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    Published on: May 25, 2017

    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 FaceTime with the Content Guy.

    I like to think of myself as not being terribly obsessed with my age. I'm 62, and I'm okay with that - it beats the alternative, and it wouldn't matter if I weren't content. Now, I recognize that I'm reasonably lucky - I have most of my hair (and have no intention of dying it), and remain reasonably ambulatory (while I can still jog four miles, I'm even slower than I used to be, and everything hurts just a little bit more). I'd like to drop some weight, but in general, like Popeye, I am who I am.

    I was thinking about this the other day when I read Michael Sansolo's column about the importance of not engaging in generalizations about Millennials, Gen X, Gen Y, or even Baby Boomers. We may belong to a specific generation, but there are a lot of differences among the members of each of those groups, and marketers make a serious mistake when they paint with too broad a brush.

    To be honest, I was thinking about age and generalizations even before I read Michael's column. I was thinking about those subjects last weekend when I was in Atlanta. I was there with a friend, my 28-year-old son and one of his friends, to attend the Atlanta Braves-Washington Nationals game at Sun Trust Park - the new Atlanta stadium that was the only major league ballpark I hadn't been to. (I'll write more about the experience in Friday's "OffBeat.")

    We were sitting in our seats along the third base line, baking in the hot afternoon sun. I was wearing a hat and sunscreen, but it was still pretty oppressive. Fairly early in the game, the very nice young woman who was the usher came down to where I was sitting and said, "Are you having a good time?"

    I told her I was. And she said, "That's great. If it gets too hot for you and you'd like to move up to a seat in the shade, it's no problem. We have plenty of seats."

    I thanked her and didn't think much about it. Until she walked down a couple of rows and said the same thing to another guy.

    A guy who must've been a World War II veteran.

    That's when I realized - she was making the offer to all the old folks.

    I didn't say anything because she was just trying to be nice, but I was not happy.

    My son said that I should just be happy that she didn't think I was a veteran of the War of 1812. (Funny guy, my son.)

    It occurred to me that this is what can happen when people and businesses make generalizations - even when they're trying to do the right thing, they run the risk of offending the customer. It speaks volumes about why businesses need to know as much as possible about their customers, and be as targeted as possible in speaking to them. Specificity isn't just a virtue, it is a necessity.

    I've gotten over it now. For the most part. But if the next time I'm in a supermarket someone comes up to me and offers to help me to the car with my groceries ... well, that may just be my breaking point.

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

    KC's View:

    Published on: May 25, 2017

    by Kevin Coupe

    Interesting piece this morning in the Wall Street Journal about Millard “Mickey” Drexler, chairman/CEO of J. Crew Group, who is endeavoring to keep his company out of bankruptcy after 10 quarters of same-store sales declines that are related to a general sense that its stores were out of synch fashion-wise and too high priced and "elitist" for its traditional core customers.

    The Drexler quote that grabbed my attention has to do with the fact that he concedes that "he missed what might be the biggest trend of all - how quickly technology would change the retail industry."

    "“I’ve never seen the speed of change as it is today,” Drexler tells the Journal. “If I could go back 10 years, I might have done some things earlier.”

    Drexler is a guy who, as recently as 2010, argued that technology would not have a major impact on his company, that "creative product" was key to a sustainable brand.

    But now he concedes that "you cannot be successful without being obsessed with the product, obsessed with social media, and obsessed with digital. Retail is now about all that.”

    Times change.

    The Journal frames the issue this way: "Many visionaries focus on doing what they do best, even when the ground shifts beneath them. From newspapers to television, successful companies have been upended by disruptive technologies. Facebook Inc. is now the world’s largest publisher; Netflix Inc. is worth twice as much as CBS Corp."

    And Clayton Christensen, a Harvard Business School professor who specializes in "the theory of disruptive innovation," puts it in context: “The incumbent leaders never see it coming."

    Which all sort of reminded me of what Warren Buffett said recently about the reason he never bought Amazon shares: "Stupidity."

    An Eye-Opener for every business leader, I think ...
    KC's View:

    Published on: May 25, 2017

    CNN reports that Walmart will ban from its stores a Bentonville, Arkansas, customer who was caught on video - and exposed on social media - as "hurling racial abuse on other customers."

    Apparently what precipitated the event was when Ea Hicks, a Walmart customer, politely asked another to move a bit so she could reach for some medicine; the latter responded by telling her to "go back to Mexico," and then using racial epithets when talking to other customers, including one African American who defended Hicks.

    Walmart said it is working to identify the offensive customer so that she can be asked never to return.
    KC's View:
    Several realities have collided here.

    One reality is that, unfortunately, there are a lot of people out there who are either bigoted or emotionally disturbed - or both. For whatever reason, people seem emboldened lately to act on their worst instincts, which creates situations like these. (We even see reporters getting beaten up by political candidates, as happened yesterday in Montana.)

    Another reality is that, inevitably, such situations are going to be caught on camera and publicized on social media. This creates issues for retailers like Walmart, which have to act quickly to minimize any possibility that they will be linked to the offensive behavior.

    Though I have to say that on balance, this is a good thing, since one can only hope that when bigotry and hate are caught on camera and exposed to the light, many of the offenders will feel some sense of shame. They all won't, because some people are absolutely shameless. But some will, and maybe we'll be a better and more tolerant culture for the experience.

    Published on: May 25, 2017

    Mark Tritton, EVP/Chief Merchandising Officer at Target, has sent the following email to the company's vendors:

    To our partners –

    I am writing to share an update on our Merchandising Transformation efforts, including how we’ll engage you as we move to a new operating model on July 2.

    At Target, we see enormous potential in front of us and we’re investing to better position ourselves to compete and grow. In Merchandising, specifically, a new team structure, clearer roles and accountabilities, and advanced data, tools and capabilities are just some of the changes we’re making to move with greater speed and agility. As you’re all keenly aware, we’re seeing a seismic shift in the retail landscape and these changes will help us work more effectively with you.

    So, if it feels like we’re moving quickly, we are – but I hope you understand that it’s for all of the right reasons.

    Yesterday, we shared staffing for our future buying, planning, inventory management, pricing and promotion, and space and presentation (formerly MPD) functions. If you work with another area of business, such as Target Sourcing Services or Product Design and Development, there are no changes and we are sharing this information as an FYI only.

    Over the coming month, team members in our new functions will be transitioning responsibilities, joining new teams and learning new ways of working. This is a huge amount of change, so know that we’ll be sharing more information as we’re ready and asking for your patience and help as we fine-tune our approach. In the meantime, thank you for continuing to work with your current business partners.

    Here’s when you will receive additional information:

    • Week of June 5  – You’ll receive information to help you understand our new roles and interactions as it relates to specific business activities.

    • By June 23 – You’ll be contacted by your current Target business leader to discuss any changes in how we will interact with you as a business partner, including new contacts, if applicable.

    • July 2 – New Merchandising operating model including changes to roles and responsibilities are effective.

    • Throughout July – Teams will reach out to you in their new roles and format as needed starting in July.

    Our new operating model will help us break new ground and carve out a meaningful and differentiated path for growth. Thank you for your support and continued partnership.

    KC's View:
    It'll take some time to figure out whether this all will be meaningful to Target's value proposition and brand equity.

    But ... I am sort of interested in the phrase, "if it feels like we’re moving quickly, we are." Because this doesn't feel fast or nimble to me. It sort of feels like a PowerPoint presentation turned into a memo.

    Maybe I'm wrong. Maybe this is the beginning of the kind of fundamental disruption of traditional retail constructs that Target needs to engage in if it is going to compete with Amazon and Walmart/Jet and Kroger.


    Published on: May 25, 2017

    Fortune reports that Campbell Soup is investing $10 million in Chef'd, described as a meal kit service that, while it competes with services like Blue Apron, differentiates itself by not requiring subscriptions.

    According to the story, the investment and a strategic partnership with Chef'd will give Campbell access to the consumer migration to an e-commerce and digital service that typifies broader consumer shifts that are taking place.

    Fortune writes that "Campbell is estimating that between 2016 and 2021, e-commerce sales of food and beverage will reach $66 billion, a compound annual growth rate of 38%. With sales for many Big Food makers barely budging, it makes sense for Campbell to invest in a sub-segment that's seeing strong consumer interest."

    Campbell will become the largest strategic investor in Chef'd. In addition, because Chef'd has partnered both with professional chefs and CPG companies in crafting its meal kits, "future kits could include any of Campbell's U.S. brands. A ;dinner in a bowl' kit might feature a recipe with Swanson broth, for example."
    KC's View:
    Smart move, and one that interestingly enough places Campbell Soup as competing at some level with retailers that are its customers.

    Traditional boundaries fall, as companies look to disrupt their own business models and define new opportunities.

    Published on: May 25, 2017

    The Wall Street Journal has a story about how Schick owner Edgewell Personal Care "is mounting a direct challenge to the Procter & Gamble Co. unit with an online subscription service that sells blades that fit on a Gillette handle but cost less" - in fact, as much as a couple of bucks less for a package of refills.

    The move brings even more disruption to the traditional razor business, which has been challenged by subscription businesses such as Dollar Shave Club and Harry's, which forced Gillette to create its own version as a way of protecting its flank.

    The Journal writes that "Edgewell said it would target what it considers a weak point of Dollar Shave Club: an inflexible delivery plan that leaves many men with a stockpile of blades. P&G said its research found the same annoyance, which is why the company this month overhauled its online service with a system called 'Gillette on Demand' that allows customers to order razors via text message."

    Gillette has made clear that it is scrutinizing the Schick offering to make sure its patents and copyrights are being protected.
    KC's View:
    Lot of flank protecting going on here. Which is important ... but figuring out how to get ahead of the wave as opposed to just endeavoring how not to get swamped by the wave might be a better strategy long-term.

    Published on: May 25, 2017

    The Wall Street Journal reports that organized labor "is placing a pricey bet as it racks up victories in a national push to raise minimum wages for fast-food workers: It’s spending tens of millions of dollars in support of workers who can’t collectively bargain and don’t pay a penny in dues."

    According to the story, "Labor organizations’ 'Fight for $15' strategy, led by the Service Employees International Union, primarily benefits low-wage workers rather than traditional union members, such as manufacturing laborers, public-school teachers and nurses." The Journal notes that most union members in the US make more than $15 an hour, but that this effort is aimed at employees who could bolster an organized labor movement that has had its share of troubles in recent years.

    The story notes that "Fight for $15, which emerged in late 2012 from a New York gathering of fast-food workers and SEIU organizers, has been successful. Two of the most populous states, California and New York, are on the path to reach a $15-an-hour minimum, as are more than a dozen cities, including Seattle and Washington, D.C. And employers including Aetna Inc. and Wal-Mart Stores Inc. have pledged to lift starting pay for workers—all while the federal pay floor has remained $7.25 an hour since 2009."
    KC's View:
    I get a lot of grief from a couple of MNB readers who wonder how come I have objected to the price increases that would result from a border adjustment tax, but have no problem with price increases that would come from a $15 minimum wage.

    Which isn't entirely accurate. My feelings about the minimum wage is that it strikes me as a fundamental problem when people work 40+ hours a week but are paid so little that they can't pay for basic living expenses. This isn't always the case, and the description doesn't apply to every company, every locality, and every employee. But it does worry me ...

    Published on: May 25, 2017

    CNBC reports that "Wal-Mart Stores is gaining a bigger slice of the $800 billion market and momentum picked up in the recent first quarter, according to a new report.

    "'Wal-Mart is taking back share from the traditional supermarket at an accelerating rate,' according to Loop Capital analyst Andrew Wolf, who estimates the retailer now has a 21.5 percent market share in the U.S. traditional grocery industry.

    "In a report this week, Wolf said the world's biggest retailer's domestic grocery same-store sales beat U.S. supermarkets by 2.9 percent in the first quarter, which represented a stronger pace from 1.6 percent outperformance in the fourth quarter of 2016."
    KC's View:

    Published on: May 25, 2017

    • The US Department of Agriculture (USDA) Economic Research Service is out with a new report saying that "in 2016, food and beverage companies introduced 21,435 new products on U.S. retail shelves—new package sizes, new flavors, new packaging, and truly new products. New beverages accounted for 18.5 percent of new food and beverage products in 2016, and snack products were second with a 14.8-percent share. Food retailers seeking profitable new products for their shelves often look for “trending” foods and beverages being sought by consumers, such as craft beers and wines and gluten-free snacks. Beer and wine accounted for 21 percent of the 3,975 beverages introduced in 2016."
    KC's View:

    Published on: May 25, 2017

    • Food Marketing Institute (FMI) president/CEO Leslie G. Sarasin issued the following statement regarding the summary of President Trump’s budget proposal that was released yesterday:

    "The President’s proposed budget seems to estimate that $2 billion in revenue to reduce expenditures on the Supplemental Nutrition Assistance Program (SNAP) would be generated for the first time, by imposing fees on retailers serving as the delivery mechanism for these benefits.

    "Yesterday we saw the first summary of the President’s budget proposal. As the President’s proposal, it is meant to message priorities the Administration views as important, such as additional spending on defense. The Congress will work through its budget process and will include additional priorities to serve as the basis for an agreed upon framework. As this process goes forward we look forward to working with the Administration, the Budget Committee and the House and Senate Agriculture Committees to address concerns to the food retail industry, including the flawed policy of imposing fees on food retailers in order to reduce the cost of the federal government’s nutrition assistance benefits to the most needy in our society.”
    KC's View:

    Published on: May 25, 2017

    Got a number of emails responding to Kate McMahon's column yesterday about convenience stores.

    MNB reader David Warrick wrote:

    Sheetz and Wawa both have good C-Stores, however, they have a ways to go to match Buc-ees in Texas.

    They are 30K+ Sq. Ft. in size, large full service deli, hot/cold tables, large Men/Women (50+ stall) restrooms, and over 100 pumps.  Some weekends need a traffic cop to assist access.

    My wife was on assignment outside of Portland Oregon, one of the employee’s was having a family reunion in Texas her first stop on the Texas bucket list was Buc-ees!

    MNB reader Tim Callahan wrote:

    Wawa has the magic.  I am addicted.  I stop at least twice a day: coffee, soft pretzels, hoagie and FREE ATM.  All on my Wawa app.

    From another MNB reader:

    Enjoyed reading your summary of “the drive home” after a child’s 4 years in college. (Congrats on your raise; mine is still a few years away, regrettably..)  I undertook a similar drive about 2 weeks ago, through Texas.  While the convenience and gas (C&G) retailers on my journey are different, the in-store experience you described is very similar. RaceTrac has overtaken the “legacy” fuel stops (Murphy, Valero, Shell) as well as the national fast food chains.  QuickTrip and Loves have clean bathrooms (which is always a determinant if we’ll stop at any of these places in the future).

    Few C&G retailers have a reason to build out private labels and charge as much for “cooler rental” to all the beverage vendors.  The exception is Sheetz & Wawa; they’ve earned the right.

    I do wonder if a Lidl (with fuel) is the challenger Sheetz & Wawa needs to remain competitive, although as you point out, they are now starting to overlap each other.

    MNB reader Gene Peace wrote:

    Loved your column today on Sheetz and WaWa.   We have gotten WaWa's here in Florida in the past four years and I think the world of how they go to market.   The other area they seem to excel in is having really good people that are over the top capable and very pleasant.  I've probably made 50 visits and have never had a negative employee interaction.   Says a lot for how they train and treat their associates.   Having spent my entire life in retail sales and marketing, people are a determining factor for where I shop.

    Also, congratulations to your daughter.  What a great feeling for her (and you)!

    Another MNB reader isn't quite convinced:

    I found your story about traveling to PA for your daughter’s college very similar to my own (except in this case,  I was the daughter in question). Five years ago, my family made the trip to Collegeville, PA from Asheville, NC to move me in for my freshman year. Being from the south, I never (and still don’t) understand the hype around Wawa.

    When I moved in, the RAs told my parents that the best thing they could leave me was Wawa gift cards for the convenience store down the street. The Wawa in question didn’t have a gas station (it was less than a block away from a Hess/Speedway), but was within a half mile walk from the college campus. The Jersey/Pennsylvania residents are OBSESSED with that store. Compared to other convenience stores, I do understand that Wawa is superior. It’s always clean. I never had bad service. It was a breath of fresh air to grab a cup of fruit than a fruit roll up before a long drive to NC. Quite frankly though, I thought the sandwiches were gross with soggy bottoms and too much grease, and they always ran out of mashed potatoes by 7PM forcing me to get the less appealing Mac-n-cheese as a substitute.

    Wawa is a great example of a good c-store and other gas stations should try to be more like them, but the food isn’t good enough to meet the hype surrounding it.

    MNB reader Chris Esposito wrote:

    In western NJ we have added competition from QuickChek.  Some of which even have pharmacies.  While only 140 locations, it dominates western NJ.  So traveling from home to say the farmer’s market in Easton on a Saturday, I have a choice of QuickChek, Sheetz and Wawa!  Although I usually stop at the QuickChek, as it is closer to home and I usually need that early morning coffee quickly and can’t wait until I’m in PA!

    On the subject of the Walmart neighborhood Market that found Boulder, Colorado, to be culturally inhospitable enough that it is closing after less than four years, MNB reader Gregg Bagni wrote:

    Bottom line? I live in the Boulder area and that Walmart Neighborhood Market closing? Biggest reason?

    It was a crappy grocery store.


    End of paragraph.

    In the interest of making sure that Gregg's sentiments are accurately communicated, I should point out that he didn't actually say "crappy." He used a different word.


    The other day an MNB reader wrote to suggest that when states and cities pass laws requiring things like the posting of calorie counts on menu boards, it is happening in states and cities that people are leaving because political leaders are engaging in self-righteous behavior out of synch with what real people actually want.

    I disagree with the conclusion and refuted - at some length - the statement about places like New York and Los Angeles declining in population, which is simply, factually, untrue.

    MNB reader Mark Delaney wrote:

    I'm calling you on a "grumpy old man" commentary on Tuesday where you took over 10 paragraphs to reply to a two sentence opinion regarding calorie counts. I agree that the comments were controversial but the length you took to defend your position was the blogger equivalent of a beat down.

    I think the "middle ground" here - if there is one - is that most would agree that posting a number next to a food item on a menu is nearly worthless without context - it's simply a "feel good" legislative check mark that elected officials can point to the next time they're up for re-election that costs businesses money. A smart retailer or restaurant might pick up where the regulations fall short and use it as a way to enable a conversation with their customers around healthy eating - thus far I haven't seen that.

    Does the average person know how many calories a day is appropriate for their age, height and desired weight? Probably not. Does the average person know that a Whopper and a Big Gulp are not the healthiest choices - probably so. Will simply printing a number on that item change their choice? Doubtful - and I don't know that government was envisioned as playing that role by the founding fathers.

    Ask the average person whether they're more concerned about the calorie count of their next Starbucks latte or whether the Goethals bridge will fall down when they drive over it later today and I think the latter will resonate more. Problem is it's "hard" to fix those problems and fixing infrastructure generally doesn't make headlines - thus the situation we're in today.

    First of all, I'm perfectly willing to have a philosophical discussion about the calorie count posting issue. (And what the hell is going on with people thinking I'm old? I'm going to get a complex...)

    But the original MNB reader wasn't making a "controversial" comment. He was making a factually incorrect statement. Did I go out of my way to deliver a bit of a beat-down? Maybe. That's certainly a fair criticism.

    But at least it was a polite beat-down.

    Here's the deal. I have lived my entire life in two metropolitan areas - New York and Los Angeles. (The latter only during college, but it is a place that I love.) When Mrs. Content Guy retires, we plan to move to another one - Portland, Oregon. While I think it is perfectly legitimate for people who live in much of the rest of the country to complain that coastal/urban elites do not pay attention to their priorities and needs - this is not only a legitimate complaint but often true - it is a mistake, I think, to dismiss out of hand the attitudes of the major coastal/urban population centers.

    Of course, these disconnects not only exist, but pretty much define the nation's political/cultural/social/economic conundrum. So maybe we're just screwed. (Though I'd like to use a different word...)
    KC's View: