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Tuesday, October 10, 2017

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Sansolo Speaks: The Winning Formula

by Michael Sansolo

Centuries ago a philosopher hit on an idea that remains relevant to this day. Occam’s razor, as it is known, suggests that among competing theories the simplest idea is usually the best.

Hundreds of years later, it still has applicability in satisfying consumer needs. That is, give customers what they want and there’s a good chance it will work.

Warren Brown, the automotive editor for the Washington Post, wrote about this recently in a way that resonates far beyond just cars. Brown, who regularly test-drives and reviews new car models, was focused on one of the most ubiquitous cars in the US: the Toyota Camry.

As Brown explained, the car has been a top seller since the late 1980s and should remain at the top of the heap thanks to its newest upgrades. Brown says he think Camry’s success comes down to some simple ideas:

Give people cars that work well all the time.

The fit and finish of the car matters. In other words, if the details on the car work well, consumers believe the entire car will perform the same.

Don’t oversell the extravagant. Provide a solid value and the crowd will follow.

The essence of Brown’s review is that Toyota built a successful foundation for Camry by mixing teams of Japanese and American designers and engineers who focused first on those key drivers of customer desire and went from there. Doing so let them design and then consistently redesign a car that dominates US sales.

Sure sounds simple, just as Occam’s razor would demand. But given all the competing models Camry outsells, it’s apparently a tough recipe to follow.

The example for other businesses is fairly obvious even if the answer can be quite complex. Focus on exactly what consumers want and give it to them, providing both quality and value.

I heard a version of this recently from an audience member during one of my speeches. As the group debated the elements of retail success, this one businesswoman claimed to have the answer. Like many people, she said her favorite store is Trader Joe’s, but her reason had nothing to do with TJ’s quirky style, merchandising and product mix or frequent sampling.

Rather, it was all about the baggers. She finds them endlessly polite, happy and engaged.

Being in the industry, she asked her favorite bagger to explain his joy at this seemingly mundane task and he credited TJ’s policy of cross-training employees and moving them to different work stations throughout the day.

So instead of getting bored doing one job repeatedly, his day is spent between multiple tasks. That one example may explain some of the recent reports about the relative loyalty of TJ’s staffers.

Here’s the bottom line. We do have to have incredibly complex discussions these days about shifting consumer behavior and emerging taste and nutritional desires. We need to understand the pathways to omni-channel marketing and all the impact of emerging technologies.

But we can’t lose sight of the basic desire shoppers have and the power of a single engaged and happy staffer to make a lasting connection.

The simplest answer can still matter and work.

]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.

Tuesday Morning Eye-Opener: Confundo!

by Kevin Coupe

We write a lot here about the fact that malls increasingly are fighting to remain relevant in a competitive climate that gets tougher every day for bricks-and-mortar retailers.

It is hard to identify the kind of magic that can change this paradigm. But one MNB reader sent me an email about The Shops at South Town in Sandy, Utah, where they’re conjuring up a solution - a Harry Potter-themed event called Christmas in the Wizarding World, described as “a first of its kind retail experience, will be reminiscent of the setting and atmosphere of a wintry Hogsmeade village. Complete with an extensive wand assortment, film-inspired window displays and interactive elements, the themed shopping experience is sure to be a hit with fans of J.K. Rowling’s Wizarding World.”

The event has been developed by Warner Bros. Consumer Products (WBCP) and GES, which produces a touring Harry Potter exhibition.

The thing is, if bricks-and-mortar businesses want to generate traffic and sales, they have to find ways to differentiate themselves, to create compelling reasons for customers to leave their homes.

In other words, work a little magic. It could be an Eye-Opener.

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For Marketers, The Magic But Elusive Number Is 26

The Wall Street Journal has a story this morning about how “the biggest single age cohort today in the U.S. is 26-year-olds, who number 4.8 million,” which means that it is 26-year-olds who are the center of the marketing target for many companies. (Followed closely, the story says, by people who are 25, 27, and 24 years old.) This is a highly desirable demographic because many of these folks “are on the verge of life-defining moments such as choosing a career, buying a house and having children.” In other words, spending money.

But … “Companies looking to grab a piece of that business, however, have run into a problem,” the Journal writes. “This generation, with its over-scheduled childhoods, tech-dependent lifestyles and delayed adulthood, is radically different from previous ones. They’re so different, in fact, that companies are developing new products, overhauling marketing and launching educational programs - all with the goal of luring the archetypal 26-year-old … Companies such as Scotts, Home Depot Inc., Procter & Gamble Co. , Williams-Sonoma Inc.’s West Elm and the Sherwin-Williams Co. are hosting classes and online tutorials to teach such basic skills as how to mow the lawn, use a tape measure, mop a floor, hammer a nail and pick a paint color.”

KC's View: This is enormously instructive, at various levels, and goes back to a seasoned MNB dictum - that it is critical in this competitive climate to be not just a source of a product, but a resource for information.

If people of this age don’t know how to mow a lawn or write a check or hammer a nail or do all sorts of other things, that probably also means that they could be less than competent in the kitchen. Which means that they’re going to need - and hopefully will value - all sorts of help that savvy retailers are ideally positioned to provide.

Of course, that means the retailers have to be innovation-minded. It is not surprising that it took outside companies to create the meal kit business, even though food retailers had all the tools/ingredients/knowhow at their disposal. And it won’t be surprising if it happens again and again and again.

Think Of It As ‘Tesco Go’

In the UK, the Mirror reports that Tesco “is looking at building stores without traditional checkouts. Instead, artificial intelligence will be used to calculate when an item is removed from a shelf and taken out of the store - automatically debiting your account when appropriate.”

CEO Dave Lewis says there’s nothing specific to announce. Yet.

““We trial lots and lots of things – the thing you refer to, yes – but we’ll only talk about it when we’ve done it everywhere," Lewis says, adding, “When we're at a place where we've got something we want to launch to all customers, we'll launch it and we'll communicate it. We've been doing it for a while. Nothing to announce.”

The move seems thematically similar to the Amazon Go checkout-free store that Amazon has been beta testing in Seattle.

KC's View: Innovations like a no-checkout store are almost certainly in the development stage at a lot of retailers … hell, it was decades ago that IBM produced a commercial prognosticating its eventual mainstreaming.

Ikea Remakes, Modernizes Business Model

The Financial Times reports this morning that Ikea has decided to start selling its furniture through online websites - including Amazon and Alibaba - as it attempts to compensate for what the story describes as “a fall in visitors to its out-of-town outlets.”

The story says that the move is part of a broader strategic direction being taken at Ikea, which also is experimenting with pick-up locations in urban areas and smaller pop-up shops with a more limited inventory.

However, the FT story notes that the third party e-commerce approach “could be the biggest change yet, marking the first time Ikea has sold products through a third party and radically revamping its business model.”

KC's View: This is what companies have to do - find new ways to be relevant and resonant to consumers, create new business models, and figure out where existing infrastructure simply isn’t up to the task of competing successfully in 2017 and beyond.

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Sephora Builds Tech Staff Dominated By Women

The Wall Street Journal this morning writes about how cosmetics retailer Sephora has put together a corporate staff, including on the tech side, that is 62 percent female, and describes this as “a corporate feat” that would make Google, Apple and Facebook jealous.

According to the story, “At a time when technology companies are struggling mightily to attract and retain women with computing and engineering skills, the beauty retailer’s tech staffing is notable not only for the numbers but also for the relatively simple way it got there … Managers say the retailer has managed to attract technical women by recruiting with an eye toward candidates’ potential rather than specific skills, encouraging hiring managers to take risks and ensuring that job performance is assessed fairly.”

Mary Beth Laughton, the company’s senior vice president of digital, says that a key factor “is a dedication to technology with a strong connection to the consumer.”

While “women hold 23% of roles in the technical ranks at the top 75 Silicon Valley companies,” the story says, at Sephora “women make up the majority of its 350-person digital and engineering staff and hold all but one of the roles on its six-person digital executive leadership team. Women lead everything from digital marketing and customer experience in apps to back-end programming of the company’s e-commerce systems.”

KC's View: Last week, while attending the GMDC Retail Tomorrow conference in New York, one of the stores we visited was the Sephora flagship in Columbus Circle, and what we found was an immersive and experience-rich retail environment that is ideally positioned to compete with online offerings. It seemed very much to be a store created by people who also were the target consumer, and it isn’t hard to believe that it would have a digital footprint that also has been developed by people who are the end users.

Smart marketing.

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Target CFO Just Wants Company To Be The Best Target

Fortune has a piece about how Target, while acknowledging that Amazon has had an impact on retailing, believes that its primary goal should not be to compete with e-commerce juggernaut.

“We are going to win when we’re the best Target, and not trying to be a competitor against Amazon or anyone else,” Target CFO Cathy Smith said at the magazine’s Most Powerful Women Summit in Washington, D.C. “That’s what keeps me up at night - just trying to make sure we’re executing, not trying to compete with someone like Amazon.”

Ultimately, Smith said, “the competition will benefit shoppers in the form of better prices and service; after all, she added, 85% of the American population has shopped at Target. Amazon ‘causes disruption, and the consumer wins,’ she said. ‘And it causes all of us to step up our game’.”

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GMDC, ReposiTrak Partner to Provide Trading Platform for All Channels

Colorado Springs, Colo. – Global Market Development Center (GMDC), an association that connects its members to advance innovation in the retail marketplace, and ReposiTrak, Inc., the leading provider of Compliance Management and Track & Trace solutions for the grocery and foodservice industries, are partnering to enhance the discovery process and improve collaboration in essential non-food and high-gross margin categories for all channels.

Under the agreement, ReposiTrak, a wholly owned subsidiary of Park City Group, will be the exclusive solution provider endorsed by GMDC for compliance management and the sourcing of retail-ready vendors. GMDC will introduce ReposiTrak to its members, whose combined volume represents more than 125,000 retail outlets and more than $500 billion in sales.

ReposiTrak helps companies reduce their regulatory, financial and brand risk in the supply chain. Powered by Park City Group’s technology, the solution has two primary applications including:

Compliance Management, which can automate the collection and management of a GMDC member’s required documentation from their supply chain partners such as supplier agreements, insurance certificates, and factory audits, dramatically reducing risk to their extended supply chain.

MarketPlace, a platform for GMDC member retailers and wholesalers to source qualified suppliers in ReposiTrak’s community of 40,000+ connections, saving weeks of time, and removing friction between trading partners in the quest to bring new products to the shelf as quickly as possible.

More information is available from ReposiTrak and GMDC.


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E-conomy Beat

CNBC reports that Nissan has announced the availability of Amazon’s Alexa voice assistant in some of its cars, allowing drivers to use the technology to unlock car door or perform various other functions.

The move is part of a broader trend; BMW last week announced that some of its cars will be equipped with the Alexa system starting sometime next year.

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FastNewsBeat

• The Richmond Times-Dispatch reports that Ahold Delhaize-owned Food Lion has completed a $110 million investment in its Richmond-area stores, performing renovations that it hopes “will give it an edge with customers in Richmond’s crowded and competitive grocery market.”

Among the changes: “Signage, flooring and check-out counters are upgraded. Fourteen of the 71 stores have new walk-in produce coolers. New products include more ‘grab and go’ prepared foods and packages of deli meat and cheeses already weighed and packaged and more organic products.”


MarketWatch reports that the Carl’s Jr. fast food hamburger chain, having decided to seek a new marketing direction after deciding to end the use of sexually suggestive commercials, seems to have identified a new target for its corporate lust.

Amazon.

The burger chain launched a Twitter campaign this week featuring a couple of dozen reasons that the e-commerce giant should buy it, including “a self-driving restaurant, an ‘Eater Reader’ tablet that you can read and eat off at the same time, and special VIP parking in front of every Carl’s Jr. for Amazon Chief Executive Jeff Bezos.”

The campaign is said to be tongue-in-cheek. Mostly.

““This is about generating a conversation around a partnership,’’ says Carl’s Jr. CMO Jeff Jenkins. “The tweets are obviously a start to try and see where the dialogue goes …have a lot of fun with it, and see if they find the spirit of it as fun as we do.’’

RIP

YA Tittle, the resilient, aging balding football player who quarterbacked the New York Giants to three consecutive National Football league championship games in the early sixties after having been traded away by the San Francisco 49ers for being too old and slow, has passed away. He was 90.

Your Views: Seeking Traction

Got the following email from MNB reader Dean Balsamo:

For the second week in a row you had something about Lidl’s apparent challenge in getting some traction in the US market.

I’m not surprised. I first reached out to the Schwartz Group in Germany on behalf of the magazine distributor I was working with, right after the concept was announced-some three years go. I heard from the first American CEO and then got a polite email from the second CEO here-once they opened their offices in VA a few years back after I’d sent them some material.

They said something about getting back to me. But I heard nothing. Then when I found out about the vendor’s portal-an online menu of categories and products which vendors could register their products on and presumably be contacted by a buyer I looked at it ready to submit our information.  But believe or not they had no “magazine” category listed. I reached out them via an email to a general address and asking about this-thinking it was an oversight. But I never heard a thing back from them.

As I looked at various postings on different LinkedIn sites both the company and individual employees had…I began to decipher a pattern. They appeared to be looking not for seasoned grocery people but young people whom in my opinion they could indoctrinate into what appears to be as well organized and disciplined group think on the part of those people they  hire and we’re looking to add to their culture. I think  “social engineering,” much like I saw with Tesco concept- might come closer to the sentiments I see.

I was certainly getting that Tesco Fresh & Easy vibe:  Extreme top down approach, a rigid formula without any meaningful input from experienced people in this country ie. Americans.

And a general self-congratulatory air seen in some of the comments by their employees on line…bragging when barely a store was open…bragging about what exactly?

But unlike Fresh & Easy where you could go meet with buyers – even if they were more interested in watching soccer - Lidl appeared to me, to be in a locked down mentality. They know it all and because it’s worked overseas in other countries it of course was going to work great here.

I guess time will tell. But Aldi certainly looks like the exception for companies coming here from overseas.  Aldi to its credit, worked for everything they have here. Is it possible these other companies think that sweat equity,  preparing the ground, isn’t important?





Regarding the speculation that Amazon soon will be getting into the prescription drug business, MNB reader Stan Barrett wrote:

The National Association of Chain Drug Stores (NACDS) … be afraid, be very afraid.  In the short-term probably will be some political/regulatory opportunity or just bite the bullet and make Amazon your largest member.

And MNB reader Bob Thomas wrote:

I can fly to Delhi, India, stay at a 5 star hotel for 3 days, have 6 months of my prescriptions (manufactured by US subsidiaries) delivered to my hotel all for less than what I pay in the US.  I think the industry needs a shakeup.

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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.

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From The MNB Sports Desk

In Major League Baseball, the Houston Astros defeated the Boston Red Sox 5-4, to win their best-of-five game American League Divisional Series by a 3-1 margin and move on to the AL Championship Series. And, in the National League Divisional Series, the Los Angeles Dodgers beat the Arizona Diamondbacks 3-1, to end a three game sweep and move on to the NL Championship Series.

Meanwhile, the New York Yankees defeated the Cleveland Indians 7-3, evening their best-of-five AL Divisional Series at two games apiece.

Over in the National League, the Chicago Cubs defeated the Washington Nationals 2-1, to take a 2-1 NL Divisional Series lead.




In NFL Monday Night Football, the Minnesota Vikings beat the Chicago Bears 20-17.

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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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