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    Published on: April 20, 2015

    by Kevin Coupe

    The Associated Press reports that "Facebook remains the most used social media site among American teens ages 13 to 17, according to a new study from the Pew Research Center," putting the lie to speculation that teens wanted nothing to do with the social media site.

    According to the story, "Aided hugely by smartphones and other mobile devices, 71 percent of teens surveyed said they use Facebook, with the same percentage saying they use more than one social network of seven options they were asked about. Half the teens said they also use Instagram and four in 10 said they used Snapchat."

    Perhaps the biggest surprise - boys use Facebook more than girls, at 45 percent versus 36 percent.

    The lesson from this Eye-Opener may be that while a lot of teens were dismayed by the fact that their parents and even grandparents embraced Facebook, the simple fact is that the social media site remains a powerful and compelling communications tool - in spite of the presence of old folks.

    Or maybe ... just maybe ... because of the presence of old folks. Because I think that as much as kids say they don;t want anything to do with the parents, there are times that they may actually find our presence to be reassuring. Annoying, but reassuring.
    KC's View:

    Published on: April 20, 2015

    Any reader of MNB would know that I could not resist this one...

    Seeking Alpha had a story over the weekend entitled "How Dr. Strangelove Taught Us To Stop Worrying And Love Amazon," suggesting that, just as in that classic movie when General Buck Turgidson says that he wishes he had a version of the secret Soviet doomsday machine, retailers may at some point they had their own version of Amazon.

    The argument is that while Amazon certainly has its flaws, both from a retailing and investment perspective, its potential far outweighs the potential pitfalls in its business model.

    Here's the argument in a nutshell:

    "To argue that revenue growth has slowed and the stock should be sold is a bow to the law of large numbers and ignores the profit potential created by Amazon's incessant investment. Bears, mistakenly in our view, want to treat the company as a mature enterprise rather than a dynamic risk-taker bent on growth and changing the way consumers consume.

    "This is not to say there won't be failures. Everyone is aware of the Fire phone flameout and the diaper disaster. And bears predict the same for Amazon's new 'Dash' button, which allows customers to reorder items before they run out with a push of a button. We are a contrary sort, though, and our confidence in Amazon is shored up by its failures. To us, it only means the company isn't afraid of constantly pushing for growth."

    You can read the entire analysis here.
    KC's View:
    This has been precisely the point that I've been arguing - that despite Amazon's missteps and the ways in which it seems to be profits-challenged, the company's persistent and consistent desire to innovate and push the envelope and challenge conventional ways of thinking only make it a company to be both respected and feared. And companies that think that Amazon won't have an impact on them are simply ignoring both history and reality.

    Published on: April 20, 2015

    MLive reports that "Meijer's online shopping and store pick-up service is back after a 26-month hiatus. But the new incarnation, dubbed Meijer Curbside, has been retooled based on customer comments," with the company adopting a click-and-collect model and dumping the previous home delivery approach.

    The story says that "launched this month at the Knapp Corner store in Grand Rapids, the pilot program could be rolled out to more of the Midwest retailer's 213 stores across Michigan, Ohio, Indiana, Illinois and Kentucky later this year."

    There is no surcharge for the service at this point, as the company learns from users, but it is expected that a charge of about $5 is likely down the line.

    The story goes on to say that "Meijer is trying to distinguish itself from the competition by offering two options: A quick-trip order of less than 12 items that can be picked up in an hour, and a full order that is ready in three hours ... Curbside shoppers can order from more than 23,000 options. While that is only a fraction of the several hundred thousand items carried in one of Meijer's roughly 200,000-square-foot stores, the available items are the ones that usually end up in shoppers' carts."
    KC's View:
    I would expect that we're going to see a lot of these sorts of announcements from companies that have either flirted with e-commerce or avoided it altogether, as it becomes increasingly clear that not offering some sort of e-option would be akin to not having scanners.

    Published on: April 20, 2015

    Fortune reports that Walmart is eliminating the role of zone manager in its 4,500 US stores "in a bid to cut bureaucracy and give front-line workers more say." The goal, the company said, is to "reduce bureaucracy, improve customer service, and give front-line workers more input into how their section of the store is run."

    Affected employees, the story says, "typically six per store, will be redeployed to other roles within stores," with the changes slated "to be implemented by this summer and will not result in a headcount reduction."

    According to the story, "The move comes as the CEO of Wal-Mart’s U.S. division, Greg Foran, has pledged to make shopping at Wal-Mart more appealing, an important task given how delicate the recovery in shopper traffic trends has been for the retailer in recent months. Foran, who took over the $280 billion a year U.S. business last year, recently told Wall Street analysts that 'we have recently undertaken some important activities to simplify our organization and empower our stores, our associates in our stores to make decisions'."
    KC's View:
    No sinister motivations here that I can detect. I firmly believe that bureaucracy often is the enemy of progress, and that seems to be what Walmart is trying to eliminate ... though this is just one layer in a company that has more layers than an onion.

    Published on: April 20, 2015

    The New York Times has a story about Dan Price, the CEO of credit card processor Gravity Payments, who made news last week when he decided to cut his million-dollar salary to $70,000 a year so he could give raises to a number of his employees that would, in essence, make $70,000 a year the minimum wage at Gravity.
    A number of compensation experts suggested that the decision was misguided since it was arbitrary and not created by market conditions, also suggesting that there is no correlation between having happy, well-paid workers and having productive, efficient and effective workers. And no less an economics expert than Rush Limbaugh described the move as " “pure, unadulterated socialism, which has never worked.”

    In addition, expert observers suggested that this was the kind of decision that only the founder/CEO of a private company could make ... that it any company of greater size with greater board oversight, it would be almost impossible.

    Price, for his part, "dismissed the back-seat business advice as misguided," the Times writes. "Proudly calling himself a capitalist, Mr. Price, the founder and chief executive of Gravity, argued that the new salary structure would benefit his firm in the long run even as it would help, more broadly, to highlight the corrosive effects of income inequality in American society. At the same time, he criticized some established business practices, like basing chief executive pay on what other chief executives earn."
    KC's View:
    I don't think that there is much argument with the notion that such a move would have been impossible at a public company, or one less controlled by a founder/CEO. I'm not sure that I buy the "this is socialism" argument, though ... at least not if you accept the definition of socialism as "a political and economic theory of social organization that advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole."

    Price isn't giving up control. He's just making a statement - and make no mistake about it, this is a political statement as much as an economic one - that the wage differential between leadership and the people on the front lines is out of proportion and needs to be addressed.

    Is his solution a little extreme? Sure. But no less extreme than the economic realities that have created such an enormous chasm to begin with. This sounds pretty market-driven to me ... and people who don't think so simply don't want to acknowledge that wage disparity creates all sorts of market problems.

    We'll see, in the end, if it works. I hope it does.

    Published on: April 20, 2015

    Last week, we reported on how Walmart unexpectedly closed five stores - two in Texas, and one each in California, Florida and Oklahoma - and laid off 2200 employees, citing consistent plumbing problems in the stores that required extended repairs. The stores could be closed as long as six months, the company said ... though there was more than a little speculation that Walmart had closed only stores where there seemed to be higher levels of union organizing activity.

    Walmart denied that allegation.

    Now, the United Food and Commercial Workers (UFCW) is going to the National Labor Relations Board (NLRB), seeking an injunction that would force Walmart to rehire all the workers. The UFCW continues to press the claim that union activity, not bad plumbing, was the cause of the layoffs and store shutdowns.

    The New York Times writes that the union says that "the closings were in retaliation for a history of labor activism at one of the shuttered stores, in Pico Rivera, Calif. Workers say they have received no guarantees that they will be hired back.

    "The Pico Rivera store was the site of the first strike at a Walmart store in the United States, in 2012, organized by a workers’ group backed by the union. The strike was over pay and working conditions for the retailer’s hourly wage workers. Since then, store employees have led actions demanding changes to Walmart’s hours and pregnancy policies, access to full-time, consistent work and at least $15 an hour in pay for workers at the retailer’s 4,500 stores across the country."

    A Walmart spokesman, Lorenzo Lopez, tells the Times, “We don’t believe there is a basis for an injunction that would interfere with our efforts to repair the serious plumbing issues at the five stores.”
    KC's View:
    And he said it with a straight face, too.

    Actually, I have no idea if these Walmarts have plumbing problems or union problems.

    Either could be true.

    I am, of course, reminded of a movie. Remember how, the the very first Star Wars, Grand Moff Tarkin uses the Death Star to destroy Alderaan? He doesn't have to do it, but Tarkin doe sit anyway, just to prove he can, and that the Empire should be taken seriously by the Rebel Alliance.

    Maybe Walmart is the Empire in this metaphor, and in fact has caused a great disturbance in the Force. Or maybe it just has severe plumbing problems in five stores.

    But let's not forget that Walmart has been judged guilty of using its super laser to destroy a planet before ... in Canada, years ago, where it closed a store that it said that was unproductive, though there was a legal finding that it actually shut down the unit to make a point to the Rebel Alliance...I mean, to its union-supportive employees.

    Published on: April 20, 2015

    The International Business Times reports that Tesco Chairman John Allan has warned British Prime Minister David Cameron that Tesco, as well as a number of other British companies, could "relatively painlessly" move their headquarters elsewhere if the country follows through on a threat to leave the European Union.

    Cameron, who currently is in a re-election battle, has promised a referendum on the matter of EU membership, but Allan, the story says, "urged the prime minister that a better approach would be to seek reforms first before promising an in-out referendum."

    Allan said that he was not choosing political sides, just pointing out that even considering the abandonment of the EU created uncertainty that made it hard to conduct business.
    KC's View:
    To be honest, I don't completely understand the whole EU membership issue ... but it certainly sounds to me like he's choosing sides.

    But it also sounds like an empty threat, since moving the headquarters elsewhere would almost certainly hurt Tesco's attempts to get its UK business back on track.

    Published on: April 20, 2015

    The Washington Post reports on how, over the past five years, Zipcar has conducted an annual survey that has consistently concluded that "millennials are more interested in alternative forms of transportation, that they often find car ownership a pain, that they'd more likely give up their cars than their smartphones."

    This year, the story says, the survey takes those conclusions one step farther - pointing out that it isn't just Millennials who feel this way, that "these attitudes disproportionately describe people in big cities, regardless of their age." The survey essentially concludes that "a 28-year-old professional in the city has more in common with the 42-year-old living in the apartment next door than a 28-year-old mom who chooses to live in a subdivision." And since Millennials are moving back to the cities, it simply makes sense that their opinions are similar to those held by people who identify as urbanites.
    KC's View:
    I think that while we have to take these survey results with a grain of salt because of who is doing the survey - it does, after all, reinforce Zipcar's view of the world - there is a core bit of marketing truth here. As people move back to the cities, retailers are going to have to think about how they are going to create new formats and innovate around the neighborhoods in which they operate, developing new and more relevant models.

    Published on: April 20, 2015

    The Los Angeles Times reports that Target has introduced a series of TV commercials designed "to attract more Latino shoppers to its stores. They are part of a campaign called '#SinTraduccion,' or 'Without Translation' — the company's first Latino-focused effort to rely on cultural concepts rather than merely translate general market advertising, as the chain previously has done."

    The story notes that "In 2014, Latinos controlled $1.3 trillion in spending power, accounting for 9.7% of all U.S. buying power, according to research by the University of Georgia Selig Center for Economic Growth. This year, that figure is expected to grow to $1.4 trillion, according to estimates from Nielsen and the Selig Center."

    "What we want to do is celebrate the fact that our bicultural guests live in two different worlds," Rick Gomez, senior vice president of brand and category marketing, tells the Times. "One is this Hispanic culture and the other is the American lifestyle."
    KC's View:
    I hope they have more luck with Hispanics than they did with Canadians, who hardly seemed to notice when Target came to Canada and noticed even less when it left.

    Published on: April 20, 2015

    • The Wall Street Journal reports that "Target Corp. ’s website went down Sunday morning, overwhelmed by shoppers clamoring for the retailer’s latest design partnership. The discount chain took its site offline for about 20 minutes due to a rush of shoppers looking for its 250-piece collection of Lilly Pulitzer bathing suits, shift dresses and jumpsuits selling for a fraction of the price of the Palm Beach designer’s luxury clothing."

    The story notes that "the episode was a less serious echo of the launch of Target’s Missoni collection in 2011, when the website crashed and couldn’t be restored for several hours. It shows Target is still able to generate hits after some less buzzy collaborations with upscale brands. But it also reveals that the company still has some kinks to work out in its online operations at a time when it is relying heavily on them to beat back competition from Amazon.com Inc."
    KC's View:

    Published on: April 20, 2015

    A new study says that "seventy percent of consumer packaged goods coupon users still use print-based coupons such as those in free standing inserts (FSI) typically found in Sunday papers to find savings," and that "traditional FSI coupons are redeemed at a rate eight times that of digital coupons." In addition, the study says, "among heavy CPG coupon users, those using paper coupons spend 8% more annually than their digital counterparts."

    And, it says that "millennial coupon users are looking to the FSI – with 63% of this age group using traditional print coupons."

    The conclusion: "While digital coupons are an important saving tool, traditional paper coupons are still a predominant player in the world of savings."

    The study, not surprisingly, was presented by GfK Custom Research and News America Marketing at the Association of Coupon Professionals' 10th annual Industry Coupon Conference.
    KC's View:
    Custom research, indeed.

    At one point in the summary, it is said that "the new study reveals surprising statistics about consumer coupon usage." Considering who sponsored the study, it would only have been surprising if the study had said anything else ... like, "abandon hope all ye who think that the FSI business has a future."

    In this case, I don't care what the numbers say. FSIs have no future. None. Maybe not today, maybe not tomorrow, but soon ... they will become as irrelevant as many of the newspapers into which they are crammed, only to fall onto the floor and then tossed into the recycling bin.

    They are the marketing equivalent of buggy whips.

    Published on: April 20, 2015

    The Wall Street Journal reports that there has been an outbreak of beef brisket thievery in Texas, at least in part because of a surge in prices that has caused it to become a hot commodity.

    The story says that "San Antonio police caught up with Allen Meneley on April 12, nearly two months after he became a prime suspect when a surveillance video appeared to show him snatching 13 smoked briskets and 10 cases of beer from Augie’s Barbed Wire Smoke House." Meanwhile, in Austin, "a Texas man was convicted this year of stealing at least $2,000 worth of brisket from several local supermarkets." And back in San Antonio, "in January, a thief broke into a smoker at Smoke Shack under the cover of night and took about $800 in half-cooked pork butts."
    KC's View:

    Published on: April 20, 2015

    ...will return.
    KC's View: