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    Published on: June 28, 2016

    by Michael Sansolo

    Everyone talks about the importance of good health, about eating better and exercising more. So why is it the path to that takes incredible detours, often with amazing ingenuity?

    The Wall Street Journal recently featured a humorous story about the lengths people go to rack up thousands of steps on their Fitbits and other electronic devices…without moving a muscle.

    There was the man who recorded 57,000 one night all while sleeping. He attached his Fitbit to the blade of an electric saw and left it vibrating on a workbench.

    Then there was the guy who tried to win a company challenge for steps by strapping his device to a hamster wheel.

    Others put their devices on pets, ceiling fans and, well, there’s even a YouTube video to show you other ways to beat so-called step challenges. The methods are both creative and devious.

    Of course, these folks really only are kidding themselves.

    All of this reminds us just how hard it is to get people to lead healthier lives. We have known for years that what consumers say they do is never exactly what they actually do when it comes to fitness or nutrition. Now the duplicity is just getting higher tech.

    Now, in nearly all the cases reported on by the Journal, the motive for cheating was relatively simple. The step-fakers were either part of company program featuring incentives to encourage more exercise or they were simply in contests with friends and co-workers.

    The goal was simply better health, hardly something nefarious. Yet the folks in the article and the thousands more who posted or watched YouTube videos on how to win these challenges, opted for cheating rather than actually improving their own health.

    In some ways, it helps explain why despite all the products, marketing, television shows, laws and countless other activities aimed at improving health and nutrition, obesity rates continue to climb. In the end, people are going to do what they want to do.

    This provides a special challenge to the food industry. We have to be partners with the shopper in trying to lead them to healthier lifestyles. We have to better explain the choices they have and hopefully help them eat and live with better balance.

    But we also have to accept that there is no magic formula for success. In the end, the only thing shoppers are sure to exercise is their choice to live as they wish. And if that means cheating on diets or Fitbit challenges, that’s what’s going to happen.

    Michael Sansolo can be reached via email at . His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available on Amazon by clicking here. And, his book "Business Rules!" is available from Amazon by clicking here.
    KC's View:

    Published on: June 28, 2016

    by Kevin Coupe

    Call it an ingenious - and unorthodox - way of looking down on the competition.

    TechCrunch reports that Uber has launched two new services that are unique to China, where it is working "to beat out its Chinese competitors."

    The result of that work is two new services, UberLIFE and Uber + Travel.

    UberLIFE is described as as way to keep users on the Uber app "for a longer period of time with a digital magazine that informs riders of cultural events in their cities." Research has shown that people apparently stay on the app even after they've ordered a car, and so Uber wants to take advantage of that as a sales opportunity.

    Uber + Travel, the story says, offers something even moe different - the ability to order up boats and hot air balloons, and not just cars.

    According to the piece, "The additional offerings come as Uber tries to compete with messaging app WeChat and ride-hailing app Didi Chuxing in China. WeChat has more than 700 million monthly active users and acts as more of a full-service app, giving users the option to make voice and video calls, shop and play games. Ride-hailing app Didi has been operating in China for four years, boasting 11 million rides a day and 300 million users in 400 cities in China."

    While these services may have customers, they don't offer boats and hot air balloons.

    At least, not yet. If they do, it'll be an Eye-Opener.
    KC's View:

    Published on: June 28, 2016

    The Wall Street Journal reports that Kroger is suing Visa "over debit-card transactions, saying the payment network has levied fines against it and threatened to raise fees and cut off its acceptance of debit cards if the grocery chain doesn’t allow customers to verify purchases with a signature instead of a personal identification number ... The lawsuit represented the latest step in a burst of legal activity between merchants and the card industry, which have been fighting over fees and other issues for decades. It comes after Wal-Mart Stores Inc. sued Visa in May over similar debit-card issues."

    PIN-based transactions are said to be both more secure and less expensive to process.

    When Kroger configured its terminals to require a PIN rather than a signature, that's when Visa informed the retailer that it was in violation of its terms of service, according to the suit. "Kroger said Visa levied fines of $7 million against it after it didn’t change its practices and told the merchant it would raise the fees it charges to process debit transactions. Kroger also said Visa threatened to cut off Kroger’s ability to accept all Visa debit cards."

    Visa has not yet commented on the suit.

    According to the story, "Kroger says it rang up $29 billion in Visa debit-card transactions last year."
    KC's View:
    I am so fed up with the banks pushing for customers to use a system that is less secure because it makes them more money ... because the gazillions they make just aren't enough.

    I think Kroger should post a copy of one of the stories about its lawsuit at every checkout in the country. Make the point that it is looking out for its customers, and Visa is only looking out for itself. Be specific, and be loud. (I'd suggest that kroger try to shame Visa and the banks, but I'm not sure they are capable of being shamed.)

    Published on: June 28, 2016

    Media Post reports on the new study by Deloitte saying that the volatility in the bricks-and-mortar retail business stems not from online competition, but from broader fragmentation.

    "We call it death by a thousand paper cuts,” says Deloitte's chief innovation officer, Kasey Lobaugh. “For the past 100 years, we’ve seen this path of consolidation. But since 2009, we’ve been on a path of fragmentation, and these smaller, more nimble retailers have entered the market. The conventional wisdom — that e-commerce is hurting retailers and that big brands are overpowering smaller ones — just didn’t stand up to our analysis.”

    According to the story, the study suggests that "focusing on either e-commerce or physical sales is less important than aligning the retailers’ strategy and value proposition with the right channels. " Retailers that focus on being "cheapest, fastest and easiest" may find their margins under pressure, while companies that focus on competing based on " experience and exclusivity of product" may have greater success, higher sales, and healthier margins.
    KC's View:
    It is the rare company that only can differentiate itself with price ... increasingly, these stores have to have something else that makes them special.

    This actually makes the point that I try to make here a lot - that MNB is not anti-store, but rather pro-relevance. People who whine about e-commerce being intrinsically evil, or bad for society, or unfair to community based businesses, are just missing the point. Compete is a verb, and differentiating action is required of everyone in the marketplace.

    Published on: June 28, 2016

    Fortune has a story about how Washington State-based CRF Frozen Foods still has not figured out what caused a "massive" outbreak that "was connected to eight patients with Listeria-related illnesses, two of whom died. The company ended up recalling over 350 frozen food products that were sold under 42 different brand names at various retailers, including Trader Joe’s and Costco. The company subsequently laid off 300 employees at its Pasco (Washington) facility."

    Nevertheless, CRF apparently has gotten past the let's-figure-out-why-it-happened phase, and now has moved into the let's-get-certified-to-reopen-our-plant phase.

    The story notes that "it’s not unusual for the source of a Listeria outbreak to go unfound. The pathogen is quite common and it doesn’t take much to affect a consumer." And, it says, getting re-certified by the US Department of Agriculture (USDA) is "a long process that involves sanitizing, testing, and ordering new equipment, all at the company’s expense. It could end up costing tens of millions of dollars..."
    KC's View:
    The best thing that CRF has going for it is the fact that nobody knows its name ... just the names of the brands that it manufactures. This will make it a little more bulletproof than it ordinarily might be ... or should be, in my opinion.

    I don;t care how much cleaning up it does. As long as they don't know the source of the contamination, I don't want to eat their food.

    It just goes to show you that despite all the steps that have been made to improve the food safety profile of the supply chain, there always will be bad actors that can throw doubt on the entire industry. Which is something about which everyone in the business should be concerned.

    Published on: June 28, 2016

    The Harris Poll is out with a new survey saying that 78 percent of poll respondents say that "eating dinner at home entails cooking from scratch," followed by "heating up something from the fridge or freezer" (45%), and "cooking using shortcuts such as precut veggies or pre-marinated chicken breasts" (37%).

    In addition, the poll says, "picking up restaurant carryout on the way home" is defined as eating-at-home by 23% of respondents, just as 22% say that they define it as "picking up pre-prepared items at the grocery store on the way home."

    The survey goes on to say that "whether they like it or not, nearly all Americans cook (97%) and a vast majority cook at least once a week (84%), while about 3 in 10 (31%) cook every day. Those most likely to cook everyday tend to be women (37% vs. 24% men), married (35% vs. 28% unmarried), adults with children in the household (37% vs. 28% without kids in the house), and those who enjoy it (43% vs. 16% who don't enjoy cooking)."
    KC's View:
    In other words, eating at home and cooking at home mean a lot of different things to a lot of different people. The key is to find your customers' various sweet spots, and then work them hard. Just doing the same old thing you've always done and hoping for success is almost a sure way to fail.

    Published on: June 28, 2016

    The New York Times reports that "just ahead of the back-to-school season, Amazon plans to make a major foray into the education technology market for primary and secondary schools, a territory that Apple, Google and Microsoft have heavily staked out ... Amazon said that it would introduce an online marketplace with tens of thousands of free lesson plans, worksheets and other instructional materials for teachers in late August or early September."

    The program, called Amazon Inspire, is designed to compete with projects like the one designed by Microsoft, which is working "to help schools introduce and integrate technology in the classroom. The project includes training programs for school administrators, online leadership courses developed with edX — a learning platform created by Harvard and the Massachusetts Institute of Technology — and services to support schools as they adopt digital learning approaches."

    As for Google, it is making "Expeditions, a free virtual reality app for students that has been available on a limited basis to schools, generally available. More than one million students tried the app during its test phase, the company said ... Google also introduced two new products for schools: Quizzes, an online form that teachers can use to give tests and automatically grade multiple-choice questions, and Cast for Education, a free Chrome app intended to promote class discussion by enabling teachers and students to share what is on their screens with one another."
    KC's View:
    The ecosystems being created by these companies are now opening new wings.

    Published on: June 28, 2016

    • The Wall Street Journal writes that as Amazon brings its online food shopping business to the UK, "it is a nightmare scenario for Britain’s established grocers. But the near-term risk is less that the U.S. tech giant eats their dinner than that it raises the bar for what consumers expect, making it even harder to run a profitable online operation."

    Tesco, the story says, "is most exposed, having 36% of Britain’s online market, according to brokerage house Bernstein." But the larger problem is that online competition from the likes of Ocado and Walmart-owned Asda has driven down delivery fees, making online less profitable than it used to be.

    "Amazon’s logistics and marketing savvy will only make it harder," the Journal writes.
    KC's View:

    Published on: June 28, 2016

    ...with brief, occasional, italicized and sometimes gratuitous commentary…

    MarketWatch reports that PepsiCo plans to "reintroduce the aspartame-sweetened version of Diet Pepsi in U.S. stores in September, its latest attempt to halt plunging diet cola sales. The company said it would continue to sell sucralose-sweetened Diet Pepsi, which it introduced last August to replace the aspartame version. PepsiCo also said it would rename Pepsi Max, a smaller diet cola brand, as Pepsi Zero Sugar in the US."

    Pepsi is dealing both with the fact that overall soft drink consumption in the US is declining and that consumers did not seem to like the sucralose-sweetened variety very much.

    Sounds awfully confusing, not to mention confusingly awful.

    • The Retail Gazette reports that discounter Lidl plans to spend the equivalent of $66.5 million (US) on the Scottish market over the coming year, hiring 300 people to add to its current staff of 180, as well as opening "new concept stores, plus a refurbishment and expansion of 10 out of 91 existing outlets across Scotland."

    “Our planned investment over the next 12 months signifies our commitment to Scotland,” says Lidl’s Scottish managing director Ross Millar, adding, “We have also set up a dedicated buying team in Scotland and we are working towards sourcing over 25 per cent of our products from Scottish suppliers.”

    Good timing, since a decent percentage of the Scottish government seems hell-bent on declaring its independence from t the UK and hook up with the European Union, figuring that this makes more sense for its economy.
    KC's View:

    Published on: June 28, 2016

    • The Toronto Sun reports that Walmart Canada has promoted Lee Tappenden, its chief operations officer, to the role of CEO, succeeding Dirk Van den Berghe, who is moving on to run Walmart's China business.
    KC's View:

    Published on: June 28, 2016

    Regarding the new effort by Barnes & Noble to upgrade the foodservice component of its business, one MNB user wrote:

    I will be incredibly interested to see how this works. To your point, it is often the independent bookstore that seems to tug at our heartstrings, not the chain. Take Kramerbooks in DC. Located in Dupont Circle. While I lived in DC it was a favorite for brunch on Sat. or Sun. with a terrific book selection. Unlike B&N you couldn't take a book to brunch with you, but while waiting for your table you had no choice but to peruse the selections. More than half the time I ended up buying a new book.

    My significant other, on the other hand, loves B&N. We live in South Florida where chains abound and restaurant choices are mediocre (save for some delicious Cuban restaurants and Argentinean bakeries). Her work is a little unconventional and she often likes to do some website design or research on a topic away from home. Her environment of choice? B&N at the Starbucks... having eaten more s'mores bars than she'd ever admit. I would guess she clocks more than 10-15 hours a week there. As for the number of books she has purchased, she tries to support them when it makes sense, but it isn't uncommon to check the price of a kindle book or hard copy from Amazon first.

    If the key to survival of the bookstore is the independent bookstore I wonder if there is an opportunity to franchise. To create something that can have local flare and feel, but with some standards and buying power of a larger entity. Would we be more apt to support our local franchise vs. national companies? I liken this somewhat to Ace Hardware vs. Home Depot.

    Great line from an MNB reader reacting to our story about Amazon doubling down on its Dash button business:

    My wife has a Dash button, it’s called ME!


    Also got a note from MNB reader Joseph Brennan about yesterday's story regarding Unilever's declaration that it will avoid typical gender stereotyping in its advertising:

    I am awaiting the day when fathers or men in general in commercials and on TV shows are not portrayed as the dumbest and most inept creatures ever planted on the planet earth.

    Two responses to this.

    One, sometimes we are the dumbest and most inept creatures ever planted on the planet earth. Just ask Mrs. Content Guy.

    Two, there was a fellow who was pretty powerful in the TV business, who decided that the world needed a TV series that not just broke with the tradition of idiot dads on TV, but also treated a minority family with respect and dignity. The show launched in 1984 and ran for eight seasons. It was called "The Cosby Show," and starred Bill Cosby ... and for reasons related to sexual assault allegations against Cosby, the show's reruns are very difficult to find on television these days.

    Also got a lot of reaction to yesterday's piece taking note of a Reuters report that just days after registered UK voters cast their ballots in favor of leaving the European Union, "quit the European Union hit sterling and raised the prospect of another recession," retailers saw both their sales and stock prices fall. At the same time, expectations are that the Brexit vote also could impact any new merger-and-acquisition activity that might take place in the UK.

    I commented:

    Lots of questions about what's going to happen now, and very few solid answers ... though just the immediate impact on the UK economy appears to have created some buyer's remorse. (John Oliver did a wonderful job of explaining - and deconstructing - the Brexit situation on last night's edition of "Last Week Tonight" on HBO.)

    I can understand some of the emotions that might have led some British people to vote to abandon the European Union; globalization can be a scary thing, especially if you see your job being threatened. But it seems to me that expecting that a vote and a political statement can hold back the forces of globalization is akin to expecting that one can vote to change the weather. I just don't think it is possible to put that particular genie back in the bottle ... and my guess is that the countries, companies and people who figure out how to make globalization work for them, as opposed to using to create fear and loathing, will be the ones that are most successful in the long run.

    One MNB user wrote:

    I have read your publication since the start of my career almost 10 years ago, and find that I hold your viewpoint about 60% of the time – which keeps me reading.  As one of those much-maligned and often misconstrued Millennials, I do fit the stereotype in that I enjoy differing opinions that are well thought-out.

    But your Brexit viewpoint is deep in the other 40%.  You wrote “my guess is that the countries, companies and people who figure out how to make globalization work for them, as opposed to using to create fear and loathing, will be the ones that are most successful in the long run”.  To me, that’s exactly what the Leave camp was petitioning at its core.  For all the rhetoric and fear-mongering on both sides, this vote was not about trying to shut the door on globalization – it was about having control over the doorway.  It strikes me as supremely reasonable that a country as strong as the UK would want more decision rights on how to navigate the global marketplace and its challenges than it had as part of the EU, which has completely devolved from its original purpose.

    I fully expect there to be short-term turbulence for our friends across the pond – in large part due to the threats and posturing of an embittered EU parliament.  But I also believe they have made a courageous and bold decision that will position the country better for the very globalization from which you believe them to be running away.  They are free to navigate change in the nation’s best interests, not the bloc’s.

    I also really enjoy John Oliver’s monologues, but his Brexit version was disappointing – it just came off as biter, crude, and pouty.  I think he – and much of the media on this issue – were practicing their own version of epistemic closure in espousing the idea of the EU versus its reality, when often the entity they were describing has not existed in over two decades.

    From MNB reader Tom Herman:

    I think it is a severe mistake for people to assume that fear of globalization is what is driving people to vote to exit the European Union.  This isn’t a bunch of backward ignorant British blokes that woke up one day and decided to leave the EU.  Globalization isn’t the issue.  The issue is that a group of unaccountable Elites in Brussels are making decisions that affect real people lives without them having a direct voice in the decisions.  Some people believe that decisions are best made at the local level, just like the people closest to the customers should have more of a direct voice.

    And from another reader:

    Kevin, These feeling of remorse were created by the press. How else could they explain the complete rejection of the liberal ideology?

    This exit will do wonders for their country as they will be able to shed the ridiculous laws and unnecessary burdens created when the EU decides that a typical work week is 30 hours and you need to retire at 50. Not to mention that it is illegal to sell crooked cucumbers.

    This might be coming a little closer to home as well. I expect Texas to renew their charge to secede from the union as well. With the win in Britain, I expect Texas to have a new found hope that it will happen.

    Really? You're rooting for Texas to secede from the union?

    Listen, I'm not sure it is fair to blame all the reactions to the Brexit vote on the media. (You can really only blame the mainstream media/liberal press for so much.) Best I can tell, currencies are wildly fluctuating, the stock markets are way down, and the UK is a smaller, less economically powerful country today than it was just a few days ago. It may also end up not being the UK, if Northern Ireland and Scotland bail out on it.

    It also seems to appear that once they won the referendum, the people who were leading the "leaving" charge did not seem to have a plan to implement, have been spending a lot of time saying that there is no hurry, and have been backtracking on some promises they made.

    I'm also fascinated by the fact that millennials, apparently, overwhelmingly voted to remain part of the EU ... and now are convinced that they are facing far more limited job prospects than just a week ago.

    Could this be good for the UK in the long run? Maybe. The question may be how much damage is done in the interim. (At the very least, it seems likely that the next James Bond movie will have the master spy driving a Mini and not an Aston Martin.)

    Maybe you're right about this not being about anti-globalization. But maybe you're wrong ... and this really is about a segment of the country that wants to go back to a time when it seemed to be stronger, better, greater. The question to me is whether this promise is real, or illusory.

    I guess we're going to find out.
    KC's View: