business news in context, analysis with attitude

Published on: March 13, 2018

by Michael Sansolo

To amend a well-known phrase, the road to great marketing is paved with unforeseen challenges. Or to put it another way, sometimes a great idea can really be too great.

That was both the enviable and unfortunate problem faced recently by one of the nation’s best supermarket retailers - H-E-B - thanks to a special promotion. H-E-B should get credit for an incredible connection with an icon for local consumers, but that great effort turned sour when the promotion took off to unimaginable levels.

As reported in the Daily Meal, HEB featured a special reusable shopping bag for $2. Nothing unusual there, but this bag featured a picture of Selena Quintanilla Perez and all proceeds went to her foundation. Consumers in Texas’s Latin community went crazy for the bags quickly buying out the entire inventory and bringing down H-E-B’s website in the process. Within hours of the bag’s release, some were selling on E-Bay for more than $100. (As of this writing, the special bags were priced as high as $240 on eBay.)

Now many of you might be wondering who Ms. Perez is or was and why a bag with her likeness is in such incredible demand. If that’s so, this is where H-E-B’s market insight should wow you.

Selena Quintanilla was an incredibly popular Tejano singer until her murder nearly 25 years ago. Her story was memorably captured in the wonderful 1997 biopic Selena, and later used in a chapter about marketing knowledge in “The Big Picture: Essential Business Lessons from the Movies,” the book Kevin and I co-authored. (And which continues to be available on Amazon. Just FYI.)

Although Selena was widely unknown in much of the US, her legend and legacy has remained enormous among the Mexican-American population, especially in many of the Texas cities where H-E-B is so dominant. It is to H-E-B’s credit that the chain recognized the ongoing sales power of the long-dead singer and the willingness of her fans to support her foundation, which is dedicated to helping children. At last reports, H-E-B had donated $25,000 in proceeds from the bags.

The promotion demonstrates in a small way why H-E- B is so good: clearly the company understands all the many population segments in the very diverse Lone Star state. On the flip side, H-E-B now has to repair connections to that same massive shopper base that is clamoring for more Selena bags and questioning why the company wasn’t ready for the onslaught in the first place.

But honestly, this is meant more to praise than criticize H-E-B. The scene in the movie Selena that stood out to me involves the singer getting ignored at a clothing store because the sales clerks saw her as nothing more than a poor Mexican immigrant. It’s only once Selena leaves the store and is surrounded by hoards of fans do those same clerks realize the enormity of their mistake.

In real life, Selena got her revenge by opening her own clothing stores and achieving the same level of success she had as a performer.

Unlike that clothing store, H-E-B understood the power and importance of Selena. They just needed to understand it a whole lot more.

Michael Sansolo can be reached via email at msansolo@mnb.grocerywebsite.com . His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available on Amazon by clicking here. And, his book "Business Rules!" is available from Amazon by clicking here.

Published on: March 13, 2018

by Kevin Coupe

Clark Kent and Melanie Daniels now have some place to go.

Wealth365 reports that having been pretty much made irrelevant and virtually invisible by the growth of the mobile phone business, “the phone booth — or at least a variation of it — is making a modest comeback.”

According to the story, “When the women-only club and work space The Wing opened its first location in the Flatiron neighborhood of Manhattan in October of 2016, the interior featured marble tables, pink velvet couches, and one small, windowless, reflective glass-doored room dubbed the Phone Booth. One year later, when another location of The Wing opened in Soho, eight built-in, glass-doored call rooms were included in the design.”

And, “Five new, maple-sided, portable, modular Zenbooth phone booths were installed late last year at the 17th Street headquarters of Gizmodo Media Group, the home of several websites, including Deadspin, Lifehacker, Jezebel and Splinter.” It isn’t enough, and so the company is ordering more.

It is an interesting object lesson. The revival, of course, is not of pay phones, but of phone booths … because companies are beginning to understand that these days, people don’t need access to communications technology, but they sometimes do need access to privacy.

That’s a key insight, and an example of how companies and institutions can look for consumer pain points to deliver a value proposition. I’m pretty sure we’re not going to see a resurgence of phone booths all over the place, but it is a good reminder that sometimes, when tweaked and rethought and repositioned, just a bit, what once was old can be new again, and relevant.

It is an Eye-Opener.

Published on: March 13, 2018

AdWeek has a story about how consumers increasingly are willing to exchange data and even access to their lives - and homes - to companies that they perceive are offering tangible value in exchange. In-home delivery of the sort now being tested by both Amazon and Walmart - with technology able to let delivery personnel into people’s homes to drop off orders, as opposed to leaving items outside - is seen as living right at the intersection of trust and relevance.

“While many consumers are still uncomfortable with in-home deliveries in particular,” the story says, “this will likely change as long-term relationships with platforms like Amazon, Google and even Walmart evolve and the collective definition of privacy shifts along with what experiences consumers deem valuable.”

It won’t be an easy sell. The story says that “a November 2017 survey from online community Toluna found almost a quarter of respondents would take advantage of in-home delivery if available. Participants could give multiple reasons for rejecting the service, and 48 percent cited security and 36 percent said safety as reasons to not use Amazon or Walmart in-home delivery.”

But the argument is that as retailers focus on developing a trusting relationship with their shoppers, it is conceivable that these numbers will shift in favor of in-home deliveries.

Published on: March 13, 2018

Bloomberg reports that Amazon’s latest scheme to achieve world domination is to “offer a credit card to U.S. small-business customers, furthering its push to supply companies with everything from reams of paper to factory parts.” The co-branded card, offered in conjunction with a financial services partner, would be “for small-business owners who shop on its website, would “feature rewards points for purchases,” and also would “let it eventually add offerings such as business insurance through a portal designed for its small-business customers.”

According to the story, “Amazon already offers two credit cards for consumers with JPMorgan and Synchrony Financial. Those cards come with as much as 5 percent cash back on purchases. The retailer is also in talks with JPMorgan and Capital One about a product similar to a checking account that could help it lower the amount it spends on card fees every year.”

The goal of such a move would be to facilitate Amazon’s move to steal market share from office supply companies such as Staples, as well as from traditional credit card companies such as American Express.

Published on: March 13, 2018

Kroger and Aldi, two businesses in many ways at the opposite ends of the retail spectrum, have announced separate tie-ups with delivery service Instacart that are designed to facilitate their e-commerce efforts.

In Kroger’s case, it is an expansion of an existing relationship with the delivery service, one of several companies with which it does business around the country. “Having grown our digital sales in 2017 by 90 percent, we continue to accelerate our digital roadmap in 2018 to make shopping with Kroger simpler and more personalized,” says Yael Cosset, Kroger's Chief Digital Officer.

Kroger says it currently delivers from more than 872 stores across the country, in 45 markets, and it offers 1,091 curbside pickup locations with plans to add 500 new locations in 2018.

Aldi also is expanding its Instacart relationship, adding Chicago to the list of markets - Atlanta, Dallas and Los Angeles - where it is offering delivery. Aldi U.S. CEO Jason Hart says that the move is because of strong consumer response to the service elsewhere.

Published on: March 13, 2018

Business Insider has a piece that compares three smart speaker systems - Apple’s Siri, Amazon’s Alexa, and the Google Assistant - to see which one is smarter.

Among the questions asked: "How old would John Lennon be today?” “What is the GDP of Kuwait?” “When was the first iPhone released?” “How much is 83 feet in meters?” "How much does a Tesla Model 3 cost?” “Why is the sky blue?” And, “Where do babies come from?”

The author concludes: “Despite my preconceived notions about the intelligence behind Google's hardware and assistant, it actually came in last place after tallying up the results of this pop quiz. It did know Apple's history better than Apple's own hardware, though, and didn't round up when asking my question about unit conversion.

“Siri and Alexa both answered the same number of questions correctly, but two of Siri's responses required me to actually look at a screen for the answer.”

It ends up that not only does Amazon’s Alexa “know how to answer science questions (why is the sky blue?) and when to pass things off to a human (where do babies come from?), but it's also pretty sharp at giving you answers to deeper queries (how old would John Lennon be today?) … The only moment that really gave me pause was when Alexa tried to sell me a Tesla accessory like, well, a used car salesperson. That would be fine if it answered my question first — something like "A Tesla Model 3 costs $35,000. Would you like to order one?" would even have been funny — but it didn’t.”

Alexa won the contest, but the story notes that “all three contestants did a pretty admirable job. It'll be interesting to revisit this article in a year or two and see how much smarter they've all gotten.”

Published on: March 13, 2018

There is a bit of commentary in the Washington Post that I think is worth taking a look at - it focuses on the social and political engagement in which some companies are engaging of late, even though it potentially creates issues for their businesses. This is, of course, a subject to which MNB has devoted some time and space in recent weeks.

Issue engagement, the pieces, suggests, needs to reflect a “corporate personality” that “reflects how a business conducts itself in commerce, and it is something that consumers can and do evaluate.” And, it also reflects the modern “need to make strategic choices and balance the commercial benefit of embracing some, while turning off others.”

You can read the entire piece

here.

Published on: March 13, 2018

• The Lakeland Ledger reports that Publix Super Markets has announced “a three-store expansion of its GreenWise Market concept, the first expansion since the Lakeland-based chain introduced GreenWise stores in 2007.” The stores, in Lakeland and Tallahassee, Florida, and Mount Pleasant, South Carolina, will offer “a thoughtfully curated selection of organic, specialty and traditional grocery items.”


• The Seattle Times reports that eight months after members of the Nordstrom family started thinking about taking the company private, and one week after the company’s board rejected the family’s $8.4 billion offer as being too low, the family is said to be considering another, higher offer that the board will find to be adequate.

However, the Times notes that the back-and-forth between the Nordstrom family and the board appears to have opened the door to the possibility that an outside entity could make a play for the family-run retailer.

Published on: March 13, 2018

In response to yesterday’s story about how some supermarkets are endeavoring to turn their stores into community centers and even a place to find romance - assuming that this is something that e-commerce can’t offer - MNB reader Ben Ball wrote:

Hilarious how old becomes news again, eh?  As a young professional in Minneapolis in the 70’s, the Lund’s on Lake Street was generally recognized as the place to go on Thursday evening if you didn’t have a date for the weekend yet.  And I’m not surprised to see Mariano’s picked as one of the sexy supermarkets of choice. With sushi, roses and a wine bar – what more do you need?

From another reader:

When I was living in DC as a young'un after college, there was the Single Safeway near Dupont Circle. It was a great place for meeting other...singles. Of course, its other nickname was Soviet Safeway after the long lines and bare shelves. 

And, from MNB reader Mary Schroeder:

The Marina Safeway in San Francisco has been the place to meet for over 50 years.

And, from MNB reader Beatrice Orlandini:

There is a supermarket in Milan - the Esselunga store in Viale Papiniano - which has built its popularity partly due to its fame of being a great place for single consumers to find non only their grocery but their perfect match as well.

This reputation dates years back.

When you're in line, just peeking into someone else's cart and making a quick assessment of their eating habits gives you a good idea of how compatible you could be on such an increasingly important issue for many consumers.

Maybe less intimidating than trying speed dating….

But isn’t everything in Italy more romantic?

Of course, sometimes these days even a casual remark hits a nerve. Yesterday, when talking about romance in the produce aisle, I mentioned the “classic” movie Animal House and the scene there between Otter and Mrs. Wormer.

This prompted MNB reader Matt Erickson to write:

Animal House as being “classic” seemed a bit incongruent.

True. 

The thing is, current circumstances mean that we all are going to have to rethink long-held opinions. It is an ongoing struggle of conscience.

I know for example, that I’m probably never going to be able to watch a Woody Allen movie ever again. Just too weird. And yet, that doesn’t mean that movies like Annie Hall and Manhattan were any less important to me when they came out, and I’m not prepared to say that they were. On the other hand, modern context makes them kind of creepy.

I have fond memories of Animal House. It certainly was a classic of its genre. But you’re right that watching it today might be a little discomfiting.

I suspect that I’m going to make these kinds of mistakes from time to time,, and that the MNB community will call me on them, and I’m going to try to demonstrate personal growth.