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    Published on: December 21, 2015

    by Kevin Coupe

    Bloomberg this weekend had a story about the impact that Amazon founder/CEO Jeff Bezos is having in another venue ... the Washington Post, which he bought more than two years ago for $250 million.

    "Bezos has shaped its digital transformation in ways big and small," the story says. "His behind-the-scene influence has yielded a milestone: The newspaper has surpassed the New York Times in unique Web visitors two months running.

    "After Bezos acquired the Post -- as an individual buyer and not as part of e-commerce giant Amazon -- he said he had no formula for rescuing the declining newspaper industry, and promised an era of experimentation. 'I didn’t know anything about the newspaper business,' Bezos said last year at a media conference. 'But I did know something about the Internet. That, combined with the financial runway that I can provide, is the reason why I bought the Post'."

    His ownership of the Post may be separate from his Amazon holdings, but that doesn't mean Bezos isn't using one to help the other:

    "While he hasn’t expressed opinions about the Post’s journalism and has only visited the newsroom a few times, Bezos has been hands-on with its technology and instrumental in making it a more data-driven company, said Shailesh Prakash, the Post’s chief information officer ... In September, the newspaper said that Amazon Prime subscribers can get online access to the national edition free for six months, with an option to continue subscribing at 60 percent off. Late last year, the Post introduced an app that comes preinstalled on Amazon Kindle Fire tablets -- a project Bezos was deeply involved with, Prakash said.

    "The Post has hired some engineers from Amazon, and its data scientists talk regularly with their Amazon counterparts, getting tips on how to recommend stories better based on Amazon’s approach to recommending products to consumers, Prakash said."

    The Bezos investment also has allowed the Post to invest in better and more journalism, which allows the company to focus on its core value proposition. And, "as he’s done at Amazon, Bezos requires Post executives to write lengthy memos outlining their projects instead of using PowerPoint presentations, believing that narrative writing forces people to think more deeply."

    Marty Baron, executive editor of the Post (and one of the central characters in the movie Spotlight), says that the newspaper's private ownership also is an advantage. “If you’re trying to improve your financial performance quarter to quarter, it would be very difficult to do this,” Baron tells Bloomberg. “If you take the longer view and are willing to accept the market will take the longer view as well, or you don’t care, then you can make these kinds of investments.”

    Wow. A long-term view that looks at what works on Main Street. It is an Eye-Opener.
    KC's View:

    Published on: December 21, 2015

    The Washington Post this morning reports that while many retailers this holiday season have been focusing on developing their click-and-collect shopping options, "many shoppers are finding it to be a big headache."

    The story says that "fully 60 percent of such orders placed on Cyber Monday ran into problems, one study found. The wrong items were received, or orders were cancelled because the product was no longer in stock. Sometimes there was no notification an order was ready."

    The Post numbers - generated by Forrester Research - suggest that "some 42 percent of online shoppers have used click-and-collect."

    The current season's issues have "forced retailers to rewrite many pages of their brick-and-mortar playbooks. They are working to develop a more real-time and accurate understanding of their inventories, so they don’t end up promising an online customer the last 42-inch TV on the shelf, only to sell that exact set minutes later to an in-store shopper.

    "They also have to rethink staffing in their stores to ensure that they are able to fill click-and-collect orders efficiently while still providing good service to in-store shoppers."

    The story goes on: "If stores can improve their click-and-collect offerings, there could be a big payoff. This format could allow retailers to wring more last-minute holiday season sales out of gifters who prefer to swipe and tap their way to a purchase ... Retailers are especially hungry to lure these kinds of customers, because research shows they spend more money than those who shop just in stores. According to a survey by Deloitte, omnichannel shoppers were poised to spend about 75 percent more than store-only shoppers this season on gifts, entertaining and other purchases.

    “You’ve got to get this right,” said James Prewitt, vice president of retail industry strategy for North America at JDA Software Group. “Because the consequences of getting it wrong are so significant.”
    KC's View:
    He's got that right.

    One of the things that retailers have to understand - and the good ones already do, even if it is harder to implement a click-and-collect strategy than conceive of one - is that these kinds of changes reflect a broader consumer shift requiring a rethinking of many fundamental aspects of the business.

    Doing it is one thing. Making a real commitment to it, and getting it right, is something else again.

    Published on: December 21, 2015

    Fortune reports that Target plans "to launch a mobile payments service in 2016" that will mimic the mobile payment systems that have been rolled out by Starbucks and is in the process of being implemented by Walmart - "using barcode scanning technology to allow consumers to pay with the wallet at a terminal." with the service linked to the customer's credit or debit card.

    The story says that "it’s not entirely surprising Walmart, and now Target, are choosing to create their own mobile wallets.

    "Similar to Walmart, Target famously decided not to accept Apple’s mobile payments technology, Apple Pay, when it was introduced last fall. Walmart and Target instead joined the Merchant Customer Exchange, a partnership of major store and restaurant chains, with ambitions of creating an Apple Pay rival. But MCX has stumbled and only started testing its service, called CurrentC, in the past few months.

    "Target would join a long list of companies pushing into in-store mobile payments including Walmart, Apple, Samsung, Google, and PayPal. These companies are clamoring to take a stake in a potentially huge mobile payments market, which is expected to handle $142 billion in transactions by 2019, according to Forrester Research."
    KC's View:
    I can only really respond to this as a consumer ... and it already is beginning to feel that there may be way too many options for me to deal with. That said, I use the Starbucks mobile app, which is tightly focused ... so maybe I'm wrong about this. Maybe there is room in my psyche for dozens of mobile payments systems, in the same way that lot of people have dozens of credit cards in their wallets.

    Published on: December 21, 2015

    The Indianapolis Star has a story saying that rather than being for sale as long rumored, Marsh Supermarkets instead is "planning to make its most ambitious moves in years to push back against national retail giants that have been gobbling up market share," with plans "to open as many as 13 new stores by the end of 2018 while updating 52 of the chain's 73 existing stores." And, Marsh CEO Tom O'Boyle says he is interested in acquiring other stores.

    "We think we're in position to look for acquisitions to expand the Marsh brand," he tells the Star.

    "If O'Boyle's plan comes to fruition, it would be an abrupt pivot for a company that has been closing far more stores than it has opened in recent years," the paper writes. "Marsh opened one store last year, but it also closed eight. It closed four more this year, and O'Boyle acknowledged additional stores could be shuttered."

    While some argue that a company that has been struggling and contracting is ill-positioned for the kind of growth that O'Boyle is talking about, especially in the face of growing competition from the likes of Kroger and Meijer, O'Boyle tells the Star that the company's sales-per-square-foot are rising, and that the company is investing in beacon technology, which uses geolocation to target customers, for all of its stores, which reflects a willingness to invest when appropriate.
    KC's View:
    I'm not saying that Marsh can't do this ... but it seems to me that before the folks there start planning an expansion, they have to be able to answer the following question...

    How are we going to disrupt entrenched and successful ways of doing business?

    Because if they can't answer that question ... if they cannot explain in easily understandable terms how they are going to be fundamentally different, as opposed to just incrementally better, then I'd hoard my chips and rethink the whole expansion idea.

    Published on: December 21, 2015

    The New York Times has an opinion piece by marketing expert Paco Underhill in which he writes about how increasingly cluttered stores are generating diminishing returns for retailers, concluding that "stores are cluttered with merchandise and promotions like never before" are at odds with a growing consumer desire for less cluttered lives.

    Here's part of what he writes:

    "Here is my advice for the industry: Emulate your customers and start to cut back. First, we have too many stores. Most chains would be healthier if they closed underperforming locations, or the lowest performing 25 percent, and studied carefully their top 25 percent successful locations. Talk to the customers. Look at what they buy in-store and online, and go into their homes and listen to them. Then test."

    Interesting piece at how a hit-or-miss approach to marketing may be designed, in the long run, to produce more misses than hits. You can read the whole piece here.
    KC's View:

    Published on: December 21, 2015

    • Walmart announced over the weekend that it will keep its stores open on Christmas Eve until 8 pm, and that its Neighborhood Market stores open until 6 pm.

    24/7 Wall St. notes that "the decision is part of a trend by retailers to expand the period during which shoppers can shop over the holidays. At one end of the holiday season, people can shop as early as Thanksgiving. At the other end, people can shop within four hours of Christmas. In almost all cases, even Amazon cannot match the advantage. Having physical store locations offers at least one edge for Wal-Mart ... The decision also may give it some leverage against Inc., where people can shop any hour on any day, 365 days a year."
    KC's View:

    Published on: December 21, 2015

    The Food Marketing Institute (FMI) has announced a new study, conducted with Deloitte Consulting LLP and Winston Weber, suggesting that "the biggest shortcomings of category management relate to being too product-focused and too narrow in approach," and that the industry needs to move to a more customer-centric strategy.

    According to the announcement, "the study found that 100 percent of retail and consumer packaged goods respondents believed some degree of change is required, a quarter of which believed that nothing less than an entire redefinition and transformation is necessary. Conversely, 85 percent of retailers have made either 'no change' or 'moderate change' to the initially prescribed, eight-step category management process."

    Win Weber, chairman and CEO of Winston Weber Associates and co-author of the analysis, is quoted as saying: “Our research strongly suggests that change is necessary, especially since no major upgrades to the ECR-prescribed category management process have occurred in the last two decades. Supermarkets are facing tidal pressures from shoppers who want their stores to evolve with their tastes and habits, so businesses need to resist the urge to remain complacent.”

    And Tom Compernolle, a principal at Deloitte Consulting LLP, says, “A shopper-centric approach is consistent with the opportunities we see around retailer-CPG joint business planning. The Holy Grail is data – business intelligence shared between trading partners hasn’t yet been harnessed, as evidenced by the research.”
    KC's View:
    I have to be honest here, with all due respect to my friends at FMI.

    Two points. One is that the best companies in the food industry started doing this long ago. The second is that the ones that didn't already are largely irrelevant and it probably is too late for them to become relevant.

    I'd be surprised if many of the leaders and managers that I know in the business didn't look upon this study with a certain amount of surprise, since very few of them have not adjusted or changed their approach to category management over the past two decades. I think that companies like Kroger and Wegmans, for example, long ago started developing a customer-centric approach to the business, realizing that understanding the customer is at least as important as understanding store categories ... and that if you have actionable data and actually act on it, that's what makes you a winner.

    If these statements are accurate, and 85 percent of retailers haven't made fundamental changes in the way they come to market, then maybe there is going to be even more fallout among existing players than I thought.

    What do you think Jeff Bezos would think if he saw a study suggesting that the food industry needs to move to a more customer-centric approach? My guess is that he'd probably chuckle and figure that any industry that hadn't figured this out a long time ago is ripe to be disrupted. (Or maybe already has been, even if some of the players don't know it.)

    What do you think Howard Schultz would think? Or Tim Cook? I think people like this would wonder how the food industry could be so far behind where any reasonably intelligent retailing executive would have been heading years ago.

    These folks may have come out with a study suggesting that the industry needs to move to a more customer-centric approach, but anybody who has been reading MNB for the past fourteen years knows that this is precisely what we've been saying here almost from day one. (I'm not that smart. I just know smart people.)

    Being customer-centric is absolutely critical if you want to have any short at being relevant.

    I think that if you're not being customer-centric in your approach to business, there's a pretty good shot that your business is called A&P. Or might as well be.

    Published on: December 21, 2015

    • The Milwaukee Journal Sentinel reports that Kroger has completed its $800 million acquisition of Roundy's, noting that "Bob Mariano, chairman, president and chief executive officer of Roundy's since 2002, will continue to lead Roundy's as president and CEO. With its acquisition of Roundy's, Kroger is now the grocery market share leader in metro Milwaukee."

    • The Boston Globe reports that the Boston Consumers' Checkbook has released its price/quality rankings, concluding that "surveyed consumers ranked Wegmans number one for quality (93 percent of respondents rated it 'superior' overall), and Checkbook found Wegmans’ prices are about 7 percent lower than Shaw’s Supermarket."

    The story says that "Checkbook found Wal-Mart Stores, Inc. is the cheapest area supermarket, followed by DeMoulas Market Basket and Hannaford. Whole Foods Market Inc. is by far the most expensive place to shop. Sudbury Farms, Donelan’s, and Roche Bros. also are more expensive than Shaw’s ... But when it comes to quality, Wal-Mart ranked among the lowest and Whole Foods was rated highly."
    KC's View:

    Published on: December 21, 2015

    • Walmart has named Tony Rogers to be chief marketing officer for its US business, succeeding Stephen Quinn, who recently announced his retirement.

    Rogers is a 10-year Walmart veteran who most recently has been head of marketing and social media for its China business; before joining Walmart, he was at Pepsi-Co's Frito-Lay division.
    KC's View:

    Published on: December 21, 2015

    If you did not see the piece that "60 Minutes" did last night about Apple CEO Tim Cook, check it out here and now ... it is a terrific story that focuses on innovation in ever facet of Apple's business, including retail.
    KC's View:

    Published on: December 21, 2015

    Responding to last week's story about Michael Jordan donating lawsuit proceeds to charity - from lawsuits he filed and won against Dominick's and Jewel-Osco after they used his likeness in ads without his permission - MNB reader Monte Stowell wrote:

    Simply Put, “Bravo to Michael Jordan.” I can only imagine what the $8.9 MM will do to help our the 23 charities that he gave this money to. Merry Christmas to all and to all a very good night. Thanks Michael, you are indeed a very classy man.

    Regarding our piece about how airports are improving the travel experience even as airlines seem headed in the opposite direction, one MNB user wrote:

    I enjoyed your piece on airports ... LGA is no paradise, anyone can agree. 
    Have you traveled on Frontier via TTN, Trenton Mercer County Airport?  Frontier has some great fares (if you can stand the restrictions & fees) but the airport is the worst I’ve ever seen in the USA.  I’ll have to check if JD Power rated that airport.

    Following up on last week's story about how a FedEx manager told my brother Tim that "this is your package, not my package" - one of the worst messages a business can send to a shopper - one MNB user wrote:

    I haven't written in a long time, but after reading your brother Tim's tale, I felt I had to chime in.  You are maybe more correct than you know, in your opinion that poor customer service is more widespread than we realize.  Just this morning one of my co-workers told of his "encounter" at one of OUR OWN STORES.  He and his wife decided to stop at one of our Supermarket Deli's to pick up something for dinner.   He was carrying his toddler son, and the deli clerk (young male) was waiting on a customer.  So Max (not his real name) stepped up to the deli case and waited.  The clerk frowned at him and went on finishing the customer.  When he came to Max,  there were two other people in line.  He then quietly mouthed a couple expletives, so Max asked him "Are you all right?"  To which the clerk whispered... "Yeah, I'm fine, I just hate customers.".  

    This, from a guy "serving you FOOD!"  Max said he wasn't sure if he should even eat it.  Fortunately, it was in a deli case, and neither the food, or the clerk were ever out of his sight.  Still, it's an eye opener to say the least.

    Thanks for listening.  I'm addressing the issue even as you read this. (Obviously you'll see why I don't care to have my name published.)

    Good luck with this.

    Regarding the spec Johnnie Walker ad we posted on Friday, MNB reader Philip Bradley wrote:

    Thanks for finding gems like this and bringing them to us in your daily column--indeed, a wonderful Friday eye-opener!

    The thing is, I didn't find it. An MNB user sent it to me. For which I am profoundly grateful.

    From another reader:

    I have approved a lot of advertising in my past.  I would have put that on the air in a heartbeat – right after I found that darned handkerchief.

    From MNB reader Yvonne Hyland:

    Excellent commercial! Gave me the chills and a few tears! I am not a scotch drinker, but might try it now.
    And MNB reader Peter Stamos wrote:

    Wow – that was a great piece of work, emotional, very close to the soul of what’s important in this life – relationships.  Well done.

    And, from MNB reader Joe Davis:

    My brother and I spent last weekend together with our parents back in St. Louis – an opportunity that has become increasingly rare over the years.  But at the same time, our closeness and respect for each other has grown tremendously.  We shared several drinks over the weekend, and walked down memory lane in old haunts and neighborhoods we lived in.  We came across this video as the weekend was closing, and I have no shame in admitting that I ugly cried on this – and will keep the Johnnie Walker brand in mind from here on out.  Exceptional story-telling and branding.
    KC's View:

    Published on: December 21, 2015

    In Week Fifteen of National Football league action...

    Jets 19
    Cowboys 16

    Chiefs 34
    Ravens 14

    Texans 16
    Colts 10

    Titans 16
    Patriots 33

    Bills 25
    Redskins 35

    Bears 17
    Vikings 38

    Panthers 38
    Giants 35

    Falcons 23
    Jaguars 17

    Packers 30
    Raiders 20

    Browns 13
    Seahawks 30

    Bengals 24
    49ers 14

    Broncos 27
    Steelers 34

    Dolphins 14
    Chargers 30

    Cardinals 40
    Eagles 17
    KC's View: