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    Published on: September 25, 2018

    by Michael Sansolo

    In this new world of e-commerce and viral marketing, it’s wonderful to find an example of creative messaging breaking through big time. It reminds us that it still can be done and that even traditional companies can find a way - as we frequently call for here - to give both the ordinary and special an extra something.

    And in this case, it begins with the Cleveland Browns, possibly the most unsuccessful sports team in North America at the moment.

    Last Thursday, the Browns won a game, which for them is quite an event. The last time the Browns won was nearly 700 days earlier or late in the 2016 season. That’s the very definition of a dry spell.

    But as good as the game was for the team, it was better for the creative marketing minds at Budweiser, who for years now have set a high bar for such performance. At the start of this season, Budweiser placed special coolers filled with Bud Light in bars all around the city. Each was chained closed and locked with a padlock and a sign explaining that when the Browns finally won, all of Cleveland would win with free beer.

    It became a huge story in the sports world and exploded all over the Internet - especially when the Browns broke their streak of futility. Twitter was replete with details, such as how each lock needed a traditional key and how at times the wait was an interminable five minutes in some bars. There were countless photos of fans opening the coolers and toasting their team with Bud Light and pictures of fans at the Browns’ game itself holding up signs saluting Bud Light and counting down the minutes to the suds.

    It all is a wonderful reminder of how marketing and merchandising doesn’t always need to focus on the obvious and traditional. Someone at Bud clearly saw the potential in first, the Browns actually winning (it had to happen eventually!), and second, the ability to own that moment in a very unique way.

    The era of e-commerce competition constantly challenges more traditional companies to look for new ways to compete and connect by delighting or exciting shoppers or finding ways to build new experiences. No longer is simple convenience the way to win them over, especially when that same shopper can just sit on their sofa and remind Siri or Alexa to order up the next case of beer.

    What’s more it certainly isn’t usual times in the beer industry with younger drinkers increasingly moving to local craft brews.

    More than ever, we need creativity to create a winning advantage and Bud Light deserves a huge salute for that. There’s special irony that the event surrounded a Cleveland team because in many ways the city has proven the same point. Once derided as the “mistake by the lake” and mocked for the local river catching fire due to pollution, Cleveland is a different place these days. Thanks to the Rock and Roll hall of fame, Cleveland is a pretty cool place to visit, with a welcoming downtown and, obviously, lots of bars where Bud Light clearly has a special place in everyone’s heart.

    There’s a reason today why Cleveland Rocks. Bud Light does too, as does great marketing and merchandising.

    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: September 25, 2018

    by Kevin Coupe

    It is the mark of a unique retailer that people actually clamor to have it open in their community.

    Think of it as “YIMBY,” or “yes in my backyard.”

    That’s what has been happening the past few years in Surprise, Arizona, where residents - and the local economic development authorities - have been going out of their way to let Costco know how much they’d like the retailer to come to town.

    For several years in a row, according to a story in USA Today, local development authorities and residents have held a birthday party for Costco, celebrating on the anniversary of the opening of its first store. They take pictures, wear hats, and even eat a Costco-made cake … and then send the photos to the company with entreaties such as “wish you were here.”

    The story says that “by sending Costco fun notes, Surprise hopes to stand out in a crowd and build a relationship with the company.” And while Costco does not comment on where it might be planning to put stores in the future, Surprise’s rate of growth, the story says, would lead one to believe that it might be somewhere on the list.

    If it happens, it’ll be an Eye-Opener.
    KC's View:

    Published on: September 25, 2018

    The Seattle Times reports that Costco is building what the story calls a “massive chicken operation” in eastern Nebraska, with plans to use the facility to hold the price of its famed $4.99 rotisserie chicken. “The $300 million plant,” the story says, “which broke ground last year, will produce about 100 million chickens a year, about a quarter of the company’s annual U.S. demand.”

    The Times writes that “Costco has at times taken a substantial loss on the rotisserie chicken – known to ardent fans as the CRC – which entices shoppers into its stores for the purchase of more profitable items. The rotisseries are usually in the back of the giant stores, meaning a shopper has to pass by everything else to go get one.”

    The story goes on: “By delving deeper into the chicken supply chain, Costco is following its own playbook” with the hot dog and soda combo that it has been selling for $1.50 since 1983. It gets those hot dogs “in staggering volumes from a plant it owns in Tracy, Calif., where it also produces ground beef.”

    The Times adds that “the operation, set to open about a year from now, will revolve around a hatchery, feed mill and processing plant in Fremont, Neb., owned by Costco. Eventually there will be hundreds of new chicken barns in Nebraska and parts of Iowa to be operated by producers under long-term contracts with Costco.”
    KC's View:
    Costco has said that it is willing to eat tens of millions of dollars a year in order to keep its hot dog and chicken prices down, even if that means spending hundreds of millions of dollars on a chicken plant. But what this story really reflects is the company’s priorities, and a willingness to think long-term and invest in the business’s differential advantages.

    That’s an approach more retailers should focus on, I think.

    Published on: September 25, 2018

    Starbucks said yesterday that it is planning corporate layoffs and reorganization as it “tries to reverse stagnant sales and rekindle investors’ interest,” Bloomberg reports.

    Starbucks reportedly plans to think out the ranks of vice presidents and senior vice presidents, but not eliminate any jobs at the retail level.

    “We must increase the velocity of innovation that is relevant to our customers, inspires our partners, and is meaningful to our business,” CEO Kevin Johnson told employees in an email. “To accomplish this, we are going to make some significant changes to how we work as leaders in all areas of the company … We have opportunities to better prioritize and move faster,” Johnson said. “We must knock down the barriers in our decision making.”

    The story points out that Starbucks “is fighting back against fast-growing regional chains as demand wanes for its signature Frappuccinos. To counter this, Starbucks wants to speed the arrival of new menu items at its more than 28,000 cafes. It’s also pushing innovation in other areas including automating its back-of-store inventory system to reduce waste and let staff spend more time with customers,” as well as testing things like delivery.

    The layoffs and reorganization are expected to begin as soon as this week and be concluded within a couple of months.
    KC's View:
    My first thought when I saw this story was to wonder what Howard Schultz was thinking. After all, he’s only been gone for a couple of months, and his hand-picked replacement is already dismantling the place.

    I think it probably is a good thing that retail employees aren’t being affected; that for sure would be a sign of things going south. As I’ve written here before, I still find myself wondering when Johnson will begin slowing up a bit on the Reserve, Roastery and Princi initiatives, seeing them as off-message and non-core businesses. Though, I have to say that, having visited a Princi bakery store in Seattle last week, I was impressed … I liked it a lot, but I’m not sure what kind of legs it is going to have.

    Published on: September 25, 2018

    The Los Angeles Times had an interesting profile the other day of Deborah English, described as “ founder and president of DL English Design, which has created the look of stores for food retail giants such as Whole Foods, as well as other types of clients … Last year alone, the studio completed nearly 3 million square feet of space, emphasizing customer experiences and community engagement.”

    An excerpt:

    “For English, much of her work now is also about preventing physical stores from becoming obsolete in the era of online retail. She designs experiences for her clients’ customers — to keep them coming back. This shift is part of the reason why DL English’s restaurant business is growing and the studio has recently expanded into food halls. ‘The demand for that type of hyper-relationship between food retail and food service is really growing,’ she said.”

    You can read the entire story here.
    KC's View:

    Published on: September 25, 2018

    The New York Times reports that Rep. Jeff Fortenberry (R-Nebraska) and Rep. David Cicilline (D-Rhode Island) have expressed their concerns about how Google “may be tracking and targeting children for advertising,” in a letter to Google CEO Sundar Pichai.

    The letter comes “in the context of a growing national debate on tech and privacy,” and follows up “on a complaint filed in April by more than 20 advocacy groups” with the Federal Trade Commission (FCC). At issue is whether Google subsidiary YouTube is complying with the Children’s Online Privacy Protection Act (Coppa).

    According to the story, “In addition to the complaint and the lawmakers’ letter, Google is facing pressure from the New Mexico attorney general on how it may collect children’s location data. The state official named the tech giant as a defendant in a lawsuit filed last week against the developer of Fun Kid Racing and other gaming apps, along with advertisers involved with them, claiming that they were sharing children’s data without their parents’ permission.”

    The Times writes that “YouTube’s terms of service state that its main app and website are meant only for viewers 13 and older, which means that the site does not have to comply with Coppa. The company directs those under 13 to the YouTube Kids app, which pulls its videos from the main site. Google’s website says YouTube Kids prohibits ‘interest-based advertising’ and ads with ‘tracking pixels.’

    “But advocates have contended that YouTube is aware that plenty of children watch videos on the main site, and Representatives Cicilline and Fortenberry are pressing Google to provide details of how it may collect data from children’s videos on the site … The letter from the two lawmakers concludes with a series of pointed questions that ask Google to explain how it determines the age of its users, whether or not it collects the same personal data from children and adults and why YouTube includes channels that are ‘clearly child-directed’.”
    KC's View:

    Published on: September 25, 2018

    Reuters reports that Snap Inc. “is testing a new way to search for products on Amazon through its Snapchat app’s camera, allowing users to shop directly using the messaging app … The visual search function will allow Snapchat users to point its camera at an item or barcode and buy it from Amazon.”
    KC's View:

    Published on: September 25, 2018

    Bloomberg reports that Walmart, after years of testing, will require “suppliers of fresh, leafy greens to implement real-time, end-to-end traceability of products back to the farm using a digital ledger developed by International Business Machines Corp. The world’s largest retailer plans similar mandates for other fresh fruit and vegetable providers within the next year, according to Frank Yiannas, vice president of food safety.”

    The requirement will apply to suppliers of product to both Walmart and Sam’s Club stores.

    The story goes on to say that “Walmart’s move shows that IBM’s huge bet on blockchain, the technology that underpins the digital currency Bitcoin, is starting to pay off. With the leafy-greens mandate, more than 100 companies will be required to use IBM’s blockchain service, according to Walmart … More vendors will join in as the mandate is expanded.”
    KC's View:
    Transparency in such things is going to become an enormous advantage to companies that adopt such initiatives.

    Published on: September 25, 2018

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

    • NACS is out with a report saying that “nearly three in four (72%) convenience retailers said in-store sales increased over the first nine months of 2018 compared to the same time last year, and more than half (52%) said their fuel sales increased compared to last year, according to a nationwide survey of U.S. convenience store owners … Only 9% of retailers said that in-store sales declined and only 20% said fuels sales declined.”

    NACS says that its survey indicates that all three retailer optimism measures that it tracks “are at record highs: 87% are optimistic about their business prospects for the next quarter, 87% are optimistic about the industry prospects and 85% are optimistic about the overall economy’s prospects.”

    • The Washington Post reports that Sears Holdings is perilously close to a bankruptcy filing. According to the story, “Eddie Lampert, who owns the hedge-fund ESL Investments and is also the retailer’s largest shareholder and creditor, has asked creditors to refinance $1.1 billion in debt before a $134 million debt payment is due Oct. 15, according to a Sunday filing with the U.S. Securities and Exchange Commission. He also called for the company to sell off $3.25 billion worth of real estate and assets, including Sears Home Services and the company’s flagship Kenmore brand, which Lampert offered to buy last month for $400 million.”

    The filing says that Sears, which has $5.6 billion in debt, “must act immediately to have sufficient runway to continue its transformation” and become profitable.

    However, Mark Cohen, director of retail studies at Columbia Business School and the former chief executive of Sears Canada, tells the Post, “Eddie Lampert is seeking permission from himself to keep Sears on life-support while he continues to drain every last remaining drop of blood from its corpse. The operation is a failure, and there is no plan to turn that around."
    KC's View:

    Published on: September 25, 2018

    Yesterday we took note of a National Public Radio report that the “Equal Employment Opportunity Commission filed a lawsuit against Walmart Inc. on Friday, alleging the company has unlawfully discriminated against pregnant workers for years at one of its warehouse locations in Wisconsin … The complaint, filed in federal court on behalf of Alyssa Gilliam, claims Walmart failed to accommodate workers' pregnancy-related medical restrictions, even though job modifications were provided to non-pregnant employees with physical disabilities. It also says the company denied pregnant workers' requests for unpaid leave.”

    In denying the allegations, Walmart spokesman Randy Hargrove told NPR that "Walmart is great place for women to work. We do not tolerate discrimination, and we support our associates by providing accommodations every day across all of our stores, clubs, distribution centers and offices.” He also said that Walmart contends that "this case is not suitable for class treatment.”

    MNB reader Susie Mui-Shonk responded:

    I was at Walmart in their eCommerce team in San Francisco CA for 7 years. During that time I had my two kids.  My friends are always SHOCKED when I tell them what a great maternity leave they offered-3 months off paid.  It was a combo of standard paid maternity leave, and then state disability payments kick in.  Walmart made up the difference between the state disability payment and my paycheck. I benefited for sure from such a generous policy.

    This all said, I was a 'middle manager' in their corporate offices. What I don't understand, and what bums me out beyond words is why corporations treat their office worker bees so differently that the front line people in the stores and warehouses.  Women are discriminated against twice - for their gender and the fact they are not part of the corporate set and their separate set of policies.  WHY???

    Good question.

    On another subject, we got this email from MNB reader George Denman:

    All these discussions on barring plastic straws. My pet peeve is all the truck retreads littering our roads and highways.  Thousands of tons of blown tires and jagged steel line the highways in every state that I visit and not only are a hazard for cars but where do they end up in the end? I was in a caravan of classic cars going to a show Friday morning and we had to pull onto the shoulder to help one of our club members and we were all dodging huge slices of blown tires…. Sick….

    And, MNB reader Andy Casey had a thought about the New York Times story about Charlotte’s Legendary Lobster Pound in Southwest Harbor, Maine, where, before they plunge the lobsters into pots of boiling water, they pump a little pot into the tanks just to mellow them out a bit:

    There has got to be a Jimmy Buffett song in there somewhere.

    KC's View:

    Published on: September 25, 2018

    In Monday Night Football, the Pittsburgh Steelers held on to defeat the Tampa Bay Buccaneers 30-27.
    KC's View: