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Tuesday, January 27, 2015

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Sansolo Speaks: The Simpsons, Supermarkets and the Future

by Michael Sansolo

Which of the following is more improbable: That an episode of "The Simpsons" would clearly explain the future challenges of competition or that a speech detailing the death of retail would actually contain a single nightmarish line?

Let’s call it a tie and accept, incredibly, that the two events happened within 15 hours of each other. Start with the speech.

Doug Stephens, the opening guest speaker at the Food Marketing Institute (FMI) Midwinter Executive Conference, detailed the stunning challenges facing retail due to changing consumer habits fueled by the world of e-commerce. Although Stephens offered hope to the conference through the power of experiential marketing, he did include one important zinger.

“Your real competitor,” he said, “is not at this conference.”

Stephens is right. In our times of change there is no telling where the next threat will arise. I doubt Uber attended any taxicab owners’ convention. Nor do I remember Walmart being a regular at FMI events prior to invading the industry 25 years ago.

You never see the one that gets you.

The FMI crowd got another warning along the same lines from John Zogby, the political and social pollster. In talking about the different habits of Millennials, Zogby said this young and powerful generation “will bypass traditional channels not geared to solving problems.”

To make the point clear, Zogby detailed numerous industries being heavily impacted by free apps, from medical care, legal advice or video downloading services. As we are found of saying here at MNB, things are only impossible until they are not.

And that takes us to "The Simpsons. " Thanks to the lingering effects of the stomach flu I skipped the FMI Sunday reception to rest in my room watching television. As a complete sophisticate, that meant tuning into "The Simpsons."

In this week’s episode Elon Musk, the founder of Tesla and Space X, literally rockets into Springfield. Finding himself bereft of new projects, Musk hangs with Homer and starts turning all of his inane ramblings into revolutionary inventions. In no time, Springfield is a haven of driverless cars and all manner of creative technologies.

There’s one wrinkle. Tycoon Montgomery Burns links up with Musk, sold on his notion that there are countless new ways for Springfield to use Burns’ supplied energy. Burns is delighted until he suddenly realizes that the innovations are costing him millions of lost profits.

As Musk explains, Burns is passing on profits now to benefit society well into the future. Needless to say, Burns isn’t pleased.

Only it is not a joke.

Think about those warnings from Stephens and Zogby. The future is likely to bring competition unlike anything we know today. And as Musk explained on "The Simpsons," they may do it without any regard for next quarter’s bottom line.

Taken together it means your company need think more creatively than ever about how to provide relevant, important and authentic experiences, services and products to your customers. It means you need keep a wary eye on the horizon and keep asking “what if” as you see changes in other industries. It means accepting that what you might currently think is impossible could very well happen soon.

Or you could do nothing and one day soon, you’ll have a one word response to the trouble you are in.

“D’oh!”

It’s your choice.


Michael Sansolo can be reached via email at msansolo@morningnewsbeat.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.

Reporting In: From FMI Midwinter - Notes & Comment From The Content Guy

by Kevin Coupe

MIAMI BEACH - The thing about a meeting like the Food Marketing Institute Midwinter Executive Conference is, there tend to be more questions than answers.

Maybe that's normal. After all, we live in a fast-changing world with evolutionary and sometimes even revolutionary competition, enormous financial and infrastructural challenges, and a consumer population that often is near impossible to judge and/or satisfy. So it's natural that during the course of several days of events, there will be more sentences ending in question marks than periods.

But that's certainly the way I felt on Monday. And it is one of the things I am going to try to address in the panel discussion that I'll be moderating at FMI Midwinter this morning.

Monday started with a presentation by Doug Stephens, an author and self-described "retail prophet," in which he talked about how traditional retailers can compete with e-commerce offerings. The prescription won't be a surprise to anyone who has been reading MNB for the past 13 years - stores, Stephens said, have to tell a story and need to create "an intensive experience that you can't have online." Retailers, he suggested, need to treat the store as a kind of 'living website," constantly offering new products and services, and be ready to adapt to shoppers who no longer are homogenous and predictable. There will, he said, be retailers that are immersive, value-added and that will create an emotional connection to the consumer, and there will be retailers that will be ubiquitous, low-service and low-cost, creating a cognitive connection to the consumer. But there won't be much in the middle, he said.

"This is an historic change," Stephens said, "and if you miss it, you are going to have a hard time staying in business." He did offer one terrific metaphor, showing a picture of a dreary bus stop and suggesting that retail has been just like it - doing what it is supposed to do, and no more. But then he showed a picture of a bus stop in Paris where the seats have been replaced by swings, and where the expectations about waiting for a bus have been turned on their head.

That, Stephens said, is what retailers need to do.

In a later presentation, pollster John Zogby - in addition to talking about the powerful habits of Millennials as described above by Michael Sansolo, also offered a somewhat dour view of the American dream circa 2015, a time when there is greater food insecurity than ever, and when more and more people are working at jobs making less than they did in earlier jobs. And, he talked about the segmenting of America, as people break up into "neo tribes," challenging marketers to figure out how best to influence them.

The thing is, all this got me thinking...

Okay, the industry has to adept to new competitive realities. New ways of segmenting and targeting customers. Has to find new products and services to offer, and figure out which products and services are less relevant. And they have to create new and immersive store experiences, except when they don't.

To me, the question becomes simple: How?

Or more specifically, how do the economics and the infrastructure of the industry have to change in order to make these adjustments?

The business world often doesn't take kindly to retailers who try to create fast, revolutionary change in their organizations. (Just ask Ron Johnson, late of JC Penney.) So what is required of leaders who lead their companies in these new directions, hoping that the destination will be a profitable one and not the edge of a cliff. And how will all these changes affect the competitive landscape of the industry?

That's what I want to talk about this morning when I get on stage with three very smart guys: Burt Flickinger of Strategic Resources Group, Scott Moses of Sagent Advisors, and Andrew Wolf of BB&T Capital Markets. I've talked to all three of these fellows ... I think they'll be provocative and lively ... and we'll bring you up to date tomorrow about what they say.

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From ReposiTrak...


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Worth Reading: The Power Of Small

There is a terrific piece on The New Yorker website that highlights the power of small:

"Consider a few surprising and optimistic facts for the new year: nationwide, independent bookstores have grown by about twenty per cent since 2009; meanwhile, American craft breweries collectively now sell more than 16.1 million barrels of beer annually, outpacing, for the first time, Budweiser. This isn’t the only evidence that small-scale businesses are making a comeback. Over the last ten years, the long-running decline of small farms has levelled out, and more than three billion dollars was spent last year on more than four thousand independent feature films. Over all, since 1990, small businesses (with, generally, fewer than five hundred employees or less than $7.5 million in annual receipts) have added millions of employees, while big businesses have shed millions.

"None of these developments has individually transformed the American economy, but taken together they represent something."

And, the piece cites as an example an industry dear to the Content Guy's heart:

"Consider the story of craft beer. Large-scale breweries destroyed their smaller rivals in the twentieth century because they were able mass produce the stuff for cheaper (reaching wholesale prices of about fifty cents a beer or less) and because their fat margins allowed them to pay for things such as television advertising. In the late nineteenth century, there were thousands of breweries in the United States; then, Prohibition came, and, after it ended, a consolidated industry emerged. By 1979, there were just forty-four remaining. The giants had won again.

"But the small breweries came back. Their beers were not better advertised and certainly not better priced. Rather, the crafts went after an enormous blind spot for the big breweries—namely, flavor. I don’t entirely mean to be snide; more precisely, craft beer succeeded by opting not to compete directly, instead pursuing what can be called a “true differentiation” strategy. That means they established a product that, in the mind of the consumer, is markedly and undeniably different (as opposed to “false differentiation,” which is more or less the same thing with different packaging). True differentiation, if it works, actually changes consumer preferences. The dedicated craft-beer drinker, once he’s hooked, no longer cares if Coors Light costs three dollars less. Today there are once again thousands of breweries in the United States (more than 3,000, in fact)."

It can't work everywhere, or in every industry ... but it can work in a lot of places, where people of independent thought and innovative mindsets look for places where they can find a differential advantage. You can read the entire column

here.

KC's View: This sort of ties into the points we've tried to make above - the importance of finding points of differentiation that can appeal to customers and persuade them to change their behavior. "Independent bookstores (whose sales are actually rising) can’t beat Amazon on price or selection," the story points out, "but they can curate intensely and make the act of browsing for books an enjoyable experience that cannot be matched online."

That's what retailers - of all sizes - have to do. But my question remains ... how to make these course adjustments while still trying to win the day-to-day battle for market share, sales and profit.

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Register Today for the Shopper Marketing Summit





Visit http://www.shoppersummit.com for a complete list of speakers, exhibitors and the full conference agenda.

Register today to reserve your spot – early bird rates expire January 30!

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Starbucks Readies New Delivery Service: The Fourth Place Is Your Place

Business Insider reports that Starbucks is getting closer to launching its new delivery service, with CEO Howard Schultz telling analysts that the company is "finalizing plans for two distinct delivery models — one of which utilizes our own people, green-apron baristas, and the other, which leverages the capabilities of the third-party service."

The story says that "members of Starbucks' loyalty program will be able to request delivery through Starbucks' new mobile order and pay app, which will be rolled out nationwide this year."

Schultz told the analysts that "what’s actually occurring is the cultural shift in time allocation away from retail experiences people have felt forced to undertake and towards retail experiences that people want to enjoy with convenience as the key enabler. Now what you’re going to see in the years ahead will be a rapid acceleration in mobile device purchases and a continued significant migration away from bricks-and-mortar commerce. There is obviously a huge prize there and that’s why we’re seeing so much activity around the payment space from all kinds of companies."

KC's View: As suggested by our headline, it is interesting to watch Starbucks move from its "third place" roots to this new, ancillary strategy. I'll be curious to see which delivery method takes precedence ... I'd bet on using their own people instead of a third party service, simply because I cannot imagine Starbucks trusting the delivery experience to an outsourced company.

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From IGA...


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HEB To Open Small Store Format In San Antonio

The San Antonio Business Journal reports that HEB plans to "build its smallest store in the chain in downtown San Antonio, a harbinger of what may come to Central Austin in the future." The company has gotten approval to open a 12,000-square-foot grocery store and gas station on South Flores Street and East Cesar Chavez Boulevard; the story notes that "the store in downtown San Antonio will be about one-sixth the size of an average HEB grocery store."

William Triplett, senior vice president of strategic design at HEB, tells the paper that "everyone always likes a bigger store because it allows us to increase our variety and offerings. We tried to make (the downtown location) as big as we could with the land available after a reasonable amount of parking, space for truck docks and the gas station."

Triplett says that HEB's biggest challenge going forward "is figuring out how to operate such a small store — especially in terms of delivery methods and stock."

KC's View: With people in the US moving out of the suburbs and back to the cities, we're going to see more and more of this ... and I wonder if it will open the door for the kind of infrastructure innovations that the industry needs to be competitive and relevant to changing consumers.

Study: As Gas Prices Go Down, Consumer Confidence Goes Up

The Nielsen Co. is out with a new study suggesting that - no real shock here - low gas prices mean greater consumer confidence.

"With gas prices down 31% since June, 2014 and oil prices around $85 a barrel, tumbling rapidly to its lowest levels in several years, American Consumer Confidence has improved dramatically, going up 12% points year over year," the study says, adding that "Americans are feeling good again about their personal finances (+6% points) and immediate spending intentions (+8% points)."

The report goes on: "The percentage of Americans who felt it was a good time to spend also increased, by 9% points.  US shopping trips/consumer rebounded in November and December, increasing from 13 trips/month in June to 15 trips/month in December. Americans also have more money to spend on each of these shopping trips, as a result of cheaper fuel – spending at least a $1 more a trip. 39% of respondents said they have more money to spend due to declining gas prices and are putting this money towards paying their bills (50%), everyday essentials like food (36%) and discretionary items like home entertainment (30%) and clothing (30%).

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From NGA...

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Over the course of four days, attendees have the chance to take part in more than 30 education workshops on issues impacting their bottom line such as: consumer engagement, digital marketing, technology, food safety, data security and more!

The 2015 Expo Floor will have even more exhibitors and pavilions in categories such as produce, meat, technology, and GM/HBC, and numerous opportunities to see the solutions you'll need all in one place!

For more information, click here.

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Wawa Launches New Mobile Payment Application

Mobile Commerce Daily reports that Wawa, the Pennsylvania-based 640-unit convenience store chain, is "launching a new mobile application featuring a payment function and rewards program.

"The new Wawa app, which is available for Android and iOS devices, enables consumers to earn rewards points for purchases made at any of its 680 bricks-and-mortar stores, as well as pay for orders within the app. Users can also check nutritional information of various items, look up store hours and directions, and view up-to-date fuel prices."

The new app is said to be similar to those advanced by Starbucks and Dunkin' Donuts, both of which have found their versions as being strong contributors to ongoing customer loyalty and growing sales.

KC's View: If it is anything like Starbucks' mobile app, it's going to be a win. That's the gold standard.

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2014 Year-in-Review from MyWebGrocer

Do you know how many million grocery emails were sent in 2014? And the growth in new eCommerce users on mobile devices?  It’s an exciting time to be a part of the digital grocery industry, as adoption rates and technological innovation continues to skyrocket. We’re thrilled to be right in the middle of it, and hope you join us on this exciting journey in 2015.

Download MyWebGrocer’s 2014 Year-in-Review infographic to learn more about what makes us the leader in digital grocery….and to uncover the answers to these questions and more (some of the numbers may surprise you)!

We’re looking forward to a successful 2015 and hope you will join us. Contact us today at sales@mywebgrocer.com , or call us at 888-662-2284.

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Tesco Battles Competitive Ennui With Restaurant Strategy

Tesco may be fighting for its competitive life because of lackluster sales and an accounting scandal, but that doesn't mean it isn't innovating.

The Guardian reports that "at the Tesco Extra in Osterley, west London, Paul Goodale (a former restaurant director at Harrods, no less) has just launched Fred's Food Construction, a very on-trend diner selling New York deli-style subs and US 'French dip' sandwiches. If it goes well, you can expect to see Fred's, in which Tesco has made a 'small investment,' rolled out in-store nationally."

The story goes on to note that Tesco "has been more energetic than most" in building a presence in the restaurant business: "It part-owns coffee chain Harris + Hoole, and last year bought Giraffe, which now has four in-store restaurants at Tesco sites, with more to come. Apparently, its introduction of places to eat, drink and hang out after the Friday night shop is all part of a bid to make Tesco stores 'warmer and less clinical.' In an attempt to squeeze a few more quid out of its captive audience, of course."

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A Reality Check ... From Samuel J. Associates...

Time to turn the page on 2014, and embrace some 2015 realities…


1.  The job market is robust.
  Samuel J. Associates currently is engaged in dozens of searches, matching exceptional talent to great companies.

2.  The opportunities are varied.  The businesses in the market for remarkable people are national and regional, chain and independent … and include both bricks-and-mortar retailers and e-commerce companies.

3.  The time is now.  Samuel J. Associates has a singular reputation for identifying and recruiting winners - people who are focused, motivated, savvy and determined to excel.   While recent years have seen a somewhat stagnant job market, 2015 appears to be positioned for a major rebound.

If you are looking for a change, and for fresh opportunities to make a contribution and embrace new challenges, contact Samuel J. Associates today.


It's 2015.  Time to get to work.

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The MNB Walmart Watch

TechHive reports that Walmart has begun selling its Vudu Spark streaming USB dongle, which allows consumers to plug into their TV sets and rent or purchase content from the Walmart-owned Vudu service, for just $25.

The story notes that "the Vudu Spark’s release is another sign that it isn’t enough to just provide an online storefront - you need to give TV lovers an easy and affordable way to watch the media you sell on their big-screen TVs ... Walmart seems uniquely qualified to get the booming streamer dongle market an added boost, too, thanks in big part to its devotion to low prices. Sure enough, at $25, the Vudu Spark is $10 less than the Chromecast ($35) and $15 less than the Fire TV Stick ($40). Meanwhile, Roku’s Streaming Stick retails around $50 and Microsoft’s Miracast will cost you around $60. All of those are fairly inexpensive, but $25 moves streaming dongles solidly into the impulse-buy range."

KC's View: Walmart, like Amazon and Apple, wants to create its own ecosystem. It's smart, because it captures more and more of the consumer's behavior, which allows Walmart then to target that shopper even more.

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From WAFC...


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FastNewsBeat

• The Wall Street Journal reports that "Post Holdings Inc. has agreed to buy privately-held MOM Brands Co. for $1.15 billion in a deal that will add Berry Colossal Crunch and Frosted Mini Spooners to Post’s trove of cereal brands ... Under the terms of the deal, Post will pay MOM $1.05 billion in cash and issue its owners 2.45 million shares of Post stock."


• The National Retail Federation (NRF) reports that its Consumer Spending Survey suggests that "the average person celebrating Valentine’s Day will spend $142.31 on candy, flowers, apparel and more, up from $133.91 last year. Total spending is expected to reach $18.9 billion, a survey high."

The study goes on to say that "men will spend nearly double what women plan to spend ($190.53 versus $96.58 on average, respectively.)  Additionally, adults 25 to 34 will outspend other age groups at an average of $213.04; 35 to 44 year olds will spend an average of $176.21 and 18 to 24 year olds will spend an average of $168.95."

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Are You Happy With Your Digital Marketing?


Webstop retailers are satisfied and you could be too.

Webstop provides comprehensive grocery websites with advanced integration of mobile features, digital coupons and other award winning marketing tools for grocers. To talk to us, call 727.942.2797 or just email shawn@webstop.com

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Executive Suite

Bloomberg reports that Walgreens Boots Alliance Inc. has named George Fairweather, group finance director for Alliance Boots Holdings Ltd. before its acquisition by Walgreen Co, to be CFO of the combined company. He succeeds Tim McLevish, the current CFO, who will become a senior adviser to the CEO.

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From Invatron...



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Your Views

...will return.

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From Coupe & Sansolo ... TWO NEW BUSINESS BOOKS THAT TOTALLY RULE!

From Kevin Coupe & Michael Sansolo, co-authors of "The Big Picture: Essential Business Lessons From the Movies"…

In "Business Rules!", Michael Sansolo brings his unique perspective on business to this guidebook for people running business big and small. Some of the 52 rules are surprising, as in “Fail fast and fail cheap” (Rule 14), which shows the power of failure. Others offer new insights: “Focus on your best customers” (Rule 4) shows how Lady Gaga is a model of loyalty marketing.

"Retail Rules!", by Kevin Coupe, offers 52 rules to steer a retailer to success. With a liberal dose of examples from today's business environment, Coupe gives advice on management, marketing, customers, and operations, reflecting The rules Kevin's unique - and often irreverent - view of the world of retail.


And … there's a special deal if you order both books. Yippee!

Both "Retail Rules!" and "Business Rules!" are designed to be fast, evocative reads … and they're both made even more fun by the drawings of Steve Hickner, the well-known animator and director of Bee Movie, who illustrates every chapter with the kind of exuberance that Kevin and Michael bring to their writing.

ORDER TODAY!

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Make Your Next Event Unique, Mesmerizing & Provocative

Here is everything you need to know about what Kevin Coupe - MNB's "Content Guy" - can bring your meeting or conference:

"The response from our staff to your presentation has been overwhelming. There has been an excitement and enthusiasm that I have not witnessed since taking over this position. The thanks in the hallways, the emails, the comments … have all been extraordinary. Thank you for capping off the perfect company event yesterday."
Steven L.  Goddard, President/CEO, WinCo Foods

"He brought a unique perspective, and  helped us think about our industry and the changing consumer in new ways ... He left us with a lot of rich conversation and actionable information ... He was terrific."
- Lynn Marmer, Group VP Corporate Affairs, The Kroger Co.

"Kevin Coupe was an injection of high energy. Both his presentation and the session he facilitated were huge hits with our team.  Unanimously, people told me how right on, topical and extremely well presented his speech was!"
- Peter T. Wolf, CMO, ParTech Inc.

"Kevin Coupe is authentic, witty, informed and speaks from the heart.   His pace and style of walking the room kept our members engaged and attentive and his remarks were punctuated by a mix of thought provoking and entertaining pictures and videos.  Kevin is direct and challenged our members to think and take risks by tapping into both sides of the brain.   The positive energy that Kevin generated lasted throughout the day; expect to be surprised.” - Shelley F. Doak, Executive Director, Maine Grocers Association

With a uniquely fast-paced, provocative and entertaining approach, Kevin Coupe identifies the ways in which consumers are changing, the reasons behind these changes (technology, the economy, culture, demographics), how new and unorthodox competitors are altering the marketing landscape, and what companies need to do to find and exploit differential advantages.

"My team was mesmerized by Kevin’s presentation. Thanks to Kevin, they left the meeting newly energized with a strong sense of purpose.”
- Donna Giordano, President, Ralphs

"Our group felt your presentation was filled with fresh, practical information and is excited about trying some new marketing approaches.”
- Norman Mayne, CEO, Dorothy Lane Market

Want to bring this kind of excitement and energy to your next meeting or conference? Check out KevinCoupe.com.

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