business news in context, analysis with attitude

Published on: September 25, 2012

by Michael Sansolo

Given all the changes in marketing these days, it was hardly surprising when a new catalog arrived featuring some interesting goods. Inside were specials on soft drinks and candy, snacks and cereal, cleaning products and simple appliances.

The catalog reminded me that prices listed inside would be frozen through December and that I could easily find "savings, selection (and) convenient delivery," with free shipping for any order totaling more than $45. Plus I could order on line or by phone.

At this point you are probably thinking, “Wow, Michael got a paper catalog from Amazon.com.” Of course, you would be wrong.

All of these offers came from a brick and mortar retailer that, frankly, would never have come to mind for any of those product choices: the office supply superstore, Staples. Interestingly enough, not one page of the catalog featured the stuff I would usually buy at Staples, such as paper products, computer needs and office supplies such as paper clips and, yes, even staples.

In short, it was a catalog of products that Staples was clearly identifying as useful to business customers that might be buying these supplies from wholesalers or clubs. That last point was made without subtlety on page 2, which urged me to "skip the trip to the wholesale club. Staples offers: a larger selection of top brands; your choice of pack sizes; no club fees.”

Pretty straightforward.

Apparently I got this special brochure because my wife, who buys all the supplies for my little business, uses Staples quite a bit and Staples was thinking that there might be some more sales to grab from Sansolo Solutions LLC. And in all honesty, if I decide we need a rotary waffle maker (like they have in hotels) or multi-language yellow floor signs to identify dangerous spots, I might well buy them at Staples.

But for the moment, I am just kind of stunned. Because while the blurring of lines in retail is really old hat, I still find it kind of amazing that a company I know for a specific type of products is so aggressively merchandising in a whole new area. I might never have seen it unless I was buying office products; and you might be missing it too.

Plus, you might be missing other things.

Former Secretary of Defense Donald Rumsfeld once made a fabulous comment about problems both seen and unseen in the wake of the more-challenging-than-expected invasion of Iraq. Rumsfeld said, “There are known knowns; things we know that we know. There are known unknowns; things that we now know we don’t know. But there are also unknown unknowns; things we do not know we don’t know.”

Politics being what it is, Rumsfeld’s comments were widely ridiculed. I’d argue that the quote should be widely shared and discussed.

Because in the world of competition the unknown unknowns - things that we don’t know we don’t know - can always kill us. That could include completely unforeseen shopper changes, emerging technologies or office supply stores suddenly selling a wide array of food products.

That’s why we all need our eyes open on the usual and the unusual. It is why we need to understand that Twitter or Pinterest matters even if we don’t get it. It’s even why we need to consider why a video craze like “Call Me Maybe” or “Gangham Style” might tell us something entirely unexpected about how the world is behaving.

In the meantime, I’m going to be watching those catalogs a lot more closely to see what new markets they may be exploring. At least, that's what I'm going to tell my wife if she catches me reading the new catalog from Victoria's Secret.

Michael Sansolo can be reached via email at msansolo@mnb.grocerywebsite.com . His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available by clicking here .

Published on: September 25, 2012

by Kevin Coupe

No time like the present to pig out.

The Chicago Tribune reports that Britain's National Pig Association is warning that the summer drought has led to a global corn and soybean shortage, which has in turn meant that there has been less pig feed.

Which means, the group says, that "a world shortage of pork and bacon next year is now unavoidable."

This will worry some people more than others.

As for me, I just can't resist a good bacon story.

Especially because it gives me a chance to link to one of my favorite MNB stories ... the one about the company that makes bacon caskets and bacon-flavored massage oil designed to increase intimacy. (You can read it here.)

Published on: September 25, 2012

There is an excellent piece in Fast Company by Tim Leberecht about how people who provide active opposition to management within organizations can serve as enormous assets to those organizations.

Leberecht writes that he's been thinking "about employee activities that are counter to the top down policies without crossing the line into the unproductive and illegal. From passive disengagement, noncompliance, and disobedience to passive aggression, covert sabotage, and overt conflict, which tactics are appropriate, legitimate, and effective? How much resistance from its fringes can an organization endure before it is threatened at its core--and stops being an organization altogether? And most important, why would fostering creative opposition even be beneficial to companies?"

He goes on:

"With a strong and self-organized in-house opposition, companies can cover the entire breadth of their corporate character. It allows them to acknowledge that they are complex and multipolar, that they have multiple truths, and that, through this tension, they can become capable of stretching themselves, expanding, and realizing their full potential.

"There are other, more practical benefits to cultivating internal opposition. Today’s Millennial employees value freedom (and opposition might well be the most obvious act of freedom), and in that sense encouraging creative opposition among young employees, rather than squashing it, can serve as an important engagement (and retention) strategy. Moreover, companies that fail to allow internal opposition may be caught off guard and slow to respond when they face external opposition."

Leberecht suggests that creative opposition "means raising the accountability for each and every employee. Employees as innovators strive to find better ways of doing business instead of just following the business-as-usual manual. This may result in the traditional corporate functions giving up authority and shifting from being owners to enablers. It’s certainly not an easy transition, but one that pays off in the long term."

You can read the entire story here.

Published on: September 25, 2012

The Associated Press reports that Fairway Group Holdings Corp., which is 80 percent owned by Sterling Investment Partners, has filed the paperwork with the US Securities and Exchange Commission (SEC) for an initial public offering (IPO), which it hopes will generate funds that will fuel future growth of three to four stores a year. Fairway currently has 11 stores in New York, New Jersey, and Connecticut.

The company, founded by the Glickberg family as a neighborhood store back in the 1930s, says in the filing that "we believe, based on these demographics, we have the opportunity to more than triple the number of stores in our existing marketing region, that the Northeast market (from New England to the District of Columbia) can support up to 90 stores and the U.S. market can support more than 300 additional stores (including stores in the Northeast) operating under our current format."

Sterling bought into Fairway in 2007, and will retain control of the comp[any even after the IPO. No price or timing have been established for the offering.

Published on: September 25, 2012

Walmart says that it plans to hire 50,000 people to help in stores during the upcoming end-of-year holiday shopping season, its busiest time of the year.

"It was not immediately clear," CNBC writes, "how many people the world's largest retailer hired to handle last year's holiday rush."

The move is part of the company's broader effort to have a strong fourth quarter, which includes a focus on its e-commerce site. The story notes that "Walmart is trying to boost its growth ... through its web site, offering free shipping with certain minimum purchases and waive shopping fees for shoppers who pick up their items in a Walmart store."

Published on: September 25, 2012

• The Portland Business Journal reports that sneaker maker Adidas AG is instituting a global policy similar to one that actually has been enforced in the US for almost two years - banning any of the retailers that carry its products from offering them for sale on third-party e-commerce sites.

According to the story, the initiative "is billed by the German sporting goods giant as a move to improve customer service and create the best possible brand experience for online shoppers. But some e-commerce analysts view it as drawing a line in the sand, particularly as it relates to how manufacturers deal with Seattle-based Amazon."

Published on: September 25, 2012

• In the UK, the Daily Mail writes that Tesco got rid of the budget-priced Value brand that it had been selling in distinctive blue-and-white striped packaging.

The reason? Sales were not up to expectations, and research showed that some customers "felt more than a little embarrassed" to be seen buying the line.

The story notes that "it has been replaced with a newly designed Everyday Value range, which features brightly coloured, more upmarket-looking packaging.

Published on: September 25, 2012

The Boston Business Journal reports that Shake Shack - the popular burger chain that started out as a kiosk in the New York City park, and has grown to locations in four states, Washington DC, and the Middle East - plans to open a location in the Chestnut Hill suburb of Boston next year.

The story adds that the burger chain, owned by Danny Meyer's Union Square Hospitality Group, is looking for other Boston-area sites.

Published on: September 25, 2012

• The Associated Press reports that "Trader Joe's is recalling peanut butter that has been linked to 29 salmonella illnesses in 18 states. The Food and Drug Administration and the federal Centers for Disease Control said that the store's Creamy Salted Valencia Peanut Butter, which is sold nationwide, is the likely source of the outbreak. The agencies are investigating whether any other items sold at the store could be contaminated."

• Reuters reports that Fuhu Inc., which makes the Nabi tablet computer for children, is suing Toys R Us, charging that "the world's largest toy retailer stole trade secrets in preparing to introduce the rival Tabeo tablet this month.

"The lawsuit filed in federal court in San Diego, California, seeks to stop Toys R Us from selling Tabeo ahead of the all-important holiday season ... Fuhu accused Toys R Us of fraud, breach of contract, unfair competition and trade secret misappropriation ... Fuhu Inc contends that Toys R Us agreed to become the exclusive seller of the Nabi last year to learn product secrets before bringing Tabeo to market."

Published on: September 25, 2012

Reaction to yesterday's postings from MNB users about California Proposition 37, which would mandate the labeling of GMO ingredients in foods...

MNB user Rosemary Fifield wrote:

In today's discussion about Prop 37, Stacy Bergmann makes statements as though they are facts but has the details glaringly wrong. GMOs are not simple hybrids from two original seeds. Their genetic material has been artificially inserted using technology and often includes material from a different species - genetic combinations that would never occur in nature. The soy, corn, canola, and sugar beets mentioned have had either Bt toxin-making ability (extracted from a bacterium) or pesticide resistance artificially inserted into their genome. None of it came from another seed, and none of it is natural.

As far as labeling products as "all natural," that is a completely bogus, unregulated, undefined term that tells the consumer nothing. Just by the statement "I don't see them as being unnatural at all--still a seed" Bergmann perfectly illustrates the value of the term "natural." Manufacturers use it as they see fit.

MNB user Neil Garrett wrote:

Very interesting debate on GMO labeling. Like you Kevin and some readers that have responded, I also believe transparency is required.  The fact that an ingredient is genetically modified should be listed on the product label.  Also like you, I think this shouldn’t become a punishment for retailers nor a “cash cow” for lawyers who take advantage of unfit legislation.  The initial genetic tinkering with corn had to do with making it unappealing to some pest. Same is true for tomatoes--unlike milk in which the cows are genetically manipulated to produce a greater volume.

As a consumer, I want to know IF a particular type of produce I'm buying is engineered and for what purpose. The grocer should have that info supplied by the grower and the label - without explanation - should indicate GMO ingredients in the product. A consumer who was interested could look it up on the seed-producer's website to learn what type of alteration has been applied to those seeds and for what purpose.  Here, the consumer also shoulders responsibility for his or her own education, not solely the grocer.

There is a compelling concern for grocers regarding California’s Prop 37 initiative as illustrated in your column.  However, instead of whining about it and crying foul, industry leaders should understand what’s coming and prepare.  Spend some time and money now educating the public and advocating for their needs by proposing reasonable solutions instead of taking a wait-and-see approach and spending all that time and money (and much more) after the legislation has passed.  It’ll be cheaper in the end and the goodwill earned will far outweigh the costs.

I wrote yesterday in my commentary:

I continue to believe that GMO labeling is a good idea, and that ultimately, consumers want to know or at least ought to have access to information about what is in their foods.

I do believe that there probably is a better way to achieve it than the California bill. I don't think retailers ought to bear the burden of providing accurate information, because most of them don't actually make most of the stuff they sell. They are dependent on others to provide them with accurate information. I also believe that there ought to be provisions in the California rules that prevent attorneys from becoming the big winners ... maybe a two-year moratorium on any GMO labeling-related lawsuits, just to allow manufacturers some time to get things right.

I also would agree with the suggestion that this ought to be a national effort, not a local effort. As a part of that, I'd like to see a major industry proposal that supports a comprehensive GMO labeling program that makes sense for consumers as well as the industry.

The problem is that a lot of folks probably don't expect the industry to support such a thing. And so they are left with the California proposal, which seems to them like it is better than nothing. And so they support it.

Which led MNB user Mike Franklin to write:

If the industry took the lead on this issue…the State would not have to intervene.

Exactly my point.




Responding to our piece about Walmart deciding to no longer sell Amazon's Kindle, MNB user Dan Graham wrote:

I'm sure the folks at Amazon were not at all surprised by Wal Mart's decision to stop selling the Kindle. I do believe, however, that if consumers cannot see and touch the Kindle before making a purchase decision sales will be negatively impacted. Since I'm sure the Amazon team understand this as well, could we be seeing Amazon retail outlets/showrooms soon? I envision a location that features display models and helpful Amazon associates, but no inventory.  Orders would be fulfilled from Amazon distribution centers with either same day or next day delivery.

There still are some retailers, like Best Buy, that sell the Kindle.

And I get your point.

But ... I've bought two Kindles over the years. In neither case had I actually held one in my hands or seen it "live." I bought them from Amazon, online. And I suspect that most of Amazon's Kindles have been bought in precisely the same way.




On another subject, MNB user Lisa Bosshard wrote:

On my drive home yesterday (which is long and traffic filled), I came upon a small pick up whose truck bed was loaded to nearly overflowing with cellophane wrapped phone books.  This led me to think about obsolete business models and the last time I received a phone book, which by the way was just two weeks previous.   What did we do with the said phone book?  We promptly threw it into our recycle bin.   In the world of becoming obsolete, who does it and why are we still printing phone books?  It seems to me that a homeowner should have the ability to 'opt' out of receiving a phone book, because while they make good foot rests, I can't honestly think of any reason to use one these days.  Instead, how many trees are we killing to produce something which is provided at no cost to neighborhoods with no thought to whether it should be done at all?  Seems like such a waste of natural (but limited) resources.  I'm sure it's a job for folks, but really we're still printing and distributing phone books?   Even my mother who is retired and not the most computer literate person can look up addresses and phone numbers on the web.  While I understand there may be a need for some folks to have a phone book, it would make more sense to provide a method to opt out if you have no need.  Just wondering how many more years I'll come home to find a couple of phone books on my porch...

Just another example of a business model moving into obsolescence...

Something we all need to avoid.

Published on: September 25, 2012

The Seattle Seahawks defeated the Green Bay Packers 14-12 in Monday Night Football action.