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    Published on: September 23, 2016

    by Kevin Coupe

    In yet another reminder of how porous the digital world can be, Yahoo yesterday announced that the personal account information of at least a half-billion of its users was hacked two years ago by what the company believes was a "state-sponsored actor," though the name of the country suspected was not identified.

    It is described in the New York Times story as "the biggest known intrusion of one company’s computer network," and probably included information about Yahoo account holders that included "names, email addresses, telephone numbers, birth dates, encrypted passwords and, in some cases, security questions."

    According to the Times story, which is worth reading here, "how the company discovered the hack nearly two years after the fact offered a glimpse at the complicated and mysterious world of the underground web.

    "The hack of Yahoo, still one of the internet’s busiest sites with one billion monthly users, also has far-reaching implications for both consumers and one of America’s largest companies, Verizon Communications, which is in the process of acquiring Yahoo for $4.8 billion. Yahoo Mail is one of the oldest free email services, and many users have built their digital identities around it, from their bank accounts to photo albums and even medical information.

    "Changing Yahoo passwords will be just the start for many users. They’ll also have to comb through other services to make sure passwords used on those sites aren’t too similar to what they were using on Yahoo. And if they weren’t doing so already, they’ll have to treat everything they receive online with an abundance of suspicion, in case hackers are trying to trick them out of even more information."

    It is the kind of event that could have far-reaching implications, even if it is unlikely to have any sort of long-term impact on the growth of the digital economy. But it certainly is an Eye-Opener, and yet another reminder of how vigilant businesses and consumers must be as the digital realm continues to expand.
    KC's View:

    Published on: September 23, 2016

    The Associated Press reports that Texas-based Blue Bell Creameries has issued yet another recall, this time of "select flavors of ice cream distributed across the South after finding chocolate chip cookie dough from a third-party supplier for use as an ingredient was potentially contaminated with listeria."

    The company said that no illnesses related to consumption of the products have been reported; the ice cream is said to have been distributed to stores in Alabama, Florida, Georgia, Kentucky, Louisiana, Mississippi, North and South Carolina, Tennessee and Virginia.

    The story notes that "last year, Blue Bell halted sales and issued a voluntarily recall of all of its products due to bacteria contamination that was linked 10 listeria cases in four states, including three deaths, drawing regulatory scrutiny from federal and state officials.
    KC's View:
    The fact is that Blue Bell didn't just have to recall its products last year, but also seemed to be slow in understanding that transparency in such matters is an absolute requirement if one is to maintain the trust of consumers.

    Now, to be fair, I have to admit here that I did not understand the degree of loyalty that many consumers feel about Blue Bell, so I underestimated the company's ability to come back from its food safety troubles. I don't want to make the same mistake twice, so I won't go predicting dire consequences for the company ... especially because this seems to be a different issue than last time around.

    That said, a brand is responsible - legally, morally, ethically - for food safety up and down the supply chain. The "a third party did it" line may be an explanation, but it is not an excuse.

    To use a Latin proverb I've often quoted here over the years, "Trust, like the soul, never returns once it goes".

    At some point, this food safety bell can't be un-rung.

    I also know this. I can't imagine any circumstances under which I would knowingly consume Blue Bell ice cream.

    Published on: September 23, 2016

    IGA yesterday announced what it called "the launch of IGA Groceries Online - or IGA GO as it will be branded to shoppers - an ecommerce solution that meets shoppers’ need for a convenient online ordering platform from their trusted local Hometown Proud IGA store."

    According to the announcement, "IGA has named two preferred partners to bring IGA GO to its more than 1,100 IGA licensed retailers across the U.S. The partners, Digital Foodie and Freshop, will begin providing their optional online grocery services to IGA retailers immediately."

    In an email to IGA members, Jim Walz, vice president of brand development for IGA USA, writes, "So why online shopping and why now? Because, as we all know, online shopping has become an essential element to shopper service in today's grocery marketplace. But that doesn't mean there's no room for traditional stores. Quite the contrary, in fact. We also know that online shoppers migrate towards a trusted brick and mortar store, which means that IGA retailers are in a unique position to leverage their well-established in-store relationships in the ecommerce space. With the right program and the right partners, the attentive service and personalized offerings that are signature to a Hometown Proud IGA store transfer easily to an online world where shoppers make grocery purchases whenever and wherever is most convenient for them."
    KC's View:
    Not to be contrarian here, but ... in some ways, the most important word in the IGA announcement is "optional." Because it points to what may be a core flaw in the IGA business model, which is a pervasive inconsistency that affects its retail fleet.

    Let's face it. There are some very good IGA stores out there. But there also are some stores that seem like they haven't changed very much in the past 20 years, that behave as though the "hometown proud" slogan is a shield against modern realities as opposed to just one weapon (and not even the most important one) in an increasingly challenging competitive environment.

    I guess I would argue that as progressive as Jim Walz's statement may sound, what needs to be said to a sizable percentage of the IGA fleet is that there is a revolution taking place, and it is time to rethink what "traditional" and "well-established in-store relationships" actually mean. If I were IGA, I'd be pointing out that the vast majority of IGA shoppers almost certainly use Amazon, and that Amazon will be aggressive, ambitious and relentless in trying to steal away as much business as it can - and that in the face of things like Subscribe and Save, a decent private label program, friendly checkout personnel and a "hometown proud" banner may simply not be enough.

    Optional? Hell, I'd make the development of an e-commerce program virtually mandated if one wanted to keep the IGA name ... and then I'd start mandating all sorts of other requirements for retailers to stay in the family. This is no time for reassurances and encomiums. This is a time to start scaring the hell out of people.

    Published on: September 23, 2016

    DNA info has a story about how 16 Chicago area bookstores have joined together to issue a statement "criticizing Amazon's plans to put its first brick-and-mortar bookstore in the city in Lakeview" and addressing "the benefits of independent booksellers and the impact the massive online superstore has had on community businesses."

    According to the story, "The shops, scattered across Chicago from Hyde Park to Lincoln Square and into the suburbs, 'pride themselves on serving customers who read voraciously and eclectically and on using books to create a conversation with customers and their communities,' the statement reads. The statement cites a January report co-sponsored by the American Booksellers Association that accused Amazon of skirting sales taxes and costing Illinois an estimated $59.8 million in revenue in 2014. Another study found the company's presence has resulted in a net loss of 7,800 retail jobs in the state, the letter says."

    One local bookseller, Lynn Mooney, says that she sees Amazon's bricks-and-mortar plans as the ultimate compliment - "that a profit-driven corporation like Amazon is trying to copy our business model. I don't know if they can copy our commitment to community building, sustainable local economies, social activism and free speech and the free exchange of ideas, so I'm confident we'll come out stronger in the end."
    KC's View:
    I think it is great to issue a statement of solidarity, but in the end, the most important statement that these retailers can make is to compete effectively with Amazon. I'm not sure there's any moral superiority in being small or independent, much as small and independent stores somehow would like to think so.

    This is a delusion often held by those of us who fall into the "small and independent" category in any segment of business. It may allow us to sleep better at night, but it isn't necessarily true. The small and independent are better at some things than larger businesses, and probably not as good at others. It is up to the small and independent businesses to identify their strengths and build on them, understanding that they have to come to the table with a differential advantage every day.

    By the way, it sounds like many of the Chicago bookstores involved with the statement are doing exactly this - they've established niches and identities that differentiate them in the marketplace.

    Make the statement, but then go out and compete. And always remember that "compete" is a verb.

    There's a movie about this. You've Got Mail, in which Meg Ryan's character - an independent bookstore owner - does a lot of things right, but operates under the delusion that she's morally superior to the big chain store up the street. And (SPOILER ALERT!) she eventually fails, but she's unable to differentiate herself enough, and compete on price enough, to make a dent in the bigger operation.

    (I wish someone would write a book about business lessons from the movies...)

    Published on: September 23, 2016

    The BBC reports that the three former Tesco executives charged in the accounting scandal that roiled the company have all pleaded not guilty, and have been released on bail pending a hearing.

    The executives - former UK finance director Carl Rogberg, former UK managing director Chris Bush and former UK food commercial director John Scouler - have been charged with one count of abuse of position and one count of false accounting.
    KC's View:

    Published on: September 23, 2016

    The Private Label Manufacturing Association (PLMA) is out with a new survey that suggests that the best way to attract millennial shoppers is with differentiated fresh departments, and reveals that "millennials love food but want food done their way. Fresh and healthy foods are at the top of their shopping lists, while prepared and portable foods are also very popular."

    One of the more interesting things about the study is the suggestion that "contrary to expectations, these (millennial) shoppers are more loyal to their favorite stores than their parents. Nine of 10 do their regular grocery shopping in only one or two stores. This represents a dramatic departure from recent PLMA studies that saw consumers spreading their shopping among a multiplicity of stores.

    "This loyalty has important implications for store brands," PLMA argues (naturally). "As they select products, millennials are well informed about brands, including store brands, and where foods come from. Nine of 10 say they are aware of the ingredients in the food products they eat and three of four read the nutritional labels on products. Their awareness of store brands and national brands is virtually the same at 84% vs. 86%."
    KC's View:
    One of the things that seems evident to me is that millennials are sort of hard-wired to buy the stuff that is non-differentiated online, because it doesn't really matter where those kinds of products come from. Then, they'll choose bricks-and-mortar stores for the stuff that is more differentiated, especially fresh items. This just makes sense, and seems perfectly lined up with the millennial mentality.

    Published on: September 23, 2016

    Crain's Detroit Business reports that "less than a week after the launch of Meijer's home delivery service in metro Detroit, Shipt Inc., an app-based grocery delivery service company that's working with the Grand Rapids-based retailer on the service, announced it will hire 200 additional shoppers." That's in addition to the 300 shoppers originally hired before the launch of the service ... which ended up not being nearly enough, and resulted in some customers complaining via social media that there were no delivery times available.

    • The Cleveland Plain Dealer reports that the "UberEATS food delivery service is now available in Cleveland. The app, separate from Uber's driving service, will bring food from local restaurants to the doorsteps of Cleveland residents 7 days a week."

    More than 60 restaurants are said to be participating.

    According to the story, "Most participating restaurants will offer their full menu for delivery, with food available for ordering until kitchen closing time. For a limited time, UberEATS is offering free delivery."
    KC's View:

    Published on: September 23, 2016

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

    • The National Retail Federation (NRF) is out with a prediction that "total spending for Halloween is expected to reach $8.4 billion, an all-time high in the survey’s history. U.S. consumers are expected to spend an average of $82.93, up from last year’s $74.34, with more than 171 million Americans planning to partake in Halloween festivities this year."

    That's a lot of money to spend on a holiday designed to scare you. Though, come to think of it, it'll probably pale compared to the amount of money a lot of people will be spending about a week later just on alcohol for an even scarier day. Election Day. When many of us will be drinking heavily.
    KC's View:

    Published on: September 23, 2016

    ...will return next week.
    KC's View:

    Published on: September 23, 2016

    In Thursday Night Football action, the New England Patriots decimated the Houston Texans 27-0.
    KC's View:
    I've always thought that there are several certainties about the current NFL season.

    One is that Patriots coach Bill Belichick was determined to go 4-0 during the four-game "Deflategate" suspension of quarterback Tom Brady, just to prove he could.

    The second is that when he gets back, Brady will be playing with a vengeance. He's gonna be angry, and he'll have something to prove. (Especially if the Pats go 4-0 without him.)

    And finally, the thing that I believe most of all is that these combination of circumstances makes the Patriots really, really dangerous. (As a Jets fan, the last thing I want is for the Pats to have any extra motivation...)

    Published on: September 23, 2016

    It isn't getting a wide release, but Equity definitely is a film worth checking out. On the surface, it is a Wall Street drama about greed and backstabbing among the tiny percentage of the population that Tom Wolfe described as Masters of the Universe ... except in this case, the majority of the players are women, and Equity was written, directed and produced by women, as well as being largely underwritten by women who actually work on Wall Street.

    There essentially are three major characters the film follows - Naomi Bishop (Anna Gunn), a an ambitious investment banker who is trying to rebound after an IPO she was running failed to live up to expectations; Erin Manning (Sarah Megan Thomas), a banker a little bit further down the food chain, who has ambitions that are complicated by a pregnancy, which only makes her more anxious to prove her mettle; and Sam (Alysia Reiner), an old friend of Naomi's now working for the US Attorney's office trying to root out insider trading on Wall Street. And the plot concerns a new IPO that Naomi and Erin are running, and the varying pressures and corruptions - big and small, professional and personal- that they face.

    The film is well plotted and acted, but what makes it so interesting is how, while these women are seen as working in what remains largely a man's world, they are not seen as appendages. (Though to be fair, they seem to be held to different standards than the men in the film, which seems entirely familiar, topical and authentic.) They drive the narrative and, whatever decisions they make, they are not dupes. They make decisions and live with consequences, and seem fully formed. Equity shouldn't be an exception in this regard, but it is; unlike on television, where diversity of all kinds seems far more embraced, feature films simply don't highlight characters like these ... or at least not very often. So check out Equity. I liked it a lot.

    One of the great things about the beginning of the traditional television season each September is that iTunes often features series pilots for free ... I get to download them, watch them, and decide if I have any interest in watching how they develop.

    There are three that I've watched this week that seem worth further attention - one is a definite, and two a little less so.

    The definite is "Designated Survivor," the new Kiefer Sutherland series about a former academic who becomes Secretary of Housing and Urban Development and isn't, to be honest, very successful because he isn't all that assertive and doesn't play the Washington power game. Then, on an evening when he is the only Cabinet member not to attend the President's State of the Union Address, the Capitol is attacked...and he ends up as President since he's the only survivor in the Constitutional line of succession. Sutherland is great, the pilot is terrific drama, and there seem to be tons of potential conspiracies to uncover as the series develops. Count me in.

    "The Good Place" is a half-hour comedy that seems to have taken some inspiration from the Albert Brooks movie, Defending Your Life. It depicts a heaven where only a tony sliver of humanity's best gets to go after death .. except somehow, a disreputable young woman slips through the cracks and gets in, and the whole "heaven" thing starts to go to hell. Kristen Bell is a riot as the young woman, Ted Danson is charming as can be as a slightly clueless angel, and if they can keep up the standard set in the pilot, this could be interesting.

    Finally, there's "This Is Us," an intriguing new series about a bunch of people who share a birthday. I'm not going to tell you any more about it because I don't want to give anything away ... but if I were you, I'd check out the pilot and see if it appeals. It did to me.

    The problem with all such programs is that the economics of network television require that the producers come up with 22 new episodes a year. (For a one-hour series like "Designated Survivor," that's like 11 feature-length movies.) This is incredibly hard to do, and even harder to sustain a premise and maintain some level of quality. So one has to go into such things with realistic expectations, and hope that the series over-perform.

    The fifth season of "Longmire" begins streaming on Netflix today, and I'm really looking forward to catching up with one of the best TV series out there - a modern western that is tonally different from the late, great "Justified," but no less ambitious in terms of its character-driven views of an evolving society in which certainty is crumbling, nobility is rare, and few things are precisely what they seem.

    BTW ... because the Netflix economics are different from those of network TV, the new season of "Longmire" has just 10 new episodes.

    Two wines to recommend to you this week, both from the Willamette Valley Vineyard in Oregon - the 2012 Willamette Valley Vineyard Dijon Clone Chardonnay, which is prefect foe the waning summer nights, and the 2010 Griffin Creek Merlot (from the Rogue Valley in Southern Oregon), which has a lot more complexity and interest than the standard Merlot.

    That's it for this week. have a great weekend, and I'll see you Monday.

    KC's View: