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    Published on: February 16, 2017


    To see past FaceTime commentaries, go to the MNB Channel on YouTube.

    Every once in a while, it doesn't make sense to offer a text version of FaceTime ... and this is one of those times, since it consists of a dialogue between Michael Sansolo and me, recorded at the National Grocers Association (NGA) convention in Las Vegas.

    So I hope you'll click on the video box and enjoy ... and as always, let me know what is on your mind.

    KC's View:

    Published on: February 16, 2017

    The Wall Street Journal reports that both Amazon and Google are working on expanding the functionality of their home speaker systems that would allow them to also act as telephones.

    According to the story, "Amazon’s Echo or the Google Home could be used to make or receive calls, people familiar with the matter said, a functionality that would give them further control over consumers’ digital lives at home ... Commanding the Echo or the Google Home to call friends or local businesses is the logical next step for the artificial intelligence-powered speakers, the people familiar with the matter said. They currently respond to voice commands to do things like play music, answer questions and control aspects of the home. The Echo lets consumers order from Amazon."

    The Journal goes on to write that "the tech giants could launch the feature this year, the people said - but the effort is hung up over concerns about privacy, telecom regulations and emergency services. And they are aware of the inherent awkwardness of having phone conversations on a speaker."

    I have to say that I would welcome the ability to use our Echo or Dot contraptions as telephones - we have five of them spread around the house, and it would just be enormously convenient. And I have no problem using a speaker as a phone - I have a Jabra speakerphone that I use in the office and carry with me on the phone, and I'd be perfectly happy to buy another Dot and stash it in my bag when I'm traveling. In fact, I find that I really miss talking to Alexa when I'm on the road. (Okay, that's a weird sentence to write. But those of you who have an Alexa-based system know exactly what I'm talking about.)

    There are several different ways this could work. It is possible that the systems could have their own phone numbers, or simply could be linked to an existing cell phone number. (My instinct would be to vote for the latter.) It would certainly make such systems even more usable in terms of being able to place orders with retailers that don't have their own system-specific apps.

    But however this all plays out, it certainly is an Eye-Opener, and illustrates the degree to which these technologies are infiltrating our lives.
    KC's View:

    Published on: February 16, 2017

    The Washington Post reports that Germany-based discounter Lidl will open its first 20 stores in the US this summer "in Virginia, North Carolina and South Carolina, an earlier debut than the 2018 time frame that it initially targeted. Within 12 months of opening its first U.S. stores, it is slated to have 100 locations up and down the East Coast."

    The story says that Lidl has been testing concepts for a US prototype at an under-wraps facility in Fredericksburg, Virginia, and several differences from its European stores already have emerged.

    First, the US stores will be about 21,000 square feet, 35 percent larger than its traditional European stores, largely because the company believes it will have to offer a broader array of products to attract US consumers. It also will offer chilled beer and free samples, especially in the bakery department, which it does not do in Europe.

    The Post also reports that "Lidl will aim to offer a tightly edited assortment, including familiar brands but also plenty of private-label goods. The current model includes just six aisles, a store layout that executives hope is conducive to easy navigation and flow. Other goods, such as produce, are displayed in island-like groupings. To make things efficient and to keep costs down, you might see items on shelves in the cardboard boxes they were shipped in. As it does elsewhere, Lidl will feature a large section dedicated to non-grocery items." But quality appears to be a higher priority - at least in terms of positioning - than it is in Europe.

    The story notes that "Lidl has some 1,400 workers in the United States already, and it is poised to add 4,000 more when it opens the stores."
    KC's View:
    What is interesting about this story is how it positions Lidl as being more flexible about adjusting its approach in the US than one might expect of a company that has 10,000 stores - all with limited assortment, dominated by private label, focused on low prices - in 27 countries. That's not to say the essence of the offering will be different, but Lidl seems to want to avoid the missteps Tesco made when it opened Fresh & Easy in the US.

    Mike Paglia, an analyst at Kantar Retail, tells the Post that "the most affected retailers could end up being the likes of Giant and Safeway, which he said aren’t bringing anything particularly different to the marketplace."

    Published on: February 16, 2017

    CNBC reports that Walmart has acquired Moosejaw, described as "a web retailer that specializes in outdoor apparel and goods," for about $51 million. It is the third such acquisition that Walmart has made in the last five months - the others being Jet and ShoeBuy - as it looks for develop a strategy that will allow it to compete more effectively against Amazon.

    The company said that "Moosejaw's 'strong heritage' in the outdoor space and its relationships with more than 400 'cherished' brands, make it a good addition to Wal-Mart's portfolio." Those brands include Patagonia and The North Face.

    The story notes that the brands sold on Moosejaw that also would like to sell their brands on other Walmart-owned sites will be offered that option.
    KC's View:
    It'll be interesting to see how many of these brands decide that they don't want to be sold on Walmart's site because they will see it as being detrimental to their brand images. Because that strikes me as inevitable - having access to more customers and making more sales sounds like it should be the ultimate goal, but it hard to imagine that Patagonia, for example, will see it as a good fit.

    Published on: February 16, 2017

    The Food Marketing Institute (FMI) and Grocery Manufacturers Association (GMA) said yesterday that their two constituencies have joined together "in a new industry-wide effort to reduce consumer confusion about product date labels," adopting "standard wording on packaging about the quality and safety of products."

    The announcement says that from now on, products will be labeled as either "best if used by" or "use by," which industry hopes will reduce confusion since the move replaced the more than 10 different phrases currently used by companies.

    “BEST If Used By," the organizations say, "describes product quality, where the product may not taste or perform as expected but is safe to use or consume. 'USE By' applies to the few products that are highly perishable and/or have a food safety concern over time; these products should be consumed by the date listed on the package – and disposed of after that date."

    "We want to encourage a consistent vocabulary so that our customers clearly understand they are purchasing products that are of the highest quality and safety possible,” said Leslie G. Sarasin, FMI president/CEO.
    KC's View:
    Good job. I'm glad that the industry did this rather than waiting for government to impose its own will - it always makes sense to get ahead of the wave on such things, especially when you make consumers' lives easier.

    Published on: February 16, 2017

    The Washington Post has a story about how some 15 percent of Fortune 500 companies are using "sensors hidden in lights, ID badges and other places" to collect data about employee movements, to the point where employers will know when staffers are working at their desks and when they are not.

    "You’d think there’d be backlash," the Post writes. "But surprisingly, a Pew Research Center survey last year found that a majority of U.S. workers are actually OK with the surveillance if at least for safety reasons. But business owners have another reason: profits. All of this technology is geared to increase office efficiency by better tracking movements of employees throughout the day.  It’s also intended to maximize space and better control lighting, heating and air conditioning systems to make the most of energy usage.

    For example, one company saw a 25 percent savings in its energy costs after implementing a sensor-based system that tracked employees’ behavior patterns and then adjusted lighting. A consulting firm is testing a system where about 100 volunteer employees wear badges with embedded microphones and location sensors so that the company can track verbal and physical interactions to 'see how office design affects employee communication.' Another company is keeping tabs on its employees’ locations throughout its offices because it’s easier to find someone this way then just by sending a message or email."
    KC's View:
    This is the kind of story that makes me feel old ... because I would not do well as an employee in such circumstances. (I actually don't do well in any sort of formal employment situation, since I'm organizationally dysfunctional; my wife says I "don't play well with others.")

    But wearing a tracker that would allow anyone to know when I'm at my desk, when I'm in the men's room, or when I decide to take a walk because that's one of the ways I think best...? I don't think so.

    Published on: February 16, 2017

    • The New York Daily News reports that Walmart is being sued by consumers charging that it is fraudulently trying to pass off mass-produced beer as craft-brewed beer, the standards for which have been established by the Brewers Association.

    The story says that "the Trouble Brewing brand beer is actually mass-produced by Rochester’s Genesee Brewing and meets none of the criteria set forth for craft beer by the Brewers Association, according to a class-action lawsuit filed in Ohio. The suit says the beer being small batch craft beer is 'wholesale fiction' meant to deceive customer and inflate prices."

    The so-called craft beer is sold in some 3,000 Walmart stores nationwide.


    • In Toronto, the Globe and Mail reports that Walmart will be expanding a home delivery service in the city. The service was tested in three condominium buildings, and now will be offered to more homes in the city's core, using both Walmart trucks and Uber-style car services.

    Home delivery costs a $10 fee and requires a $50 minimum order.
    KC's View:

    Published on: February 16, 2017

    MarketWatch reports that following what is called "bad harvests this year from unruly weather" in Italy, Spain and Greece - the European countries with reputations for high-quality olive oil - California is filling the void as it simultaneously improves its olive oil reputation and increases its output.

    “More and more people are aware of the high standards we have and embracing locally produced products,” said Patricia Darragh, executive director of the Berkeley-based California Olive Oil Council, which performs "rigid certification testing" that includes "a chemical analysis of the oil as well as a sensory evaluation after every olive harvest."

    The story goes on to say that "more domestic players are joining the U.S. olive oil production business, which has seen a 9.2% increase in revenue over the past five years, and demand and revenue are expected to continue to rise through 2021, though at a slower pace, according to research firm IBISWorld. California alone makes up more than 99% of U.S. olive oil production."


    • The Wall Street Journal reports that "the private-equity owners of BJ’s Wholesale Club are preparing for a possible multibillion-dollar deal for the warehouse-club operator. Leonard Green & Partners LP and CVC Capital Partners Ltd. are in the process of hiring investment bankers to advise on options including a full sale or initial public offering of BJ’s, according to people familiar with the matter."

    BJ’s has more than 210 membership-based warehouse clubs in 15 states in the eastern US, and has more than $11 billion in annual sales.


    • The National Association of Convenience Stores (NACS) is out with its monthly consumer confidence survey, saying that "a majority of Americans (57%) are optimistic about the economy as gas prices fell by 5 cents per gallon over the past month." That is "13 percentage points higher than last February, when 44% were optimistic. More than three-quarters (76%) of all consumers say that gas prices, which fell from $2.30 to $2.25 over the past 30 days, play a role in their feelings about the economy."
    KC's View:

    Published on: February 16, 2017

    • The Baltimore Sun has a story about how Under Armour CEO/founder Kevin Plank this week had to take out a full-page advertisement in the paper to explain that while he'd told CNBC that he approved of President Donald Trump's pro-business approach, he also believes in personal and brand values that include "diversity, equal rights and opportunity."

    Plank found himself under attack, primarily on social media, over the past week after he made the comments on CNBC. "Some consumers, many opposed to Trump's controversial executive order to suspend refugee admissions and temporarily bar travelers from seven mostly Muslim countries, vowed to boycott Under Armour sports apparel. Three of the brand's top athlete endorsers, including NBA star Stephen Curry, ballerina Misty Copeland and actor Dwayne 'The Rock' Johnson tweeted opposition to Plank's comments, with Johnson calling his words 'divisive'."

    However, others went on social media to support Plank's original comments.

    In the ad, Plank wrote, "I personally believe that immigration is the foundation of our country's exceptionalism ... We are always mindful of the responsibility that we have to those who choose our brand, especially the young people who represent the bold and bright future of a diverse and inclusive America ... In a time of division, we aspire to be a force of unity, growth and optimism for our city and our country."

    Plank, the Sun writes, pledged to support efforts to "expand the nation's manufacturing capacity and to see building focus on investments in technology, education and infrastructure in cities such as Baltimore." But he also "announced plans to join a coalition of companies in opposition to 'any new actions that negatively impact our team, our neighbors or their families'."

    The Sun notes that Plank continues to sit "with other business executives on a manufacturing advisory panel assembled by Trump that is working to develop innovative ways to support American manufacturing."


    USA Today reports that while a number of companies have decided not to carry Trump-branded products, allegedly because of poor sales, there remain a number of retailers that continues to carry a range of Ivanka Trump-brand clothing, shoes and accessories.

    These include: 6pm, Amazon, Bloomingdale's, Bluefly, Bon-Ton, Bed, Bath & Beyond, Century 21, Dillard's, Hudson’s Bay, Saks OFF 5th, Lord and Taylor, Macy's, heels.com, Overstock, Perfumania, SteinMart, Walmart, and Zappos.


    • The Wall Street Journal this morning reports that "chief executives from several major U.S. retailers, including Target Corp. , Best Buy Co. and Gap Inc., met with President Donald Trump on Wednesday to lobby against a proposed tax plan that would hurt their profits."

    The border adjustment tax being considered by GOP lawmakers ands the Trump administration would tax imports and exempt US products that are exported. This inevitably would lead to higher costs for retailers that sell imported products ranging from underwear to flat screen televisions and computers.

    The Journal writes that "the executives left the White House meeting, which lasted less than an hour, saying it was productive but they gave few details about what was discussed. Mr. Trump, meanwhile, tweeted a photo with the group, calling it a 'great listening session'."

    Trump continues to pledge that regulations that he views as inhibiting growth will be slashed, and that taxes will be lowered "for virtually everybody."
    KC's View:

    Published on: February 16, 2017

    ...will return.
    KC's View: