business news in context, analysis with attitude

Published on: August 3, 2012

by Kevin Coupe

Clive Palmer doesn't believe in defeat. Or, apparently, in going to the movies.

You may remember our "Eye-Opener" from a few months ago that reported on how Palmer, an Australian billionaire mining magnate, was planing to build a ship. A ship called "Titanic II." A ship that he said “will be every bit as luxurious as the original Titanic but of course it will have state-of-the-art 21st-century technology and the latest navigation and safety systems.” And, he added, “It is going to be designed so it won't sink.”

We've heard that before.

But now, the San Francisco Chronicle reports that Palmer has himself another hobby:

"According to someone in his inner circle, Palmer may be plotting to clone a dinosaur" that he would feature in a resort he is building in the Middle East. The story also says that Palmer is not commenting, and there is no word on what kind of dinosaur he may be thinking of cloning. ("Fingers crossed for a herbivore," the writer says.)

Palmer's gumption is to be admired, if not his common sense. I can see trying to build the Titanic II, but the whole real-life Jurassic Park thing has me spooked. All I can think about is the point in the movie where John Hammond talks about getting the place back under control, and Laura Dern's character says, "You never had control, that's the illusion!"

Let's hope Palmer's idea for a new resort doesn't come back to bite him.

Literally.

Published on: August 3, 2012

"Chick-fil-A Appreciation Day," as Wednesday was dubbed by politician and radio host Mike Huckabee, was a good day for the fast food retailer, as news reports from virtually every market it serves spoke about long lines of people that broke sales records in supporting the CEO's state stance against gay marriage.

While the company said it would not release sales figures for the day, VP Steve Robinson released a statement saying, “We are very grateful and humbled by the incredible turnout of loyal Chick-fil-A customers on August 1 at Chick-fil-A restaurants around the country."

The Appreciation Day was organized after company CEO Dan Cathy made a comment to the Baptist Press that he is for the Biblical definition of marriage and against gay marriage. Those comments were widely circulated, leading some supporters of gay marriage to say that they would boycott the fast feeder; the mayors of Chicago, San Francisco and Boston even went so far as to say that Chick-fil-A would not be welcome in their cities because it did not share their citizens' values.

There also was much debate about what impact Cathy's statements would have on business long-term, and whether CEOs should be engaging in discussions of such culturally polarizing issues.

The controversy isn't over yet. Pro-gay marriage activists plan a "Kiss In" at Chick-fil-A restaurants around the country today, urging people of the same sex to show up and kiss each other there.

And the Los Angeles Times reports that in Arizona, a man named Adam Smith thought it would be a good idea to videotape his confrontation with a Chick-fil-A employee in which he told him that he worked for "a horrible corporation with horrible values," and then post the video on YouTube. (The employee is shown telling Smith that it was "a pleasure to serve you, always.")

However, Smith was employed as CFO/treasurer by a company called Vante, which instantly fired him, saying, "“We respect the right of our employees and all Americans to hold and express their personal opinions. However, we also expect our company officers to behave in a manner commensurate with their position and in a respectful fashion that conveys these values of civility with others.”

Published on: August 3, 2012

Internet Retailer reports that "a representative of Amazon.com Inc. today urged Congress to enact the Marketplace Fairness Act of 2011 in testimony during a hearing before the U.S. Senate Committee on Commerce, Science and Transportation. The Marketplace Fairness Act of 2011, also known as S. 1832, would require online retailers who exceed a revenue threshold to collect and remit state sales tax on online purchases in all states. Current law requires online retailers only to collect and remit state sales tax in states where they have physical operations."

Published on: August 3, 2012

The Austin Business Journal reports that Whole Foods is partnering "with a digital entertainment distributor FilmBuff to increase the audience of its online film festival," which features what it calls "provocative films about food and environmental issues.

"The organic grocer’s Do Something Reel film festival will now be accessible on multiple platforms, including iTunes, YouTube and XBox 360."

The current film is entitled Grow! and is about 20 young sustainable farmers in Georgia.

Published on: August 3, 2012

• Information Week reports that "the newest version of Google Wallet now sports a feature that makes paying with a cellphone that much more a reality for non-techie users. Google has launched a cloud-based version of Wallet that 'supports all credit and debit cards from Visa, MasterCard, American Express, and Discover," according to a post on the Google Commerce blog'."

Google Wallet is described as "a payment system that allows both online and in-store payments" that competes with PayPal, though it has not gotten a lot of traction yet. However, a number of retailers reportedly have signed up to be part of the Google Wallet system, including Macy's, Bloomingdale's, Foot Locker, OfficeMax, Toys R Us, CVS, Sunoco, and Radio Shack.

Published on: August 3, 2012

• The Associated Press reports that a northern New Jersey Wal-Mart that was evacuated earlier this week because of a bomb threat had to once again be evacuated yesterday when another threat was phoned in.

The story notes that "authorities were investigating whether the New Jersey incidents were related to at least a dozen similar threats that have been received at Wal-Marts in Kansas, Oklahoma and Missouri in recent days. No explosives were found in those incidents."

Meanwhile, the Hannibal Courier Post in Missouri is reporting that "a spokeswoman for the Walmart company backs the decision by management at the Hannibal Supercenter to not evacuate the store following Monday morning’s bomb threat ... Dianna Gee, a Walmart spokeswoman, said the decision not to evacuate was made after taking into consideration that similar threats last week at a handful of other Walmarts in Missouri and Kansas had proven bogus."

Published on: August 3, 2012

The New York Times reports this morning that Procter & Gamble has found a cutting edge spokesperson for its Tide Vivid White and Bright detergent.

A cutting edge face, but not exactly a new face.

P&G has announced that 90-year-old Betty White has signed to do a series of commercials and ads for the product.

The agency responsible for the campaign says that her name is just a happy coincidence, that White was hired because she is seen as "the ultimate rule breaker and has always bucked the trends and done her own thing with her signature humor." White has seen an amazing resurgence in her career in recent years, with movie and TV parts and a range of commercials that trade on her somewhat saucy persona.

Published on: August 3, 2012

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

• KnoxvilleBiz.com reports that Publix has opened its first Knoxville, Tennessee, store, a 56,000 square foot unit in the western part of the city that is seen by some as the harbinger of a shake-up of the local grocery market.

• Here's an interesting tidbit about the impact of the Olympics...

Apparently because of the live streaming of Olympic events by NBCUniversal, Netflix saw its streaming activity last Sunday drop by 25 percent.

The activity figures are generated by a company called Procera, which provides broadband technology to networks; Procera also said that online streaming activity overall was up by 100 percent over the first two days of the Olympics.

NBC has itself come under much criticism for not broadcasting all events live, but showing some on tape delay during prime time; it has been streaming every event live, however.

Netflix apparently has warned people that its numbers this quarter may be down because of the Olympics. But the numbers just show how the world of communications has changed in fundamental ways, requiring fundamental adjustments by those seeking to use it.

Published on: August 3, 2012

MNB took note yesterday of a Fast Company column about dumb business rules, one of which is "the customer is always right." Not so, said the columnist - sometimes the customer is wrong, and acting like she is right makes no sense.

To which I responded:

What it really means is "always act like the customer is always right, because in the long run it is better for business than treating any customer like he or she is wrong." In the end, one never wins an argument with a customer. Even if you do, you lose ... because you've created a dissatisfied customer who is more than willing to communicate that dissatisfaction to others.

MNB user Chris Weisert disagreed:

Sometimes I wonder if you make some statements  to create conversation…. Wait I think you always do.

I believe you put your front line employees in a precarious position as they try to decide if a customer is truly someone who has a valid concern or if they are one of the many less than trustworthy people who make a living off of “the customer is always right” policies.

The columnist has obviously had the opportunity to see the amount of wasted money companies have to spend to satisfy certain customers which in the long run create a detriment (higher prices, less service, unfriendly policies) to customers who have valid claims.

I have seen managers berate the same clerk for being too strict or too lenient as they try to navigate the precarious position of dealing with unhappy customers.

I always told my staff that they do not have the authority to say “no” to a customer. They always have the authority to say, “ let me get the manager for you”. Through that process you do not have to humiliate your front line folks by overturning their decision (which they made to protect you and the company in their eyes) while you try to educate them on the process of identifying and removing thieves.

I think there are some pretty good companies out there - think Nordstrom, Stew Leonard's and New Seasons - that have created a culture around the notion that employees are empowered to make decisions and will not be criticized for taking a "customer is always right" position, even when the customer is wrong. (There are two ways not to humiliate an employee who makes an decision-making error. One is to reduce the number of decisions the employee feels empowered to make. The other is to not humiliate the employee, whatever the decision.)

That doesn't mean that the customer who tries to steal from you is right. Just that the customer-first culture of the store is designed to empower the employee.

And for the record ... I wasn't taking this position just to create conversation. I've been lucky enough to shop at Stew Leonard's for almost 30 years, and they've got an enormous rock at the front door with this credo carved into it. I guess it rubbed off on me.

From another MNB user:

I think you're correct to not take a literal stance on the tired old phrase "the customer is always right." This is really more of a continuum of best responses that vary given the situation. I agree with your suggestion of "Always act like..." It's generally a good thing to treat the customer with respect. In other situations, though, my response is "The customer is mostly right." If the customer is blatantly making a mockery of the store's return policy and forcing the team members to accept her rude and churlish behavior, team morale takes a big hit. Nobody likes to be used and abused.

The columnist's time spent at Marshall's obviously left a sour taste in her mouth. And besides, who wants customers who soil garments and then return them in said shape? I know that as a regular customer of Wegman's, if I had to watch employees be subject to this sort of humiliation, I would question management's judgment. And finally, true story, I once saw a fight break out at a fast food restaurant because someone in line didn't take to kindly to another customer's abuse of the employee. Lawsuit waiting to happen. If someone returns their food because they don't like it, of course they're right.But if someone comes in to return something you don't even sell, obviously making a mockery of your organization or institution, you don't need them dragging employee morale down. There's a point where you have to stand up for yourself as a brand and say "We don't accept abuse. It's not what we're about.

On the other hand, there is the story, possibly apocryphal, about the Nordstrom employee who took back a set of tires. That may seem silly to some, but they've built an entire culture on that story. LL Bean is much the same way - they take back anything, any time.

And I have to say one other thing about this. I actually think that the vast majority of shoppers are good and decent and reasonable people who don't take advantage of anyone. Sure, there are a few folks out there who push the envelope and work the system. But I believe it is a tiny majority.

Another reader wrote:

This reminds me of Peggy, the Cat Lady. Peggy must have been 75 years old. I was managing a store for one of the premier grocery companies in the US. Peggy lived down the street from the store in an old mansion. She had tons and tons of cats. Maybe 50-100 cats! We knew this because Peggy would conveniently take our shopping carts to her house, so we would send someone to her home  to retrieve the carts once per week. Her cats were everywhere…on the porch, window ledges, on the hood of an old car… Peggy would buy lots of cat food. Usually generic (black and white label). She would also buy a six pack of beer. That’s it, cat food and beer. But once Peggy would leave the store, a few hours later she would return and look for me, or another one of the managers, and she would approach us with her receipt from the previous shopping trip and say, “you charged me for a six pack of beer and cat food”. “As usual, someone forgot to bag my beer so you owe me a six pack”. She would say this as she was placing the beer in her basket while walking out of the store. This happened at least once per week. Peggy was wrong, but she had a big mouth. An unhappy Peggy the Cat Lady was simply dangerous with her mouth. She could scare other customers away. So we let it slide, we let her steal beer, but we always got our shopping carts back and we sold her a ton of generic cat food, and in return, Peggy the Cat Lady always felt she was always right.

And still another MNB reader chimed in:

This common saying is true 99% of the time.

Having spent many years as a Walmart store manager, believe me when I say I've seen it ALL! There are some "customers" you do not want.

People wanting to return air conditioners and lawn mowers after the season, burned out light bulbs, half empty buckets of paint, not to mention the habitual out-right thieves.

Walmart used to be a push-over when it came to returns. If a customer  brought back a used air filter for example...you think I'm kidding...and put up a fuss, it was policy to simply refund, rather than spend 1/2 hour arguing with an unreasonable customer.

I'm convinced we did not want those shoppers in our store, and when they share their experience, it is to brag about how they "worked" the system, and what they were actually allowed to return!

Being denied a return for this type of customer, is deemed a failure in their minds, and they tend to not share that experience.

This policy led to a tightening of rules for ALL customers.

Do you still treat all customers as if they are right? Of course, with respect, professionally, and with a smile. Then you hide behind "company policy" and deny them the unreasonable and or fraudulent claims.

And MNB user Doug Madenberg wrote:

Agree with your comments on The Customer is Always Right credo.  To simply leave it at that discredits and devalues the sometimes lip-biting patience needed by front-line associates, who are critical in making sure all customers/guests leave with a positive feeling about their experience.  The way I always phrase it is, The customer is NOT always right, but the customer IS always the customer.




Some folks seemed to like my Nike "FaceTime" commentary yesterday.

One MNB user wrote:

I can relate to your words about the technology offered by Nike.  Two years ago at Christmas I received a Nike Sportband from my fiancé and I love it!  I’m 55, had never run regularly in my life before she encouraged me to try it (always been a cycling enthusiast for my primary exercise routine) and the Sportband has catapulted me into a regular runner (when it is not 116 degrees outside).  Initially I used the sport band “disc” taped to my New Balance shoes, but I’ve moved into some Nike shoes that I really like and the disc inserts into the insole for tracking runs.  The best part about the Sportband – its totally motivating!  When I finish a run I love to plug the insert into my USB port and see how I “did”.  You can review all of the runs you’ve ever made, see those spots where you slow down or speed up, it calculates calories burned, distance travelled, fastest mile, etc. etc.  I’ve only scratched the surface.  I’m not a super techy guy, but the sport band is an apparatus that I would recommend to anyone who runs/jogs, or just wants to track the distance of their walks!  It is an amazing piece of technology.

And from another reader:

What’s really cool is that Nike has a Nike Plus app for the iPhone. I don’t even need a wrist band. I run with my phone so I can listen to music and the app tracks it all while I’m running. It even talks to me to give me ½ mile alerts and times while I run. I bought a really nice Garmin GPS running watch three years ago and I never use it anymore because the Nike app is so great.

And what all this points to is a customer that will, over the long haul, expect more and more information and interactivity, and will demand these kinds of technological solutions from all the brands he or she acquires.

That may not be the week's most significant retail or cultural event. But I thought it was an insight worth sharing and considering.

BTW...my writing about Nike reminded several viewers of the fictional - and wonderful - Nike commercial crafted by the Mel Gibson character in What Women Want. You can see it here.




On another subject, one MNB user wrote:

I have read and heard many bitter comments about how Albertsons is to blame for Supervalu's lack of success.  I would like to take a moment and defend the Albertsons culture that I had the privilege to work with but not for.   I have been in the industry over 30 years and remember when Albertsons was considered the most profitable and best organically grown food retailer in the country.  Then, just as Supervalu did, Albertsons felt the need to get bigger or get bought out.  They bought American Stores, a larger and failing retailer.  They did the buying but they lost control of their company in the process. The new board members and executives from American Stores destroyed Albertsons from within and drove off many talented executives.   Peter Lynch being just one of the more recognized names.  Albertsons lost their identity and culture of success after that merger.  Bringing in a CEO from the GE  appliance division to run a food retailer was a illustration of that loss of direction.

There is a disease coursing through the industry today.  It's a disease that removes the focus of selling groceries and replaces it with the focus of Boardroom politics.   Where board members and CEOs are more concerned with internal gamesmanship than with figuring out how to better sell merchandise.  Both Albertsons and Supervalu people are victims of that disease.

There is another Albertsons out there. Albertsons LLC has many successful former Albertsons leaders and they are doing fine.  They took the "poor performing" divisions that Supervalu did not want.  They kept the original Albertsons philosophies, made the tough decisions and have kept their stores operating at a profit.  I would buy that stock if it ever goes public again.  Just like Safeway, 30 years ago.  I would keep an eye on Albertsons LLC for future growth.




And finally, responding to my use of the phrase, In a world where fundamental changes are taking place, incremental action almost never suffices, one MNB user wrote:

Each time I see this referenced in your commentary lately, I'm instantly hearing Don LaFontaine doing a movie trailer voice over.

Wow! Extra credit for the semi-obscure movie reference.

If you don't know what he's talking about click here.
 

Published on: August 3, 2012

At my age, life-changing experiences don't come around all that often. When they do, they often involve a blonde, a motorcycle, a tattoo, body piercings, alcohol, sex, drugs and divorce.

Or, as my friend Jim Roxbury suggests, the prostate.

I got lucky. I had a life-changing experience, and none of that was involved. It just had to do with an apartment in a terrific city, (Portland) a chance to explore what I believe is the most beautiful part of this country (the Pacific Northwest), and a classroom full of young people who were eager to learn and, as it happened, willing to share what they knew and felt.

That is them in the top picture at right.

This was my first extended period of time in the classroom, thanks to the kind and generous Prof. Tom Gillpatrick of Portland State University, and I have to tell you that it was a blast, mostly because the students were so extraordinarily thoughtful.

The first thing I asked each of the students to do was to write a short essay on the subject of their most memorable meal. I have a bias, long on display here on MNB, that too many people in the food business think only in terms of category management, sales lift and profit margins, and don't think enough about food. So I wanted the students, to use a familiar phrase, to think different.

I have to tell you, I was blown away by the essays. They ranged from meals eaten in a four-star restaurant in Beirut to quieter, more intimate dinners shared at home with family and friends. In each case, the passion was clear.

None of the students will be insulted, I think, if I tell you about one of my favorites, written by a man who said that his most memorable meal consisted in part of rice and A-1 steak sauce consumed on Christmas Day; he was serving in Afghanistan, had just returned from patrol, and, he said, it was memorable because he was with his brothers, all of whom he would have died for, and each of whom would have died for him. Puts things in perspective, doesn't it?

(Full disclosure: I stole the idea for this essay from the novelist and journalist Bob Morris, who uses the same idea with his creative writing classes at Rollins College in Florida. My class was full of business majors, but it had the same impact - it got people to write with passion about a subject easy to feel strongly about. So thanks to Bob for that.)

Another short essay I asked them to write was themed to our book, "The Big Picture: Essential Business Lessons from the Movies." (No, I didn't require them to buy the book. I donated a couple of cases to the class.)

I asked them each to write a short "chapter" for a sequel, with the only caveat being that it had to be about a movie not covered by Michael and me in the original.

Once again, I was blown away by their creativity. The chapters were just great, with movies chosen that I never would have considered, but that made absolute sense once I read the essays.

Again, just one example: Weekend At Bernie's, which the student said she chose because it illustrates the importance of have a great brand - one so strong that it survives even in death. Outstanding! (And again, apologies to the rest of the students, each of whom contributed great stuff.)

I'm done teaching for the summer, but I hope I'm not done for the rest of my life. I found college life to be energizing, and particularly the urban campus that helps to define Portland State University. There is just something gritty and real and stimulating about the place...

I won't go into too much detail about the rest of my trip; I did that a couple of weeks ago in this space, and if you're interested you can read it here.

There are some pictures at right...of Crater Lake, of Mrs. Content Guy and me on a hike, of the spectacular Oregon coastline, and of Multnomah Falls.

It wasn't all pleasure, by the way. There also was some business mixed in. One of the advantages of going to a place like Oregon for an extended period of time is having the chance to visit stores that one ordinarily might not have a chance to see.

I had a chance to go to retailers like Zupan's, which focuses on specialty foods and has a new Lake Oswego store that would just blow you away.

And New Seasons Markets, which has a street-savvy vitality about healthy and local products that I found to be compelling and very, very smart.

At the other end of the spectrum, I saw a Grocery Outlet discount-driven format that I thought was really strong; like WinCo, which I also think is terrific, it manages to be about low prices without being a lowest common denominator retailer. All were impressive, and I would shop any and all of them if I lived there.

Finally, let me tell you about the bottom picture. It was taken at the vineyard of Carlton Cellars, which is owned by Dave Grooters and Robin Russell.

I briefly rhapsodized about their 2007 Roads End Pinot Noir in an "OffBeat" column a couple of years ago. I had been given the wine by a friend, didn't know Dave and Robin, but apparently they became MNB readers. When they found out I was spending time in Oregon, they invited me to their winery and vineyard, and it proved to be a memorable way to end my visit.

(I started my stay with a trip to the fabulous Willlamette Valley Vineyards...it was a good month.)

First of all, their Carlton Cellars wines are just wonderful - each one is unique and delicious. I don't have a sophisticated enough palate to be able to give it to you in "wine-speak," but I can tell you that you can almost taste the hand-crafting that goes into each one. My favorites, other than the always exquisite Roads End Pinot Noir, would be the 2011Proposal Rock Yamhill-Carlton Sauvignon Blanc, and the 2011 Cannon Beach Willamette Valley Pinot Gris.

Dave and Robin don't have a ton of national distribution, so if you can't get one from your local wine merchant (or can't get them to sell in your store), check out their website, and thank me later.

But here is the real story about the bottom picture. ..

That's me, obviously, on the deck overlooking the vineyard. We'd just eaten lunch, which consisted of their wines and the best BLT I've ever eaten. When I commented on the sandwich, and especially how good the bacon was, Dave said that it came from hogs being raised just down the road.

That's when I realized that it is true - food really does taste better when you are in touch with its source. I don't have an agricultural bone in my body - I have no desire to raise grapes or pigs or anything else - but there is something nourishing about being connected to where food and wine come from. It nourishes the body, the spirit and the soul.

I think you can see it in my face in the bottom picture. I'm happy, and well-nourished.

I'm in Oregon.

And so, thanks to all of you who made this a life-changing summer. I always swore that I would never live in the suburbs and I would never live where there is snow, and I have spent my entire adult life in a New England suburb.

If I may mix my cultural references for a moment, my Oregon summer taught me that I have found me a home. Maybe not today, maybe not tomorrow, but soon....

That's it for this week. Have a great weekend, and I'll see you Monday.

Fins Up!