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    Published on: November 12, 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.

    This is the Main Street in the town where I live. In a few short weeks, it will be festooned with Christmas decorations. There will be trees and wreaths, and in front of churches and private businesses there will be creches and other displays of religious significance. In some of these stores they will say "Merry Christmas," in some they will say "Happy Holidays." Some people will be in the Christmas spirit from the beginning, and for others, it will take a little longer. As always, there will be a few Scrooges.

    But in general, it is fair to say, there will be plenty of tangible and intangible evidence of the Christmas spirit. Even at the Starbucks down the street, where the holiday cups are red and the baristas will say "Happy Holidays," because that is their definition of inclusiveness. (They will, however, continue to sell a Christmas Blend of coffee ... so they're apparently not too anti-Christmas.)

    Y'know something? I'm totally okay with that. Because I take it in the spirit in which those season's greetings are offered ... with good will toward men (and women). As do, by the way, Jewish friends of mine who are not the least offended when someone wishes them a 'Merry Christmas" the day before Hanukkah.

    Let me tell you a little story. My dad is either 89 or 90 years old; we're not sure, because the date on his NYC birth certificate and the birthdate listed on his baptismal certificate don't match. But because of the way my dad was raised, there are three words that he finds it almost impossible to say: "I love you." I'm sure he said them to my mom, who he loved deeply. But he has a harder time time saying them to his kids. I can't remember him ever saying them to me, though I've never doubted how he feels about me.

    What he says instead, because those words roll more easily off his tongue is this: "God bless you."

    This used to bother me. But at a certain point, I guess, maturity kicks in. I decided that this really was my problem, not his. So now, when my dad says to me, "God bless you," which he does pretty much every time I see him, I hear the words, "I love you." And I always look at him and say, "I love you, too."

    I've learned two things from this. One is that I'm responsible for my own happiness, not my dad. I can let it bother me, or I can get over it. The other is that I tell my kids I love them as much as I can. I don't want them ever to not be able to remember my saying it, and meaning it, with all my heart.

    I thought about this a lot this week as I read the various stories and emails about the Starbucks cups and how this represents some sort of hate speech. And how companies who ask employees to say "Happy Holidays" instead of "Merry Christmas" are somehow anti-religion.

    They're not bowing to a minority; they're just trying to remember that we live in a far more diverse world today than we used to.

    Here's the deal, at the least the way I see it ... if someone wishes you a Happy Holidays, and you are offended by that, it's your problem, not theirs. It isn't that they are launching a war on Christmas. It is that you are trying to pick a fight ... and that doesn't strike me as in the spirit of the season.

    The only thing that worries me is that there's six weeks until Christmas, and we're going to have to listen to this until the end of December. I guess I'm just going to have to remind myself that love, actually, is all around.

    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 12, 2015

    by Kevin Coupe

    It has been interesting reading the coverage of a concept called ShopWithMe, which is described as a "moving, global destination for brands that want to engage their customers in a new and personalized way. The solution is built for both traditional retailers that are moving towards smaller showroom locations and online retailers that are looking to expand into physical stores."

    In this case, the destination has been built on Michigan Avenue in Chicago as a kind of "smart store" designed to "bring the best of both offline and online shopping together under one roof, while creating personalized experiences for every shopper." It features "internationally recognized fashion brands, TOMS Shoes and Raven + Lily" that are integrated into the ShopWithMe experience." The companies' products are "featured on smart fixtures and customers will experience futuristic changing rooms that engage with the customers via interactive mirror displays, allowing customers to make purchases or request alternate products without leaving their changing room, providing unprecedented convenience for their shoppers."

    "Our promise is to make retail simple and beautiful," says Jonathan Jenkins, founder/CEO of the company. "We provide the infrastructure and technology that brands need to activate a turn key interactive retail store and begin selling seamlessly, overnight. This is something that hasn't been achieved by any retailer before."

    And the goal of ShopWithMe is the be completely movable - "designed to be mass-produced so they can be deployed across the US or shipped anywhere around the world ... The vision of ShopWithMe is to build a network of smart stores all across the world which retailers can activate and deactivate within days. This will allow brands to go from zero stores to fifty overnight and then down to zero again a few weeks later."

    I have no idea if this specific concept will work, but I do think it is indicative of a more enlightened approach to retailing in a world where consumers' rules of acquisition are changing. (I think Glen Terbeek, who pioneered Andersen Consulting's Smart Store laboratory in Chicago a quarter-century ago, must be smiling at this. H saw the future a long time ago, and the rest of us are just catching up.)

    Hard to imagine what the Ferengis would think of this changing climate, though I suspect they would add to their 285 Rules of Acquisition to adjust to e-commerce. After all, as rule number nine says, "Opportunity plus instinct equals profit." But I digress...

    Brands are looking for ways to present their brands to consumers in new and differentiated ways that allow them to bypass - one might even say "dis-intermediate" - traditional retail venues ... and even nontraditional retail venues, such as Amazon. This is something these retailers need to take very seriously ... because they don't want to get disrupted right into irrelevance.

    It's not like this can or will happen overnight. But it is a pretty good rule of thumb that all these things happen fast than one expects, and take the business in unexpected directions.

    Ferengi Rule of Acquisition # 208 says, "Sometimes the only thing more dangerous than a question is an answer." But just because questions and answers are dangerous doesn't mean that business can avoid asking and answering them.

    They are always Eye-Openers.
    KC's View:

    Published on: November 12, 2015

    The Wall Street Journal this morning reports that c-store chain 7-Eleven is expanding upon its previous installation of Amazon lockers - where people can pick up orders rather than having them delivered - by offering lockers from which customers can pick up products sent by Walmart or via either FedEx or UPS. Now, the story says, "any retailer that ships via UPS or FedEx has the lockers as a delivery option."

    Customers are able to access the lockers either by scanning a bar code sent to their smartphones, or by entering a code number provided by the shipper.

    The Journal writes that "for retailers, locker solutions offer a potential salve for the logistical headaches that have come with surging online sales, including overtaxed distribution networks and escalating shipping costs. Wal-Mart, for example, can save on extra home delivery costs by dropping packages off directly at lockers using its own truck fleet. 7-Eleven has felt less of this pressure because much of its business comes from impulse purchases made in person. But executives say they had to find a way to stay relevant as an increasing number of consumers shop for groceries, personal grooming products and other convenience store staples online."

    One potential problem for 7-Eleven is the fact that the lockers take up a lot of space, which used to be devoted to convenience products. But 7-Eleven and its franchisees do get paid a fee for the installations, though the company says it is too early to know whether those fees - and the impulse sales it might get from people who come into the stores to use the lockers - can compensate for sales not made of merchandise no longer carried.
    KC's View:
    I think that some retailers have to be a little careful about the degree to which they embrace the opportunity of serving as a venue from which people can pick up other companies' products ... but the convenience store business strikes me as ideally situated to employ this strategy.

    But all retailers need to be aware of how online businesses are looking to occupy and traverse the so-called "last mile," making it easier to connect with shoppers in ways that shoppers deem to be appropriate and relevant.

    Published on: November 12, 2015

    Roundy's chairman/CEO Robert Mariano said yesterday that the impending acquisition of the company by Kroger would have no impact on the eponymous stores that have opened in the Chicago area.

    "“Nothing's going to change in our stores,” Roundy's Chairman and CEO Robert Mariano tells Crain's Chicago Business. “We're not going to change our produce department; we're not getting rid of gelato. I want to make sure that's very clear.”

    The Crain's story says that "under new ownership, Mariano will remain in charge of not just his 34 namesake stores in the Chicago area but also the 117 supermarkets in Wisconsin that operate mainly under the Pick 'n Save name." Five Mariano's stores being built in Chicago remain on course.

    Indeed, the Crain's story makes it clear that kroger sees a lot of opportunities in the Roundy's acquisition - it can bolster the competitive position at Pick 'n Save "in a manner that wasn't previously possible given Roundy's precarious financial state," and it can grow the Mariano's concept beyond the Chicago metro area, using it to build a strong urban concept that could be utilized in numerous other cities.
    KC's View:
    Let's be clear. Things are going to change at Roundy's ... if only because Kroger knows how to do acquisitions, knows how to simultaneously empower its divisions while supporting them, and brings enormous financial power to the markets that Roundy's traditionally has served.

    I may be wrong on this, but it seems to me that two food retailers in Chicago that ought to be nervous about this acquisition ought to be Albertsons' Jewel stores, and Whole Foods ... each of which strike me as being vulnerable to what Kroger can bring to the Mariano's concept.

    Published on: November 12, 2015

    The Wall Street Journal this morning reports that Walmart "is pulling back on the Black Friday frenzy this year. Instead of stretching the event over about five days as the retailer did last year, Wal-Mart will offer deep discounts on gift items like TVs, DVDs and pajamas starting at 6 p.m. on Thanksgiving at its stores until they are gone. The retailer plans to offer longer term, though less drastic, discounts through the holiday season."

    The story notes that "the shift reflects an increasingly delicate balance many retailers are navigating around the holidays---how to give shoppers the feeling that they should buy quickly to grab deals, while also offering enticing promotions anytime a customer happens to shop in a store or online for gifts. Adding pressure on retailers to get it right, shoppers tend to spend most in the first store they shop for gifts, likely drawn by a big deal on a high-ticket item, retail consultants said."

    Such big deals have been the hallmark of Black Friday sales, but those sales have been slowly shrinking as a percentage of all holiday sales. In part, that is because of stores opening on Thanksgiving, and in part it is because e-commerce has changed consumer buying habits, slowly moving them away from the notion that they need to be in a specific place at a specific time to get a deal price.
    KC's View:
    Some customers always are going to be attracted the shiny object, which essentially what Black Friday is. But more and more, I think, customers are getting tired of being sold a bill of goods, and are resistant to the inherent hucksterism that seems top typify Black Friday.

    I've been making the point for years that Black Friday was one of Walmart's least favorite days, because it violates its "always low prices" concept, essentially saying that prices can get lower, and do on Black Friday. They're probably a little relieved in Bentonville about this shift in strategy.

    Published on: November 12, 2015

    The Wall Street Journal reports that Dollar Shave Club, the online grooming site that has disrupted the traditional razor-and-razor blade business, is looking to create a "media enterprise" designed for, the company says, "men who measure themselves by something other than (or at the very least, in addition to) their interests in sports cars, barrel-aged Scotch and designer socks."

    The new vehicle, the Journal writes, "comes as more companies invest in fashioning their own content, often in an effort to establish themselves as “thought leaders” on a certain subject matter ... Such sites can also provide the companies that back them crucial data about consumers, which helps when it comes to more sophisticated ad targeting and understanding what various consumers like to read."

    At this point the Dollar Shave Club vehicle - dubbed MEL - currently exists as a twice-weekly newsletter being sent to subscribers, and there are plans to expand it into a website. The newsletter does not currently carry advertising for Dollar Shave Club or any other entity, and the company is not saying whether this will change down the line.
    KC's View:
    Dollar Shave Club essentially is doing something we talk about a lot here on MNB ... moving from being just a source of product to being a resource for information. It is how you build consumer connections and, in the long run, build sales.

    Other brands should take note.

    Published on: November 12, 2015

    Forbes has a story about the delivery service startup Postmates, which delivers meals and other products from local merchants in some two dozen states around the country.

    CEO Bastian Lehmann estimates that the company will be making a million deliveries a month, and is using that projection to raise additional capital. The story notes that Lehmann says that "despite raising $80 million in June, the company will likely seek more funding as early as next January. Lehmann declined to state how much he hopes to raise or at what valuation, but said that it could possibly be from a late-stage or private equity investor."

    Lehmann says that his goal is to build "the anti-Amazon," believing that local merchants will gravitate to his offering rather than using similar services offered by Amazon: "Why would a merchant knowingly work with a company that might put them out of business, he asked, portraying his startup as the local-friendly logistics partner for restaurants and other shops."
    KC's View:
    A legitimate point ... but I also think that some retailers will gravitate to the Amazon offering just because its power is pervasive and its presence ubiquitous. They just have to make a judgement about whether their long-term brand equity is served or undermined by doing business with Amazon.

    Published on: November 12, 2015

    Bloomberg Business reports that labor activists are not satisfied with Walmart's decision to raise wages for employees and now are pushing the company to give employees a discount on food purchases, a move that could cost the company as much as $400 million.

    According to the story, "Wal-Mart currently offers workers a 10 percent discount on all merchandise except the vast majority of food. Fruits, vegetables and some snacks are the only food items included in the promotion, unless they’re on sale. Some employees want more groceries to be included in the discount, noting that competitors such as Target Corp. and Whole Foods Market Inc. already offer that perk."

    Bloomberg goes on: "A group of Wal-Mart workers started an online petition last week calling on the company to expand the discount, and it’s received almost 13,000 signatures from employees. The group, which isn’t affiliated with a separate organization financially backed by the United Food and Commercial Workers International union, plans to take the petition to store managers and executives this month."

    Walmart has maintained to this point that higher wages, more hours and more regular schedules are a higher priority at this point.
    KC's View:

    Published on: November 12, 2015

    BuzzFeed reports that "Walgreens customers using Apple Pay no longer need to scan their rewards card to earn points on purchases, with the company becoming the first retailer to integrate its loyalty program directly into Apple’s mobile payments system." The story suggests that this new feature "is a big step forward in Apple Pay’s transition from a pure payments system into a broader e-commerce offering encompassing loyalty programs, coupons and more. Walgreens has over 8,000 locations and more than 85 million members in its Balance Rewards program, and was one of the first major retailers to start accepting Apple Pay last year."


    • Performance analytics form SOASTA is out with a new survey saying that American consumers would respond to a ratings system that evaluated the efficiency and effectiveness of e-commerce sites.

    Specifically, the survey says that "70 percent of Americans’ browsing and online shopping behavior would be affected by such a rating, with Millennials being the most reactive. Fifty-three percent of Millennial women said they would skip online shopping sites with poor grades, and 56 percent said they would do more shopping from sites with good grades. In addition, especially significant as the holiday shopping season approaches, 46 percent of American women say they most rely on website performance to do online holiday shopping."
    KC's View:
    Not surprisingly, SOASTA says that it commissioned the research "to support the launch of its new Consumer Performance Index (CPI), a unique way to benchmark how well a website engages consumers."

    Go figure. A self-serving survey.

    That said ... I do think that it is worth noting that the world is pretty transparent, consumer reviews are everywhere, and when companies and sites do not live up to their promise, it will have an impact.

    Published on: November 12, 2015

    United Press International reports that the US Department of Agriculture (USDA) is investigating a Hormel Foods-related slaughterhouse "after the release of an undercover video purportedly showing workers dragging and beating pigs as they are being taken to slaughter and gutting some when they were still alive."

    The slaughterhouse is located in Austin, Minnesota, and the video was released by an activist organization called Compassion Over Killing; it allegedly was shot at a Quality Pork Processors plant that serves as a third-party distributer for Hormel.

    Quality Pork Processors is disputing the conclusions reached by the activists.


    • Supervalu announced that it is adding 24 SKUs to its Culinary Circle brand of restaurant-inspired food this month "in conjunction with the introduction of its new brand positioning, logo and packaging. With additional new products planned in early 2016, Culinary Circle will offer consumers more than 200 items in categories across the grocery store."

    Supervalu said that the Culinary Circle brand also will be expanded to include limited-time, imported seasonal items, such as Panettone for Christmas.

    The Culinary Circle brand originally was launched in 2008.


    • The New York Times this morning reports that JC Penney has settled a class action lawsuit that accused it "of marking up prices on apparel and accessories before putting them on sale to deceive shoppers into thinking they were getting heavy discounts ... as part of the settlement, J.C. Penney agreed to improve its pricing and advertising policies."

    The story says that "under the terms of the proposed settlement, the retailer will pay $50 million to settle the claims made by California shoppers in federal court. Class members will have the option of selecting a cash payment or store credit, and the amount each shopper will receive will depend on the total amount purchased by each class member in the period specified in the lawsuit."
    KC's View:

    Published on: November 12, 2015

    It never used to be a big deal when coffee chains released new holiday-themed coffee cups ... until this year, when Starbucks' cup - a simple red cup with the green Starbucks logo - was deemed by some as being not holiday-themed enough and, in fact, was emblematic of a corporate war on Christmas.

    And so, it made news yesterday when rival Dunkin' Donuts introduced its holiday cup, which has a green and red holiday design and says 'Joy' in red letters.
    KC's View:
    To be clear, it is almost certain that Dunkin' Donuts designed this cup long before the Starbucks kerfuffle started.

    My opinion about all this has been clear ...and is reiterated above in my FaceTime video.

    No matter what some people would have us believe, I think the number of people who will choose Dunkin' Donuts over Starbucks because of the cup design will be pretty small. But I know what I'm going to think when I see it ... that it is a canny, subtle advertisement for , the new Jennifer Lawrence-Robert De Niro-Bradley Cooper movie, written and directed by David O. Russell (American Hustle, Silver Linings Playbook), that is coming out on Christmas Day.

    But maybe that's just me.

    Published on: November 12, 2015

    ...will return.
    KC's View: