retail news in context, analysis with attitude

Published on: April 13, 2015

by Kevin Coupe

FlyerTalk has a story about how an Australian hotel chain, Art Series Hotels, has begun reviewing its guests, ranking them on its website and rewarding the people defined as best guests.

According to the story, "Between April 17 and May 31, the hotels will be rating guests on a star system ranging from one to five stars, with five stars being the highest. These reviews will then be posted on the hotel group’s website for all to see. Five-star guests will be offered a free night, and anyone with bad behavior will be on display for the public to see," ... though guests have to opt-in to be publicly identified.

The hotel's website explains it this way: "…we want to see if the fear of having one’s dirty laundry aired in public affects guest behavior, making our hotels better for all. After all, it’s the bad guests that often ruin it for the good ones. But, perhaps more importantly, we want to find out who the perfect guests are. We do have special guests; ones who always greet us with a smile and make us want to come to work. We want to bring them back for an extra night, because these are the kind of guests we want at Art Series Hotel Group."

FlyerTalk writes that "Art Series Hotels sees Reverse Reviews as a way to potentially alter behavior and also to let guests in on the group’s behind-the-scenes processes."

This is an interesting idea, though I'm not entirely convinced that it is a good idea to post reviews of one's customers. I'd expect that the vast majority of folks who agree to be rated online will be good customers, so the list will be highly self-selective.

Still, the focus on best customers is an Eye-Opener ... if only because the act of identifying them is a positive one.

Published on: April 13, 2015

Reuters reports that New York Attorney General Eric Schneiderman is questioning the legality of the retail staffing practice called "on call shifts," which requires part-time employees to call in to stores to find out whether they have to work just hours before they would have to report.

In a letter to 13 different retailers - including Gap, Target, J Crew, Urban Outfitters and Williams-Sonoma - Schneiderman suggested that the practice may violate New York law.

"Employers in New York are subject to a rule that says employees who report for a scheduled shift on any day have to be paid for at least four hours at the basic minimum hourly wage," the story says, adding that "Schneiderman asked the retailers to provide details on the processes they follow to schedule on-call shifts such as whether they use computerized systems and penalize employees who do not follow on-call procedures.

"He also asked the companies for any analysis that they may have conducted on the cost savings associated with on-call shifts and the impact on workers' well-being."

Twelve of the retailers did not comment on the letter from Schneiderman, but Gap did go on the record as saying that it "is committed to establishing sustainable scheduling practices."

Published on: April 13, 2015

Advertising Age reports that a new study from Bond Brand Loyalty questions the efficacy of mobile loyalty marketing programs, and even suggests that consumer loyalty to such programs may be decreasing.

"As consumers go mobile," the story says, "they have yet to adopt mobile loyalty apps to a great extent. According to the Bond report, 48% of loyalty program members said they would like to interact with the programs on their mobile devices but just 12% of them have downloaded a loyalty program app."

The report also "shows consumers have a limited capacity to actively use loyalty programs. People are joining more programs, but using them less. On average, those surveyed are members of 13.3 loyalty programs compared to 10.9 a year ago. However, they are active in only 6.7 programs compared to 7.8 last year, according to Bond. That, says the company, 'tells us that consumers appear to have a finite capacity in terms of the number of programs with which they can actively engage'."

Published on: April 13, 2015

The New York Times reports this morning about how "some of the biggest names in e-commerce, along with a growing pool of start-ups, are vying for a chunk of the fragmented, quotidian, heretofore entirely local market of electricians, plumbers, dog walkers and other manual labor, known broadly as home services ... The idea is to bring the efficiency and capabilities of the web to some of the lowest-tech and least-transparent enterprises by connecting consumers with vetted service providers through online marketplaces. Most companies will then take a cut of each transaction that ensues."

According to the story, "The work may be mundane but the money and stakes are huge. Angie’s List, the 20-year-old subscription service that offers reviews of local service providers to members, estimates the home services industry is $400 billion. Others put it at more than $800 billion."

Published on: April 13, 2015

Now that its $9.2 billion purchase of Safeway is complete, AB Acquisition has announced that Robert Miller, CEO of Albertsons since 2006, now will serve as CEO of Albertsons, New Albertsons and Safeway, the three entities owned by the company.

Robert Edwards, who was CEO of Safeway pre-merger and CEO of the merged companies since the deal was completed several months ago, now becomes vice chairman of the company.

Albertsons also announced "the restructuring of their executive leadership team, introducing the Office of the CEO to support the day-to-day operations of the company's 14 divisions and 2,200 stores. In addition to Miller, the Office of the CEO will be comprised of Wayne Denningham, Chief Operating Officer for all of the company's regions; Justin Dye, Chief Administrative Officer; and Shane Sampson, Chief Marketing & Merchandising Officer. Jim Perkins and Kelly Griffith will continue to serve as Executive Vice Presidents of Operations for the company's regions and will now report to Denningham."

Published on: April 13, 2015

The Huffington Post has a story about how "Kroger is making the transformation from its traditional roots as a sole brick and mortar company into starting to build out the omni-channel and digital commerce experience for customers." In an interview, Shashank Saxena, the company's Director of Digital and e-Commerce, talks about "what's driving the change and how retail is going about in responding to this new environment."

There are, he says, six basic trends shaping digital retail transformations ... and you can read about them here.

Published on: April 13, 2015

Bloomberg reports on a new research from Forrester saying that "retailers should stop wasting so much time trying to win over millennials because they’re often broke. Instead, they should target older shoppers with more money to spend."

The story goes on: "The bulk of consumer spending has shifted from those younger than 45, who now make up a smaller percentage of the population and are strapped with student loans, to those 45 and older, who have equity in their homes and bigger incomes. The recommendation runs counter to retailers’ frenzied push to court millennials, the generation born after 1980, with new gadgets and fashion trends."

The report also says that retailers "need to stay lean if they want to be competitive in coming years ... The chains that are able to cut costs without compromising customer service will win."

Published on: April 13, 2015

• The Wall Street Journal reports that "the Walton family said Friday it plans to sell some of its stake in Wal-Mart Inc., to offset further increases in its ownership percentage and to help fund charitable contributions. As a result of the company’s stock-buyback programs over the past several years, the Waltons’ stake - owned by Walton Enterprises LLC - has risen to about 50% of the company, the family said in a statement on the retailer’s website ... To facilitate the share sales, the family has established the Walton Family Holdings Trust, to which it is distributing approximately 6% of Wal-Mart’s shares outstanding."

Published on: April 13, 2015

• The Democrat and Chronicle reports that the Federal Trade Commission (FTC) is looking to block the proposed $3.5 billion acquisition of foodservice company US Foods by Sysco Corp., suggesting that it would be anti-competitive.

According to the story, "The federal regulator and the food service giants are scheduled to head to court next month as the FTC is seeking to put the kibosh on the takeover. There, before a U.S. District Court judge, the FTC is pursuing an injunction blocking the merger ... The heart of the FTC argument is that US Foods and Sysco already are huge, with nationwide networks of distribution centers, and their toe-to-toe competition now 'yields substantial benefits to customers in the form of lower prices, better service, and higher product quality.' Take away the competition and those benefits disappear, the FTC argues."

Published on: April 13, 2015

Responding to our story last week about the Apple Watch - that rare Apple product that I've been unable to find much personal connection with - MNB user RA Causey wrote:

Like you, I’m a huge Apple fan, owning several of their products and thoroughly in love with every one of them.  Yet despite that passion, I’m also only intrigued with the Watch, not yet convinced it’s something I’ll buy.  I don’t know why that is – probably some uncertainty as to my real need for something like that, and/or of how it’ll fit into my life/the collection of digital gadgets I already own (iPhone, iPad, iPod).  What incremental value it’ll bring to the table.  I’m unclear as to what “space” or “need/gap” it’ll fill.

This is different for me, because for most things Apple, I’m usually hooked immediately, and one of the first in line to purchase.  But not so much with the Watch.

But I am interested and will continue to follow the Watch in the months ahead, with growing interest.  So the reviews are most helpful.

MNB user Matt Kleinhenz chimed in:

Step 1 - Apple Watch.

Step 2 - Google Glass.

Step 3 - The wrap around computer that plugs directly into my head (and really, we probably aren't as far off as we would like to believe).

Only then will I be ready to apply for the job of City Administrator of Cloud City on Bespin.

Extra credit for the Star Wars reference.




MNB reader Bob Vereen wanted to weigh in on the dollar store competition:

I recently deliberately walked the aisles of a Dollar Tree store and found hundreds of surprisingly well made $1 items that could be added to Family Dollar stores and sold for $2 or more and still be great bargains for consumers, especially in small towns and cities where there is not much choice.   Perfect example:  ear buds for MP3 or other gadgets for $1.   At Walmart, a different style is $5.  Action like that would make Family Dollar not only much more competitive but also amazingly profitable.




Regarding Amazon's delivery drone program MNB reader Chris Utz wrote:

Kevin,  I’m a ‘naysayer’ when it comes to the practicality of the drone deliveries.  What could possibly go wrong?

Amazon is allowed to fly drones as long as they don’t exceed 400 feet or 100 miles per hour?  I’m assuming the FAA will also ban drones from flying in the Class A airspace around airports.  Jolly good job, FAA.  Airports and aircraft are still safe.  I’m not convinced the bureaucrats at the FAA have our safety in mind.

What could possibly go wrong?

Amazon’s drones would probably have to be fairly large to deliver anything but their their smallest and lightest packages.  I wouldn’t want to get hit by a large drone traveling 100 mph, while riding my Harley, regardless of the direction of travel.  How about getting smacked by a high speed drone while innocently standing in the front yard or mowing your lawn?  You’d be safe from drones in your house, right?  I wouldn’t want my dinner party ruined by big drone crashing through the picture window.

Advocates might counter that drones wouldn’t be allowed to at high speeds while in close proximity to the ground.  What about wind shear accidents or computer malfunction?  Even if a drone delivery were to go ‘perfectly,’  I can envision an angry German Shepherd getting hurt ingesting propellers, electronics or batteries, defending his or her airspace from a delivering drone.

If Amazon is allowed to make drone deliveries, then surely Target, Walmart, Walgreens, CVS and Supermarket pharmacies should be allowed to do so, if only to be fair.  If a multiplicity of companies are independently operating drones simultaneously, what would keep them from crashing into each other and raining debris, not to mention packaged gifts from the skies?

Perhaps the FAA should monitor and control every drone flight.  They could build a new supercomputer to do that;  they could call it SKYNET.

Boom! Another movie reference!




MNB reader Roger Hancock had some thoughts about our piece regarding the first full-time, regular season official hired by the National Football League (NFL):

You concluded your Thursday  Morning Eye Opener with, "This is all about sports and business looking more like life. As they do it, I believe it will be an Eye-Opener."

Allow me to push the envelope  a little.

What I find curious is the meaning of "looking more like life."  Clearly the implication of your comments in this case is to see more women with the vocation of umpire/referee in the sports arena and executive  in the business world.  No doubt, there are women who would and do excel there.  In other pieces you have written, "more like life" has a racial diversity definition.  I suppose there are other operational definitions that some may choose.

This is curious to me because the general assumption underlying the notion is that skill sets, desires, and circumstances all are distributed evenly in life.  In other words, all are equal in most every sense.  What I find in life, though, is that gifts, talents, desires, abilities and many other attributes (beauty, strength, ambition, craftiness with words to name a few) are not equally distributed, as unfair as that may seem.  While my anecdotal observations are limited and skewed, a variety of research finds this to be true also.  One area of note can be found in professional athletics.  Neither the NBA, the NFL, nor MLB "look like life" from a racial diversity standpoint.  One can easily search for the research that has been done on this topic.  Yet, no one cries foul or promotes equal representation.  Quite the contrary in fact - people love their sports, they love their teams, they love their superstars, and they love for their teams to amass the best talent so they win.

None of this is to say that people should be institutionally held back from pursuing their dreams, or not given opportunities to succeed in their aspirations.  In fact, one characteristic of a well-functioning society, at least that Plato advances, is that its citizens are functioning to their potential.  While harder to measure and impossible to legislate, isn't that the better standard to strive for?  Then the focus is to remove the barriers rather than to push for a particular look.  Imagine what a company, industry, or society functioning to its potential would look like!

Isn't it pretty to think so?

I don't think anyone would argue that society should be filled with people who are able to live up to their potential, and institutions that are culturally structured to enable and embrace such people. But that's not the way that a lot of institutions are set up. In fact, they're set up to protect the interests and futures of the people in power.

From all the reports, this woman was hired because she is very good at her job, and brings to it both expertise and experience. I don't think there's anything wrong with the NFL - which hasn't exactly been setting the world on fire with a progressive attitude toward women - saying that this is a move that needed to be made.



On another subject, MNB reader Margaret Bigley wrote:

YUMMY! After reading the fingerling potato descriptions, I’m purchasing fingerling potatoes for dinner this weekend.

Hope you enjoyed them.

Published on: April 13, 2015

Jordan Spieth, a 21-year-old Texan, won the Masters over the weekend with a two-under-par 70 on Sunday that gave him a 72-hole score of 18-under 270. It is Spieth's first major tournament win, and the New York Times writes this morning that "Spieth, who was younger than four of the seven amateurs in this year’s Masters field, displayed some of that steeliness in becoming the first wire-to-wire winner at the event since Raymond Floyd in 1976 and the fifth over all. The others include two of the game’s greats, Arnold Palmer (1960) and Jack Nicklaus (1972)."

Published on: April 13, 2015

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