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    Published on: June 10, 2015

    by Michael Sansolo

    CHICAGO - Given the diverse nature of both the supermarket industry and the challenges it faces, it’s nearly impossible to find any single aspect of the FMI Connect show currently taking place here that encapsulates all that change.

    But not completely impossible.

    A compelling study of realities in the produce department in many ways puts into focus the challenge of changing consumers, their changing desires, competition, regulation and more. Thankfully, MNB friend and industry consultant Anne-Marie Roerink was able to capture all of that and more in her multiple presentations of “The Power of Produce,” a new study she did for the Food Marketing Institute.

    Consider some of the key points in Roerink’s presentation and how they reflect on the entire range of industry issues.

    • Purchasing behaviors are all over the place. Produce is largely a planned purchase, yet more than half of shoppers frequently make impulse buys. There are two key elements to these findings: first, shoppers can be won over the produce items provided the displays are well maintained and inviting. Product appearance is more important in produce that nearly any other category and can easily outweigh price as a purchasing decision.

    Second, whether shoppers make lists and how they do it is changing greatly by generations. Millennials, the largest and increasingly important shopper group, is far more likely to use electronic means to view ads and are much less likely to make lists. Plus, more than other shoppers, they crave useful information and help, so the opportunity for building sales is there.

    But remember, you can’t abandon paper advertising completely as it remains important to other generations. So as with so many issues, retailers must walk a fine line these days between on technology and traditional methods.

    • Megatrends and food issues weigh heavily in produce. Shoppers surveyed by Roerink put increasing importance on locally sourced products even if their definition of local is all over the place. As Roerink explained, this gives retailers an opportunity to define the meaning and make it important.• In addition, don’t overlook the changes in purchasing behavior. Organic is an incredibly important attribute in many produce categories and must get significant attention. What’s more when it comes to electronic shopping, produce has power. Market basket statistics from MyWebGrocer show that produce is among the most frequently purchased items by on-line grocery consumers. Sales building ideas are widespread. In produce this includes the use of value-added products or appealing to shopper needs, such as helping shoppers consider produce for snacking or new recipes.

    • While it’s hardly news that produce is a major factor in how people shop, this factor looms larger than ever in today’s competitive marketplace. Excellent produce merchandising might be critical toward growing sales and profits, especially as more on-line competitors rise up in the marketplace.

    In other words, there’s a lot to learn from produce in terms of all the challenges facing the industry.

    Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com . His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available on Amazon by clicking here. And, his book "Business Rules!" is available from Amazon by clicking here.
    KC's View:

    Published on: June 10, 2015

    by Kate McMahon

    I inadvertently and most-reluctantly became “That Customer” last week – the one holding up the line with a complicated, time-consuming exchange. The Bed Bath & Beyond customer service rep showed infinite patience and good cheer while inputting 20-plus SKUs individually and applying the 20% discount coupon, and I exited the store wishing I could sing her praises to her colleagues and the higher-ups at BB&B.

    Five minutes later I caught the end of a Bloomberg Business radio report about an app that would allow me to do just that, called Goodsnitch. I Googled it immediately, curious about the unlikely combination of the words good and snitch.

    And it is just that – a free app that lets you rate service and quality at a retailer, restaurant or other provider through a quick survey and comment section. It has been called the “anti-Yelp” – encouraging positive public comments and private constructive criticism.

    Goodsnitch was launched in 2012 by Rob Pace, a former Goldman Sachs investment banker who promotes his product with sound analytics and unbridled optimism. The app is free to “mom and pop” businesses, not-for-profits, and municipalities such as Albany, Oregon. The company charges a fee to customize the platform for large customers, including the Dallas Cowboys and the recruiting firm Robert Half International. Pace firmly believes that harnessing positive feedback will improve workplace culture, staff retention, customer loyalty, and ultimately, the bottom line.

    Reinforcing its mantra, the San Diego-based tech company last week released a survey that found an overwhelming majority of consumers believe businesses need to better leverage online feedback to improve the customer experience.

    The poll of more than 2,500 consumers also found:

    • Of the Americans (51%) who have ever written online reviews for businesses, products or services, the vast majority (82%) wrote both negative and positive reviews.

    • Seven in 10 Americans believe it is important to write online reviews for local businesses.

    • The majority thinks companies should do more to publicly recognize individuals for good work.

    It’s equally important for companies to respond to negative comments directly and immediately, Pace told MNB. “We celebrate the good publicly and let businesses fix the not-so-good privately,” he said, adding that in the current unchecked social media landscape of Yelp and Twitter “the business community has to take back that dialogue.”

    When I read the Goodsnitch customer feedback on Starbucks, Walmart, Vons, Trader Joe's, Whole Foods, Harris Teeter and more, it all came down to customer service – individuals on the front lines and behind the scenes who made the extra effort.

    This “snitch” about Stephanie at the Trader Joe’s sample counter in Encinitas, CA was typical:

    "I frequent my local Trader Joe's at least three times a week and am ALWAYS so amazed at what a wonderful employee Stephanie T is. She is always smiling. Most customers seem to know her by her first name as she greets each and every one of them. She is knowledgeable about the products they sell and is always eager to help. “

    Will the Goodsnitch “power of positive reinforcement” continue to gain traction, paid users and a widespread consumer community? There are marketing folks who have questioned the use of the term snitch in the name, but Pace counters that the prefix good is all that matters. And the company’s “Everyday Hero” campaign is rewarding employees and snitches with a $1,000 cash reward to share.

    The app aside, the business takeaway is clear: In today’s cut-throat competitive market place, simple acts of kindness and personalized service by a store employee can absolutely influence consumer spending and loyalty. That behavior must be ingrained in the corporate culture, and rewarded.

    And after being “That Customer” last week, it’s on me to be a good snitch.

    Comments? As always, send them to me at kate@morningnewsbeat.com .
    KC's View:

    Published on: June 10, 2015

    by Kevin Coupe

    Yesterday, you may remember, MNB took note of a CNBC report that Dunkin' Donuts is poised to begin testing a delivery initiative and a mobile ordering app, believing that these are big opportunities ... and no doubt worrying that Starbucks' established plans along these lines could put it at a competitive disadvantage.

    So I had to chuckle yesterday when I was giving a speech in Florida at the First Source Seafood conference, and in the conference room next door, the local Dunkin' Brands division was getting together for a meeting.

    Now, I'm reasonably sure that delivery and mobile applications were not the sole subject of the meeting, but it is hard to imagine that it did not come up. After all, figuring out mobile ordering and delivery is going to create certain strains on the Dunkin' infrastructure ... and it ain't going to be easy.

    Anyway, I saw the sign on the door and couldn't help myself. You can write your own caption. (And just to make it interesting, the best one wins a copy of "Retail Rules!")

    I hope it's an Eye-Opener.

    KC's View:

    Published on: June 10, 2015

    Internet Retailer reports on a new study from Consumer Intelligence Research Partners (CIRP) suggesting that while Amazon Prime currently has approximately 41 million members in the US, or 42 percent of the company's US customer base, the percentage is actually down slightly from earlier in the year, when it was about 45 percent.

    The reason? CIRP believes that it likely is because while Amazon's overall customer base grew, people who adopted Prime on a trial basis for the 2014 holidays chose not to renew and pay for it when the free offer ran out.

    Some other Amazon statistics from CIRP:

    • "The average Prime member spends $1,500 annually with Amazon. That compares with about $700 per year for other Amazon shoppers. "

    • "34% of Amazon customers in the United States own the e-retailer’s Kindle tablet or e-reading devices," while "5% of Amazon’s U.S. customers own a Kindle Fire TV box or stick" and "less than 1% of Amazon customers own Amazon Fire smartphones or an Echo, a voice- controlled interactive speaker launched last year that lets  customers stream music and search the Internet."

    • When it comes to spending, Kindle owners spend $1,300 annually with Amazon, the research firm says. That compares with $650 per year for those Amazon customers who do not own Kindles."
    KC's View:
    No surprise that Amazon Prime members and Kindle owners spend more than other Amazon customers, and no real surprise that the Kindle seems to have caught on to a far greater degree than other Amazon hardware initiatives. Amazon is smart enough to learn from both sets of numbers, and keep iterating until it gets things right.

    I'll tell you one thing, though. The Echo is a very cool piece of technology. My daughter got it, and loves it ... one of these days I'm going to have her do a guest FaceTime commentary so she can explain why.

    Published on: June 10, 2015

    GeekWire reports that e-commerce giant Alibaba's founder/executive chairman, Jack Ma, told The Economic Club of New York this week that "his company could surpass Walmart in terms of revenue this year. Last year, Alibaba reported $390 billion in sales, and eventually he sees revenues reaching $1 trillion.

    "In comparison, last year, Walmart reported $486 billion in revenue."

    During the talk, the story says, Ma "addressed the company’s U.S. strategy, saying it wasn’t his intention to compete with eBay and Amazon by selling directly to Americans. Instead, he eyes a much larger opportunity in helping American companies sell their products to a growing Chinese middle class."

    Which is why, GeekWire writes, last March Amazon "launched a storefront on Alibaba’s e-commerce portal, saying that it was savvy move to operate on multiple sales channels. And, in May, Alibaba and Walmart announced a partnership that would allow Walmart customers in China make store purchases using Alipay Wallet, Alibaba’s mobile payment service."
    KC's View:
    Ma likes to keep saying that he plans to get bigger not by competing with Walmart and Amazon, but by working with them to sell more US goods abroad. Which is fine for the moment, but I wouldn't bet a nickel that this guy does not have designs on the US e-commerce market. Guys like Ma - and I mean this as a compliment - don't get to where they are by not thinking big. (There's a double-negative in there, but you get my meaning.)

    Published on: June 10, 2015

    Bill Marler, who often is described as the most prominent, powerful and effective food-safety attorney in the country, has a piece in Forbes in which he essentially makes the case that CEOs need to engage with food safety issues at the highest level if they are to close the gap between reality and the idea when it comes to safe food.

    "It is one thing to read or view media reports on the latest foodborne illness outbreaks and brand-damaging product recalls; it is quite another to really understand the widespread, adverse impact these incidents have on your consumer base, on your employees, on the efficiencies of your operations, and ultimately, on your bottom line," Marler writes. "In other words, today’s food company CEO needs to know a lot more than producers in the fresh-cut produce industry initiated massive recalls last week, or that a regional restaurant chain closed down, or that a spate of pet fatalities due to the inclusion of a banned substance on an international scale means his or her company should look more closely at imported ingredients for awhile."

    Why?

    "To be successful, food companies are now in the business of managing risk," Marler says. "This means garnering a good understanding of why food safety is important to your business, what risks there are to the business, how you can mitigate or eliminate those risks, and how in doing so the food safety program will provide a return on your investment."

    You can read the entire column here.
    KC's View:

    Published on: June 10, 2015

    Bostinno has a story about a new "recipe kit" store scheduled to open this month in the Boston area - Pantry, described as a "brick-and-mortar version of online 'dinner in a box' services like Blue Apron and Plated."

    According to the story, "Pantry aims to take the stress and hassle out of planning and shopping for meals. The store features 'Recipe Kits' with pre-portioned, locally sourced food as well as recipe cards and videos. All recipes available at Pantry can be prepared in 20 to 45 minutes max. And unlike online subscription-based recipe kits, Pantry requires no commitment or advance notice."

    A delivery option is scheduled to be added to the format later this summer.
    KC's View:
    The questions is, how long before a traditional supermarket chain decides to start offering this sort of service and product in a highly stylized and specific way? You'd think that would be top-of-mind for a number of retailers right now.

    Published on: June 10, 2015

    • The Washington Post reports that Wegmans plans to open what is described as "an urban-style store" in the Tysons Corner neighborhood.

    Ralph Uttaro, senior vice president of real estate for Wegmans, tells the Post that "he expects the urban-style Tysons store to be about 80,000 square feet, while most of the company’s stores in rural or suburban areas of the commonwealth are at least 120,000 square feet. He said the company decided to move forward after seeing strong sales at its second smaller, urban store, in Chestnut Hill, Mass."

    It would be the third urban format for Wegmans.


    • A report from the Hudson Institute released yesterday at the FMI Connect meetings in Chicago says that "lower-calorie foods and beverages drove the bulk of sales growth for supermarket chains between 2009 and 2013, making up 59 percent of growth, compared to just 41 percent for their higher-calorie counterparts ... Those trend lines did not hold, however, for foods and beverages that contribute the most calories to the diets of children and adolescents, items like desserts, snacks, sugary drinks, and pizzas.

    "During the study period,higher-calorie versions of these products made up more than 70 percent of sales and grew more than 12 percent, whereas lower-calorie foods and drinks saw growth of roughly 5 percent."

    The study was funded by the Robert Wood Johnson Foundation.


    Reuters reports this morning that the Humane Society of the United States is saying that it found unsanitary and 'inhumane' conditions - including " hens laying eggs in cramped cages with deceased birds" and "broken eggs and dead chickens were on the floor" - at Hillandale Farms, in Gettysburg, Pa., which supplies eggs to Costco.

    Costco has not yet commented on the accusations.
    KC's View:

    Published on: June 10, 2015

    • Joe Watson, most recently director of produce for Thibodaux, La.-based Rouses Supermarkets, will join the Produce Marketing Association’s (PMA) as vice president of domestic business development, the organization announced yesterday.


    • McDonald's has hired two new senior executives - Silvia Lagnado, former global chief marketing officer of Bacardi Limited, has been named to that same role with the fast feeder, while former Obama campaign spokesman and administration press secretary Robert Gibbs has been named global chief communications officer.
    KC's View:
    I guess these folks have to have jobs after they leave the White House, but I cannot imagine what it must be like moving from the most important office on the planet to doing something like shilling for hamburgers.

    I'm also not entirely sure what a guy like Gibbs brings to McDonald's aside from a little star power in his field. You'd think they'd be better off hiring cooks and chefs who could do something about making the food taste like, well, food.

    Published on: June 10, 2015

    ...will return.
    KC's View:

    Published on: June 10, 2015

    I have three kids. My oldest, David, lives in Chicago where he is an actor/writer (with a day job to pay the rent); I wrote about him here several years ago when he performed in a Klingon version of "A Christmas Carol." My second child, Brian, has worked in retail (among his employers have been Starbucks and a local wine shop, where he developed a palate far superior to mine) and is doggedly pursuing a dream of working in sports.

    Which brings me to my third child. Allison, my only daughter ... who turns 21 today. I'm traveling this week - as you read this, I'm probably on my way to the Food Marketing Institute (FMI) convention in Chicago - and so I'm not going to be with her as she celebrates this major milestone. And so I wanted to take this public opportunity to apologize for that, and to say that I love her and am proud of her ... and that I promise to make up for it when I get back.

    There's nothing like having your youngest child turn 21 to make one feel like the mileage is beginning to pile up, but there's nothing like having three great kids to make one feel young. Seems like a reasonable trade-off to me.
    KC's View: