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    Published on: February 27, 2017

    by Kevin Coupe

    No matter how high on the mountain you happen to be, or how long you've been there, this story ought to open your eyes to what is possible.

    Re/code reports that an unrelenting five-year decline in sales and relevance means that "the BlackBerry smartphone platform fell to 0.0 percent market share in the fourth quarter of 2016, according to research firm Gartner."

    The story notes that BlackBerry "was a smartphone pioneer that got leapfrogged in hardware — and more importantly, software — capability and design by Apple and the iPhone. Then Google Android swallowed the rest of the non-iPhone market with a capable, cheap operating system."

    And now, it is virtually dead. One can argue that the folks at BlackBerry didn't see the importance of continued innovation, didn't pay attention to the changing marketplace, or got complacent about the leadership position the company enjoyed.

    There was a time when the word "Crackberry" was coined to illustrate how addicted to their BlackBerry devices. Well, it ends up that it indeed is possible to break that addiction ... and the company that came up with the cure was BlackBerry.

    Eye-Opener. to say the least.
    KC's View:

    Published on: February 27, 2017

    CNBC reports that Walmart "is running a new price-comparison test in at least 1,200 U.S. stores and squeezing packaged goods suppliers in a bid to close a pricing gap with German-based discount grocery chain Aldi and other U.S. rivals like Kroger."

    According to the story, Walmart "launched the price test across 11 Midwest and Southeastern states such as Iowa, Illinois and Florida, focusing on price competition in the grocery business that accounts for 56 percent of the company's revenue ... The competition at these stores is intense, with both competitors selling a dozen large eggs for less than a dollar. A gallon of milk at some stores was priced at around $1."

    The goal, CNBC writes, is "finding the right price point across a range of products that will attract more shoppers, and then adjusting prices as needed."

    The CNBC also provides some context: "The big box retailer ... held meetings last week in Bentonville, Arkansas with food and consumer products vendors, including Procter & Gamble, Unilever, Conagra Brands, and demanded they reduce the cost they charge the retailer by 15 percent, sources said. Wal-Mart also said it expects suppliers to help the company beat rivals on head-to-head pricing 80 percent of the time, these vendor sources said. The wide-ranging meeting with suppliers - where Wal-Mart discussed other topics - was also attended by Johnson & Johnson and Kraft Heinz, among others."
    KC's View:
    Walmart essentially has to avoid its UK problem.

    The Wall Street Journal reported over the weekend that Walmart-owned Asda Group in the UK has been dealing with a problem that it generally has been unused to over the years - the perception that its prices are too high. That's largely been because discounters such as Aldi and Lidl have so effectively undercut its low-price image, leaving Asda to search for a solution.

    CEO Sean Clarke, the story says, "has been given the go-ahead to compete more on price with discount retailers, according to people familiar with those plans. Last month, Asda halved prices on popular items such as Napolina canned tomatoes and Pot Noodle soups." Beyond that, Asda is endeavoring to bring in US products not generally available in the UK, as well as "working on more quickly identifying product shortages and putting more staff on shop floors."

    But as we've been saying here for a while, US retailers have to use the UK as an object lesson for what can happen when you lose - or just give up through complacency - your competitive edge and differential advantages.

    Published on: February 27, 2017

    The Des Moines Register reports that when Hy-Vee previewed a new 36,000 square foot, $10 million store in the downtown area for the media last week, it showed off a store with "concrete floors, exposed duct work in the ceiling; food stations serving sushi, Italian piada sandwiches and imported cheeses; a juice and smoothie counter; grocery aisles offering exotic olive oil, chips and Cheerios; and a stand to fill growlers and quart cans with craft beers on the spot," all designed to make the unit "stand apart from other Hy-Vees."

    The preview also featured an "unannounced appearance from actor, producer and health and fitness devotee Mark Walhberg, who came to promote his Performance Inspired Nutrition brand of fitness supplements. Hy-Vee is the exclusive Midwestern region retailer for the product, which goes on sale March 1 in all stores."

    The story says that "Hy-Vee is using this urban downtown store as a pilot that it hopes to replicate in other cities such as Lincoln, Omaha and Kansas City."
    KC's View:
    Well, that's pretty cool.

    What Hy-Vee is doing in Des Moines is critical, and important for every retailer - find new opportunities, change the game, and challenge company orthodoxies whenever and wherever possible. I'm looking forward to my next trip to Des Moines, even if Mark Wahlberg won't be sampling the product in aisle seven.

    Published on: February 27, 2017

    USA Today has a story about how "a trip to the mall in 2018 might look very different than one right now," largely because of the mall tenants that have either bitten the dust or are dealing with major cuts in their store fleets. "Some chains such as The Limited and Sports Authority have already gone to the big mall in the sky, while major anchor chains Sears and Macy's have laid out plans to close significant numbers of stores," the story says.

    Some examples:

    • "Sears and K-mart, both owned by Sears Holdings, have been on a slow, sad death march, closing stores steadily in the hopes that somehow less will eventually equal more. In January, plans were made public to close another 150 stores -108 K-mart locations and 42 Sears stores ... Things have become so dire for Sears Holdings that selling off inventory and store fixtures to generate cash makes more sense than trying to fix stores that are relatively close to break-even."

    • "After filing for Chapter 11 bankruptcy protection in May, Aéropostale received $160 million in debtor-in-possession financing provided by Crystal Financial, which, "combined with operating cash flow, will allow Aéropostale to meet its go-forward financial commitments," according to a press release. The company has already closed 113 locations in the United States, as well as all 41 stores in Canada. That is likely only the tip of the iceberg for the chain, whose survival is very much in doubt."
    KC's View:
    And the list goes on and on. I try to avoid malls for the most part, but when I go, I have to admit that I look around at many of the stores and wonder how they stay in business.

    Published on: February 27, 2017

    The New York Times over the weekend had a story that read, in part, "A decade after the 'Save the Rainforest' movement forced changes that dramatically slowed deforestation across the Amazon basin, activity is roaring back in some of the biggest expanses of forests in the world. That resurgence, driven by the world’s growing appetite for soy and other agricultural crops, is raising the specter of a backward slide in efforts to preserve biodiversity and fight climate change."

    The piece looks at both the progress that some agricultural companies have made as well as the potential backsliding that could have an enormous impact on the environment; it also has the potential of creating yet another political issue with which food industry companies may have to grapple.

    Fascinating story, and you can read it here.
    KC's View:

    Published on: February 27, 2017

    • The Virginian-Pilot reports that European discount grocer Lidl "will start hiring 800 people across Virginia this week," for locations in 12 Virginia markets.

    Lidl has said it will open its first US stores this summer.

    • The Associated Press reports that "Wendy's says it plans to install self-ordering kiosks at about 1,000 locations by the end of the year," with current plans to install three kiosks per location.

    Company CIO David Trimm tells the AP that "the kiosks are intended to appeal to younger customers and reduce labor costs," as well as "allow customers of the fast food giant to circumvent long lines during peak dining hours while increasing kitchen production."

    Reuters reports that French produce company Bonduelle has reached an agreement to acquire Ready Pac Foods, the privately held California company that produces fresh, prepared salad mixes. Terms of the deal were not disclosed.

    According to the story, "The Ready Pac deal would make the United States the largest market for the company, which is headquartered in Villeneuve-d'Ascq, France."
    KC's View:

    Published on: February 27, 2017

    • The Hershey Co. has announced that it has hired Todd Tillemans, most recently the president of customer development at Unilever, to be its new US president, overseeing its confection and snacking portfolios.

    At the same time, Steven Schiller, who has been running the company's China and Asia businesses, has been named president, international, taking on the additional responsibilities for the Americas region, India, Europe, the Middle East and Africa.

    And Terry O'Day, Hershey's chief supply chain officer, will become a senior vice president and chief product supply and technology officer.
    KC's View:

    Published on: February 27, 2017

    Stories from both sides of the political divide this weekend looked at the activists who are making political points to the business community and using the retail business to make political points. Both are worth reading...

    The New York Times had a story about Shannon Coulter who founded an organization called Grab Your Wallet, which has focused on encouraging boycotts of companies that do business with President Donald Trump's companies or those controlled by his family members as a way of exercising political pressure on an administration with which she has profound political disagreements.

    You can read that story here.

    At the same time, the Washington Post had a piece about Mary Carson, a Virginia woman who is one of a number who have decided to take action against retailers - such as Nordstrom and Neiman Marcus - that have done things like drop Trump-related brands like Ivanka Trump's jewelry line.

    "It’s a shame, she told a Nordstrom store manager, "you couldn’t keep your mouths shut about our president."

    That story can be read here.
    KC's View:
    These folks are out there, both sides are well-intentioned, and they have the potential of having an impact on any business that deals with customers. Retailers are being in the position where they have to make decisions, some of those decisions are going to be seen as political (even if they are not), and then there may be hell to pay. To someone.

    Published on: February 27, 2017

    Bill Paxton, who may never have achieved real movie stardom but nonetheless left his mark on a number of movies with deft performances that ran the gamut from comedy to serious drama, passed away this weekend at age 61, reportedly from complications after surgery.

    Just some of the movies in which he acted in were Terminator, True Lies, Aliens, Titanic (all for writer/director James Cameron), Apollo 13, and Twister, as well as the HBO series, Big Love.
    KC's View:

    Published on: February 27, 2017

    Got the following email from MNB reader Joe DiVincenzo:

    IMHO, Brick and Mortar aren’t so much being beaten by E-Commerce, they are serving their customers up to them, even when they have a differentiated advantage.  I can’t tell you how many times I’ve purchased product on Amazon, not because it is easier and I don’t have to leave my house, but often I simply no longer can find the items I want anywhere locally  among a wide range of products that I used to shop in town for.

    This past weekend was different.  I needed a new sport coat, and to me, that’s the type of item you want to see in person, look over the selection, try on several styles, get advice on fitting, and potentially have alterations made right in the store.

    So, off I drove to the remaining Macy’s in Rochester, 20 miles and a half hour from my home.  To my surprise, there was a friendly knowledgeable sales person who asked me questions about what I wanted, showed me several styles, helped me try them on and in about 10 minutes had picked out a suitable (no pun intended) sport coat that fit right off the rack that I could bring home with me.   Of course, the actual price was less than half of the marked price which was to be expected.  All good, there still is a place for Brick and Mortar… or so I thought till I went to the checkout.

    As I checked out, the clerk told me they were having a pre-sale promotion where I could get an additional 25% off.  Sounds good, ring me up!  Sounds good till he explained they would swipe my credit card but not process it, store my sport coat in the back room for 3 days, then I could return to the store and pick it up.  I told him that’s ridiculous.   I’m buying the coat, they are taking it off the floor and storing it, they need additional labor to retrieve it for me, and I have to drive an additional 40 miles round trip to get a Jacket that’s just sitting there.   I asked why in the world would they want to inconvenience a customer so much when I could just as easily take the model number and size, go to Amazon and have it delivered right to me.   Surely I thought the clerk or a manager could  over-ride this and just let me take the coat home.  The response was this promotion comes from Corporate, they are not empowered to change it and I could take the coat with me and lose the 25% discount, or drive the hour round trip in a few days if I didn’t want to overpay.

    I have no clue what Marketing Genius at Macy’s came up with this one, but if their goal is to make Customers even more inconvenienced than they already are, and not want to shop there anymore they’ve succeeded.  With so many other options available, they just lost another customer and hastened their final demise.

    Mind Blowing!

    Regarding Walmart's reinvigorated competition online against Amazon, MNB reader Bob Vereen wrote:

    I recently checked both Amazon and Walmart for prices on several items, and found Walmart to have the lower prices.   It appears this retail giant is making headway in its e-commerce efforts.

    On another subject, MNB reader Jeff Gartner wrote:

    Kevin, if Sears were serious about its new DieHard Auto Center, it would be better branded without the "Driven by Sears" add-on to its name. If you're not a Sears shopper (and there's an increasing large number of people who belong to that category), you probably don't know DieHard is a Sears-owned brand. Why give it that baggage of the Sears name? 

    Of course if it fails, then it can change the name to Diehard Auto Center CRASHED by Sears!"

    And from MNB reader Tom Redwine, reflecting on my comment about what on Star Trek was called "infinite diversity in infinite combinations," wrote:

    Loved the "Star Trek" IDIC reference. As far as intelligent life on other planets, I certainly hope so, because (as Monty Python would say) "there's bugger-all down here!"

    It is a successful MNB, I think, when we can get both Star Trek and Monty Python into the copy.
    KC's View:

    Published on: February 27, 2017

    The 2017 Academy Awards were handed out last night...

    Best Picture - Moonlight
    Best Actor - Casey Affleck, Manchester By The Sea
    Best Actress - Emma Stone, La La Land
    Best Supporting Actor - Mahershala Ali, Moonlight
    Best Supporting Actress - Viola Davis, Fences
    Best Director - Damien Chazelle, La La Land
    Best Original Screenplay - Manchester By The Sea
    Best Adapted Screenplay - Moonlight
    Best Documentary Feature - O.J.: Made in America
    Best Animated Feature - Zootopia
    Best Foreign Language Film - The Salesman
    KC's View:
    It probably was the weirdest Oscars ceremony I've ever seen, with Warren Beatty capping the night when he was handed the wrong envelope and ended up mistakenly announcing that La La Land had won Best Picture ... only to have the producers announce that, in fact, Moonlight had won. (Not to be unkind, but perhaps Beatty was distracted by how much plastic surgery his co-presenter, Faye Dunaway, has had ...)

    It also is worth noting that both Amazon and Netflix produced movies that earned Oscars last night.

    Amazon could take credit for Manchester By The Sea, which got both best actor and best original screenplay nods, and best foreign film winner The Salesman. And Netflix was involved with The White Helmets, which won best documentary short-subject.

    What would Jack Warner think?