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    Published on: June 28, 2018

    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, I’m Kevin Coupe and this is FaceTime with the Content Guy.

    I’m recording this as I make my way through an airport, which made me think of a recent travel experience my brother told me about that illustrates the best kind of customer service, the kind that makes a real difference in the customer’s life and creates what Feargal Quinn used to call the boomerang effect.

    My brother and his high-school age son were traveling in Scotland and Ireland looking at possible colleges - which I think is totally cool all by itself. They were in St. Andrews, Scotland, looking at the University of St. Andrews, and then drove down to Edinburgh to look at the university there before catching a flight to Dublin, where they were going to visit Trinity College.

    When they got to Edinburgh they checked into a local hotel and, while going through their stuff, my brother realized that he couldn’t find their passports. My nephew asked if he’d left them in the hotel safe back in St. Andrews, and so my brother called the hotel there.

    A young woman answered the phone, my brother explained the problem, and she took his number and promised to call him back in a couple of minutes. Which she did, with the news that she’d found the passports in the safe.

    Now, my brother didn’t have time to drive back to St. Andrews, and they had a plane to catch the next afternoon. So he asked if there were a courier service that could get the passports down to Edinburgh. She said she’d check and would call him back. Which she did, informing my brother that the passports would be delivered to his hotel there by 11 the next morning … and that there would be no charge, because she’d handle the task personally.

    That’s pretty amazing. My brother knows this. If his son gets into St. Andrews, there’s only one hotel he’ll use when he goes to visit. Heck, I’m thinking about visiting - I’ve never been to Scotland, and Mrs. Content Guy loves it there - and there’s only one hotel where I’d consider staying.

    I don’t know if this was standard service by the hotel, or just one employee going above and beyond. But I do know that this is the kind of service that keeps customers coming back for more, and this is the kind of employee that every business should want.

    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: June 28, 2018

    by Kevin Coupe

    While at the United Fresh Show in Chicago earlier this week, I was talking to a friend of mine, who mentioned something called Farmers Fridge, a vending machine business specializing in fresh food.

    What was interesting was I’d just read a piece about how Danone Manifesto Ventures, an investment fund sent up by food company Danone, is investing considerable money in start-up companies designed to challenge “the dominance of big brands” - and Farmers Fridge was one of those companies.

    Okay, maybe that was a coincidence.

    But then, I was walking back to my hotel … and there, in the passageway from McCormick Place, was a Farmers Fridge.

    Go figure.

    I was fascinated, so I decide to buy something to eat and see how the whole thing worked. There was a selection of sandwiches and salads - all, I thought, reasonably priced. (The caprese half-sandwich I chose was $4.50, and the pesto pasta bowl was $6.00.) What really impressed me was the degree to which the machine had graphics that allowed me to drill down for ingredient and nutritional information - it seemed to have the requisite level of transparency, and I felt smarter because I wasn’t buying Twizzlers from a different vending machine. (Pics below.)

    I did a little research on Farmers Fridge and found out that the company has more than 100 machines in Illinois and Wisconsin, in hotels, airports, schools, private companies and retail stores. They apparently stock the boxes once a day, and empty them out at night, delivering any leftover food to homeless shelters.

    The food was pretty good. Even though it was towards the end of the day, the pasta salad stayed fresh, and the sandwich was tasty, if maybe a bit dry. I blamed the latter on recyclable cardboard packaging that seemed a tad less than totally secure, though I wasn’t worried about the safety issue.

    I paid with a credit card, and got a receipt delivered to my iPhone within moments; the next day, I got a survey via email, asking me to rate the product. All of which I thought was smart.

    I don’t know if Farmers Fridge has the legs to do a national rollout, but I think it is a good idea that points to how differentiated vending experiences may be able to extend retailers’ reach and relevance. And that was the Eye-Opener.

    KC's View:

    Published on: June 28, 2018

    Amazon this morning announced a new service designed to help individuals set up their own delivery businesses that would in turn deliver packages for Amazon.

    According to the announcement, “Amazon will take an active role in helping interested entrepreneurs start, set up and manage their own delivery business. Successful owners can earn as much as $300,000 in annual profit operating a fleet of up to 40 delivery vehicles. Individual owners can build their business knowing they will have delivery volume from Amazon, access to the company’s sophisticated delivery technology, hands-on training, and discounts on a suite of assets and services, including vehicle leases and comprehensive insurance.”

    The goal, Amazon says, is to “empower hundreds of new, small business owners to hire tens of thousands of delivery drivers across the U.S., joining a robust existing community of traditional carriers, as well as small-and-medium-sized businesses that already employ thousands of drivers delivering Amazon packages.”

    Amazon says that it will provide “technology and operational support to individuals with little to no logistics experience the opportunity to run their own delivery business. To help keep startup costs as low as $10,000, entrepreneurs will also have access to a variety of exclusively negotiated discounts on important resources they’ll need to operate a delivery business. The deals are available on Amazon-branded vehicles customized for delivery, branded uniforms, fuel, comprehensive insurance coverage, and more.”

    In its story, the New York Times writes that “the start-up service is certain to raise questions about whether it could challenge - or even replace - some of the work currently done by Amazon’s partners, including United Parcel Service and the United States Postal Service.”
    KC's View:
    This is fascinating approach on Amazon’s part - it has talked in the past about wanting to take greater control over the so-called last mile leading to the customer, and this is one way to do without creating an entire internal infrastructure. Outside contractors is one way to go … it requires an investment, but less hands-on management while still maintaining a great deal of control.

    One can only imagine the impact that such a move would have on the USPS, which generates a lot of revenue delivering packages for Amazon. And then, what happens if those Amazon-branded vehicles start to compete against the USPS for the delivery business of other online retailers.

    I didn’t see this coming, at least from this direction. But that’s what Amazon is good at doing - coming up with unexpected answers that can be game-changers.

    Published on: June 28, 2018

    The Wall Street Journal reports that the soft drink industry is facing the fact that over the past two years there have been more than a half-dozen communities that have enacted soda taxes to address what is perceived as their growing obesity problems.

    The solution? Since some local communities seem resistant to the soft drink companies’ persuasive charms - and the significant amounts of money they are willing to spend on lobbying to get their way - the goal now is to get states to pass laws that prevent municipalities from enacting any such taxes.

    According to the story, “The beverage industry says the statewide measures are an appropriate way to protect local businesses and consumers from higher taxes … In California, the bill to pre-empt soda taxes, which was championed by the soda industry and introduced over the weekend, came as a shock to public health advocates and many state lawmakers. The state has passed more soda taxes than any other, shepherded by progressive lawmakers who see them as a source of revenue for schools and public services and a tool to fight obesity and diabetes.”
    KC's View:
    Is this how democracy begins to die? I have to admit that I get downright cranky when someone tries to take away my right to vote on something. I wonder what the people making this play are hiding, or why they’re so convinced that their interests are more important than my interests as a functioning citizen in a democracy.

    I’m not saying I’m for soda taxes. I am saying that I ought to have the right to help determine my community’s position on them. And I’d be curious what positions the people spearheading efforts to stop local initiatives have taken in the past on local rights.

    I think this is a crock.

    Published on: June 28, 2018

    Business Insider reports that “Chick-fil-A temporarily closed two restaurants this week because they ran out of chicken due to a problem with a supplier.” The closures came after “In-N-Out temporarily closed all 37 of its restaurants in Texas earlier this month, saying it had a quality issue with its hamburger buns,” and as “Whataburger and Raising Cane's stopped selling buns and Texas toast, also citing quality issues.”

    All the companies have said that there were no food safety issues involved, just a matter of supply or lack of satisfaction with product quality.
    KC's View:
    There is something wrong when Chick-fil-A stores run out of chicken. Like a disturbance in the space-time continuum. Or End of Days.

    Published on: June 28, 2018

    Reuters reports that Chipotle plans to close 65 “underperforming” restaurants, as well as “add ‘in-app’ delivery of its products to about 2,000 restaurants by the end of the year and launch a long-awaited loyalty program in 2019.”

    According to the story, “Chipotle also said it would launch a customer loyalty program in 2019 and is exploring offering $2 tacos with a drink as part of a proposed ‘happy hour.’ The announced changes come as the troubled burrito chain seeks to recover after a rash of food safety lapses dragged on the brand.”
    KC's View:
    A lot of this seems to make sense, though I do think that Chipotle has to be careful about seeming too much like Taco Bell … which is a danger since its CEO, Brian Niccol, used to be CEO of the rival Mexican fast feeder.

    I’m still waiting for the chihuahua to make a return appearance.

    Published on: June 28, 2018

    USA Today reports that “in the rush to compete in the new era of online shopping, Home Depot is joining other chains in modifying its stores to make them more convenient for those who buy on the website … that means installing lockers near the front of its stores. Those who order merchandise from home are directed to the rows of orange boxes, where they unlock the designated one and then leave without having to seek assistance from an employee.”

    The story notes that “Home Depot hopes to have lockers in all its stores within three years,” as a response to the fact that “45 percent of Home Depot’s online orders (are) picked up at stores.”
    KC's View:

    Published on: June 28, 2018

    • The Puget Sound Business Journal reports that Amazon “s opened its first package pickup facility in Seattle. Located in North Seattle at 14333 Aurora Ave. N., the 400-square-foot building provides a secure storefront for customers to pick up Amazon packages and return items for free … Prime members get free same-day and one-day shipping to the new pickup location, and there's no order minimum to receive free shipping … The pickup stations are Amazon's latest attempt to get packages safely and conveniently to customers.”

    The story notes that at least some “Amazon staff would be on-hand to assist customers with the self-help shipping kiosks.”
    KC's View:

    Published on: June 28, 2018

    • The United Fresh Start Foundation has announced “the launch of a three-year fundraising campaign that aims to secure $5 million in commitments to support the foundation’s mission of increasing children’s access to fresh fruits and vegetables.”

    The announcement notes that “the Foundation is best known for its flagship Salad Bars to Schools Program, which has placed over 5,000 salad bars in schools in all 50 states, benefitting nearly three-million children. The Foundation’s Community Grants Program, now in its second year, has provided $100,000 to community organizations that increase kids’ access to fresh fruits and vegetables after school, on weekends, and throughout the summer.”

    CNBC reports that Conagra Brands has announced “plans to acquire Pinnacle Foods in a cash-and-stock deal valued at about $8.1 billion that furthers Conagra's transformation under CEO Sean Connolly and its push into frozen foods … The pairing of Healthy Choice-owner Conagra and Bird's Eye-owner Pinnacle would create the second-largest U.S. frozen food company behind Nestle, analysts at RBC Capital Markets have written. Conagra has poured money into its frozen business, with an eye toward repackaging and reformulating its products to cater to younger diners.”
    KC's View:

    Published on: June 28, 2018

    Responding to yesterday’s Innovation Conversation, MNB reader David Spawn wrote:

    I can’t wait for my enhanced experience with my “refrigerator, washer & dryer, coffee maker, filtered water pitcher, vacuum cleaner, electric toothbrush and more” to begin.  The eye-opening outcomes will surely be worth the wait.  I sure hope my coffee maker will tell me it needs to be cleaned instead of my seeing the grime build up in it and knowing it needs to be done and being reminded in a calm, monotone HAL 9000 voice:

    Day 91 – “David, you really ought to run the de-scaler soon,”

    Day 92 – “David, I told you yesterday that you ought to run the de-scaler soon,”

    Day 93 – “David, why aren’t you listening to me?  I’m sorry but I refuse to make coffee for you until you run the de-scaler”

    Day 94 – “David, I left de-scaler in your coffee this morning.  I hope it ruins the taste for you so that you will listen to me and follow my commands.”

    The enhanced relationship with my filtered water pitcher promises only be even more enlivening I’m sure.  Yours in old crank-dom.

    Be a lot easier on everyone if you’d just de-scale your damned coffee pot.

    On the subject of the American Express swipe fee ruling, MNB reader Jim DeLuca wrote:

    While Amex charges the most swipe fees, all the rest have multiple rates.  And the cards that provide "points" for customer use also charge the retailer more; some more than others.  I think that the cards with the biggest "rewards" have the highest swipe fees.  And for years I was unhappy that my little store was helping pay for my customers' vacations, etc.  Then one day, I decided that I could not beat this, so I personally joined and got a credit card with the most points…

    My Amex swipe fee is 2.3%.

    The range for my Visa, MC and Discover is 1.48% to 2.95%.  Most cards are around 1.9%.

    At my scale of business, we do about $10k per month with Amex.  If we could switch all of that to the 1.48% cards (not possible anyway), we would save $82 per month.  If we could switch to the 1.9% cards, we could save $40.

    My choice is to keep the Amex customers because while we might not lose all of them because they probably have a high reward Visa as well, but to cover that $40 loss, I just need to lose $110 in Amex business per month:  probably 4 transactions in a month at our average basket size.  I do think that Amex customers purchase more than an average basket too, so…

    Welcome AMEX shoppers.

    From another reader:

    On the Amex issue, I can’t see where this even comes close to anti-trust as there are other payment options available - even other credit cards. I see this as a Coke and Pepsi play - years ago, these two companies tried to dictate shelf space to retailers based on contractual agreements. Retailers (Cub Foods here in MN) pushed back hard and even threw one out for a period of time (I think it was Pepsi - but I am not positive) until they all agreed to what equal shelf space meant - and that it meant the retailer controlled the equation.

    Like Costco, if I was a retailer I would not accept Amex with this piece in their contract. Probably 25% of the places I go (outside of Costco) do not accept one of the cards - and most of these are Amex refusals. I carry an Amex - but never use it (back up only). This should never have made it to the Supreme Court - this is a retail control thing where only the retailer can halt it.

    And from another:

    I have had a American Express Platinum Card for more than 15 years. My $500 yearly fee covers $200 in airline credit, $200 in Uber credits, free access to airline lounges around the world and a host of other benefits. I receive three time the value of my yearly fees almost every year.

    If a retailer does not want to take my card I simply go elsewhere. Costco is still begging me for their card but my benefits are better than theirs. Besides, my checks are linked to my American Express account and I receive credit when shopping at Costco. So much for their better card.

    Regarding my criticisms of Target’s grocery offering, one MNB reader wrote:

    Vendor funds, promotional allowances, still don't like them in this day and age.  My company keeps buyers working until they reach a certain dollar amount of vendor funds in a given day, or you don't leave.  Store management bonus on the obvious financial goals, in addition to items that are being pushed due to vendor funds.  The produce department is starting to look like a grocery department, new vendor items every week, dry goods obviously.  Not a great way to do business, and I'm sure you already know all this.  Making money on the buy not the sell, not the way to go.

    From another reader:

    In terms of Target and talent, Target for years has sort of ignored “grocery store” merchandising. They do not hire for that talent at store level (and restrict the creativity of the ones they do hire) and they do not have a very solid understanding of it at corporate - at least as it applies to execution and the art or theater of in-store merchandising. I can’t say they don’t care but this is not a skill they value as much as they value the ability to squeeze the supplier community.

    I would be more concerned with creating that inviting experience that solid merchandising creates, focus on building basket and then focus on building traffic for the grocery section. To clarify, they have not yet called me for advice (although I have offered my assistance a few times).

    Finally, one MNB reader had this response to my piece yesterday about Stumptown Coffee in Portland, Oregon:

    We were at the Stumptown in your photo last summer and I agree - it lost a little something with the upgrade.
    KC's View: