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    Published on: March 31, 2016

    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.

    It is an article of faith here on MNB that the majority of retailers will find success and develop customer loyalty with the products and services that are unique to them, not with the products and services that everybody else carries, or that you can get anywhere.

    That's all you need, but it certainly is an important component ... and I would probably say that it is an important rule in 21st century retailing.

    (By the way, I know of a pretty good book on the subject called Retail Rules! 52 Ways To Achieve Retail Success. Just sayin'...)

    It isn't just retailers that are doing this. It also is HBO, with programming like "Game of Thrones" and "Last Week Tonight" with John Oliver. Or Netflix, with "House of Cards." And Amazon, with "Bosch." The list goes on and on, as companies look to work the differences, not the similarities.

    Now, the New York Times reports, Apple is getting into the game.

    But it isn't with a full slate of TV or movie productions, as some might've thought. Rather, they're testing the waters with a non-scripted series that will focus on the app economy.

    There is speculation that this could turn into a giant promotion for Apple's app store, but I think that would be both shortsighted and counter-productive. Used correctly, such a show could entice people, educate people, and enlarge their appreciation for how apps are changing the ways in which people live and communicate in fundamental ways. Just using such a show to sell stuff would be a waste ... and my general impression of Apple is that they're smarter than that.

    That said, any show about the app economy would be necessity reflect and reinforce Apple's view of the world, and that's an important lesson ... because when any company looks to develop proprietary products and services, they should play to a company's strengths and be strategically focused and of tactical value.

    You can't just throw spaghetti against the wall to see what sticks.

    Apple, typically, won't discuss specifics, such as financing, title, timeline, storylines, episode length or how people will watch the show. But I think it makes sense to watch what they do, for both content and context, because it is likely to provide some pretty good lessons in what in other venues would be called private label.

    By the way ... keep in mind that Apple could've just thrown money at this problem and done what everybody else is doing. But they're not ... even though this is a lot harder way to go.

    But it's like one of the lessons from A League Of Their Own ... it is the hard that makes it worth doing.

    And yes, that's a lesson from a movie. I happen to know a pretty good book on that subject, too ... called The Big Picture: Essential Business Lessons from the Movies. (This isn't just me engaging in admittedly shameless self-promotion. It is also me exploiting that I think makes me different.)

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

    KC's View:

    Published on: March 31, 2016

    by Kevin Coupe

    I think it is worth noting this morning that Guiding Stars, the nutritional guidance program that currently is in more than 1,500 US and Canadian supermarkets, rating good, best and better-for-you foods with one, two and three stars, based on a publicly available algorithm, is celebrating its 10th birthday.

    I can remember well when Guiding Stars first was launched; it was a concept that I liked a lot, and wrote about a lot here on MNB. It wasn't the only one out there, and there are people and companies with preferences for one or another.

    The thing that I always liked about Guiding Stars was the fact that it was easy to understand; I can remember hearing from parents who would send their kids into the cereal or cookie aisle, instructing them to pick out anything they wanted ... as long as it had stars. I thought about Guiding Stars again this week when I was sent a study from the University of Phoenix that concluded that emojis are an effective way to communicate to children about what they should or should not eat. In the end, what is a star if not a kind of emoji ... though in this case, one created long before the concept of emojis were popularized.

    It also is worth noting that Guiding Stars was pretty early to the party when it comes to doing something we write a lot about here on MNB ... the importance for stores to be more than just a source of products, and to become a resource for information. And let's not forget the fact that Guiding Stars made its algorithm public, being completely transparent to retailers, suppliers and consumers ... another way in which it was ahead of a wave that has gathered force as technology has fostered a new kind of information age.

    I know this all sort of sounds like a commercial for Guiding Stars, and that's not my intention ... I understand that there are plenty of ways to slice this loaf of nutritional information bread, and that's fine. But I also thought it was worth noting how far we've come in the last decade, and the role that this particular company has played in the nutrition-and-transparency continuum.

    It's been an Eye-Opener.
    KC's View:

    Published on: March 31, 2016

    Bloomberg reports that in the year since Amazon rolled out its Amazon Home Services business, which does "everything from mounting flat TVs on walls to assembling treadmills," as well as "painting, plumbing and yoga instruction," the company has expanded so that it now sells "more than 1 million items that give shoppers the option of requesting assembly, installation or other related services."

    In turn, this expanded list has boosted the sale of relevant items, the company says.

    The Bloomberg story says that "Amazon now offers more than 1,200 services ... It’s part of a push by Amazon to expand beyond products, and also a way to make it easier for consumers to buy big items that require an extra pair of hands to set up."
    KC's View:
    Not just a source of product, but a resource for the customer ... and creating an ecosystem designed to make Amazon the first, best choice for pretty much everything and anything. Sounds like to a great degree, it's working.

    The question then becomes how other companies are going to compete. Because compete they must. Or risk irrelevance.

    Published on: March 31, 2016

    The Wall Street Journal reports that Chipotle, the taco and burrito chain that saw its "food with integrity" reputation take an extended hit because of a series of food safety issues, is developing a new chain called Better Burger.

    According to the story, "A new restaurant concept around burgers would add to Chipotle’s group of small chains, including ShopHouse Southeast Asian Kitchen and Pizzeria Locale. Each only has a few locations so far, but they are expanding."

    The Journal goes on to note that "Chipotle benefited for years from the success of its business model, which uses a limited list of fresh ingredients to allow people to create customized orders in a few minutes. The strategy, pinned to offering higher quality than traditional fast food, brought Chipotle years of rapid sales growth, but also, a lot of copycats. Last year, Chipotle’s growth began to slow, as it faced new competitors focused on serving fresh food fast, while the likes of McDonald’s Corp. invaded its turf with moves like eliminating artificial ingredients."
    KC's View:
    All of which has meant that Chipotle has had to try new things, like testing new formats and concepts focused on different cuisines. Of course, its emphasis on fresh food also has had to be adjusted, with less emphasis on local sourcing and more centralization, since lack of control seemed to be at the heart of its food safety problems.

    Normally, as someone who likes better burger places such as Shake Shack, I'd be jazzed about this news. But I'm not ready to go back to Chipotle yet, and I'm not ready to try one of its other concepts.

    Published on: March 31, 2016

    The New York Times reports this morning that major US companies - including Walmart and Coca-Cola - are re-evaluating roles that they planned to play at the 2016 Republican National Convention in Cleveland, concerned about the possibility that they could be implicated in what increasingly seems likely to be a raucous, divisive, even racially charged event.

    At the heart of the problem is Donald J. Trump, the real estate speculator and reality TV program host, whose "divisive candidacy has alienated many women, blacks and Hispanics." If Trump is the nominee, it is expected that there could be massive protests; if he is not, Trump himself has suggested that there could be rioting started by his disappointed and angered supporters.

    According to the Times, "Walmart, which contributed $150,000 to the Republican convention in 2012, has yet to commit to contributing this year. 'We haven’t made any decisions,' said Dan Bartlett, executive vice president of corporate affairs at Walmart, who emphasized that even before Mr. Trump’s rise, the company had been discussing reducing its involvement."

    The story goes on to say that Coca-Cola "has declined to match the $660,000 it gave for the 2012 Republican convention, donating only $75,000 for this year and indicating that it does not plan to provide more. Kent Landers, a Coca-Cola spokesman, declined to explain the reduction in support. But officials at the company are trying to quietly defuse a campaign organized by the civil rights advocacy group Color of Change, which says it has collected more than 100,000 signatures on a petition demanding that Coca-Cola and other companies decline to sponsor the convention. Donating to the event, the petition states, is akin to endorsing Mr. Trump’s 'hateful and racist rhetoric'."
    KC's View:
    You reap what you sow. It would appear that these companies - smartly, in my view, want to be careful about sowing in a place where discord may be the order of the day ... Cleveland is a city, after all, where the police have been soliciting bids for 2,000 sets of riot gear.

    Published on: March 31, 2016

    • Monetate, which describes itself as an "experience marketing platform for brands worldwide," is out with a new Ecommerce Quarterly report saying that return shoppers spend significantly more than first time shoppers on websites.

    During Q4 2015, for example, the study found that "despite making up less than half of all ecommerce sessions (48 percent), returning visitors spent nearly $5.3 billion online – almost twice as much money as new visitors spent during the same timeframe ($2.7 billion) ... In Q4 2015, returning visitors, on average, added an item to their cart 15 percent of the time; new visitors, on average, added to their cart roughly 8 percent of the time."
    KC's View:

    Published on: March 31, 2016

    The New York Times has a story about celebrity chef David Chang, who this spring plans to open a new Manhattan restaurant that will have the following value proposition - it won't serve dine-in customers and instead will only do take-out.

    According to the story, "When it gets rolling, Ando will deliver food in the style of Mr. Chang’s Momofuku restaurants ... to customers in a slice of the Midtown East neighborhood who order it through an app. The chef in charge will be J. J. Basil, an alumnus of WD-50, and Mr. Chang’s partner in the enterprise is Expa, a start-up studio that helps build new companies."

    Chang is vague about the menu: "It’s a sandwich but maybe not a sandwich ... What I want to do is just sell cheese steaks and doughnuts."
    KC's View:
    I wonder if we'll see more of this kind of stuff, as food people look for new and different ways to get innovative food into the hands and stomaches of consumers. I'd love to try Ando ... but I have to admit that I'm even more excited about Fuku, a new David Chang sandwich place opening up at Citi Field this season.

    Published on: March 31, 2016

    • The Cincinnati Business Courier reports on how Kroger looked to team up with several private equity groups when it sought to acquire The Fresh Market, which eventually was sold to private equity firm Apollo Global Management.

    The effort, experts say, shows that Kroger is very acquisition-minded, with expectations that it likely will look to add to its collection of banners in the near-future.

    Legal Newsline reports that the Public Employees' Retirement System of Mississippi is suing Sprouts Farmers Market, charging that the retailer "failed to disclose to the investing public it was experiencing a significant adverse trend in deflationary pricing that was negatively affecting the company's revenue and outlook for revenue growth. This adverse fact, the complaint states, had a material impact on the company's profitability, and, as a result, the company's stock price fell significantly."

    • The Associated Press reports that Trader Joe's and Pepperidge Farm have reached a ‘‘mutually satisfactory resolution’’ of a lawsuit filed by Pepperidge Farm over Trader Joe cookies that it said too closely resembled its iconic Milano brand.

    The lawsuit has been withdrawn, and both companies have agreed not to discuss the negotiated solution.
    KC's View:

    Published on: March 31, 2016

    Bloomberg reports that PepsiCo announced the promotion of Al Carey "to a new position overseeing all three of its North American beverage and snack businesses, a move that more tightly integrates the sprawling company’s food and drink operations." Carey, who has been leading the North American Beverages business, "will now be in charge of the Frito-Lay and Quaker Foods divisions on the continent as well, the company said Wednesday in a statement. Frito-Lay’s current North America head, Tom Greco, is leaving PepsiCo to become a CEO in a different industry."

    In addition, Bloomberg suggests, "Combining drinks and snacks under a single leader reflects PepsiCo’s dedication to remaining one company."
    KC's View:

    Published on: March 31, 2016

    ...will return.
    KC's View: