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Thursday, June 29, 2017

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FaceTime with the Content Guy: Common Sense


A Note from the Content Guy: Normally, FaceTime commentaries are available as both text or video, but occasionally ... as in this case, when the commentary consists of a conversation between Michael Sansolo and me ... we forgo the text version. I hope you enjoy it ... and, to see past FaceTime commentaries, go to the MNB Channel on YouTube.

Thursday Morning Eye-Opener: Gray Matter


Better late than never...

This video is a skit that ran during the just-completed season of "Saturday Night Live" ... and I must confess that I missed it the first time around. (Not sure how ... like a lot of people, I watched more "SNL" this season than I have in years.)

But Mrs. Content Guy actually brought it to my attention, and on the premise that maybe you also missed it, I thought I'd bring it to your attention. The video is a promotion for a version of the Echo/Alexa system that Amazon may not have thought of ... yet.

Enjoy. It is an Eye-Opener, with more of a grain of truth than many of us would like to admit.

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Corporate Drumbeat

From MyWebGrocer...

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Industry Drumbeat

From ProLogic Retail Services...



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Settlement Reached In Pink Slime Lawsuit

The New York Times reports that ABC News and Beef Products Inc. have reached a confidential settlement in the so-called pink slime case, in which the network was accused of defaming the meat producer with its reports about low-cost processed “lean finely textured beef," which was sprayed with ammonia and used as filler in ground beef.

ABC News ran several stories about the subject, though Beef Products will have to prove that it was intentionally malicious in its coverage and use of the word "slime," which it says is the most offensive word that could've been used to describe its products.

While the US Department of Agriculture (USDA) has approved the use of "lean finely textured beef," one of its staff microbiologists actually is the person who coined the allegedly negative term, "pink slime."

The settlement brings to an end what was expected to be an eight-week jury trial.

The Times reports that "ABC News has not retracted or apologized for its report, which remains available on its website." In a statement, the network called the resolution "amicable," adding that "throughout this case, we have maintained that our reports accurately presented the facts and views of knowledgeable people about this product. Although we have concluded that continued litigation of this case is not in the company’s interests, we remain committed to the vigorous pursuit of truth and the consumer’s right to know about the products they purchase.”

For its part, Beef Products Inc. said that it was “extraordinarily pleased” to reach the settlement, which would give it “a strong foundation on which to grow the business ... While this has not been an easy road to travel, it was necessary to begin rectifying the harm we suffered as a result of what we believed to be biased and baseless reporting in 2012. Through this process, we have again established what we all know to be true about lean finely textured beef: it is beef, and is safe, wholesome, and nutritious."

ABC News could have been on the hook for more than $6 billion if it lost the case.

KC's View: I was never quite comfortable with the network's concession that its reporting engaged in "imaginative expression" and "rhetorical hyperbole." That's the mind of stuff I do...but I'm a pundit, and I label the commentary as such.

That said, I always thought the best defense would have been that the company was not being transparent about what was in its ground beef, and that it falls within the purview of a journalistic organization to report on such a lack of transparency.

I'm glad there was a settlement, but I hope both sides learned a lesson. ABC, that it should avoid "imaginative expression" and "rhetorical hyperbole." And Beef Products, that it ought to be more transparent.

I hope they learned a lesson. But I'm dubious.

Trump Goes After Amazon On Taxes

President Donald Trump yesterday launched a Twitter attack on Amazon, writing on the social media platform that Amazon isn't "paying internet taxes (which they should)."

The president tweeted:

"The #AmazonWashingtonPost, sometimes referred to as the guardian of Amazon not paying internet taxes (which they should) is FAKE NEWS!"

This is not the first time that Trump has targeted Amazon. During the presidential campaign, CNBC reports, Trump said that "the e-commerce giant operated a monopoly with an unfair tax shelter that's somehow propped up by Bezos' ownership of the Post ... During a rally, Trump said, 'If I become president, oh [does Amazon] have problems. They're going to have such problems.' He added that Bezos only bought the Post to have 'political influence'."

At another time, Trump said: "Amazon, which, through its ownership, controls the Washington Post, should be paying massive taxes -- but it’s not paying, and it’s a very unfair playing field and you see what that’s happening and what that’s doing to department stores all over the country. Very, very unfair. And you’re talking about billions and billions of dollars. They should be paying those taxes.” 

Trump clearly has been irked by the aggressive coverage of his administration by the Washington Post, which Amazon CEO Jeff Bezos owns in a personal investment.

KC's View: Rather than me deconstructing the presidential tweet, let me just refer to Fox News, which points out in its analysis that "while it's unclear what 'Internet tax' the president is referring to, Amazon does indeed collect sales taxes on items it sells on its platform." In fact, Amazon collects sales taxes in 45 states - or every state in which there is a sales tax.

To be clear, Amazon did not always collect sales taxes, because states either did not require it or did not enforce its rules. But as laws and attitudes evolved, Amazon changed its approach.

Plus, Fox News reports, "in the first quarter of 2017, Amazon paid $229 million in income taxes on approximately $1 billion in profits. Total revenue for the quarter was $35.71 billion. Amazon paid $475 million in income taxes on operating income of $1.07 billion."

Fox News also writes that "it's unclear what prompted the latest attack by Trump, but it may stem from a recent report by The Washington Post surrounding Trump and fake Time magazine covers hanging in his various properties. The newspaper found that a number of Time magazine covers in several of his golf clubs were deemed fake, including one from March 1, 2009."

Walmart And Amazon Compete On Multiple Fronts

• The New York Post reports that Walmart is "escalating" its battle with Amazon "by sending veiled messages to the trucking companies that haul its merchandise from its distribution centers and stores, telling them if they do business with the Web giant it may not want to work with them, according to an industry expert ... The trucking squeeze comes on the heels of reports that Walmart has asked technology companies with which it works to stop using Amazon Web Services for the retailer’s cloud-computing services — or face losing Walmart’s business."

The story notes that "the two retailers are going head-to-head for consumers’ business in every area of retail, and Amazon’s announcement this month on acquiring Whole Foods Market was among the sharpest blows to Walmart, which counts on groceries for half of its revenue."

Walmart says that it had not "had discussions with trucking companies about high-peak delivery times or about Amazon, adding that 'it would be illegal for us to tell them who they can do business with'."

If this demand indeed was made - even if covertly - it could be problematic since Amazon and Walmart are two of the nation's largest "users of truckload capacity."


• The Associated Press reports that "hundreds of inventors have flocked to Walmart’s headquarters in Bentonville to find out if the country needs a few more secret sauces, prettier mouse pads or 'instant hair gel' packets for the on-the-go clubber. The 500 businesses selected to take part in Walmart’s fourth annual 'Open Call' Wednesday have already been offered spots on the company’s online portals, as it battles Amazon for billions of dollars in revenue. Visits with Walmart’s marketing team, though, could land any number of entrepreneurs shelf space in nearly 4,700 brick-and-mortar stores."

The story notes that Walmart was not alone: "Amazon on Wednesday held its own event for online sellers. Through its portal, it gives any would-be sellers step-by-step online guidance on how to receive and fulfill orders."

Walmart, the AP writes, has both advantages and disadvantages. "With auditions, Walmart does it differently," giving entrepreneurs access to its buyers and reinforcing its way of doing business. However, at this point Walmart can only carry a finite number of items, which is a limitation Amazon does not have.

KC's View: 've been saying here for quite some time that there is going to be a pitched and aggressive battle between Walmart and Amazon on a number of fronts, and that there inevitably will be a lot of collateral damage. The degree to which these two behemoths are going to come into conflict is only being hinted at in these stories.

Staples Sold To Private Equity Firm For $6.9 Billion

Staples has made a deal to sell itself to private equity group Sycamore Partners for $6.9 billion, is a move that the New York Times describes as "the latest instance of a once-prominent name in retailing being laid low by the powerful forces reshaping how people shop (in other words: Amazon) ... Sycamore is acquiring a company that is squarely in decline. Sales and gross profits at Staples have fallen for each of the last four full years. At the same time, the company has been shrinking the number of stores it operates."

Staples had tried to compete by acquiring rival Office Depot, a move it thought would better position it to face off against the likes of Amazon. However, federal regulators successfully opposed that move on antitrust grounds. In Staples' view, that left it with few acceptable options.

The Times story notes that Staples "was an ideal target for a leveraged buyout ... Staples has very little debt, just about $1 billion in total. That healthy balance sheet will mean Sycamore — which will borrow much of the money it needs to fund its buyout — will not have to overload the company with a crushing debt burden."

KC's View: Sycamore says that it is acquiring an "iconic brand," but it also is a brand in decline with lessening relevance. That's going to be an enormous challenge, especially because private equity likes to buy things to sell them ... and it is hard to imagine how it will be able to reverse Staples' fortunes. One suggestion is that it could make another attempt to acquire Office Depot, and hope that the Trump administration is more sympathetic than the Obama administration was.

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More About The Amazon-Whole Foods Deal

Mashable reports on a new survey from media and research firm Morning Consult concluding that when asked about the pending $13.7 billion acquisition of Whole Foods by Amazon, "about two in five of the more than 2,000 people polled in the days following the deal said they saw Whole Foods in a more favorable light. Around 45 percent said the same of Amazon.

"Indeed, three in 10 people said they were more likely to join Amazon's Prime program because of the acquisition."

That doesn't mean that all those folks are ready to start doing all their Whole Foods shopping online, though. "While the majority of respondents say they're open to buying canned goods, toiletries, and cleaning products online for delivery — 54 percent, 64 percent, and 64 percent, respectively — the numbers drop off to between roughly 30 and 40 percent when it comes to frozen goods, bread, produce, dairy, and fresh meat."

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From the Network of Executive Women...


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Target Launches New Restock Program

In Minnesota, the Star Tribune reports that Target has "gone live" with Target Restock, a new pilot program that charges $4.99 and allows its online shoppers to "select from more than 10,000 baby, beauty, personal care, food, pet and household products and choose as many as can fit into a box about the same size as a shopping cart.

"As shoppers add each item, the website shows shoppers how much more room they have left in the box, which is limited in weight to 45 pounds ... Target is touting the program as a way to provide faster delivery of items in one package. In the process, by encouraging shoppers to buy more items at one time, it also helps the Minneapolis-based retailer make shipping online orders more cost-effective at a time when online shopping has put more pressure on profit margins."

Target says that orders placed by 2 pm will be delivered the next business day. The Restock program is available in several Minnesota communities, and, at the moment, only to holders of Target’s Redcard."

KC's View: The argument here for some time has been that every company needs to develop an automation and replenishment strategy, in order to effectively compete with Amazon initiatives in this area that are adding $50 million a week to its volume - dollars that are coming from somewhere, never to return.

So kudos to Target on that score. The problem, as I see it, is that the company seems tentative and slow in its approach to innovation ... even as its executives say that they are going as fast as they can. While the story says that Target is "a few years behind Amazon in rolling out such a capability," it also says that "the service is priced for a dollar less and promises faster delivery than Amazon’s counterpart, Prime Pantry." But that doesn't seem like a recipe for luring customers away from Amazon, which it seems to me that it absolutely must do in order to be successful.

Guest Commentary: Missed Target

Content Guy's Note: I've known Seth Mendelson - someone who is familiar to many of you in the retail/CPG world - for years. In fact, we both worked in the same newsroom, for the Rockland Journal-News, back in the late seventies; Seth was a sportswriter, and I covered county government and politics. I was reading a Facebook posting from Seth the other day that I thought smartly illustrated some of the problems that Target is having, and I asked him for permission to re-post it here. Seth kindly agreed, and here it is...

Have you been in a Target store recently?

Me either. That is, until yesterday, when a friend decided to buy a Target gift card for a recent college graduate and I went along for the ride. Not sure what her thinking was (does a 22-year old man shop Target?), but it is certainly good fodder for a blog.

Frankly, i was shocked by the condition of the store. Yes, it was a summer Sunday but the shelves throughout the unit were half-empty and messy and the place was simply chaotic. It looked like a department store on the day after Christmas, not a lazy, hot day in late June.

While she was shopping for the gift card and a graduation greeting card (which, amazingly, she never found: who would think to include graduation cards to the greeting card section in June!!!), I ventured over to the sporting goods department to see if I could pick up one or two of those little basketballs for my pool. The sporting goods section was all of three small aisles, and, besides some full-size basketballs and a smattering of other items, there was not much to it. There certainly were no mini-basketballs in the mix.

The rest of the store seemed like a barely-manageable mess, too, which got me thinking about the successful and long marketing program the chain used over the last decade to try to set it apart from the competition.

Walmart? That's for the huddled masses looking to save a buck. Sears? Why shop there unless you needed a new dishwasher or a power saw. Kmart? Let's not even go there.

Target supposedly stood apart from these other mass retailers, with clean stores, an upscale appearance and an assortment of product that made many feel they were getting a little more for their hard-earned dollars. Remember "cheap chic?" Cool TV ads, too.

Not so much anymore.

My guess is that with pressure mounting from both Walmart and Amazon, the Target brass in Minneapolis has adopted the never-successful strategy of saving a buck as the basis to return to glory. Of course, saving a buck usually means losing three bucks in sales, which makes the business try to save five bucks.

You know where this leads, right?

So my suggestion to the folks in the northland is to maybe invest some capital into their store operations and update the merchandise mix a bit. Amazon and Walmart are turning up the heat big time. Now is not the right time to sit back at headquarters and think you have it all figured out. You don't and all you have to do is walk into one of your own stores - particularly the one I visited - to get a clear picture of things.

Amazon is doing great on its own. No need to make their jobs even easier.

KC's View: I do want to be fair about this.

First, I'm sure that not every Target store looks like this. But I've been in a bunch that do, and at a time when the company is under siege from so many directions, it really cannot afford to have any like this. If a customer visits one Target store like this, it informs their opinion of the entire chain ... and probably takes it off the list of viable shopping options for the foreseeable future.

Second, I'm reasonably sure that the folks at Target headquarters do not think they have it all figured out. It is simply not possible to have that level of denial. I think the bigger problem may be that they're simply not sure what to do, and at the very least are incapable of moving fast enough to make a difference. Remember what Tom Furphy has written on MNB in our "Innovation Conversation" series - that Amazon has a bias for action and has been incredibly fast at moving major initiatives (Amazon Fresh and Prime now, for example) from conception to launch.

I agree with Seth. Stores like this Target make it easy for Amazon ... and, by the way, for Walmart, Kroger and pretty much everybody else competing with Target.

BTW...if you'd like to reach out to Seth, you can reach him by email at palidog@optonline.net .

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From Webstop...

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E-conomy Beat

• The Wall Street Journal reports that "Albertsons Cos. plans to overhaul the e-commerce systems of its 2,300 supermarkets and stores in fiscal 2018 as digital disruption comes to the grocery business, most recently in the form of Amazon.com Inc.’s $13.7 billion offer for Whole Foods Market Inc."

The Cerberus Capital Management-owned company "expects to migrate, and in some cases rewrite, e-commerce systems built five to 15 years ago so that they can run on modern public and private cloud platforms, including Microsoft Corp.’s Azure. Albertsons currently is updating features on its mobile app and websites to be 'cleaner and simpler' for shoppers ... The modernization is intended in part to help Albertsons compete with rivals such as Wal-Mart, which is expanding the geographic areas where it offers online grocery shopping. Amazon.com’s $13.7 billion offer this month to buy Whole Foods adds another competitor."

FastNewsBeat

GeekWire reports that Blue Apron has lowered expectations for its upcoming initial public offering (IPO), saying that it plans to sell shares at between $10 and $11 apiece. That's down from the $15 to $17 price tag it originally said set for its shares.

The reason for the downgrade? GeekWire says that Amazon's bid to acquire Whole Foods for $13.7 billion seems like the probable cause, since "Whole Foods and Blue Apron target the same demographic, those with discretionary spending power and values-driven consumer behavior." Now that Amazon appears to be in the game, it would appear that Blue Apron could have more formidable competition.


• The Financial Times reports that UK grocer Tesco "is cutting 1,200 jobs at its head office and support centres in the latest in a wave of mass job losses in the grocery sector as it attempts to counter rising costs."

Tesco said that "the moves would reduce duplication and cost but also, very importantly, allow us to invest in serving shoppers better. The eliminated roles include marketing, finance, buying and property functions and will affect one in four workers at the supermarket's head office in Welwyn Garden City."

It was just a week ago that Tesco "announced the closure of one of its call centres with the loss of up to 1,100 jobs," FT writes. "Earlier this year it also culled 1,600 deputy store manager roles in its smaller stores, with junior staff left to pick up the slack."

Executive Suite

• The Wall Street Journal reports that SpartanNash has announced the resignation of executive vice president and chief financial officer Christopher Meyers. Thomas Van Hall will take over the role on an interim basis until a search for a permanent successor is completed.

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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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Your Views

...will return.

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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...

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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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