retail news in context, analysis with attitude

I continue to get email about, well, email...

MNB reader Stephen Willmott wrote:

I love Morning News Beat and try to read it every day. I frequently get news from our local PBS channel. But, it is frustrating how easily politics have a way of getting in the way of the real news.

I’m a little surprised by the way you paint the Secretary of State’s e-mail issue with such a broad stroke. True, there are others that don’t trust technology and probably for good reason. But that is not the case for Mrs. Clinton. She uses and embraces technology. And, we may find she committed a felony by keeping her official communications private to selectively review before releasing. She clearly disobeyed direct orders from President Obama and this while holding her own reports responsible for the very issue she was ignoring.

Mrs. Clinton is probably running for the Presidency of the United States. That certainly seems arrogant and as I noted we could find her actions were criminal. You frequently promote transparency in business and that should be the same for politics. President Obama tells us “his is the most transparent Presidency in history.” Mrs. Clinton’s actions are the opposite of transparent and it seems that is the big story here and not who does or doesn’t embrace technology.


I think that I've tried not to let politics get in the way of how I've written about this issue ... and, in fact, my entire focus in the Hillary Clinton case has been on transparency.

But maybe that hasn't been as clear as I'd like it to be.

Writing about the other side of the story - politicians who don't use email - MNB reader Herb Sorensen wrote:

John McCain pretty well lost the use of one arm in Viet Nam, and I believe that he is possibly too disabled to use a computer.  This was reported on when he was running for president.  I presume this might have some relevance to non-use of email.

I also know there are chief executives in the corporate world who do not personally "use" email.  I forget who it was that has his secretary review and print out all of his emails, and then reviews the print copies and makes handwritten notes for her to type up replies.

Maybe the optics aren't good, but I don't think use or non-use of email is the issue.  In Hillary's case it is likely criminal malfeasance which is being buried.  In this sense, it is destruction of publicly owned records over which she had control, that is the issue.  She is in the Lois Lerner class.  Criminality in the administration of our government has become so rampant, that it is difficult to be sure who is and isn't doing it, in every case.  But people destroying records that may document their own incompetence, malfeasance or criminality, are probably guilty, why else would they be destroying mandated records?


Just a few points.

1.  McCain is not too disabled to use a computer.  He was caught playing poker on his iPhone during a 2013 Senate hearing on Syria.  If you can play poker on your iPhone, you are capable of sending email.  You just choose not to. (By the way...I want to emphasize here that I am not minimizing McCain's injuries, nor the extent and dedication of his career in public service. Far from it.)

2.  I think the number of CEOs in the corporate world who do not do email is dramatically smaller today than it was 5 or 10 years ago ... and I'd be willing to bet that many of the ones who don't have the same last name as the the company, or own the place.

3.  Your point about Hillary is fine ... as long as you are willing to concede that people with different political viewpoints than you may see it differently.  I'm not a Hillary fan, and I think this issue tells us a lot about her - none of it good - regardless if there is criminality involved.  And because I am neither judge nor jury nor lawyer, my inclination is to look at this story from the business lesson point of view ... because that's what I do.



On another subject, I got the following email from MNB reader Ed Lonergan:

After the hostile takeover of Chiquita I am retired for the second time.  Will see how long that lasts.  I still love to read MNB daily.  I don't always agree with you, but I love your willingness to take stands and create dialogue.  Where would we all be without it?  Bravo!

I was prompted to write by your piece on Wendy's (farm to fork) and poke at McDs.  Think what you may of the burgers, but I thought I'd note a couple of things.

First McD's beat Wendy's to the punch by a number of years.  You can see the video of my friend and Fresh Express Supplier, Dirk Giannini, here.

And a few added bits on apple, potato, etc. supply, here.

McDs did these videos back in 2011 to tell a bit of the story about their value chain.  Fresh Express is one of the suppliers of lettuce, apples, onions, tomatoes and other veggies to McDs.  They could have filmed Dirk, Bill Tarp, Jerry Rava, or any of the other family farmers supplying product ... the quality story and their passion for their product is real.

There is no small amount of debate about whether pre-washed/pre-cut or whole head programs (where product is washed or cut at the store) are better.  I have my personal opinion (I prefer bagged product that I know has been processed in a food safe environment).  We were agnostic as a company and supplied both types of product for both kinds of customers.

One thing I can tell you though, the QA team at McDs was amazing.  They collaborated closely with us on a daily basis.  They were regularly on the farms, with the harvesters, in the plants, you name it ... to be sure they fully understood and "owned" the value chain.  They pulled cases from across the value chain every month and did cuttings of all products with all suppliers attending ... products were quality and sensory scored ... and the suppliers helped one another raise the bar each year for the good of the enterprise.  We were darned proud when we beat our fellow suppliers on quality, and when we didn't, we worked hard to improve.

It took us almost a year to qualify to make cut cukes for McDs wraps and to do so, we had to invent an entirely new gentle handling process to make the grade.

I hope McDs finds their new path and relevance for the millennial generation.  I've served their business in various capacities across the world (Diversey provided cleaning & sanitation products) ... and especially in emerging markets, the role they served in driving the industry to better, safer practices was inspiring.


Thanks for that. It is a good day when I learn stuff.




I did a little bit of a rant yesterday on what I see as the inefficiency and growing irrelevance of newspaper circulars, which prompted MNB reader Richard Layman to write:

They are like mnemonics.  People need reminders.  Most of what we buy we don't need.  But we might be thinking about it.  Circulars are one of the tools that keep certain stores "top of mind" and push people ("trigger") them to shop and buy.

You say they aren't targeted.  Sure they aren't.  At least not in the way that you think.

But remember the old study of advertising and activation.  People need to see an ad 7 times before they buy.  But they don't see ads every time they are run by the merchant.  So 21 ads need to run for the target to see the ad 7 times.

Anyway, circulars are one of the elements in what we might call "maxi-marketing" -- although the book of the same title is actually about multiple channels.

The same general point is why Ron Johnson's everyday low price initiative at JCP or Macy's post merger with May and dropping of coupons in ads didn't work.

Sure we want low prices.  But to buy something we don't really need, we need an inducement. A coupon, like an ad circular, is a mnemonic.


However, MNB reader Jack DiSalvo disagreed:

How right you are.  As a buyer/merchandise manager for nearly 20 plus years I spent a 1/3 of my time planning, reviewing, or analyzing tab results.  We charged our Consumer Product companies  an enormous amount of money to be in tabs( inserts).  In the 70’s and early 80’s the stores would typically order extra product for the event but when inserts became so prevalent that they were in the newspapers weekly the sale per item was so low that store were just using there existing inventory and would replenish what they sold. 
 
Where there is problem someone will come up with a solution.  Maybe a Facebook can be an aggregator for a consumers by sending  only those coupons I need for this particular week.  I check off those things ( broad category’s), and they send me coupons which I either except or reject then load them onto my telephone and when I go shopping I use my phone as a way to get specific discounts.  Save a lot of wasted paper and handling ( manufactures pay a pretty hefty handling premium to the retailer now).


MNB reader Rich Heiland chimed in:

I was a newspaper reporter, editor and later publisher/general manager and I know you started out in that trade. The tone-deafness of newspapers is not new.

The circulars you write of began as advertiser resistance to a long-standing newspaper policy of ROP: You can run any ad you want as long as you run it the way we want you to and in no more than two colors (black and white) and pay what we ask. Obviously with the advent of big box stores, more competition in the grocery business the model that was desirable for the newspapers was not desirable for the advertisers. The revenue hit newspapers took when pre-prints became dominate was staggering compared with ROP rates. Now pre-prints are becoming obsolete.

FYI - I was one of the first publishers to run front page ads. All my industry peers thought it was heresy. My answer was to go back and look at early day newspapers - which featured front page ads. I also would run an ad upside down if that's how an advertiser wanted it. I'd like to say newspapers have learned from the past and today are creative and leading the charge into new ways of serving communities and businesses. I'd like to, but...


From another reader:

Add to your list that circulars are the main tool "cherry-pickers" use to shop multiple stores and save money by only purchasing loss leaders and low margin sale items. Cherry-pickers buy the largest percentage of ad items which generate a small percentage of profit for the stores.

And MNB user Dan Blue wrote:

I wanted to comment on your discussion on newspaper circulars. I am reading a book written in 1890 by Alfred Thayer Mahan, a famed US Navy admiral and historian. The book, "The Influence of Sea Power Upon History, 1660-1783" has had a few excellent business lessons in it that I wrote down when I read them for further consideration. Your piece this morning reminded me immediately of this passage:

"The battles of the past succeeded or failed according as they were fought in conformity with the principles of war; and the seaman who carefully studies the causes of success or failure will not only detect and gradually assimilate these principles, but will also acquire increased aptitude in applying them to the tactical use of the ships and weapons of his own day. He will also observe that changes of tactics have not only taken place after changes in weapons, which necessarily is the case, but that the interval between such changes has been unduly long. This doubtless arises from the fact that an improvement of weapons is due to the energy of one or two men, while changes in tactics have to overcome the inertia of a conservative class; but it is a great evil. It can be remedied only by a candid recognition of each change, by careful study of the powers and limitations of the new ship or weapon, and by a consequent adaptation of the method of using it to the qualities it possesses, which will constitute its tactics. History shows that it is vain to hope that military men generally will be at the pains to do this, but that the one who does will go into battle with a great advantage, - a lesson in itself of no mean value."


Wow. Thanks for that.



And, I got some nice emails about yesterday's FaceTime video commentary.

One MNB reader wrote:

I had to comment on this. I have been traveling for over 15 years now and have ordered room service twice. Once in a terrible snowstorm (which I know you can appreciate) and once when I was very sick. For the life of me I cannot understand how one does not take the opportunity to go out and explore, interact with locals and absorb the local landscape when out and about. Absolute truth; I have been in cities where I know my way around better than the locals.
 
Of course, my love of great beer and food helps drive this passion. The friends and experiences made along the way are priceless.
 
Much of what you write about resonates with me but this especially so. It would be great to share a beer someday. I know a thousand great places!!! Thanks for what you do!!


My pleasure. And I've love to.

From another reader:

Your Face Time article this morning hit a personal cord with me that I just had to write and tell you how great it was.  I am in sales for a food manufacturer and travel the country selling our products.  It should also be noted that I’m an only child and don’t have any brothers and sisters. 
 
Needless to say, eating alone in a restaurant never bothers me.   I typically eat at the bar, have a beer and watch a game.  This is usually the plan but, more and more I find myself talking to someone seated next to me, the bartender, waiter, etc.  I love listening to where they’re from, where they went to school, what they want to be, past job positions and general experiences.  My wife and kids always say they feel sorry for me that I have to eat alone.  I find it an adventure.  Who will I talk to tonight and what stories will be told? 
 
I tell my daughter (15 years old) that I think it’s really sad when you have a friend or two over to the house and 15-20 minutes go by where I don’t hear you conversing with each other.  Your texting, twitter, snap chatting or so deep into your phones that you forget to engage in conversation with the person in the room.  Why did they come over in the first place?


And, from yet another reader:

Fantastic! What a great piece to read with the first cup of coffee ... and working in one of the best movies ever...

I was driving yesterday and an old Jimmy Buffett song came up on my iPod that I thought made roughly the same point I was making...

I rounded first, never thought of the worst
As I studied the shortstop's position
Then crack went my leg like the shell of an egg
Someone call a decent physician.
I'm no Pete Rose, I can't pretend
While my mind is quite flexible
These brittle bones don't bend...

I'm growing older but not up
My metabolic rate is pleasantly stuck
So let the winds of change blow over my head
I'd rather die while I'm living then live while I'm dead.

KC's View: