business news in context, analysis with attitude

MNB Archive Search

Please Note: Some MNB articles contain special formatting characters, and may cause your search to produce fewer results than expected.

    Published on: July 24, 2018

    by Michael Sansolo

    If the customer experience is really going to be the key element of success in the battle of traditional shopping versus electronic commerce, then it is probably time for marketers to visit the global center of experiential marketing.

    It’s time to go to Disneyland!

    (At least that’s one way of justifying why I joined my 31-year-old daughter on a recent trip to Disneyland. Well, that and the reality that we are both unabashed big kids.)

    The Disney experience is still all it always promised. The entire trip through the parks (Disney and the California Adventure) is about immersing yourself in a real life fantasyland (which somehow in Disney’s hands is not an oxymoron). And while, as expected, costumed employees stay relentlessly in character, it is worth pointing out that so do staffers in more traditional roles such as ticket takers, waiters and others.

    What impressed us on the trip - aside from some wonderful new rides - is how Disney is both evolving and improving at the same time. For example, Disney now has a smartphone app now makes the trip easier than ever. With a quick look at our phones we could determine which rides had the shortest lines, or even where to find key characters walking the park.

    That alone is something retailers need to consider. Disney’s app is the perfect example of using technology to enhance a real world experience with information the consumer really wants and values.

    Likewise there are some obvious small steps and improvements. For example, one key to any thrill park ride is ensuring that riders actually employ their safety belts correctly. Disney now adds a bright yellow strip of cloth to each seat belt so that staff can quickly determine if the belts are truly in the right position for riders. That’s a simple, yet profound change that probably increases safety and efficiency, which in turn keeps those long lines moving.

    However, what most impressed us was how staff remains trained for the best possible interaction with customers. On one ride - the Toy Story arcade - guests travel through a series of computer-generated games where you can shoot virtual balls at assorted virtual targets. On our trip through we noticed that one massive screen had gone completely black, no doubt due to a computer glitch. When the ride finished, I told a staffer about the glitch. He quickly thanked me and checked a control panel that no doubt confirmed my report.

    Then, without hesitation, he handed me a special pass to allow me to skip the line for a return ride—a pass that enabled me to bring a party of up to seven others with me. In other words, with a simple move he thanked and rewarded me for being a helpful consumer with something that cost the park nothing. In the process he turned a potential complaint into a compliment.

    Now clearly, Disney spends countless millions creating new “wow” moments that no retailer or marketer could ever match. But it won’t take gigantic budgets to come up with useful apps, or creative solutions like yellow tags on seat belts or staff training that enables the better experience every time.

    To make it happen, you don’t even have to wish upon a star.

    Michael Sansolo can be reached via email at . 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.
    KC's View:

    Published on: July 24, 2018

    by Kevin Coupe

    There have been a whole bunch of stories in recent days that have concerned people working at retail.


    • A transgender woman in Arizona had to deal with a CVS pharmacist who refused to fill a prescription for hormone therapy, but also refused to return the prescription or provide a reason for why it was being denied. The New York Times reports that “based on federal and some state laws, CVS does allow a pharmacist to refuse to fill specific medications if doing so would violate the person’s religious convictions … But the pharmacist would be required to notify the company in advance so it could ensure that the patient would promptly receive the medicine.” CVS has said that it no longer employs the pharmacist.

    • A female employee at a Jacksonville, Florida, Burger King lost her job after she stepped in while off duty to help when lines at her store were moving too slowly. According to Fox News, “Witnesses say they watched the woman who was photographed wearing a tank top and shorts  leave the slow-moving line and step into the food prep area, where she proceeded to slap on a pair of gloves before getting down to work … Burger King said that the woman was an off-duty employee, but confirmed that the incident should not have happened. It also stated that the manager, and the woman, had been fired.”

    • The Washington Post has the story of Maurice Rucker, a 60-year-old African American working at a Home Depot in Albany, New York. Two weeks ago, a man and his unleashed dog approached the checkout lane where Rucker was working; Rucker reportedly asked the man to put his dog on a leash, which prompted the man to hurl racist invective at Rucker.

    Home Depot’s first response was to fire Rucker, a 10-year-employee, for “failing to disengage and alert management about a customer confrontation.” Subsequently, after media attention to what happened, Home Depot backed off and offered Rucker his job back … but Rucker has declined to return.

    To be clear, these scenarios are all very different.

    • I’m glad the CVS pharmacist got fired. While he may not have been wiling to explain his problem to the transgender woman, it isn’t hard to imagine what his issues are. But let’s be clear - his issues don’t matter. Fill the damned prescription and keep your mouth shut.

    • I get why the Burger King employee got canned, but I can’t help but think that a lot of retail businesses would love to have someone on staff who is willing to jump in and help out even when off-duty. Maybe they could’ve offered some sort of food safety re-education instead of a pink slip? But if that’s not enough, I would think that this woman’s actions could serve as a positive calling card when looking for another job.

    • As for Rucker … nobody should have to put up with this crap. I think Home Depot should’ve been a lot faster to tell the customer in question that he and his dog should find someplace else to shop.

    The scenarios may be different, but I do think they all illustrate the fact that the retail environment is becoming a war zone, where different sides of the culture wars can clash in a way that can turn ugly.

    Retail executives have to be prepared for this … they have to make sure that their people are trained in how to handle difficult, sometimes explosive situations.

    To my mind, as complex as situations may be and comprehensive as the training needs to be, there out to be a couple of basic rules.

    • First, employees need to know that they are there to take care of customers. Selling them something does not require approval … it just requires an understanding that they are in the service business. If they’re not prepared for that, then it probably makes sense to get a job in another business.

    • Second, employees need to know that when they are faced with customers who act in a racist/misogynist/homophobic manner, management always will come down on the side of the employee. Always. Steps will be taken to minimize the in-store drama, but maintaining a friendly, nurturing workplace isn’t just a sentiment included in a mission statement. It is a real commitment.

    It’ll never be as simple as just saying these things. Life is complicated, and people are complex. But businesses have to pledge to keep their Eyes Open to every situation, and to always endeavor to do the right thing. Always.
    KC's View:

    Published on: July 24, 2018

    The Wall Street Journal reports on a number of retailers “that have joined a new marketplace allowing advertisers to buy and insert paper ads in customers’ boxes.”

    That’s right. Now, when these retailers - there apparently are more than two dozen - ship you something, included in the box will be ads that are paid for by other businesses.

    The Journal writes that “the rise of online shopping has taken a toll on retailers as shipping costs and investments in e-commerce capabilities have cut into profits. Retail margins on average fell to 8% last year from 10.2% in 2012, according to consulting firm AlixPartners. Over that period, e-commerce sales expanded to 17.6% of total sales from 10.5%.

    “Retailers hope they have a remedy: Wring more money out of the space inside the box.”

    Apparently the system is designed so that “retailers can break up the volume of packages into segments, smaller brands and niche advertisers are able to buy inserts.”


    Advertising Age has a story about how Amazon is seeking ways that it can extend its Sponsored Products category beyond its own site, “delivering them to outside websites by retargeting consumers who visit Amazon.”

    The Ad Age story explains it this way:

    “Sponsored Products is one of the main ad formats on Amazon's platform. It lets brands run campaigns pegged to the terms that consumers search for, similar to the search ads that made Google fantastically rich in the open web. Brands target the ads based on keywords that reveal exactly what Amazon users are in the market to buy. They appear sprinkled within search results and individual product listings.

    “Now, those ads will also appear on websites within Amazon's advertising marketplace, which connects to top publishers. People who click on the ads will be delivered to brands' storefronts back on Amazon.”

    Everybody who goes online is familiar with how this works, even if unfamiliar with the technology backbone that makes it possible. For example, you see an item of clothing on a website, and suddenly it seems to be popping up everywhere you go online, reminding you that it is available to be purchased.

    Amazon has not commented on the story, though sources tell Ad Age that the program could launch within weeks.
    KC's View:
    I’m sorry, but I’m not buying. Not even a little bit.

    I understand that these bricks-and-mortar stores want to generate more revenue, but selling access to my eyeballs ought not be one of the ways they do so. I don’t mind if they send me promotional materials for their own products, but turning the inside of their boxes into a paid advertising medium strikes me as way, way beyond reasonable. The very idea just ticks me off.

    As for Amazon … I would suggest to them that they ought to heed the Jurassic Park lesson - just because you can do something doesn’t mean you should do something. I’m less annoyed by the Google remarketing program than some people I know - Mrs. Content Guy, for one, finds it really annoying - but even I can get irritated when bombarded by messages related to previous visits to certain web pages. And sometimes I get irritated enough that I make the decision not to buy anything promoted in these messages … just because I can.

    Could we somehow at least have an opt in/opt out feature?

    Maybe this could be a place in Amazon’s ecosystem where customers are safe from being barraged with commercial messages. And maybe, just maybe, this would make its hold of its customers even stronger, not weaker.

    Published on: July 24, 2018

    The Financial Times reports that Tesco, after years of watching discounters Aldi and Lidl nibble away at its UK sales and market share, and take bigger bites out of its margins, plans to launch a new chain of discount stores that it hopes will be better positioned to do battle in this segment.

    While Tesco has not commented on these plans, the story points out that it has been advertising for job openings at an entity that will be run separately from its core flagship brand.

    FT writes that there could be as many as 30 units opened in short order this autumn, with the possibility that the chain will be called Jack’s - a likely reference to Tesco founder Jack Cohen.

    According to the story, “Bruno Monteyne, analyst at Bernstein, said Tesco was in a position to launch the new stores because it would be able to supply them with its own-label Farm Brands — priced within 2 per cent of equivalent hard discounter products — while its merger with wholesaler Booker last year also allowed it to provide competitive prices on some items.”
    KC's View:
    I guess my question is about the degree to which Jack’s - if it ends up being called that - actually is separate from Tesco. Hard to imagine that it will be completely divorced, simply because Tesco will want to take advantage of its greater buying power and operational infrastructure. The problem is that you can’t be just a little bit pregnant … if you want to foster a truly different culture and image, you have to really be separate, as if created by a kind of skunkworks. But that works against typical corporate mindsets.

    It’ll be interesting to see how this plays out, and if Tesco is able to do this efficiently and effectively.

    Published on: July 24, 2018

    CNN reports that fast feeder Chick-fil-A is getting into the meal kit business.

    According to the story, the company “will test a meal kit service from late August through mid-November … Customers can pick up the kit at 150 participating locations in Atlanta. The meals include chicken flatbread, crispy dijon chicken, chicken parmesan, chicken enchiladas and pan-roasted chicken. Chick-fil-A says the meals should take less than 30 minutes to prepare.”

    CNN notes that “a meal kit could help Chick-fil-A test possible new menu items (and) could also allow Chick-fil-A to let customers handle more complicated meals rather than mass-producing them in its restaurants.”
    KC's View:
    This wouldn’t get my vote for most likely brand extension. But I’ve learned my lesson … I’m not going to be reflexively negative about it.

    Published on: July 24, 2018

    In Minnesota, the Star Tribune reports on how Best Buy, after a decade in which the sales of compact discs have been in “freefall,” has decided to put all of the CDs it has left in the bargain bin. For the most part, the story says, the discs are from artists like “Lynyrd Skynyrd, the Who, Cat Stevens, Billy Ocean, Lionel Richie — all a nod to the aging demographics of those who still buy them.”

    In fact, the story says, Best Buy now displays and sells more iTunes cards than it does CDs. “Best Buy is also in the process of removing CDs altogether from its website,” the Star Tribune writes. “It only has a handful of audio systems with a CD player left in stores as streaming takes over the music business.”

    The story goes on: “Target, too, is cutting back on its CD selection. The Minneapolis-based retailer still sells new releases, but in October 2016 it pulled back on the number of catalog, or previously released, CDs it carries from about 300 to 100.

    “Target is in the midst of an aggressive push to modernize hundreds of its stores. As stores are remodeled, the space for CDs, especially those catalog titles, will be further squeezed, said Joshua Thomas, a company spokesman.”

    And there are some music stores - smaller, more niche-oriented businesses - that still are selling plenty of CDs; the story references a Minneapolis store called the Electric Fetus, where CDs still account for half of sales.

    The other half? Vinyl records, which have been seeing a resurgence among dedicated audiophiles.
    KC's View:
    I can’t even remember the last CD I bought. I’m not surprised by this , but I also know that this technology/cultural change is creating collateral damage … and it so happens that this is the subject of Thursday’s FaceTime with the Content Guy.

    So stay tuned.

    Published on: July 24, 2018

    • Amazon announced that it has begun delivery of natural and organic products from Whole Foods Market through its Prime Now service in Fort Lauderdale, Miami, Palm Beach, parts of Long Island and select areas in New York City, beginning with lower Manhattan and Brooklyn.

    Amazon said that the service “will expand to additional neighborhoods in New York City, and across the U.S. throughout 2018.”

    • The Philadelphia Business Journal quotes Jeff Wilke, Amazon’s CEO of worldwide retail, as saying that said that the company was disappointed by the technical glitches that created problems for some shoppers during Prime Day last week, and already is “working on ways to prevent it from happening again.”

    “Tech teams are already working to improve our architecture, and I’m confident we’ll deliver an even better experience next year,” Wilke said.

    The story notes that “a record number of Prime Day shoppers spent an estimated $4.2 billion on more than 100 million products during the sale.”

    • Target announced that its Shipt delivery service will begin same-day delivery in the New York City metro area.

    According to the company, “This announcement builds upon Shipt's recent growth into Upstate New York in June. Cumulatively, this landmark expansion gives more than 1.3 million households across New York City and surrounding areas access to products delivered by Shipt in as little as one hour.”

    It also happens as Walmart’s unit begins offering same-day grocery deliveries in New York City from a fulfillment facility it is opening in the Bronx.
    KC's View:

    Published on: July 24, 2018

    …with brief, occasional, italicized and sometimes gratuitous commentary…

    • The Wall Street Journal reports that specialty retailer Brookstone “is shopping for bankruptcy financing to fund its business if it files for chapter 11 protection … The retail chain is seeking a roughly $50 million to $60 million loan to keep the business afloat,” and while the situation is said to be “fluid,” a bankruptcy filing could come soon. Another alternative would be a shuttering of unprofitable stores in its fleet of about 140.

    Brookstone still is in business? Who knew?
    KC's View:

    Published on: July 24, 2018

    Content Guy’s Note: Stories in this section are, in my estimation, important and relevant to business. However, they are relegated to this slot because some MNB readers have made clear that they prefer a politics-free MNB; I can't do that because sometimes the news calls out for coverage and commentary, but at least I can make it easy for folks to skip it if they so desire.

    Bloomberg reports that President Donald Trump has “resumed his public campaign against billionaire Jeff Bezos by calling his newspaper, the Washington Post, an ‘expensive lobbyist’ for Inc. and alleging the online retailer has a ‘huge antitrust’ problem.” The story notes that “Trump used Twitter on Monday to repeat his suggestion -- without offering any evidence -- that the newspaper is ‘used as protection against antitrust claims which many feel should be brought’ against the online retailer. He went on to misstate Amazon’s role in an internet sales tax case and the company’s impact on postal service revenues.”

    Bloomberg goes on to point out that the Trump administration “could act against Amazon through antitrust, the U.S. Postal Service, consumer protection probes or even stoke the mounting push against their government contracting business,” though there are institutional and procedural limits on how far and how quickly the White House could act.
    KC's View:
    First of all, I spend a lot of time reading the Washington Post, and one of the things I’ve noticed is that the paper seems to have no qualms about doing negative stories about Amazon. Or positive stories. They seem pretty even-handed to me, ands always are up front about the fact that Jeff Bezos owns the Washington Post.

    Second, I have no problem with a mature, nuanced discussion about whether the nation’s antitrust guidelines ought to be adjusted in view of new competitive realities created by technology. I think there have been plenty of cases when government regulators have made the wrong decisions because they’re using old rules that don’t reflect the way the world is.

    But … it has to be a nuanced discussion untainted by politics. Which means, I’d guess, that there isn’t much shot that it is going to happen.

    Published on: July 24, 2018

    Responding to yesterday’s story in which we talked about the advantage enjoyed by companies in which employees are owners, giving them skin in the game, MNB reader John Baragar wrote:

    My brother-in-law owns an Engineering firm in Atlanta.  He is a nice guy and from what I could tell, had a good relationship with his employees.  About 15 years ago, he told me he was going to give half the company to his employees.  I asked what they had to do for it.  He said  “Nothing.  I am just hoping to get us to see the bigger picture and be more proactive rather than just put in work.   I want them to be connected to the company not just see it as a job”.

    He gave 49 % of the company to his employees and they received 49 % of the profit each year.   I thought he was nuts.  He spent 15 years building the company from a single employee to over a hundred and he was going to give half of it away for free.

    I saw him the next year at Thanksgiving and asked how it was going.   “A little better than I expected.  With my 51 %, I’ll make more this year than I ever made with my 100 % so it didn’t really cost anything but people have a real connection to the company now and the difference around the office has been really something to see.”

    On another subject, from an MNB reader:

    The piece on July 23, 2018 about a “window” of opportunity for Wal-Mart was very timely.  Why?  I am an Amazon Prime member, have been since it started.  I was on Amazon today and was buying a Whole Foods 365 item.  During my checkout,  in order for me to get the 365 item, I HAD to be a member of Amazon Prime Pantry.  What!!!  I pay you $119 a year and now you are telling me I need to pay an ADDITIONAL FEE for Prime Pantry to purchase certain items??  Fool me once, shame on you.  Fool me twice, shame on me!!!

    I went to the Wal-Mart sight and bought a “like item”.  Was not a 365 item but who cares!  The 365 items ain’t gold!  The item was a “commodity” anyway.  When a company get’s “greedy” is a good time for competition.


    Regarding the Amazon-Walmart battle, I wrote yesterday:

    Ultimately, I think there is room for both Walmart and Amazon. But I also think that there is a lot of truth in the phrase, “Walmart won’t risk its business on this.” Risk is part of the game … that’s something that Amazon and Jeff Bezos understand in their DNA (perhaps because Bezos knows who said it).

    Which, inevitably, prompted one well-informed MNB reader to write:

    Jeff Bezos certainly does know, said Captain Kirk!  I'll say it again, until Walmart can get an item to my door on Sunday that I ordered on Friday, then I'll listen to any argument about how well they are doing to compete with Amazon - boom!

    Chiming in one the debate about whether price creates loyalty, one MNB reader wrote:

    Price is an effective motivator. When offered price incentives on products the consumer normally purchases they will purchase even more. When consumers purchase more of a product it takes them out of the market for several purchase cycles and less likely to shop elsewhere. One would think this would be obvious. It is an expense well worth the investment and one the customer will appreciate.

    I agree that price can be an effective motivator. I just think that in most cases, it cannot and should not be the only motivator.

    I wrote yesterday that “Francesco Molinari became the first Italian ever to win the British Open on Sunday, besting Tiger Woods, Jordan Spieth, Justin Rose and Rory McIlroy.”

    But one MNB reader corrected me:

    He is the first Italian to win ANY major (Masters, U.S. Open, PGA). Bravissimo!

    KC's View:

    Published on: July 24, 2018

    As often happens at this time of year, I’ve been getting emails from Portland, Oregon-area MNB readers wondering if I am going to have one of those casual get-togethers that we've done here the past few years.

    The answer is yes … and this year, I’m thrilled that it will be sponsored by Portland State University’s Center for Retail Leadership.

    So, let's get together Thursday night, August 2, at 5 pm, at Nel Centro, located at 1408 SW 6th Ave, in Portland. I'll plan on being there for a couple of hours, hopefully on the outside patio - and I hope that any MNB readers who'd like to stop by will do so. Put it on your calendar.
    KC's View: