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    Published on: December 1, 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.

    Over the Thanksgiving holiday, I had the opportunity to attend a 60th birthday for some friends of mine. Which was a good time, in part because it always is fun to hang out with younger folks.

    But I also had a chance to have an illuminating chat with someone who was a lot younger than me - a 25 year old woman whom I found to be enormously impressive. She told me about a startup company in Washington, DC, that is doing very interesting work ... and I thought there were some important similarities to what a lot of companies, including retailers and suppliers, ought to be doing.

    The startup is called Engaged MD, and let me see if I can explain what they're doing. The company works with healthcare organizations to improve patient education and engagement. They've started by working in the fertility space, which can be a complicated and long road for patients. Essentially, they provide a series of educational experiences on video that help patients understand the road on which they are embarking, and then, after each educational segment, patients are quizzed so there is an understanding about what they've learned. This allows the doctors to have a better appreciation for what the patients get and don't get, and therefore deliver health care services that are more targeted and effective.

    Now, I found this fascinating, in part because it seems to have so many applications to other health care issues and disease states. If the startup works, and I imagine that it will, the sky will be the limit.

    This illustrates a larger truth about how to deal with patients ... and customers.

    Education and engagement are critical pieces of any relationship, and it is something on which I think everyone trying to connect to customers should focus. More and more, no matter what you're selling, I think it is just as important to sell ideas as it is to sell this SKU or that one.

    Ideas, especially the aspirational kind, create connections that can endure. At Engaged MD, I think, that's the bottom line. And I think that retailers and suppliers ought to take the same approach - look at the products and services that you're selling, and think about their applications, not just their size and price and margins.

    Engagement and education. Pretty good tools for success, I think.

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

    KC's View:

    Published on: December 1, 2016

    by Kevin Coupe

    Netflix made a major change - and, I would say, significant improvement - to its service yesterday, announcing that customers now will be able to download series and films to their devices as well as stream them.

    In a note to subscribers yesterday, Eddy Wu, director of product innovation at Netflix, said, "While many members enjoy watching Netflix at home, we’ve often heard they also want to continue their 'Stranger Things' binge while on airplanes and other places where Internet is expensive or limited. Just click the download button on the details page for a film or TV series and you can watch it later without an internet connection ... The new feature is included in all plans and available for phones and tablets on Android and iOS."

    It also will save people money, since streaming content onto mobile devices tends to use up a lot of data.

    As someone who is a Netflix addict, I will tell you that as soon as I saw this message, I went online and updated my Netflix app. This is a huge step in making Netflix content more easily accessible. (I've been trying to find time to watch "Luke Cage" and the new seasons of "Longmire" and "Daredevil," and a long plane ride would be perfect. Can't watch "The Crown" there, though ... I'm saving that for a cold winter night when Mrs. Content Guy and I will pour ourselves a good glass of wine and settle in on the couch to stream it.)

    I think this is going to force Amazon and pretty much everybody else in the content business to improve accessibility, and all of this is good for viewers, plus a great lesson to every retailer and marketer. Products and services increasingly will be judged and chosen based on accessibility and relevance ... which isn't always the same thing as convenience, but can be. And these are the questions that business people need to be asking themselves and each other...

    How can we be more relevant to our customers? How can we be more accessible?

    And, of course, after they answer those questions today, they have to ask and answer the questions again tomorrow and the next day and the next day.

    It never ends. Netflix's example provides an Eye-Opener.
    KC's View:

    Published on: December 1, 2016

    Rumors abounded yesterday that Albertsons is in what Reuters called "advanced talks" to acquire upstate New York-based Price Chopper for about $1 billion.

    The Reuters story says that "a deal would underscore the wave of consolidation sweeping the U.S. grocery industry, as regional chains struggle to compete against online retailers such as, big box stores such as Wal-Mart Stores, and discount chains such as ALDI."

    The story goes on: "The sources, who asked not to be identified because the matter is confidential, cautioned that it is still possible for the deal negotiations to fall through. Albertsons and Price Chopper declined to comment.

    "Schenectady, New York-based Price Chopper operates roughly 130 stores across the U.S. Northeast, including New York, Connecticut and Massachusetts. Earlier this year, Scott Grimmett took over from Jerry Golub as chief executive of Golub Corp, the Golub family's company. He is the first non-family member to hold that position."

    Albertsons is controlled by private equity firm Cerberus Capital Management, and operates more than 2,200 stores around the country under a variety of banners.
    KC's View:
    I could be wrong about this, but I am convinced by my sources that these are just rumors, and that the suggestion that "advanced talks" are taking place is specious.

    I've consistently said in this space that I know from personal experience that there are few things that annoy Price Chopper's chairman, Neil Golub, than reports that the company is for sale. (I've been on the wrong end of those phone conversations. Trust me.) The company isn't commenting on these reports, and I think it is because sale negotiations are not taking place. I'll believe that Price Chopper is being sold only when Neil Golub tells me so.

    I think that it is a lot more likely that Price Chopper could be soliciting some investment dollars, and wouldn't necessarily be against the idea of taking them from the likes of Kroger or Albertsons. (And this kind of deal, of course, might include some sort of long-term option to acquire the company.) What Price Chopper is trying to do with its conversion to the Market 32 format is both ambitious and expensive, and seeking out some investment capital would seem to make sense.

    Published on: December 1, 2016

    Forbes reports that at Amazon Books, the company's Seattle-area bricks-and-mortar store, prices for people who are not Prime members now have to pay higher prices than Prime members.

    According to the story, " Amazon Prime members who visit the physical store are able to access the book prices; those who have yet to sign up for Prime are not."

    This is a change from when the store opened a year ago, when discounts were available to everybody who came in, and Amazon's strategy seemed to be focused on gaining learnings from people who prefer physical stores (that can then be applied to physical stores in other segments).

    "Regardless of Amazon’s initial strategy," the story says, "increasing its Prime membership is now clearly one of the bookstore’s functions. Prime, the $99 free-shipping membership that also includes access to video streaming among other services, is already making Amazon money: this July, Consumer Intelligence Research Partners estimated that more than half of Amazon’s customers were Prime members. A couple of weeks later, an analyst at Morningstar Inc. reported that Prime was seeing growth in Europe and Japan. It’s a focus for the company, and Amazon Books is a solid way to convince its more reluctant shoppers to join up."
    KC's View:
    This isn't wildly different from how many retailers offer lower prices to people who have loyalty cards ... with the difference being that most retailers hand out loyalty cards for free to anyone who wants one, and Amazon is charging $99 a year for Prime membership. In that way, Prime is a lot more like having a Costco membership.

    But again, there is a difference ... because Amazon's strategy is keyed to creating an ecosystem in which it is the first and often best choice for pretty much everything. It isn't just looking to sell stuff. And that is an enormous competitive advantage that other retailers have to consider. The competition has to figure out what the counter argument is ... and they have to make that argument fast and persuasively.

    Published on: December 1, 2016

    The New York Times reports that "Nestlé, the international food behemoth, announced Wednesday that it had developed a way of restructuring sugar, allowing the company to reduce the amount of sugar in its candy products."

    Dr. Stefan Catsicas, the company’s chief technology officer, tells the Times that "it is sugar, but it is assembled differently so it can disassemble easily in your mouth with less going into your gastrointestinal tract."

    The Times goes on:

    "Nestlé declined to fully explain the process, because the company is pursuing patents for it. But Dr. Catsicas compared a normal crystal of sugar to a shoe box, where the box is made of sugar and everything inside it is also made of sugar. The new sugar, he said, will be processed to have the same sugar exterior — though it may be a globe instead of a box — to dissolve in the mouth. Because less sugar is inside, less goes to the stomach.

    "Nestlé said the new sugar would be introduced in products starting in 2018, and that more details about it would be released next year. If the new sugar lives up to its billing, it would represent a milestone in the food business’s never-ending quest for more healthful ways to sweeten products."
    KC's View:

    Published on: December 1, 2016

    Motley Fool reports that Amazon plans to build on the success of its intelligent, voice-assistant-enabled smart speaker system, Echo/Alexa, by "working on a premium version of its Echo device" that "will feature a touchscreen measuring about seven inches, which tilts upwards." The idea is to make the device even more useful and accessible in a variety of different ways.

    The story says that "a premium version of Echo would add to a growing list of Amazon products sporting the company's voice assistant. Amazon's voice-controlled home devices include Echo, a portable Echo-like device called Tap, and a smaller version of Echo made for connecting to external speakers called Echo Dot. The same voice assistant included on these home devices has also recently debuted on Amazon's Fire tablets."

    The development of such a product also would raise the bar for competitors such as Google and Apple, which have to varying degrees developed voice-assistant-enabled smart speaker systems that compete with the Echo/Alexa system.
    KC's View:
    Sign me up for one. Right now. I am totally on board with this technology, and can't wait to see the next iteration.

    By the way, if you want to see where this all is headed for Amazon, just go watch any episode of "Star Trek: The Next Generation" and see how the crew interacts with the computer. Amazon hasn't figured out the replicators yet, nor the transporters and the holodeck. But I'm guessing that there is a room just down the hall from where Amazon is working on drones where there are a bunch of tech geniuses trying to figure this stuff out.

    Published on: December 1, 2016

    Internet Retailer reports that "a new look at web traffic patterns between Thanksgiving and Cyber Monday shows that total visits to the top 100 shopping sites increased 14% during the period compared with last year."

    If there is bad news in this number, the story says, it is for anyone competing with Amazon - because that's where the lion's share of the gains seemed to go.

    Here's how Internet Retailer frames the story:

    "A look at total visits to Internet Retailer’s list of Top 100 holiday-oriented shopping sites during the five-day period between Thanksgiving and Cyber Monday (the Monday after Thanksgiving), shows that consumers worldwide visited these sites a total of 1.41 billion times. That’s a 14.3% increase compared to 1.23 billion visits during the comparable five-day period last year.

    "However, comprised 57.6% of that growth, as the site experienced 101.6 million more visits from desktop and mobile users this year than last year. That’s nearly 10 times as much incremental traffic generated by the next highest gainer, Best Buy Co. Inc. (No. 12). Consumers visited 10.8 million more times from Thanksgiving to Cyber Monday this year versus last year."

    In addition, the story says that Amazon accounted "for more than 75% of all gains on mobile web traffic for the 100 holiday merchant sites" that it tracks.

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

    Published on: December 1, 2016

    CBS News reports that Wegmans has announced lower prices on "more than 40 products 'most meaningful to families week in and week out.' This includes a mix of small pack and Family Pack sizes ... The grocer said due to a growing customer demand for organics, the list of products is also heavy with fresh produce, including organic salad blends, organic bananas, and asparagus."

    • Fairway Markets said yesterday that it plans to open a new store in Brooklyn, New York, its second in the borough, next month.

    The announcement comes despite the retailer's recent financial difficulties - it had to close a store, went in and out of bankruptcy, and has been generally foundering since a 2013 IPO.

    The 40,000 square foot store is scheduled to open in the Georgetown neighborhood of Brooklyn.
    KC's View:

    Published on: December 1, 2016

    Grant Tinker died Monday. He was 90.

    If you don't know who Grant Tinker was, if you are of a certain age you almost certainly know many of the television programs for which he had some level of responsibility, either as a producer or the network executive who put them on the air.

    "The Mary Tyler Moore Show." "The Bob Newhart Show." "Hill Street Blues." "Lou Grant." "Cheers." "Rhoda." "Family Ties." "St. Elsewhere." "Miami Vice." "The Cosby Show."

    For many of these programs, he was the president of MTM Enterprises, which he founded with his then-wife, Mary Tyler Moore. For others, he was the chairman and CEO of NBC, which he turned around, restoring both its ratings and profits in the eighties.

    Tinker was known as a man of both elegant taste and a willingness to get out of the way of the creative types who wrote, directed and produced these shows; he was especially known as a guy who loved writers, and empowered them in a way that made them want to reach for the highest denominator. And he was well-known within the media industry for a dictum that, I think, could be applied to a wide variety of industries:

    “First be best, then be first.”
    KC's View:

    Published on: December 1, 2016

    Yesterday, MNB took note of a Bloomberg report that Kellogg Co. is pulling all its ads from the website Breitbart News, described as "the right-wing news organization whose former chairman Steve Bannon has been tapped as a top adviser to president-elect Donald Trump." The reason: concerns that the site espouses racist and anti-Semitic views (though Breitbart denies holding such views). Kellogg's said that its goal is to make sure that its ads do not appear on sites holding views that are not aligned with its values; to this point, a third-party company was responsible for placing the ads, and Kellogg's is now taking back some control of those placements.

    Breitbart responded to the move with a statement: "Kellogg’s decision to blacklist one of the largest conservative media outlets in America is economic censorship of mainstream conservative political discourse. That is as un-American as it gets.”

    I commented, in part:

    Gee, I can't imagine why a company looking to appeal to a broad spectrum of consumers would be concerned about a website that refers to pundit Bill Kristol as a "renegade Jew" because he did not support Donald Trump, or features stores with headlines such as “Birth Control Makes Women Unattractive and Crazy,” or “Hoist It High And Proud: The Confederate Flag Proclaims A Glorious Heritage,” or “There’s No Hiring Bias Against Women In Tech, They Just Suck At Interviews.”

    Look, this is going to get complicated for a lot of CPG and media companies. The CPG companies aren't in the business of offending potential and existing customers, and media companies have to figure out how to navigate some treacherous terrain.

    There was a piece in the New York Times the other day that looked at how different media outlets were dealing with the term "alt-right," which some describe as focused on economic nationalism, and others define as a term that "euphemizes and legitimizes the ideologies of racism, anti-Semitism, Islamophobia and white supremacy," as well as "hard-core misogyny."

    You can take either view you want. CPG companies have to make choices, and most almost always going to choose a path that they believe will be seen as inclusive ... because not being seen as inclusive by either customers or employees won't be good for business. It is that simple. By this standard, I think Kellogg's made absolutely the right decision. (It was not, no matter what anyone wants to say or think, a "right-or-left" decision. It was a business decision.)

    Got a number of responses.

    One MNB reader responded:

    It’s a shame that companies have to kow tow to a few.  They set up a fake system of activist and make it feel like it is a large population of people against Breitbart.  If anything Breitbart is the pulse of the countries values.  They find all the political sludge that out there and exposes it for the American people to see. The activist wouldn’t complain to Kellogg’s if they sponsored some Rapper that degrades women and our country.  Where is the FREEDOM of SPEECH?  IT’S A DAM SHAME!!

    As I said a couple of weeks ago in a slightly different context, if you think that anti-Trump activism is being ginned up by the media and is neither significant nor real, you are making the same mistake the media made in underestimating the kind of visceral discontent that got Trump elected.

    MNB reader Tom Herman wrote:

    This is a very slippery slope that companies seem to be going down.  If they want to pull all advertising from all political opinion sites like Brietbart, The Daily Kos, Huffington Post, Salon, Slate, BuzzFeed; I’m all for it.  When they only target conservative websites, it’s called totalitarianism. I think that these activities are wrong on both sides of the political spectrum.  Conservatives have more children than liberals, I don’t think it is wise for Kellogg to step into the political arena.  Peoples of good faith have very differing political views.  There is a time for politics and a time to get away from politics.  I don’t attend plays, concerts and sporting events to witness political statements, I go there to get away from them.  Do we want every Christian church in America to mount a boycott of every left leaning business in the US.  Of course not.  This needs to stop, it’s not healthy.

    I think that issue is not political views, but what some people would define as hate speech. We talked about this in a different context recently in a story about pro-diversity comments made by PepsiCo CEO Indra Nooyi, as well as social media firestorms created by executives at New Balance and GrubHub, and I commented:

    I do think that we're going to see some corporate executives go out of their way to make pro-diversity statements, to say that they find racism, misogyny, religious bigotry, homophobia or any other sort of intolerance to be totally unacceptable. I would not necessarily view such statements as being overtly political, nor would I go out of my way to identify such corporate cultures as being defiant of anyone or anything.

    That said, I think the vast majority of Americans are going to be supportive of people and companies that decry racism, misogyny, religious bigotry, homophobia or any other sort of intolerance. For example, I see very little downside to the marginalization of white supremacist groups that may try to take advantage of election results that I think ultimately had little to do with white supremacy.

    And another MNB reader chimed in:

    Its "values as a company" should be to collect consumer-dollars regardless of the reading-habits of the consumer.  Perhaps they should also question whether they want to be "aligned with the values" of the wackos who voted for Bernie Sanders.

    And you could cherry-pick headlines from the L. A. TIMES that are equally absurd and inflammatory.

    We had a similar discussion about the first point a couple of weeks ago - and I continue to disagree with the notion that a company's only responsibility is to collect money. There is such a thing as the intelligent loss of business - and sometimes that has to do with ethical positions that companies and executives feel they need to make.

    From another reader, a different view:

    You're right -- this is going to be an interesting cycle of action and reaction for marketers. The heavy-handed policies and thin-skinned reactions of the President-elect and his cohorts are taking "you're either with us or against us" to a radioactive level.

    It's interesting to note Breitbart's response ... Don't they know they're out of step with the President-elect, who suggested boycotting Hamilton after the VP-elect received a plea for respect and understanding, and with many of his followers, who launched a boycott effort against PepsiCo, after its CEO described the legitimate concerns of many employees following the election? Or are they actually calling out the President and his followers as un-American?

    Finally, I finished my commentary yesterday with this final note:

    Politics have come up a number of times recently on MNB, and I have received emails from some folks suggesting that this is a topic I should avoid. While I understand and appreciate the advice, I think these are entirely legitimate business subjects to discuss here on MNB ... it may not always be safe, but I think being safe is overrated. And if we don't talk about these issues as a community, we run the risk of ignoring or underestimating their import. I'm going to do my best to be fair, but I don't want to shy away from the subject when it seems appropriate to be engaged.

    To which MNB reader Jim Veregge responded:

    Kevin, don’t EVER shy away from making poignant comments on MNB, that’s what many of us depend upon on your website and we’d be disappointed if you didn’t “weigh in” on controversial issues (even though I don’t always agree with your stances).
    KC's View: