It seems that women on death row, when they have to choose their last meal, are far more likely to include fruits and vegetables in their chosen menu than men.

    "The last meal is a strange cultural custom and a hell of a one-two punch for any prisoner," the story says. "First, the state makes a rare display of generosity, often procuring a mélange of favorite items for the prisoner from various restaurants. Then it insists on a syringe for dessert.

    "But as archaic a practice as it is, the last meal provides us with a fascinating glimpse into the appetites of the world’s most dangerous people, women included. Last meals reveal gendered differences in culinary indulgence that persist even in the face of death. It’s no secret that men and women eat differently, but it is remarkable how true they stay to their habits with just one meal left to savor."

    In fact, "two of the 15 women who have been executed in the last 40 years have even selected meals entirely composed of fruits and veggies."


    "Christina Marie Riggs, executed in Arkansas in 2000 for the murder of her two children, feasted on a supreme pizza but also asked for a salad and pickled okra. Teresa Lewis, executed in Virginia in 2010 for murdering her husband and stepson, ate two fried chicken breasts, but didn’t forget to request sweet peas on the side.

    "You might think that women on death row would finally throw caution to the wind in the hours preceding death. Not so."

    Compare that to a couple of men: "Gary Carl Simmons Jr. - who was executed in 2012 after dismembering a man in 1996 - ordered a Pizza Hut supreme deep dish pizza, a family size bag of Doritos, two large strawberry milkshakes, two cherry Cokes, a super-sized order of McDonald’s fries, and two pints of strawberry ice cream, along with sides of parmesan cheese, nacho cheese, ranch dressing, and a side of jalapeños." Or David Thomas Dawson, executed in Montana in 2006 for murdering three out of four members of a family in their motel room, who "requested two double cheeseburgers, two orders of fries, a half-gallon of vanilla fudge ripple ice cream, and two bottles of Dr Pepper."

    As I said, an Eye-Opener.
    KC's View:

    Published on: February 26, 2015

    The Consumer Goods Forum (CGF) announced today that its board of directors has agreed on a set of "Consumer Engagement Principles" designed to act "as a framework for how companies engage with their consumers, and ... promote an environment of trust and pro-active consumer communication."

    The goal, CGF says, "is to have consumers view the industry as a responsible user and steward of consumer data and insights – thus forming the common foundation from which the digitally enabled value exchange can be optimised by individual companies."

    Among the principles agreed to by CGF's board are:

    • "Enabling consumers to easily choose whether and how their personal information is used and to have access to information on how their personal information is used, and the ability to correct it and/or have it removed."

    • "Listening and responding to consumer feedback about the use of their personal data."

    • "Preserving integrity in social media practices."

    • "Protecting the reliability and accuracy of consumers’ personal information and, should things go wrong, being open about the status of their personal information."

    The announcement notes that Capgemini was instrumental in designing the principles, and will participate in instructional webinars over the coming year while "developing an online portal dedicated to the Consumer Engagement Principles."
    KC's View:
    The question is, are these Data-Focused Consumer Engagement Principles? Or Consumer-Focused Data Engagement Principles? Not that it matters...

    The announcement notes that the principles are built on work already done within member companies to address the issue, and it is fair to point out that the principles will only be as effective as individual companies are in adopting them.

    However, they also make a critical point - which is that such declarations and policies also only are effective if they begin and end with consumer concerns. Sure, good business practices have to be part of the equation, but in the end consumers don't really care about good business practices if they conflict with their own priorities, needs and desires.

    Sure, there has to be mutual value. But the highest priority has to be the consumer.

    Businesses can only be effective in the current competitive environment if they not only believe that, but imbed this principle within their cultures.

    Published on: February 26, 2015

    The New York Times reports that the decision by Walmart to increase wages to $9-per-hour for some 500,000 employees is creating pressure on other retailers to make similar moves, while opening up another front in labor's efforts to get Walmart to liberalize its labor policies.

    The story notes that "the move to increase hourly wages by Walmart, which employs 1.3 million workers as the country’s largest private sector employer, is sending ripples through the retail industry. On Wednesday, the TJX Companies, which runs the discount chain T. J. Maxx, said it would follow suit, raising the pay of its hourly wage workers to at least $9 later this year, and to $10 next year.

    "With some progress on the hourly wage front, labor activists are highlighting another longstanding demand: more hours — and more consistent hours — for hourly-wage workers ... something they say will make as much a difference to workers’ pocketbooks as an increase in wages."

    According to the story, "At the heart of demands for higher wages and better hours, experts say, is the dwindling number of middle-class jobs. More primary wage earners who in the past may have held stable blue-collar jobs in manufacturing are now relying on low-wage jobs at Walmart or other discount retailers to support their families."

    However, this desire conflicts with retailers' need to control costs in the face of tough competition and shrinking margins: "By hiring a large pool of hourly workers whose hours can expand or contract depending on business need, retailers can better sync hours to demand, experts say; posting schedules with limited advance notice allows managers to further minimize the risk of assigning too many hours. Restricting work hours also limits outlays on overtime and employee benefits."
    KC's View:
    This is all incredibly complicated stuff, and I certainly don't want to minimize the importance of Walmart's wage increases. It is a positive step, especially if it creates movement on the part of other companies.

    I continue to believe that there are limitations, though ... I want to know how many of the Walmart employees who get raises are able to quit their second jobs because of it. I am, fair to say, dubious. And it seems to me that the issue of sufficient hours is as important as wages.

    That said, we're in a transitional economy. As the story says, people are more dependent on retail jobs to be sustaining jobs than ever, but retailing is not set up that way. And so we have to figure out as a nation - as a matter of national policy - how to address this problem, and the resulting bifurcation of the economy, if we are going to create a robust and opportunity-filled environment for everybody.

    Published on: February 26, 2015

    Marketing Daily reports on a new Mintel study saying that private brands have found considerable favor among Millennials: "42% of Millennials (ages 18-36) agree that store brand food products are more innovative than name-brand products. In fact, Millennials are more likely to buy store brand foods in general (97% versus 94% of all U.S. shoppers). 

    "Furthermore, 37% of U.S. shoppers as a whole say they prefer to buy store brand products over brand name products. "

    The story goes on to say that "nearly two-thirds (63%) of store brand buyers —  including 70% of Millennials — agree that these products are higher-quality than they used to be. Many shoppers also agree that store brands stack up against their name brand counterparts in flavor, packaging and variety of product offerings."
    KC's View:

    Published on: February 26, 2015

    Fortune reports that Nordstrom plans to invest $1.2 billion "this year on its e-commerce and new stores, compared to $750 million last year. Over the course of the next few years, the total capital spending plan comes to $4.3 billion." The goal is to achieve $20 billion in revenue by 2020, up from $13 billion today, and "the integration of its stores and its digital business, both at its luxury department stores and its Rack outlets stores, are key to those efforts."
    KC's View:
    I've always thought that Nordstrom does about as good a job as any retailer of integrating its physical and online businesses. And it seems highly focused on being better at it.

    Published on: February 26, 2015

    • In an interview with the Associated Press Walmart CEO Doug McMillon offered an assessment of his first year in the top job:

    "I feel good about the first year," he says. "I think we've increased our clarity as it relates to our strategic plan. Our leadership has a better sense of where we need to go do to capitalize on our opportunities. I feel like we have done a good job of listening to our associates and beginning to respond appropriately to set them up for success. Growing an e-commerce business is important. And we are getting stronger in markets like China."

    McMillon adds, "I've been here pretty much my whole adult life. So what I believe and the things I learned have been largely influenced by Wal-Mart, and much of our culture will stand the test of time and still will be really valuable to the business and to the communities we serve. But there are things that need to change ... how we serve customers, the tools that we use to do it."

    CityWire has a story about how Walmart's new leadership says it remains committed to its made-in-the USA initiative.

    “Our new CEO Greg Foran is equally committed to the U.S. Manufacturing initiative because it is a good business decision," says Cindi Marsiglio, the company's vice president of U.S Manufacturing. "Of course there are business advantages that come with a shorter supply chain particularly in responding to seasonal trends. But it’s also at the core of Everyday Low Price and is a cost-cutting strategy that is a crucial part of our business. It’s smart and we are quite pleased with the progress made in two years’ time."

    The story notes that "in 2013, Wal-Mart announced it would buy an additional $50 billion in American products over the next decade. Wal-Mart estimates cumulatively over the next decade the investment will total $250 billion. The Boston Consulting Group predicts that this $250 billion investment will create one million jobs, including the jobs in manufacturing and related services."

    However, the story also cites a new AT Kearney study saying that "reshoring is not yet making a difference. Its 2014 'Reshoring Index' was down 20 basis points compared to 2013, indicating that 'offshoring to foreign manufacturing markets outpaces reshoring'."
    KC's View:
    While I am willing to take Walmart at its word that it wants to focus more on made-in-the-USA products, I also think they need to do a better job of certifying that the products they advertise this way meet the standard. That has not always been the case - witness the televisions they were selling that don't pass the sniff test and currently are the subject of an FTC probe.

    It is important to do this. But equally important to get it right.

    Published on: February 26, 2015

    CBS News reports that Google "has filed for a patent on a new digital deodorant device ... the device would be a small wearable fan complete with sensors that track your sweat. The user straps the 'odor-removing device' to their body and it autonomously emits a fragrance when it detects body odor."

    According to the story, "The device will also alert you when you smell and warn you, via a social media linkup if your friends are close enough to get a whiff of your stench. Then the GPS kicks in offering 'an alternative route to travel such that the predicted odor may not offend others that are socially connected to the user'."

    The story does not indicate precisely how it should be worn, though speculation is that it is the kind of wearable technology that could be built into athletic wear manufactured by companies like Under Armor.
    KC's View:
    One thing, however, seems obvious. Which is that it ought to be made mandatory for teenaged boys.

    Published on: February 26, 2015

    ...with brief, occasional, italicized and sometimes gratuitous commentary…

    • Staples announced yesterday that it is teaming up with Lendio, described as "an innovative financial technology firm and the leading small business-lending marketplace," to offer business loans to small businesses. The programs available include more than 20 different funding options for loans ranging from $2,500 to $1 million, and the ability to see all funding options available with just one application.

    • The Wall Street Journal reports that private-equity firm Roark Capital Group is putting its Atkins Nutritionals business on the sales block. It acquired the low-carb diet company in 2010 for an undisclosed sum, and experts say that it currently could fetch more than $1 billion in a sale. According to the story, "It is unclear who might be interested in buying Atkins this time around, but auctions of such companies typically draw private-equity firms and other industry players."

    • Sprouts Farmers Market said yesterday that it saw a 110 percent increase in net earnings on a 22 percent increase in sales, and a 9.9 percent increase in same-store sales, during the 2014 fiscal year.

    The company also said that it grew its fleet by 23 stores in 2014, with plans to open close to 30 this year, with speculation emerging that it could open units in new markets such as Florida and North Carolina.

    Which explains why the folks at Whole Foods recently have been denigrating Sprouts a bit, casting doubt on its credibility as a natural/organic grocer. Nothing like a 110 percent in net earnings to get the competition's attention...
    KC's View:

    Published on: February 26, 2015

    • Justin Dye has been named Chief Administrative Officer of the newly merged Albertsons and Safeway organization, overseeing IT, corporate development, supply chain, real estate, and the integration of the two organizations.

    Dye is a former Cerberus Capital Management executive who previously was COO at New Albertsons Inc.
    KC's View:

    Published on: February 26, 2015

    On the subject of Walmart's recently announced wage increases, MNB reader Fran DiRubbo wrote:

    Kevin, As always I’m a big fan of yours and really love reading your perspective every day!! However, I really believe you are missing the mark when you discuss Walmart.

    For some background, I have been in the business as a supplier for over 38 years and I manage the Walmart International business for Campbell’s. During my 12 years on the Walmart business I have been nothing short of impressed with the Walmart Team and management. They are very dedicated and how they really care for their associates.  I have seen that same caring culture in all the Walmart countries I have visited. The pay increase decision will cost them over 1 billion dollars…that is coming directing out of Mr. Rob’s pocket.  Much like the investments that great American industrialists did at the turn of the century. Think back in history to Andrew Carnegie when he donated much of his wealth to build public libraries and Halls to support the arts. This decision by Walmart’s leadership truly reflects how they care about their people.

    By not living in Bentonville, you don’t get to see how they support the community and the great quality of life “actions” they make investments with every day. Even outside of this state…when I coached little league baseball in New Jersey one of our largest financial supports was the local Walmart Supercenter. Further, you never had an opportunity to see the 20 Walmart truckloads of blankets and bottled water that arrived in New Orleans immediately after Katrina struck. They were there when no one asked and well ahead of FIMA first responders. I could go on and on but I think you get the idea.

    People need to take the time to understand Walmart before they comment on their actions. They are not always perfect but they listen and respond.

    Walmart is truly a great American company and Mr. Doug will take this organization to even greater levels of performance during his tenure at the helm.

    On another subject, MNB reader Cindy Sorensen wrote:

    The news of Don Keough’s passing made me very sad.

    I had the pleasure of meeting him in 1992 when he was in Minneapolis to receive an award from the Sales & Marketing Executives (SME) group.  Coca-Cola was hosting the event at which he would receive this award, and as an employee of The Minute Maid Company (formerly known as Coca-Cola Foods),  I was also invited to attend.  We had a private “meet and greet” with Mr. Keough that night.  He was so warm and genuine and he made a big fuss over me and my manager that night.   Mr. Keough had once headed up marketing at Coca-Cola Foods before moving on to senior leadership roles at The Coca-Cola Company.   I think he still held a special place for Coca-Cola Foods as a place he had spent the early part of his career.

    There was a professional photographer capturing the events and we had our photo taken together and said to me, “When you get that photo from the photographer, you send it to me so I can sign it for you.”    I did, and he did.  I framed it and it has always been one of my prized memories of my career in this business.
    KC's View: