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    Published on: November 5, 2015

    This commentary is available as both text and video; enjoy both or either ... they are similar, but not exactly the same. To see past FaceTime commentaries, go to the MNB Channel on YouTube.

    Hi, Kevin Coupe here, and this is FaceTime with the Content Guy. I'm coming to you this morning from the town in Connecticut where I live, and behind me you can see a shopping development that's been there for more than 50 years. It isn't in great shape, much of the retail is mediocre at best, and it isn't exactly the thing you want people to see when they drive into town; it suggests that the town's better days are long past.

    The good news is that much of the town has been getting a facelift in recent years - there are more stores and better restaurants here than ever. And the development you see behind me also is likely to have a new life - and friend of mine who is a local real estate developer has acquired all the land, and plans to raze all of it so that a new, tastefully done, New England-style yet totally modern center can be built there, featuring stores, restaurants, offices and even condominiums.

    I've seen the plans, and they're impressive - ambitious yet tasteful, and respectful of the town's past without being held hostage to it; my friend is the antithesis of a guy like Donald Trump.

    In fact, he was showing me the plans - which still have to go through a lengthy approvals process before a shovel can go into the ground - the other day. At one point, he looked at his watch and said he had to go. When I inquired, he said that he had a meeting - with a local 12-year old boy (he knows the family) who had been reading about the planned development and had some ideas.

    I'm not stupid. I know a good commentary when I see one. I asked if I could tag along, and he said yes.

    I have to tell you that this 12-year-old was very impressive. Smart, curious, and savvy enough to have polled his friends on the school bus to find out what they'd like in a new shopping development. He also brought along pictures of things he'd seen on family vacations that he thought might be applicable, and website addresses for businesses that he thought might be relevant. I suspect this kid is going to be a lawyer, an architect or real estate developer some day.

    But I also was impressed with my friend. He took this kid very seriously - this was a real meeting, with lots of back-and-forth, legitimate questions, and a desire to understand what the young people in town might be looking for. (The general answer, by the way, is that they're interested in retail that engages them, not just tries to sell them stuff. He also saw the value in a ping pong parlor. Also fire pits. I'm with him on all this stuff.)

    We talk about this a lot here on MNB - the importance of listening to more than just the usual suspects when developing formats, products and/or promotions. Talk to all the same people, you're likely to get all the same answers. That's no way to create innovative foundations, sustainable growth, and broadly relevant concepts.

    That's what is on my mind this Thursday morning. As always, I want to hear what is on your mind.

    KC's View:

    Published on: November 5, 2015

    by Michael Sansolo

    A recent report from Stanford University may provide an Eye Opener and some welcome confirmation about the challenges of employing today’s younger generations.

    Only it has nothing to do with the young people. It’s all about their parents.

    Julie Lythcott-Haims, a former dean at Stanford, has written a book about the detrimental results of helicopter parents on their children, entitled "How to Raise an Adult: Break Free of the Overparenting Trap and Prepare Your Kid for Success," which you can find on Amazon here.

    She tells stories about “over helping” parents trying to assist their children in all endeavors, only to deprive them the chance to build and grow their own skills.

    In the process, she found students who were accepted to one of America’s most competitive colleges and yet were unable to manage some of the most basic tasks in their lives.

    Lythcott-Haims hopes her book will give parents a wake up call to back off.

    No doubt there are countless store managers and company human resource professionals who have seen the same trend, with parental involvement and intrusion all the way to the job site. Those managers and HR professionals might not be able to fix these strange family dynamics, but might still find some comfort and confirmation in these concerns from academia.

    Plus books like the one by Lythcott-Haims may make great suggested reading when (not if) parents call to question management practices or reviews.

    Here’s hoping that might open some eyes at home as well.
    KC's View:

    Published on: November 5, 2015

    Reuters reports that Target Corp. "is seriously considering partnerships with outside companies to help shore up a creaky fresh food supply chain that has led to chronic shortages on store shelves ... The potential shift to relying on outside partners comes as Target pushes to revamp its food business with newer offerings and  aims to get a bigger slice of online grocery sales, which will put new pressures on its food supply chain."

    COO John Mulligan tells Reuters that while the company is committed to upgrading its food offerings, its history has created a patchwork system that does not work efficiently and is not reliable in some parts of the country.

    MNB fave Burt Flickinger, managing director of retail consultancy Strategic Resource Group, says that such "partnerships could mean billions of dollars for wholesalers, food distributors, and food and grocery manufacturers who have existing infrastructure to store and ship food products to Target stores."

    While Target has not provided a timeline for developing and/or announcing such partnerships, the speculation is that a likely candidate would be Supervalu, which also is based in Minneapolis and has the kind of national footprint that would make it a valuable piece of the puzzle for Target.
    KC's View:
    There is, of course, another possibility to be considered. If Target is thinking about partnerships, it could be looking at a deal with some similarities to the one it struck with CVS earlier this year, converting all of its pharmacies to CVS-owned facilities. The belief seemed to be that CVS would bring more credibility to the business than Target ever would, and that Target would do better in the long run with CVS owning its pharmacy biz.

    I'm not saying that Target would or should just sell off its grocery business, though that's certainly a possibility if its leadership determines that it is a better way to go ... after all, Target seems open to pretty much any possibility that will make it more effective.

    But what if Target decided to outsource the grocery business to another company, that could be a powerful thing. What if its grocery departments were branded as Trader Joe's, Aldi, Lidl, or some other name that would give them enormous credibility and visibility?

    I'm not saying it will happen. But it is a tantalizing possibility ... and maybe a more interesting way for Target to really differentiate itself.

    Published on: November 5, 2015

    Reuters reports that as Whole Foods announced disappointing financial numbers this week, including Q4 same-store sales that were down 2.1 percent, co-CEO John Mackey pledged "to shake the chain's high-price 'Whole Paycheck' reputation without sacrificing its position as a high-quality retailer."

    Co-CEO John Mackey told analysts, "Some would say that increasingly everyone is selling the same food and that price is all that matters ... We are going to be competitive on price where we need to be, but, first and foremost, the Whole Foods Market brand stands for the highest quality, selection, and service."

    The story says that "existing efforts to lower prices at Whole Foods have squeezed profits at the chain, which recently cut more than 2,000 jobs to reduce costs.

    "Unlike traditional grocery stores that tend to centralize operations, Whole Foods' individual markets for decades have had far greater freedom to choose what they sell. The company is exploring centralized purchasing for packaged foods and other 'center store' products, but plans to continue regional buying of produce, seafood and other perishables that are a point of differentiation for the chain, executives said.

    "It is investing in new cash register systems that should keep check-out lines moving faster and track inventory. It also is testing a loyalty program, competitive price-tracking tools and digital promotions."
    KC's View:
    What I'm not sure of, to be honest, is whether the Whole Foods model needs tweaking or something more substantial. Much of what they seem to describe strategically sounds like baby steps, though its new 365 format would appear to be a lot more revolutionary. To be fair, though, both observations could be erroneous ... the little things could add up to bigger changes, and 365 could be less than the sum of its parts.

    We'll have to see how it all plays out.

    I do find myself wondering if Whole Foods ought to be thinking about bringing in a new CEO or COO who could have a fresh and unvarnished view of both the organization and the mission. I don't think this is going to happen anytime soon, but I wonder if this might help.

    Published on: November 5, 2015

    Business Insider reports that both Walmart and Ahold-owned Peapod have announced the integration of their online grocery shopping services with Hiku, described as a "scanning and voice-enabled shopping button" that is similar in nature to the Amazon Dash buttons that have been growing in popularity.

    The story says that "Similar to Amazon Dash, hiku allows customers to scan or speak items to a mobile shopping list. After customers scan or speak items into hiku (a small, metallic button), the resulting shopping list is matched to online availability. Customers then place their orders at Walmart Online Grocery, which requires customers to pick up their purchases made through hiku, or Peapod, which offers pickup and delivery."

    Hiku says that its service will be available in more than 40 markets in 24 states.
    KC's View:
    This is a very good idea. It has been the position around here for a long time that the overarching strategy at Amazon seems to be to create a path of least resistance between the shopper and the product. In a time when many consumers seem addicted to both technology and convenience (which often add up to instant gratification), finding ways to connect with them in this way can be extraordinarily valuable.

    There likely won;t be an immediate payoff, but these kinds of investments are absolutely necessary if companies are going to stay current with where customers are going and what they want.

    Published on: November 5, 2015

    Online Video Insider reports that "a survey of regular Netflix users said they watch 10 shows per week on Netflix and four movies. That’s a rise from five shows per week three years ago, according to the research firm GfK, which conducted the study."

    The survey also reveals that 24 percent of regular Netflix users are watching content on their mobile devices, a number that has doubled in the last three years.

    The story says that there are two basic takeaways from the numbers.

    One is that Netflix has become "a force in the TV business" and, essentially, a “TV ecosystem unto itself."

    Second, is the fact that "as Netflix continues to spread its reach and become indispensable with consumers, expect traditional networks to adapt."
    KC's View:
    Which explains why CBS has decided to run the new "Star Trek" series that it plans to debut in January 2017 on its streaming network, CBS All Access, and not on the traditional broadcast venue.

    The lesson here goes beyond how and where people watch TV and other forms of entertainment. It is that consumers are open to, and will embrace, non-traditional forms of consumption up and down the line. Just because they've done things a certain way doesn't mean that they always will.

    I always wonder if the people who think that e-commerce never will have an enormous impact on the food industry sit at home at night watching old-fashioned cathode ray tube TV sets, getting up to change the channels between NBC, ABC and CBS, because that simply the way things always have been done.

    Published on: November 5, 2015

    Things got worse yesterday for Volkswagen, which, the Wall Street Journal reports, "said its emissions-testing scandal had widened beyond what was previously disclosed, now encompassing a broader set of infractions that could affect about 800,000 more cars and cost it at least an extra $2 billion ... The German auto maker said Tuesday it understated the level of carbon-dioxide emissions of the additional cars when providing information to regulators. Some of these cars were gasoline-powered, Volkswagen said, moving the violations beyond the company’s diesel fleet for the first time."

    In addition, Volkswagen is dealing with allegations that the problems also extend to its sister Audi and Porsche brands.
    KC's View:
    At some level, I'm sure that they're going to try to continue peddling the fiction that this was a few errant employees on the assembly line who causes this problem.

    To me, this is sort of the same thing as Claude Rains saying that he was surprised by the gambling at Rick's Cafe Americain in Casablanca even as he was pocketing his winnings, or Tom Brady saying he was shocked that a couple of locker room attendants, in an effort to get him a competitive advantage, deflate some of the footballs he used during the Super Bowl.

    Every senior executive at every company ought to be looking at the Volkswagen situation and asking if somehow, the same problems could be facing them someday.

    Published on: November 5, 2015

    Variety reports that Facebook has reached the point in its development that it "now sees more than one billion users every single day — 1.01 billion, to be precise. Daily active users are up 17 percent from last year, the company revealed Wednesday."

    The story goes on to point out that "Facebook’s continued growth is largely driven by mobile: 894 million people used Facebook on their phones every single day in September. Mobile daily actives are up 27 percent compared to last year.

    "Altogether, Facebook now has 1.55 billion monthly active users, with 1.39 billion of those checking the site with their mobile devices. And Facebook is getting a lot better at monetizing all those mobile eyeballs: 78 percent of Facebook’s ad revenue is for mobile ads. A year ago, just 66 percent of all ad revenue was generated on mobile."
    KC's View:
    A billion users a day? Yikes.

    Published on: November 5, 2015

    • In Wisconsin, the Journal-Sentinel reports that Sendik's Food Markets has launched Sendik's Express at seven of its stores, described as a click-and-collect service that costs $5.95 per order.
    KC's View:

    Published on: November 5, 2015

    • Published reports say that Target plans to close 13 of its stores around the country that it has identified as being unproductive.

    The stores are in Arizona, California, Florida, Indiana, Iowa, Kentucky, Michigan, Minnesota, Ohio, Texas, Wisconsin,

    Advertising Age reports that PepsiCo plans to launch a new cola flavored soft drink called 1893, "which is an apparent reference to the birth year of a predecessor to Pepsi-Cola known as 'Brad's Drink' ... The launch appears to be part of a recent strategy by the cola giant to create more premium cola brands to complement the mainstream Pepsi brand. Pepsi in late 2014 launched a new brand called Caleb's Kola that is made from cane sugar, kola nuts from Africa, spices and a hint of citrus. The cola is named for Pepsi inventor Caleb Bradham."

    • Published reports say that Niemann Foods, which operates more than 100 stores, plans to acquire six County Market stores owned by Covington Foods. Terms of the deal were not disclosed, but CEO Rich Niemann Jr. said no operational changes were anticipated at the units.

    Newsday reports that "Best Market is looking to buy five Waldbaum's and Pathmark stores on Long Island owned by the Great Atlantic & Pacific Tea Co. for $4.425 million, in addition to four other A&P supermarket locations it previously agreed to take over." The deal would require approval from the bankruptcy court overseeing A&P's affairs as the company winds down operations.
    KC's View:

    Published on: November 5, 2015

    • Cathy Polley, VP, Health & Wellness at the Food Marketing Institute and Executive Director of the FMI Foundation, passed away this week after a long battle with cancer.
    KC's View:

    Published on: November 5, 2015

    ...will return.
    KC's View: