business news in context, analysis with attitude

Published on: October 25, 2012

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Think of this as a kind of Andy Rooney commentary.

In other words, it is about stuff that sort of annoys me. Everyday stuff - all business related - that just rubs me the wrong way. Stuff that I notice as I wander around Main Street USA.

For example...

Obviously there has been a lot of attention paid to the announcement yesterday of the new iPad Mini. But what interests me more is that a month after the release of the iPhone 5, the Apple Store still does not have any cases for the new smart phone. I know this because Mrs. Content Guy recently got an iPhone 5 - not because she has an enormous desire to be up to date technologically, but because the iPhone she was using was almost an antique and not working particularly well.

When she asked to buy a case, the guy at the Apple Store said that we'd have to look elsewhere ... apparently because there is a supply shortage, and none of the Apple Stores will carry them until all of the Apple Stores can carry them. This strikes me as colossally dumb ... and makes me ask a question that I hate to ask: Would this have happened when Steve Jobs was alive? I think not...because he was focused on the entire experience, not just selling a new gadget.

That's a missed sales opportunity. And a misstep.

I hate that kind of dissonance. It is like fingernails on the chalkboard.

I was walking by a barbershop the other day, and I notice two things. One is that it was empty. The other was that the sole barber on duty had a horrible haircut - it looked like it had been done with a hacksaw by a blind man. There is no way I ever would let this guy anywhere near my hair ... and it is a good lesson. If you want to sell something, you have to demonstrate some expertise about it.

It's like when you open up those airline magazines, and you see these multi-page ads with pictures of the nation's so-called best plastic surgeons. I say "so-called" because if I were going to have something about my appearance fixed, I'd probably want to pick someone with a face that shouts out competence. Not to be unkind, but some of these folks could use a good consult ... or they simply believe that beauty is more than skin deep, which is an admirable quality, though not necessarily what I'd be looking for in a plastic surgeon.

Another thing ... there's a Whole Foods not far from me, and every once in a while I see guys in Whole Foods uniforms outside grabbing a smoke. Really? Is that the message they want to send? Consistency means something. or ought to.

Finally, I think that sometimes retailers don't think things through. I was walking past some stores the other day and noticed that one of them was closed midday, but there was a sign on the door saying "Back in 15 minutes." Which is great, but ... 15 minutes from when? Wouldn't it be better to say what time you'll be back, instead of the length of the departure, since nobody knows when you actually left?

Again, think things through. Think like a consumer.

These kinds of dissonances may not seem like much, may seem like isolated and unrelated cases.

But I think that for every one of these examples, there are hundreds, maybe thousands of similar examples ... and that each one teaches us lessons about how to be better at our jobs, to run more consumer-oriented businesses.

Anyway, that's what is on my mind this Thursday morning. As always, I want to hear what is on your mind.

Published on: October 25, 2012

by Kevin Coupe

Business Insider has an interesting story, based on research done by an analytics firm called Jirafe, on which states have consumers that spend the most making online purchases.

Number one: Alaska, where the average online purchase size is $160. Second is Idaho, at $156, followed by Hawaii, at $144.

The rest of the top dozen are, in order, Wyoming ($130), Florida ($125), California ($123), Montana ($122), Pennsylvania ($121), Colorado ($120), North Dakota ($118), Illinois ($116), and Washington State ($116).

In many of these cases - such as Alaska, Idaho, Wyoming, Montana, Colorado and North Dakota - the sparseness of the population and the relatively long distances to traditional bricks-and-mortar shopping seem to have contributed to the high online spend rates.

The study also found that "people in California make up a whopping 13.3 percent of all online spending in the U.S."

Published on: October 25, 2012

Accenture is out with its annual consumer holiday shopping study, which shows "that consumers are expected to spend an average of $582 on holiday shopping this season, and 23 percent plan to spend more than $750. Half (52 percent) expect to increase their spending by $250 or more. However, only 5 percent say they expect to be 'extravagant' in their holiday shopping, and only 8 percent said they would 'splurge'.

"This year’s survey also found that half (52 percent) of consumers would be willing to shop online on Thanksgiving Day if retailers offer discounts, and 53 percent plan to shop on Black Friday, which would reverse a three-year trend of declining interest in Black Friday shopping indicated by Accenture’s previous surveys. In 2011, the survey showed that only 44 percent of respondents were interested in shopping on Black Friday, down from 47 percent in 2010 and 52 percent in 2009."

Another finding: "The majority of shoppers (56 percent) say they are likely to participate in 'showrooming' this holiday season, which means that after seeing a product in a physical store, they would search online for the best price and then purchase online. 27 percent of these same shoppers say they would likely make the purchase online, using their smartphone or tablet, while they are still out shopping."

Published on: October 25, 2012

Reuters reports that ABC News is looking to move the defamation case against it, related to its reporting about lean finely textured beef, popularly known as "pink slime," from Union County Circuit Court in South Dakota to a federal court in the same state. According to the story, "Defendants sometimes prefer to fight lawsuits in federal courts where procedures are more standardized, rather than in state courts."

The case has been filed by Beef Products Inc. (BPI), which is seeking $400 million in damages, saying that it is equal to the profits it lost when ABC News reported about the existence of lean finely textured beef, made of trimmings washed with ammonia to remove pathogens, in ground beef products. The ABC stories led to a number of retailers, restaurants and school districts to only buy meat without the lean finely textured beef trimmings, even though the trimmings were perfectly safe; BPI maintains that the stories, and the use of the term "pink slime," were designed to inflame consumers in a baseless way.

ABC has said the suit is without merit.

Published on: October 25, 2012

• The Los Angeles Times reports that "a temporary ban on big-box retail stores in Chinatown fell short Tuesday, when Los Angeles City Councilman Ed Reyes failed to get enough colleagues to add their support. The measure needed at least 12 votes, but got 10, with four members opposed.

"The council is expected to reconsider the issue again at its meeting Wednesday, but could delay a re-vote until next week.

"The proposed law was drafted to target efforts by Wal-Mart Inc. to open a 33,000-square-foot grocery store in the area. The project has been the subject of months of protests from community groups and labor unions, who say the project would endanger the cultural history of the neighborhood."

• Reuters reports that Walmart is reorganizing its its compliance, ethics, investigations and legal units into one organization that will report to Executive Vice President, General Counsel and Corporate Secretary Jeff Gearhart, a move that comes as Walmart continues to deal with a variety of investigations into charges of widespread bribery of public officials by its Mexico operations.

According to the story, "Wal-Mart also said on Wednesday that it has already spent more than $30 million on updating its global foreign corrupt practices act and anti-corruption compliance program. Jay Jorgensen will become Wal-Mart's senior vice president and global chief compliance officer, reporting to Gearhart.

"Jorgensen is joining Wal-Mart from Washington, D.C. law firm Sidley Austin. Prior to his work at Sidley Austin, where he was a partner and litigator, Jorgensen was a law clerk for former U.S. Supreme Court Chief Justice William Rehnquist and for then Judge Samuel Alito at the U.S. Court of Appeals for the Third Circuit."

Published on: October 25, 2012

Eataly, the high-end food hall that reportedly has attracted more than 13 million visitors in two years to its New York City location, generating some $165 million in sales, said yesterday that it will open a Chicago location on Ohio Street near Michigan Avenue, in Fall 2013.

According to the story, the new Eataly will be in a 60,000 square foot space formerly occupied by the ESPN Zone. Eataly is owned by Mario Batali, Joseph Bastianich, Lidia Bastianich, among others.

The company reportedly plans other Eataly locations in Los Angeles, Brazil, Istanbul, and Bari, Italy.

Published on: October 25, 2012

Reuters reports that Isis, the mobile payments system developed by Verizon Wireless, AT&T Inc and T-Mobile USA as a way of allowing "consumers to make payments by waving their phone at a check-out terminal, instead of using a plastic card," has now "kicked off its much-delayed mobile payments service" in Austin, Texas, and Salt Lake City, Utah.

According to the story, "Isis was initially expected to launch services in its first markets in the first half of this year, but first changed its launch target to the summer 2012, and the last month said the service would be delayed further ... The service will work on payment cards from American Express, Capital One as well as an Isis cash card."

Among the retailers accepting the Isis system are Whole Foods, 7-Eleven, and CVS.

PC Magazine notes that "the system will go up against rivals like Google Wallet and PayPal Here, as well as mobile payment options from companies like Square."

Published on: October 25, 2012

The Wall Street Journal reports that Barnes & Noble has determined that customers in 63 of its stores - in California, Florida, New York, New Jersey, Rhode Island, Connecticut, Massachusetts, Illinois and Pennsylvania - may have had their credit card and debit card information stolen because of PIN pad devices that had been tampered with.

The FBI is investigating the incidents.

According to the story, "Barnes & Noble said it didn't know the number of customers affected. It also said its own internal systems weren't breached, and that purchases on Barnes&Noble.com weren't affected, nor were purchases made via its Nook devices or Nook apps. Member data bases weren't breached, and customers making purchases at the retailer's college stores also weren't affected."

Published on: October 25, 2012

• Reuters reports that "a sale of Supervalu Inc. heralds a break-up of the far-flung supermarket operator, with its diverse brands and assets sold to rival supermarket chain operators and private equity firms, according to people familiar with the matter.

"Buyout firm Cerberus Capital Management is preparing a bid for the third-largest U.S. supermarket chain, with an eye toward divesting the troubled company's assets to several parties interested in pieces, the people said."

According to the story, Cerberus is the only company considering a buyout of the entire Supervalu organization; it also says that Supervalu's board would still consider a piecemeal sale if it believes that will create more shareholder value.

Published on: October 25, 2012

• The Kroger Co. announced that Marnette Perry has been named Senior Vice President, Strategic Initiatives and Operations, and Michael Ellis has been named Senior Vice President, Retail Divisions.

Perry formerly was responsible for eight of Kroger's supermarket divisions, and also led the team responsible for Kroger's "faster checkout" rollout.

Ellis has been president of the company's Fred Meyer division, based in Portland, OR, since 2006.

• Best Buy, which said yesterday that its Q3 profits and same-store sales would disappoint, also announced that Mike Vitelli, president of its US business, would leave in February 2013, and that Tim Sheehan, executive vice president of US operations, would depart next week.
According to the Chicago Tribune story, these moves represent "the first big structural change under new CEO Hubert Joly, who was brought in as the company grapples with the rising trend of shoppers who treat its stores like showrooms for cheaper online retailers."

Published on: October 25, 2012

...will return.

Published on: October 25, 2012

In Game One of the World Series, the San Francisco Giants defeated the Detroit Tigers 8-3, taking a 1-0 lead in the best-of-seven series.