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    Published on: October 23, 2015

    by Kevin Coupe

    Mashable reports that Barnes & Noble has unveiled a new Nook e-reader.

    It has lots of stuff going for it: "The GlowLight Plus ditches the plastic back for an aluminum one, which looks more premium and is sturdier. The 6.4-inch screen has a built-in backlighting system for reading in the dark and has a 300 dpi resolution that renders text sharper and with better contrast. The GlowLight Plus is also light (6.9 ounces) enough to fit into inner jacket pocket and not bulge out." And, the company says, " the battery life will last up to six weeks on a single charge."

    And, one more thing: it is waterproof, able to be "submerged in up to 3 feet of water for up to 30 minutes."

    Now, the first thing that occurred to me when I saw this story was, I didn't know that Barnes & Noble was still making the Nook.

    The second thing was, how many people read underwater?

    The Mashable piece makes it sound like this Nook may actually be a pretty good piece of equipment. But I have to wonder if it even matters ... if the Nook has become generally irrelevant because Barnes & Noble came to the table with too little, too late. In so many ways, Barnes & Noble's inability to compete - with its bricks-and-mortar stores, and with its e-readers - is an Eye-Opener about how to react to potential disruption.

    You have to do it fast. Early. Consistently. Persistently. And every day has to be day one ... with little allegiance to legacy ways of doing business.
    KC's View:

    Published on: October 23, 2015

    In Toronto, the Globe and Mail reports that less than a year after Target decided to bail out of its Canadian adventure, closing 133 stores there after deciding that profitability was too far down the road, the retailer has decided to return.

    Online.

    According to the story, "The U.S. discount chic retailer has quietly opened an international website that gives Canadian shoppers the option of ordering products that will ship over the border.

    "But shopping at Target won’t come cheap because online orders face a list of extra charges, including duties and taxes as well as shipping fees."

    The story says that "the international website is being operated by Borderfree, a company that specializes in helping retailers sell products around the world, and will charge local shoppers in Canadian dollars."
    KC's View:
    Might've been a good idea for Target to go to Canada with an e-offering first, and then decide whether it made sense to open stores there.

    But, hey ... that's all rear view mirror stuff. I think it probably is smart for Target to test the waters this way. I'm not sure that they'll generate a ton of business, but it is one way of staying in the game.

    Published on: October 23, 2015

    The New York Times has a story saying that Walmart's decision to invest $2 billion in e-commerce is a tacit acknowledgement "that it had fallen far behind Amazon in the race for online customers.."

    Here's how it frames the story:

    "Walmart first said it would make e-commerce a priority at the dawn of Internet retailing in 1999. Back then, Walmart was a disrupter in its own right, rapidly expanding its big-box concept around the country and driving mom-and-pop stores out of business.

    "Though it knew Internet retailing was here to stay, Walmart in the 16 years since has often acted as though it hoped Amazon would just go away. Now, the magnitude of the task it faces has grown exponentially as e-commerce growth continues to surge globally." And, the Times adds, "Walmart built its success on being associated with low prices, but it is struggling to keep up as the growth in e-commerce surges worldwide. Shoppers can often find better selection and prices on Amazon."

    Good piece...and you can read it in its entirety here.
    KC's View:

    Published on: October 23, 2015

    Business Insider has a story saying that Amazon "has added 21 new logistics facilities globally over the last 12 months, up 14% from last year, bringing the total to 173 facilities worldwide.

    "Of the 173 facilities, 104 are in the North America region, with the rest spread across Europe and Asia. The 173 logistics facilities include the large fulfillment-center warehouse; sortation centers, where packages get presorted for shipping; and Prime Now hub, a separate building to store one-hour delivery items."

    What this all adds up to, the story suggests, is what appears to be Amazon's serious intention to compete with "companies like UPS, FedEx, and DHL: the logistics and transportation business."

    Indeed, the story says that Baird Equity Research has a report suggesting that "Amazon may be the only company with the fulfillment/distribution density and scale to compete effectively with global UPS/FedEx/DHL, and with an investor base that historically is tolerant of margin volatility relative to the 'profit mandates' of traditional Transportation & Logistic shareholders, a significant competitive advantage in our view."
    KC's View:
    Amazon's desire to expand its shipping footprint is clear ... the other day, the Wall Street Journal reported that Amazon "conducted a test briefly this fall using newspaper carriers to make package deliveries along their routes, according to people familiar with the matter. The experiment, which enlisted Tribune Publishing Co. trucks in Chicago, lasted just a week or two, according to the people."

    I suppose this only makes sense as long as it controls or cuts costs, and enables Amazon to control the fulfillment experience to a greater degree. At the very least, this points to Amazon's willingness to try a wide variety of approaches in its effort to find the most efficient and effective ways of doing business. And this should concern its competition, because it speaks to the degree to which Amazon is willing to branch out in order to create an effective retailing ecosystem.

    Published on: October 23, 2015

    The Washington Post reports that Jos. A Bank, the men's clothing retailer that has long specialized in "buy one, get three free" sales, has decided to change its marketing stripes. Facing declining sales, the retailer ascertained that one of its problems is that all the sales led customers to believe that the suits weren't of very good quality, and so they stayed away.

    The image problem was so serious that "Saturday Night Live" did a skit making fun of the retailer, showing a mom who said it was cheaper to clean up messes with Jos A. Bank suits than with paper towels.

    "When ‘Saturday Night Live’ parodies your pricing promotions, you know you have a problem,” says CEO Doug Ewert. “It stung.”

    Perhaps because Jos A. Bank was under new ownership, having been acquired last year by Men's Wearhouse, management was open to changing directions.

    Which is what they're doing. The new marketing approach, the story says, will focus on what the suits cost rather than on what people can save. And, Jos A. Bank is using Men's Wearhouse creative director Joseph Abboud to upgrade its clothing lines, hoping that it will attract a somewhat younger demographic.
    KC's View:
    I find this fascinating, and a great example of what can happen to a retailer that depends too much on price without establishing other value points on which it can build as reputation. I'm not sure that Jos A. Bank will be able to make this change effectively ... it may be that the "buy one, get three free" image is too ingrained.

    I'm not the best barometer of such things, since I only own one suit. But it would never occur to me to shop at Jos A. Bank, simply because I would tend to think that the quality would not be great. Maybe they can change my mind, but it'll take time.

    Published on: October 23, 2015

    • Amazon yesterday reported that net sales increased 23% to $25.4 billion in the third quarter, compared with $20.6 billion in third quarter 2014, while Q3 net income was $79 million, compared with net loss of $437 million during the same period a year ago.

    Analysts and pundits had been predicting a Q3 loss, so the news came as something of a surprise.

    And, the New York Times notes that Amazon has been growing consistently: "This year revenue will exceed $100 billion for the first time, making Amazon one of the country’s largest retailers."


    Crain's Cleveland Business reports that "Google Express is bringing its overnight delivery service — a rival to Amazon Prime — to a handful of Midwestern cities, including Cleveland ... customers in Northeast Ohio who join Google Express can order from 18 national retailers, including Costco, Toys R Us, Barnes & Noble and PetSmart, and get delivery the next day."

    The expansion is "part of a significant Midwest expansion for Google Express that also includes Des Moines, Detroit and St. Louis, among other cities," the story says.
    KC's View:

    Published on: October 23, 2015

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

    • The Dallas Business Journal reports that JC Penney plans to cut its headquarters staff by nine percent, or "300 of its 3,400 home office jobs as part of cost-cutting measures."

    The story notes that "since being hired as CEO-designee in November under former J.C. Penney CEO Mike Ullman, newly-appointed CEO Marvin Ellison has stressed the importance of cutting costs, including around supply chain and manufacturing efficiency."

    Okay, I'm not saying this is a bad idea. And there seems to be some enthusiasm in the marketplace for some of the moves that JC Penney is making. But ... whenever I hear about these kinds of cuts, I always wonder if they are going to make the company more productive, or if they're just going to end up with the remaining staff being overworked and less effective.


    Reuters reports that the Oregon attorney general has hit GNC with a lawsuit charging that it "sold dietary supplements containing two illegal synthetic drugs in the United States."

    The suit specifically says that GNC "violated the Oregon Unlawful Trade Practices Act by selling thousands of units of products containing either stimulants picamilon or BMPEA (beta-methylphenylethylamine) .... Picamilon, while not approved in the United States, is used as a prescription drug in some countries to treat neurological conditions. BMPEA, a powerful stimulant and amphetamine-like substance, is sometimes sold as weight loss or performance enhancing nutritional supplements."

    GNC has removed the products from its shelves, the story says.


    Fortune reports that General Mills "is launching a new venture capital arm to make quiet bets on small rivals that could someday become big players in the grocery store. In a new strategy firmed up about three months ago, a General Mills business unit called 301 Inc. will take investment stakes in very small regional startups that are looking for capital to grow ... The move is a telling nod by the maker of Cheerios and Lucky Charms that Big Food can learn a thing or two from entrepreneurs who are challenging the way the industry operates today."
    KC's View:

    Published on: October 23, 2015

    Two very different views of the wage increases taking place around the country.

    MNB reader Bruce Wesbury wrote:

    Kevin, while all these companies line up to apparently “Do the right thing”, it will always be the consumer holding the bill. Pushing for an increase in the minimum wage only results in prices being raised on those very same workers. The fact that Walmart might push their competitors to increase their wages shows that economics 101 does indeed work.

    I’m also slightly amused that educated people actually think that Walmart will not recoup these additional expenses because after all, they are responsible to their shareholder’s. Any increase in wages needs to be offset by driving additional profit to the bottom line. While there are many options for driving profit, raising prices will eventually become, if not already happening, a reality.


    And from MNB reader Rich Heiland:

    In the end hundreds of thousands, if not millions, of people move further UP in the consumer chain as a result of higher paychecks. When will folks understand that a shrinking middle class means a shrinking consumer class which ultimately is a death spiral for everyone? I hope it doesn't take our version of the French Revolution to figure out what happens when there are no more consumers.

    MNB reader Mark Heckman had some thoughts about the challenges facing Walmart:

    If Walmart has any hope to improve its perishable and out-of-stock issues, as is the plan, the must continue to invest in associate salaries.  In order to execute in-store programs and provide shopper’s improved produce, meats, and deli-bakery, better paid people are a must.  

    I recall when Kroger made investments in stores, people and programs back in the mid 90’s, Wall Street punished Kroger to the extent they could as these investments impaired short term profitability.  Kroger bought back stock and proceeded full speed ahead and they have been kicking A ever since.





    MNB reader David Carlson had a opinion about the lawsuits against Subway for marketing six inch and footlong sandwiches that actually were on smaller rolls:

    There’s one good way to avoid such lawsuits – deliver what you promise.

    Agreed.




    Responding to yesterday's faceTime about Haggen, one MNB user wrote:

    Kudos; Perfectly stated, fair and honest.

    The original Haggen’s culture disappeared years ago. That is true of Markets in California, Oregon and Washington. This experiment was a total failure for employees and very expensive for suppliers, some suppliers may not recover.

    I have no pity for the Haggen’s company. They knew they were failing and tried a hail Mary. I predict all Markets in all three states will soon be on the auction block.

    The PNW has been a breeding ground for unique and exciting grocery stores. These trendy formats can survive as long as the leadership has the heart, drive and finances they need. Haggen’s heart was lost long ago.





    And, regarding my comments about the National League Champion New York Mets, one MNB reader wrote:

    I usually agree with most of your commentary, but not today

    Go Royals!


    We all have our teams to root for. Of course, the Royals haven't yet won the American League pennant ... they still have to win another game against the Toronto Blue Jays to get there.

    But hope sprigs eternal.

    And, from another reader:

    Thanks for the reminder that your Mets beat our Cubbies like a rented mules.  As good as the Cubs looked against the Cards was as bad as they looked against the Mets.  What a tough series for Chicago to watch…

    We've all had those kinds of seasons and felt that kind of pain.

    And it is at times like these that we all have to remind ourselves of what the great Robert B. Parker once said, that "baseball is the most important thing that doesn't matter."
    KC's View:

    Published on: October 23, 2015

    In Thursday Night Football action, the Seattle Seahawks defeated the San Francisco 49ers 20-3.
    KC's View:

    Published on: October 23, 2015

    Steven Spielberg's new film, Bridge of Spies is exactly what you'd expect from the director - a high-minded popular entertainment with plenty of suspense, strong acting, and a respect for the audience that translates into a movie that is both solid and special. If there is a Spielberg "tell," it is that his movies know how to tell a compelling yarn ... and I mean that as the highest possible compliment.

    Bridge of Spies, based on a true story, takes place during the Cold War, as a New York insurance lawyer named James Donovan, who once served on the prosecutor's team at Nuremberg, is asked to defend a captured Russian spy ... and later, to trade the spy for Francis Gary Powers, the US spy plane pilot who has been shot down over Russia.

    As played by the reliably excellent Tom Hanks, Donovan is a believer in the US Constitution and that even foreign spies are entitled to their rights under what he calls the "rule book." That doesn't make him popular with the government, with the general public, or even his family ... but as one would expect from a Hanks character, he sticks to his guns, believing that he must make ethical decisions even in the face of danger. And the Russian spy is placed by the remarkable Mark Rylance, who seems to be doing nothing and yet accomplishes a great deal with his implacable demeanor and knowing, sad eyes.

    Bridge of Spies plays out from the courtrooms of New York City to the back alleys of East Berlin, which in the film has just been cordoned off; there are no explosions, no superheroes, no car chases ... just a solid, suspenseful spy film made by adults for adults.

    Go see it.



    This weekend on the Hallmark Mystery Channel, Tom Selleck returns as Robert B. Parker's troubled small town police chief, Jesse Stone, in a new movie, Lost in Paradise ... and I can tell you that it is a worthy addition to the series.

    The jesse Stone movies always have existed in a kind of parallel universe to the books, which originally were written by Parker and now are written by Reed Farrel Coleman. The movie Stone is older and even more troubled than the book version, and Selleck - who co-writes and produces the movies - always has emphasized that exploring Stone's personality is more important than whatever mystery he has to solve.

    In Lost in Paradise, Stone, having done a great job of cleaning up the coastal Massachusetts town of Paradise, offers his services to the Boston Police Department to work on a serial killer case; he knows that when he has nothing to do, he gets bored, and starts to drink too much, and becomes self-destructive. And so in Lost in Paradise, he's walking a kind of emotional tightrope, the archetypical American lawman looking to impose a sense of justice on the situation in which he finds himself.

    The acting is uniformly excellent - especially by William Devane as Stone's shrink - and Los in Paradise unfolds as deliberately as a forties detective movie. Which, in essence, it is.

    Check it out.




    When I was growing up, I always yearned to be able to go to a baseball game for my birthday.

    Alas, baseball was always over by November 4.  Perpetual disappointment.

    But not, potentially, this year … when Game 7 of the World Series is scheduled for November 4.

    With age comes wisdom, though.  I no longer need or want baseball on my birthday.  But a ticker tape parade for the New York Mets through New York City's Canyon of Heroes would be nice….




    That's it for this week. Have a great weekend, and I'll see you Monday.

    Slàinte!
    KC's View: