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    Published on: May 17, 2016

    by Kevin Coupe

    Twitter is on the verge of announcing a major change in its stay-everything-you-can-in-140-characters policy that will allow people to post longer messages.

    According to Bloomberg, Twitter "will soon stop counting photos and links as part of its 140-character limit for messages, according to a person familiar with the matter. The change could happen in the next two weeks, said the person who asked not to be named because the decision isn’t yet public. Links currently take up 23 characters, even after Twitter automatically shortens them."

    The story notes that such a change would be part of a broader effort to give Twitter users greater flexibility, which has been undertaken in part because of how technology has changed since Twitter began a decade ago. The 140-character limit originally was imposed, Bloomberg writes, "because it was a way to send Tweets while fitting all the information within a mobile text message - a common way for sending Tweets when the service debuted in 2006, before the proliferation of smartphones."

    But while Twitter wants to makes the service more flexible, it also faces the same problem of a lot of brands - it does not want to mess with the product's core values. And so while it at one point considered expanding the limit to 10,000 characters, it decided not to, since "the quick, concise nature of Tweets has helped set the site apart from the competition."

    In addition to expanding the character count of messages, Bloomberg writes, Twitter "has been making video a priority as part of its push for live events. Earlier this year, the company agreed to pay $10 million to the National Football League for the rights to stream 10 Thursday night games during the 2016 season, people familiar with the matter have said. Twitter is working on more content deals for streaming sports, political events and entertainment."

    And so, a major brand works to expand what it does while not tinkering with the fundamentals of what it means.

    Just like a lot of brands. And it is an Eye-Opener.

    For Twitter, like a lot of companies, it is a character issue. Except that in Twitter's case, the issue is literal.
    KC's View:

    Published on: May 17, 2016

    Money magazine offers an update on Jet's progress since being launched last summer as an online competitor to Amazon, saying that it has "been adding 350,000 customers per month and last week added fresh groceries to the long list of items it sells."

    According to the story, "What’s attracting customers to Jet.com is the same thing that first drew shoppers to Amazon: low prices. Jet.com originally pursued a strategy of significantly undercutting the competition on a wide range of goods, with a particular focus on standard household purchases like paper towels, soap, toothpaste, and pasta." The company has been focusing on low prices and changing some of its original tactics; it "eliminated the $50 membership fee it initially planned on charging, and it offers all shoppers free shipping with purchases of $35 and up—both of which compare very favorably to Amazon, which charges $99 annually for Prime membership and the privilege of free two-day shipping on most purchases."

    Money goes on to draw the battle lines: "Many studies and unscientific price comparisons indicate that (Jet CEO Marc) Lore is correct concerning the fact that Jet.com often beats Amazon on price, and that Amazon doesn’t quite dominate the low price battle as it once did. Instead, Amazon’s success is increasingly relying on the strategy of turning casual shoppers into Prime subscribers. Once they’re members, their spending at Amazon tends to increase significantly due to convenience, habit, and the appearance of saving money via competitive (if not the absolute cheapest) prices and free two-day shipping. Prime’s other perks, like free Prime Video streaming and unlimited photo storage, serve as incentives for paying subscribers to keep being paying subscribers, even after they realize that other sites may be cheaper than Amazon."

    While Jet "may never become the 'Amazon killer' it was hyped as ... by consistently undercutting the Amazons, Costcos, and Walmarts of the world with 5% cheaper prices, it can win over many more customers and become a very powerful player in retail."
    KC's View:
    I have to admit that I've done some comparison shopping on Jet, and I think it is fair to say that it is competitive with Amazon on price, sometimes a little lower and sometimes a bit higher, but usually right in the neighborhood. I guess that one of the things that hurts Jet is the fact that compared to Amazon, it just seems far less robust ... in fact, it is far less robust. But it seems like a legitimate competitor, though it continues to support its low prices with investment dollars, and it is racing to build its volume to the point where those numbers alone will justify getting better prices from suppliers.

    Published on: May 17, 2016

    Giant Eagle announced yesterday that COO John Lucot plans to retire next month after 42 years with the company. Lucot, who started with Giant Eagle as a grocery clerk, was named president/COO in 2012.

    CEO Laura Karet will take on the COO responsibilities, the company said.
    KC's View:
    In addition to all the testimonials that will be offered to John Lucot's talent and passion, I'd like to add my own by acknowledging that several years ago, he traveled to Oregon during the summer - on his own dime - to spend time with the food marketing class that I team teach (with Tom Gillpatrick) at Portland State University. It was a remarkable and illuminating evening, as he acquainted the students with a company they knew little about and a retailing attitude that was infectious. I've always appreciated that ... and wanted to take advantage of the moment to than him publicly for his kindness.

    Published on: May 17, 2016

    The Wall Street Journal reports that Starbucks plans to sell 10-year bonds in order to raise $500 million "to pay for so-called sustainable projects, including support programs for farmers in coffee-growing regions ... underscoring the greater focus on environmental and social issues in corporate business practices."

    The story notes that "the company already operates an agronomy center in a Costa Rica farm along with a network of eight farmer support centers around the world, and it had committed to invest $50 million in short- and long-term loans to farmers." Starbucks promised to issue annual updates about how the money is being invested.
    KC's View:
    The key phrase in the story is how this underscores "the greater focus on environmental and social issues in corporate business practices." This is what an increasing number of consumers want, and a standard against which an increasing number of companies will have to measure themselves. Which, I think, is a good thing.

    Published on: May 17, 2016

    QSR magazine has an excellent piece about how Chipotle continues to deal with the food safety problems that sickened hundreds of people last year and through a major wrench into its financial performance, as the problems undermined its value proposition of "food with integrity."

    The outbreaks, the story says, "have led many to believe that the brand’s focus on wholesome, simple ingredients belies a slew of operational challenges associated with its labyrinth supply chain of small farms and suppliers. Now, many are left wondering: Is it possible to scale a brand built around fresh, locally sourced foods?" And, QSR writes, "Experts say the various outbreaks linked to Chipotle raise underlying questions about the viability of its model and the number of fast-casual concepts that have similarly constructed their identities around fresh and locally sourced ingredients."

    One expert tells the magazine that he "thinks Chipotle’s reaction may even undermine its core concept. By blanching, chopping, and sealing some ingredients like tomatoes in central locations before sending them off to stores, Chipotle has begun to resemble the national distribution models of the massive restaurant chains it originally sought to repudiate."

    And it is an enormous potential problem when a brand has to undermine the core values that made it special.

    You can read the entire story here.
    KC's View:

    Published on: May 17, 2016

    • Walmart said yesterday that it is making its Walmart Pay mobile payments solution available to customers at 110 of its stores in Arkansas, saying that the introduction makes it "the only retailer to offer its own payment solution that works with any iOS or Android device, at any checkout lane, and with any major credit, debit, pre-paid or Walmart gift card – all through the Walmart mobile app."

    Walmart says that the mobile payments solution is imbedded in its Walmart app, and that "more than twenty million customers actively use the Walmart app each month and it ranks among the top three retail apps in the Google and Apple app stores. The Walmart app enhances the shopping experience in Walmart stores with features including checking in to pick up an online order at a Walmart store, refilling pharmacy prescriptions and finding an item’s store location."


    • Walmart yesterday announced the signing of an agreement with McKesson Corp. that will have the two companies collaborating "on sourcing generic pharmaceuticals for their respective U.S. operations," which they said would add "scale and value for both companies." The companies said that the new agreement "leverages McKesson’s demonstrated strength and expertise in the global pharmaceutical industry and Walmart’s proven commitment to delivering leading health and wellness services at an everyday low price to its customers."

    The announcement quotes George Riedl, senior vice president and president, Health and Wellness, Walmart U.S., as saying that “Walmart and McKesson have built a strong business relationship over the past 30 years by working together to help lower the cost of health care. The dynamics of health care continue to change, and we’re changing with it. It’s why we are taking our relationship with McKesson to the next level, using our combined size and scale to drive efficiencies, something that is core to our business."

    Reuters notes that "Wal-Mart, which has been sourcing generics with McKesson for several years, has been looking to strengthen its health-related business as well as cut costs in its pharmacy operations, which emerged as a significant drag on earnings last year."
    KC's View:

    Published on: May 17, 2016

    • Kroger yesterday said that employees working in its Indianapolis division have ratified a new contract that covers more than 5,800 associates working in 61 stores. Specific terms were not disclosed.

    Katie Wolfram, president of Kroger's Central division, said that the deal "is good for our associates and also allows us to be competitive and grow in the Indianapolis area."


    • The Albany Times Union reports that Hannaford is testing a new program called 'The Misfits" that "sells fruits and vegetables that don't meet the perfect image of their usual offerings. The cucumbers may be twisted into odd shapes, the limes not quite so perfectly green, and the eggplant oversized and lumpy, but they don't taste any different from their better-looking brethren," all of which will be sold at a 30 percent discount.

    Ryan Merrone, a produce field merchandiser for Hannaford, described the program as being good for the environment because it cuts down on waste.

    It is worth noting that in a different context, CNBC reported yesterday that "the United Nations estimates that more than one third of food produced worldwide is lost or wasted. For all the food that ends up on our kitchen tables, one good, perfectly edible portion makes it to the trash first. And while it's not a new problem, the issue is becoming hard to ignore: In the U.S. alone, the amount of food we waste today is three times more than what we wasted 50 years ago ..."


    • The New York Business Journal reports that upscale burger chain Shake Shack "is accelerating its expansion plans amid strong performance from its chicken sandwich and a hot opening of its first California store in West Hollywood ... The company, which has raised its revenue expectations, plans to open at least 16 domestic, company-operated Shake Shacks this year, up from the 13 it had originally planned."

    According to the story, "Shake Shack credits its menu innovation as a factor in driving sales. To that end, in the second half of the year, the company will roll out a new limited time only menu item: a Bacon Cheddar Shack burger. It will be a classic cheeseburger, topped with all-natural bacon and melted aged cheddar cheese, priced at $6.89."

    What makes me really happy about this story is that one of those new stores may actually be in my Connecticut town, if the folks in the local zoning board every decide to remove their heads from wherever they happen to be and appreciate that Shake Shack both will sell a better-than-average product and expand the town's tax base. Which is just my way of acknowledging that I have a bit of a bias here...


    LA Biz reports that Smart & Final Stores says that it "has converted all 33 stores it bought from Haggen in December to Smart & Final Extra! stores. The store openings were part of an aggressive growth plan for the Commerce-based retailer, which plans to open 100 new stores over the next four years and hire at least 5,000 employees to staff those stores ... Haggen last year sold its stores and filed for Chapter 11 bankruptcy after less than a year in California."
    KC's View:

    Published on: May 17, 2016

    • Suja Chandrasekaran, who used to be the global chief technology officer and chief data officer at Walmart, reportedly has joined Kimberly-Clark as chief information officer. The Wall Street Journal notes that Chandrasekaran previously held executive IT positions at Timberland, PepsiCo, and Nestle.
    KC's View:

    Published on: May 17, 2016

    Michael Sansolo is on assignment this week. He'll be back next Tuesday..
    KC's View:

    Published on: May 17, 2016

    will return.
    KC's View: