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Monday, November 28, 2016

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Monday Morning Eye-Opener: A Sacred Cow Goes Out For Coffee

by Kevin Coupe

Marketplace, on National Public Radio, had an interesting story the other day about a retailer that is dealing with changing consumer habits by changing the way it charges customers.

At the typical coffee shop, the story notes, people often seem to spend a lot of time reading, chatting, surfing the web and turning the shops into an extension of their offices or homes - while maybe buying one coffee (albeit often an expensive one). This is sort of what Starbucks had in mind when it built an entire chain around the "third place" strategy, though it may not have occurred to the company's leadership that some people would stay for quite so long or spend so little.

In Brooklyn, New York, however, one coffee shop has found a new way. There, the Glass Hour Cafe "feels more like somebody’s living room than a coffee shop. Walking around, you see a couch, some bean bag chairs. What you won’t see at Glass Hour: a kitchen or even a cappuccino machine. You serve yourself from a simple drip coffee pot. The food? A few humble granola bars and chocolates.

"The owners, who opened it in August, call it an anti-café. Instead of shelling out for food and drink, customers pay for the time they spend - 10 cents a minute or $6 an hour. Which means no one will judge you for sitting here all day long."

To be clear, "Glass Hour isn’t profitable yet, so the founders are still waiting to see if there’s a market in America and Brooklyn, land of coffee shops, for their imported idea."

But I think the idea - which seems like it was positively made to be tested in Brooklyn - illustrates a larger notion. Companies cannot and should not always do things the same old way, just because they've always done them that way. in fact, in the current competitive environment, that's probably the best reason to abandon old strategies and tactics. The odds are pretty good that they're simply not up to the task anymore.

A friend of mine, Beau Fraser, co-wrote a book several years ago that focused on this, and the title vividly illustrates the book's premise: "Death To All Sacred Cows: How Successful Business People Put The Old Rules Out To Pasture." (You can find it on Amazon here. I recommend it heartily.)

I have no idea if the Glass Hour will be successful or not, but I do think the counter-intuitive exercise is worth undertaking. For everybody.

It can be an Eye-Opener.

Post-Thanksgiving Sales Recap: Sales Up As E-commerce Dominates

The Washington Post reports on National Retail Federation (NRF) sales figures for the just-passed holiday weekend, saying that "about 154 million shoppers made purchases at stores or on e-commerce sites this holiday weekend ... a bump up from the 151 million people who last year participated in the annual barrage of Black Friday deals."

At the same time, the shift to e-commerce away from bricks-and-mortar stores continues. "This year," the Post writes, "about 108.5 million people shopped online over the holiday season, compared with 103 million last year. Meanwhile, the number of people who shopped in stores fell to 99.1 million from 101 million last year."

However, the Post also notes that "average spending per person was down to $289.19 from $299.60 in 2015," which it said was probably "baked into" retailer expectations. The Post also notes that this trend "could prove a troublesome dynamic for them if ultra-deep discounts end up being needed all season long to get people shopping."

NRF president/CEO Matthew Shay said in a prepared statement that "in fact, over one third of shoppers said 100% of their purchases were on sale."

The Wall Street Journal writes that "the shift highlights the struggle traditional retailers face as they strive to attract foot traffic into their brick-and-mortar locations with deep promotions, friendly staff and exclusive products, while investing billions to become e-commerce experts to fend off Amazon.com Inc. and attract consumers who are more willing to use their mobile phones to snag deals."

Mobile also played a bigger role this year, according to reports. The Wall Street Journal writes that "Amazon said sales from mobile phones on this year’s Black Friday beat last year’s Cyber Monday and Black Friday, and exceeded such sales on Thanksgiving to become one of the biggest mobile shopping days on its site ... Wal-Mart Stores Inc., the world’s largest retailer by revenue, said 60% of Black Friday online orders came through mobile devices, up from 50% last year. According to Adobe, mobile phones accounted for 55% of website traffic on Black Friday, and 36% of sales, up from 33% of sales in 2015 and 26% of sales in 2014."

Today is what is referred to as Cyber Monday, which is when many e-commerce sites launch their most aggressive holiday promotions. "NRF’s survey found that about 122 million people plan to shop on Cyber Monday, up from 121 million last year," the story says.

KC's View: It seems to me that what we're really seeing here in many ways is a continued shifting of power from retailers to consumers. It used to be that stores could ring the bell on Friday morning, and like Pavlov's dogs, consumers would get up early in the morning to hit the stores and fight over this toy or that appliance in scenes that seemed akin to the running of the bulls in Pamplona. (I know I'm mixing my animal metaphors here.)

Now, consumers spend money when they want to, and don;t have to go anywhere to do so. They can get better deals while sitting on the couch or at the Thanksgiving dinner table if they so choose, and they can comparison shop to their hearts' content, and wait to get better deals that they assume (usually correctly) that they think will come.

The Wall Street Journal quoted Ray Harjen of RetailNext, an in-store analytics firm, as saying that most Americans think it is “easier to shop from one’s couch than to fight one’s way through the mall." No argument here. And NRF said that the most time to shop in stores was after 10 am on Friday, which suggested that the old "let's hit the stores at 5 am" mentality is a thing of the past. Again, no argument.

That's certainly what we did over the weekend, but we were in control of the experiences ... and there was plenty of time to stop at a local saloon to decompress from an experience that, to be honest, wasn't all that intolerable. It was, however, a good excuse to go out for a drink.

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From MyWebGrocer...

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From the National Grocers Association...

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From Cobram Estate...

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Visa Revises Chip Technology Rules For Merchants

Bloomberg reports that Visa Inc. has "revised rules for merchants using its new chip technology for debit-card transactions after some retailers claimed the requirements inhibited competition." According to the story, "Merchants won’t be required to ask the cardholder to choose which network processes the debit transaction, Visa said Tuesday in a statement. Stores can also continue to prompt cardholders to enter a personal identification number, or PIN, on in-person transactions."

The story says that "retailers have complained that the fees they’re charged for debit payments have climbed in the aftermath of the US transition to chip-embedded, or EMV, cards. Unlike magnetic-strip cards, whose codes can be copied and stored by hackers for later use, EMV technology generates distinct codes for each transaction."

The changes reflect "'new guidance recently issued from the Federal Reserve and address a Federal Trade Commission inquiry,' Visa said in the statement."

Leslie Sarasin, president/CEO of the Food Marketing Institute (FMI), issued a statement in response to the changes, saying that "FMI is pleased to see Visa change its rules on the confusing EMV debit screens at checkout," but added, "While Visa’s actions to change its rules to comply with the law are a significant step in the right direction, it will take some time for grocers who have the confusing screens to replace them. Therefore, FMI requests that Visa prevent additional exposure to liability while merchants revise their systems to ensure customers have the safest, most secure and most efficient transactions."

Fat Chance: Chipotle Said To Be Full Of Beans About Calorie Claims

The Los Angeles Times reports that Chipotle, still trying to recover from a series of food safety problems that threw its business into turmoil, now is being sued by three consumers who say that it has been making fraudulent nutritional claims.

At issue is a chorizo burrito that Chipotle was advertising in the Los Angeles area has being just 300 calories. According to the story, the men "thought they had entered burrito heaven," but then, having consumed the burritos - which included chorizo, white rice, black beans, tomato salsa and cheese - they felt excessively full and questioned the claim.

The Times writes that "although the lawsuit claims the 300-calorie claim is a lie, it does not provide an alternate calorie count for the burrito." However, "according to the nutrition calculator on Chipotle’s website, a burrito with chorizo, white rice, black beans, tomato salsa and cheese would pack 1,055 calories. A serving of chorizo alone is 300 calories, according to the website.

"The lawsuit contends that 'consumers are lulled into a false belief that the items are healthier than they really are, and thereby encouraging repeat patronage by consumers who are concerned about the nutritional values of the food they eat'."

Chipotle says that it does its best to be transparent, and dismissed the lawsuit as "nothing more than allegations and is proof of nothing.”

KC's View: I would've assumed that the tortilla alone might've been close to 300 calories.

The 300-calorie claim doesn't sound very credible to me. In fact, it sound so incredible that I'm sort of amazed Chipotle would've made it.

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From Webstop...

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Worth Reading: The Expense And Efficacy Of Health Food

Good piece in the Washington Post about two relevant questions that are worth considering when thinking about why Americans don;t consume healthier food.

"The first," the Post writes, "is empirical: Is healthful food more expensive? The second is behavioral: Is cost what stands between people and a better diet?"

While cost is an important factor, it may not be the only factor ... and there are other things that consumers are thinking about - and retailers and suppliers ought to strategize about - when it comes to healthier diets.

You can read it here.

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From Samuel J. Associates...Better To Light A Candle Than Curse The Darkness...


From MorningNewsBeat, September 15, 2016:

A US Department of Labor report recently revealed that there were 5.2 million jobs available in the United States ... which was said to be the highest level of job availability since these specific numbers started being tracked back in 2000. This despite the fact that there remains considerable debate, much of it cacophonous, about national unemployment and under-employment.. The problem, one expert said, is that what we have in this country is "one of the biggest mismatches between skills and lack of qualified help available in the nation's history."


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The kind of match that can help a business achieve new heights and higher levels of differentiation by identifying the people who don't just fit into a culture, but help create a culture of excellence. The kind of match that can help individuals identify companies where they are empowered to make a difference, and move the needle on customer service, product development, marketing, merchandising and/or technological advancement.

Don't just settle. Don't just make the easy choices. Allow Samuel J. Associates to work for you. We don't just believe in such people and companies. We actually put them together. And we have the track record to prove it.

Click here for more information from Samuel J. Associates.

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ProLogic Retail Services Extends Shopper Loyalty Program at Lowes Foods

Winston-Salem, NC -- ProLogic Retail Services, the largest provider of loyalty marketing solutions to independent grocers, announced the extension of its contract with Lowes Foods, which operates close to100 full-service supermarkets in North Carolina, South Carolina and Virginia.

Through the Fresh Rewards program, ProLogic enables Lowes Foods to segment its shoppers, identifying its top shoppers and understanding their purchase patterns. With this information, ProLogic enables Lowes Foods to run targeted promotions that are specifically tailored to individual shoppers or groups of shoppers. These targeted promotions help Lowes Foods to retain its best shoppers and expand their purchases throughout the store.

"We are very pleased to extend our longtime partnership with ProLogic," said Tim Lowe, President of Lowes Foods. "ProLogic delivers great value to Lowes Foods with a powerful, flexible loyalty marketing platform that enables us to create and execute intelligent promotions. The Fresh Rewards program is a cornerstone of our relationship with our guests and has proven highly effective in helping us retain our top shoppers and increase their purchases."

For more information, click here. Or contact Lance Recker at lrecker@prologicretail.com or at 561-454-7646.

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Video Stores Take Action To Maintain Consumer Viability

The Wall Street Journal has a story about how some video rental stores continue to buck the streaming video trend, offering options to consumers that they can't get elsewhere.

"Owners and customers of the more than 100 independent and nonprofit video stores still kicking throughout the U.S., often in places with strong locavore food scenes, say the stores offer variety film lovers can’t find elsewhere," the Journal writes. "It might be a deep roster of anime films by Hayao Miyazaki, or one of Dario Argento ’s more obscure grindhouse efforts. They allow a browsing experience impossible online and serve as libraries for movies and TV shows that will likely never transfer to an online format."

KC's View: The story make a very important point for any retailer looking to compete with e-commerce giants (or even bricks-and-mortar giants) - you have to be really, really consumer focused, with a deep knowledge of what consumers want, an ability to predict how they'll respond to recommendations, and a willingness to not do business according to old constructs.

I think it is very interesting that video stores tend to be successful in places with strong locavore movements, but I also believe that one cannot simply wait for movements to emerge. One can help seed them by being aggressive about promotion and product selection.

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From iControl...

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E-conomy Beat

GeekWire reports that Amazon is considering making an $1 billion buyout offer for Souq.com, described as "an 11-year-old e-commerce marketplace based in the Middle East ... An acquisition of Souq.com, with nearly two million products for sale on the marketplace across categories such as books, electronics, toys and home products, would supercharge Amazon’s expansion in the Middle East."

The story says that Souq was originally interested in selling just 30 percent of the company, but that Amazon's preference is for all or nothing all.

Two other points from the GeekWire story: that "Souq is facing new competition from a Saudi Arabia-backed company by the name of Noon, which earlier this month raised $1 billion" and "plans to launch in January with 20 million products," and that a billion dollar purchase of the company "would be one of the largest deals for Amazon, which historically has spurned large acquisitions in favor of organic growth."

FastNewsBeat

• The Seattle Times reports that a federal judge over the weekend ordered pilots at the Air Transport Services Group (ATSG) to go back to work, issuing a temporary restraining order to end a strike that started last Tuesday.

The reason this is important? ATSG, the story notes, "hauls packages for Amazon.com and DHL Worldwide Express," and the strike, had it continued, "threatened to disrupt holiday deliveries." Amazon was leasing the ATSG fleet as a way of coping with expected high volumes during the end-of-year holiday shopping season.

RIP

Three notable deaths since MNB took off for the Thanksgiving weekend...

• Fidel Castro, the former president of Cuba who helped to overthrow a dictator there only to become one himself, turning Cuba into a Socialist state while oppressing his people and suppressing all dissent, passed away late Friday night. He was 90.

• Florence Henderson, who gained national fame and enduring affection that transcended generations as the mother on "The Brady Bunch" TV series, passed away on Thanksgiving day from heart failure. She was 82.

• Ron Glass, who became best known to one generation of viewers as one of the detectives in the "Barney Miller" TV series, and then became part of the cult TV series "Firefly" ensemble, as Derrial Book, a shepherd and spiritual advisor, passed away on Friday. The cause was respiratory failure. He was 71.

KC's View: As a Browncoat, I feel it is my duty to repeat a line that Derrial Book utters on "Firefly." Once asked how come he does not care where he is going, Book responds, "Cause how you get there is the worthier part."

A sentiment worth remembering.

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From the Western Association of Food Chains (WAFC)...


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Your Views: Target Practice

Got the following email from MNB reader David Fischer:

You've written a number of stories about Target's grocery efforts, here's an observation that I made this last weekend.

On Thanksgiving Eve, I went to Fred Meyer to do some last minute grocery shopping. The store was packed with people as you would expect on the busiest grocery shopping day of the year.

Afterwards I went to Target to pick up some personal items. I like going to Target for those items since they have a better selection and lower prices than Fred Meyer. I wandered over to the grocery section, which was nearly empty. I looked around and realized that you could buy anything you needed for a thanksgiving meal at Target. So it got me thinking, why are so few people buying their food at Target?

Here's the revelation I had. Target's problem isn't so much selection, rather it's perception. Yes, their produce selection needs help. And they don't carry much in the way of meat but they have enough for most people. Not having a deli or bakery probably isn't a deal killer. The problem is that they shove the department to the far end of the store. Out of sight, out of mind. It sends a message that grocery is an afterthought at Target.

So imagine if you were to walk into Target and the first thing you see is the food department with a nice produce section to entice you. By flipping apparel and food, Target might just be able to turnaround the department. Hiring the most brilliant grocery merchant will probably have little impact when visually food seems irrelevant at Target. It's at least worth a test.





Last week, MNB took note of a New York Times report that federal judge Amos L. Mazzant III of the Eastern District of Texas has ruled that the Obama administration's Department of Labor "exceeded its authority" when it expanded "by millions the number of workers who would be eligible for time-and-a-half overtime pay," raising the salary limit to salary limit below which workers automatically qualified for overtime pay to $47,476 from $23,660. Mazzant issued a nationwide temporary injunction preventing implementation of the rule, and the Times writes that it seems likely that he will strike down the rule permanently once he has considered the case on its merits."

I commented, in part:

I'm not sure what the number should be, but it does occur to me that the previous $23,660 ceiling is just three grand higher than the national poverty level for a three-person household. My point being that $23,660 doesn't go very far these days, and that when people have to work overtime for that sort of salary without any extra pay, it doesn't seem very fair, and certainly creates an environment in which employers can exploit employees. As to whether the Labor Department should be making such changes ... well, I guess this a decision up to the courts.

One MNB user responded:

I agree that it is unbelievably unfair that workers are expected to work overtime for such little compensation.  I’ve read many articles on this and have another take on the many companies that have come forward to say that their labor costs will go up for a combined millions of workers:  You have a business model that requires and exploits employees to work overtime without compensation.  This is morally wrong and I hope the law is changed.  How could this be legal?

The answer, I think, is that one man's exploitation is another man's end-of-year bonus for keeping labor costs down.




Got the following email from MNB reader Michael Eardley:

My wife and I went to see Arrival after your review, what an awesome movie! Still attempting to think it all out and I am sure I will be watching it again numerous times in the future.

Outstanding direction and filming!

Reminded me of the theme running thru a number of Kurt Vonnegut’s books years ago (you and I were both In Catholic grade/high school). He wrote about the visitors to the earth who described humans way of looking at time as “looking at life thru a pipe” only seeing one piece of life instead of looking it in totality. He was such a great writer/author.


I'd forgotten that line from "Slaughterhouse-Five." You're right. It is a good one. And I fear that too many of us these days are looking at the world through a pipe, seeing only what we want to see, assuming that the opinions with which we agree are the only legitimate opinions out there.

This is how cultures die.

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Stater Bros. Adopts ReposiTrak Food Safety Compliance Management Solution

SALT LAKE CITY - Stater Bros. Markets announced today that it has chosen ReposiTrak, Inc., the leading provider of Compliance Management and Track & Trace solutions for food and dietary supplement safety, to manage regulatory and business documentation compliance within its supply chain.

“Our top priority at Stater Bros. is to provide the safest and highest quality products for our customers,” said Dennis McIntyre, Executive Vice President of Marketing at Stater Bros. “ReposiTrak’s automated system will enable us to better manage our growing list of documents we require from our approved suppliers in order to verify their good business and safety practices.”

ReposiTrak, a wholly owned subsidiary of Park City Group, helps manage regulatory, financial and brand risk associated with issues of safety in the global food, pharma and dietary supply chains. Powered by Park City Group’s technology, the platform consists of two systems: Compliance Management, which not only receives, stores and shares documentation, but also manages compliance through dashboards and alerts for missing or expired documents; and Track & Trace, which quickly identifies product ingredients and their supply chain path in the unfortunate event of a product recall.

For more information about how to join the rapidly expanding community of retailers and suppliers using ReposiTrak's robust safety and compliance solutions, go to ReposiTrak.com.


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From The MNB Sports Desk

In Week Twelve of the National Football League...

Vikings 13
Lions 16

Washington 26
Cowboys 31

Steelers 28
Colts 7

Rams 21
Saints 49

Titans 27
Bears 21

Cardinals 19
Falcons 38

NY Giants 27
Browns 13

Chargers 21
Texans 13

Jaguars 21
Bills 28

Bengals 14
Ravens 19

49ers 24
Dolphins 31

Seahawks 5
Buccaneers 14

Patriots 22
Jets 17

Panthers 32
Raiders 35

Chiefs 30
Broncos 27

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"GOOD IS NOT GOOD WHEN BETTER IS EXPECTED"

In this fast-paced, interactive and provocative presentation, MNB's Kevin Coupe challenges audiences to see Main Street through a constantly evolving technological, demographic, competitive and cultural prism.  These issues all combine to create an environment in which traditional thinking, fundamental execution, and just-good-enough strategies and tactics likely will pave a path to irrelevance;  Coupe lays out a road map for the future that focuses on differential advantages and disruptive mindsets, using real-world examples that can be adopted and executed by enterprising and innovative leaders.

"Kevin inspired our management team with his insights about the food industry and his enthusiasm. We've had the best come in to address our group, and Kevin Coupe was rated right up there.  He had our team on the edge of their chairs!" - Stew Leonard, Jr., CEO, Stew Leonard's

Constantly updated to reflect the news stories covered and commented upon daily by MorningNewsBeat, and seasoned with an irreverent sense of humor and disdain for sacred cows honed by Coupe’s 30+ years of writing and reporting about the best in the business, "Good Is Not Good When Better Is Expected" will get your meeting attendees not just thinking, but asking the serious questions about business and consumers that serious times demand.

Want to make your next event unique, engaging, illuminating and entertaining?  Start here: KevinCoupe.com. Or call Kevin at 203-662-0100.

Now back to regularly scheduled editorial...

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Good Is Not Good When Better Is Expected

In this fast-paced, interactive and provocative presentation, MNB's Kevin Coupe challenges audiences to see Main Street through a constantly evolving technological, demographic, competitive and cultural prism.  These issues all combine to create an environment in which traditional thinking, fundamental execution, and just-good-enough strategies and tactics likely will pave a path to irrelevance;  Coupe lays out a road map for the future that focuses on differential advantages and disruptive mindsets, using real-world examples that can be adopted and executed by enterprising and innovative leaders.

"Kevin inspired our management team with his insights about the food industry and his enthusiasm. We've had the best come in to address our group, and Kevin Coupe was rated right up there.  He had our team on the edge of their chairs!" - Stew Leonard, Jr., CEO, Stew Leonard's

Constantly updated to reflect the news stories covered and commented upon daily by MorningNewsBeat, and seasoned with an irreverent sense of humor and disdain for sacred cows honed by Coupe’s 30+ years of writing and reporting about the best in the business, "Good Is Not Good When Better Is Expected" will get your meeting attendees not just thinking, but asking the serious questions about business and consumers that serious times demand.

Want to make your next event unique, engaging, illuminating and entertaining?  Start here: KevinCoupe.com. Or call Kevin at 203-662-0100.

Now back to regularly scheduled editorial...

Finally, a word from our sponsor...

Industry Drumbeat

"GOOD IS NOT GOOD WHEN BETTER IS EXPECTED"

In this fast-paced, interactive and provocative presentation, MNB's Kevin Coupe challenges audiences to see Main Street through a constantly evolving technological, demographic, competitive and cultural prism.  These issues all combine to create an environment in which traditional thinking, fundamental execution, and just-good-enough strategies and tactics likely will pave a path to irrelevance;  Coupe lays out a road map for the future that focuses on differential advantages and disruptive mindsets, using real-world examples that can be adopted and executed by enterprising and innovative leaders.

"Kevin inspired our management team with his insights about the food industry and his enthusiasm. We've had the best come in to address our group, and Kevin Coupe was rated right up there.  He had our team on the edge of their chairs!" - Stew Leonard, Jr., CEO, Stew Leonard's

Constantly updated to reflect the news stories covered and commented upon daily by MorningNewsBeat, and seasoned with an irreverent sense of humor and disdain for sacred cows honed by Coupe’s 30+ years of writing and reporting about the best in the business, "Good Is Not Good When Better Is Expected" will get your meeting attendees not just thinking, but asking the serious questions about business and consumers that serious times demand.

Want to make your next event unique, engaging, illuminating and entertaining?  Start here: KevinCoupe.com. Or call Kevin at 203-662-0100.

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