business news in context, analysis with attitude

Published on: October 31, 2013

This commentary is available as both text and video; enjoy both or either. To see past FaceTime commentaries, go to the MNB Channel on YouTube.

Hi, I'm Kevin Coupe and this is FaceTime with the Content Guy.

One reads and sees a lot in the news about identity theft and credit card fraud, so it did not take much recently for alarm bells to go off around our house.

What happened was that Mrs. Content Guy got an email from a jewelry company, notifying her that the items she purchased had been shipped, that her credit card had been charged for $149 and change, that the package had been shipped to our Pennsylvania address and that they appreciated her order.

The only problem was that my wife never had heard of the company, hadn't bought anything from them, and we live in Connecticut.

The email came over the weekend, and when we tried to call the jewelry company, called Stella & Dot, we found out that the customer service line only is open on weekdays … which was kind of 20th century quaint, if a little inconvenient.

On Monday morning, because my wife was off teaching her third grade class, it fell to me make the call. Which I did. Spoke to a very nice young woman who seemed completely confused by what had happened. She asked if our credit card had actually been charged, a question I could not answer because the credit card number was not on the original email. I asked her to track down the credit card number, and she said she would, though her voice did not inspire tremendous confidence.

Some hours later, she called back, and gave me a the last four numbers of the credit card … which did match up with any credit or debit card in our possession. Now I was really worried that someone had opened up an account in our names, which was going to be an even bigger problem. The Stella & Dot woman also was confused, and did not seem to know what to do next, since everything seemed "right" except the email address to which the message and invoice had been sent. My definition of "right" and her definition of "right" clearly did not have a lot in common, but her next step was to return to her IT department with yet another query.

I was worried, but I had an idea. Maybe, indeed, everything was right except the email address.

I had checked to see if the Pennsylvania address actually existed, which it did. But now I went back online and checked the address a different way. This time, I typed the address … but I added a name: Coupe.

And go figure. There is a Coupe family living in that house. The husband/dad was Jim Coupe, a clinical psychologist. It wasn't hard to track down his work phone number, which I called, leaving the following message: "Jim Coupe, my name is Kevin Coupe. And I'm willing to bet that your wife has the same first name as mine. we may have a credit card problem, so I'd appreciate it if you'd call me." I left my phone number.

It didn't take long to get a call back. Jim Coupe was initially confused, but we quickly figured out that indeed his wife had the same first name as mine, and that she had ordered the jewelry and that the credit card was his. The only mistake: his wife's email address consisted of her first name and last name @mac.com, while my wife's email address was her first initial and last name @ mac.com.

Go figure. It ended up that there was an easy solution. We just had to figure it out.

The funny thing is that when I called Stella & Dot back, they were no closer to finding a solution, but the customer service rep was thrilled to find out that I'd unraveled it. She asked how, and I said, "It's a secret. A little thing called Google."

Amazing.

The thing is, sometimes in all our businesses we overthink things. We use the IT department when all we really need is Google and maybe a little common sense. In doing so, we don't necessarily inspire confidence in our customers. Or even in people who aren't actually our customers, but just have the same last name.

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

Published on: October 31, 2013

by Kevin Coupe

With the holidays coming, Amazon has launched a new initiative - AmazonSmile, which allows shoppers to dedicate 0.5 percent of eligible purchases to any of almost a million charities that are participating in the program, including the Red Cross and the Nature Conservancy.

According to Fast Company, "Not every item for sale at Amazon is part of the AmazonSmile program, and in particular, Subscribe and Save purchases are excluded. Amazon sales were $61 billion in 2012, so if only 10% of purchases are made through smile.amazon.com, that could drive $3 million in donations to charities."

I think this is terrific … and it will definitely have an impact on where I shop during the holidays and what I buy, since it will allow me to simultaneously show support for causes in which I believe.

The announcement comes during the same week as Amazon finally launched its Matchbook program, allowing people who have bought hardcover and paperback books from Amazon to purchase digital versions for Kindle at reduced prices - 99 cents, $1.99 and $2.99, depending on the book. Not every publisher is participating, but Amazon promises that the list will grow - especially as it is able to demonstrate how ancillary revenue is coming in as a result of the Matchbook program. (I know that there are two books that are on my bookshelf that I've never read that I've already downloaded to my Kindle/iPad … just because it's more likely that I'll read them if I have them in that format. And I can think of dozens more on my shelves for which I'd do the same thing.)

Here's the analysis from Fast Company that I think is germane:

"The decision to squeeze revenue even further with a charitable giveaway reads as the latest move in founder/CEO Jeff Bezos's maverick playbook. With moves like same-day delivery and the Matchbook program, he has proven himself again and again unafraid, even gleeful, to leave money on the table if it will help his company undercut competitors and distinguish itself in inspiring customer loyalty."

Or, there's my metaphor, which has always been that Bezos is playing chess while many of his competitors are playing checkers.

Published on: October 31, 2013

Sesame Workshop, the producers of "Sesame Street," and the Produce Marketing Association (PMA) announced at a White House event yesterday that will grant PMA a free two-year license to put Sesame Street characters and the program's logo on fresh fruit and vegetable products, a move described as "a unique and powerful collaboration committed to increasing children’s consumption" of such items.

In essence, PMA will re-license the characters and brand to retailers and manufacturers, allowing them to leverage the highly visible and credible images in an attempt to influence children's consumption behavior.

Also appearing at the event: First Lady Michelle Obama, who has made childhood nutrition and the battle against childhood obesity a central theme of her role in the Obama administration. “Just imagine what will happen when we take our kids to the grocery store, and they see Elmo and Rosita and the other Sesame Street Muppets they love up and down the produce aisle,” she said at the event. “Imagine what it will be like to have our kids begging us to buy them fruits and vegetables instead of cookies, candy and chips. That’s what this new collaboration between Sesame Workshop and the Produce Marketing Association is all about – showing our kids that healthy food can be fun and that fruits and vegetables don’t just make us feel good, they taste good too.”

“PMA seeks nothing less than to inspire a fresh food revolution,” said Bryan Silbermann, PMA president and CEO. “We’re delighted to be part of this new partnership that brings together the White House and two non- profit organizations (PMA and Sesame Workshop) with one very critical mission – helping kids develop healthier eating habits early in life by choosing fresh fruits and veggies. These are goals for both organizations: for Sesame Workshop, utilizing its engaging characters to help families make healthier choices; for PMA, focusing more resources directly on our newly unveiled strategic plan with its emphasis on driving produce consumption.”

Silbermann tells MNB that Cathy Green Burns, the former president of Food Lion who is joining PMA as president in early December, will have the Sesame Street licensing initiative as part of her portfolio when she begins her duties there.

Published on: October 31, 2013

The Wall Street Journal reports that Kroger CEO Dave Dillon told investors yesterday that he believes that most Americans won't turn to the internet to buy their groceries.

“I understand some people like that … but there’s still a large percentage of customers that like to get out and have that interaction with friends and neighbors in their community as they walk through the store,” Mr. Dillon said, adding, “I wouldn’t be too quick to assume that the leap to home delivery ends up replacing everything."

The Journal notes that Kroger COO Rodney McMullen, who will become CEO in January when Dillon retires, left the door to an e-commerce initiative open a bit wider, saying that "the digital component will be a major focus of his in keeping Kroger relevant. While he didn’t counter Mr. Dillon’s claims, he did mention online ordering–though not home delivery—that the supermarket operator is hoping to learn more about from its acquisition of Harris Teeter."

And a Kroger spokesman said, “We’re putting our focus where our customer is today … and when you look at our industry today, e-commerce makes up a tiny, tiny percentage of the food business," noting that "Kroger’s digital strategy is not mutually exclusive of e-commerce, as it has been testing an online shop and delivery program in the Denver market at King Soopers stores for several years."

In his comments, the passer writes, Dillon "took a stab directly at Amazon, saying there haven’t been any changes in the online ordering and grocery delivery process that make it more profitable for the stores. But Amazon, he said, can afford to get in the business because its investors only care about top line, not net profit. 'It’s totally different when you’re a company that is only valued based on its revenue and not the cash flow you produce,' Mr. Dillon said."

Published on: October 31, 2013

The New York Times reports this morning that "about 12 percent of spices brought to the United States are contaminated with insect parts, whole insects, rodent hairs and other things, according to an analysis of spice imports by federal food authorities.

"The finding by the Food and Drug Administration is part of a comprehensive look at the safety of spice imports that has been years in the making. The federal authorities also found that nearly 7 percent of spice imports examined by federal inspectors were contaminated with salmonella, a toxic bacteria that can cause severe illness in humans.

"The shares of imported spices contaminated with insect parts and salmonella were twice those found in other types of imported food, federal food officials said … Spice imports from Mexico and India have been found to have the highest rate of contamination. Nearly one-quarter of the spices, oils and food colorings used in the United States comes from India, according to the F.D.A."

According to the story, spice manufacturers, while not yet commenting on this report, "have argued in the past that food manufacturers often treat imported spices before marketing them, so F.D.A. findings of contamination levels in its import screening program do not mean that spices sold to consumers are dangerous."

Published on: October 31, 2013

In the UK, Retail Gazette reports that Sainsbury, dissatisfied with the ruling earlier this year by the Advertising Standards Authority's ruling that Tesco's Price Promise was legitimate, is challenging that decision in the courts.

Tesco's "promise," Sainsbury claims, was selective - it would compare its everyday tea with Sainsbury's Fairtrade tea, for example, which Sainsbury said was intellectually dishonest.

According to the story, "Sainsbury’s Commercial Director Mike Coupe said it was time to take a stand on behalf of the huge majority or customers who want to be able to make fair comparisons when they shop. “More than ever, customers want to be able to let their values guide them and in price-matching its products with ours Tesco is, when it sees fit, choosing to ignore factors such as ethical or provenance certification or even country of origin,” he said. “We think that’s wrong and we’re pretty sure our customers do too.”

Published on: October 31, 2013

Forrester is out with an analysis of how marketers and e-business executives evaluate digital marketing opportunities, concluding that these executives believe that Facebook "creates less business value than any other digital marketing opportunity." This despite the fact that last year alone, Facebook generated ad revenues in excess of $4 billion.

In an open letter to Facebook CEO Mark Zuckerberg, Nate Elliott, vice president and principal analyst at Forrester, writes:

"We believe there are two reasons.

"First, your company focuses too little on the thing marketers want most: driving genuine engagement between companies and their customers. Your sales materials tease marketers with the promise that you’ll help them create such connections. But in reality, you rarely do. Everyone who clicks the like button on a brand’s Facebook page volunteers to receive that brand’s messages — but on average, you only show each brand’s posts to 16% of its fans. And while your company upgrades its advertising tools and offerings monthly or more, you’ve done little in the past 18 months to improve your unloved branded page format or the tools that marketers use to manage and measure those pages.

"Second, your company isn’t good enough at the pure advertising business onto which you’ve shifted your focus. We estimate your site now delivers tens of billions of display ads every day. But fewer than 15% of those ads leverage your ever-growing cache of social data to target relevant audiences. And your site’s static-image ad units offer marketers less impact per impression than they could achieve with the ad units other sites offer. The result? The executives we surveyed said Facebook’s display ads were significantly less effective than the display ads they buy elsewhere online. They also reported that Facebook ads were less valuable than any other marketing tactic they could use on your site."

To rectify the situation, Elliott writes, "you’ll need to once again build bridges between companies and their customers, you'll need to fully leverage social affinity data within your ad targeting products, and you'll need to better listen to the marketers who drive your company’s financial success. But you must act quickly, before more marketers act on their growing dissatisfaction and start earmarking an increasingly smaller budget share to your company."

Published on: October 31, 2013

Internet Retailer reports that "Staples Inc. is on the verge of greatly expanding its online business-to-business and consumer product offerings to more than 1 million SKUs. That’s up from about 200,000 today and would include categories such as power tools, medical devices and garden supplies as it prepares to go far beyond its core office supplies market and begin channeling sales from third-party sellers as well as handling its own sales on the chain’s redesigned e-commerce sites, says Faisal Masud, executive vice president, global e-commerce."

The story notes that "Staples, which says it carries 8,000 SKUs in a typical Staples store, does not plan to stock its stores with the expanded product lines … Instead, in-store shoppers will be able to order any products through online kiosks to have them shipped to their home or business addresses or to stores for in-store pickup. Expanded product lines on Staples e-commerce sites already include items such as power tools and doctors’ stethoscopes, with more to come, the company says."

“Businesses have lots of needs beyond office products, and that’s what we’re going after,” Masud tells Internet Retailer. “Businesses may need hard hats or networking technology, or products for their employee break rooms. We’ll be covering any business needs.”

Published on: October 31, 2013

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

• The New York Times reports that L’Oréal is testing a project in the 42nd Street-Bryant Park subway station in New York City that essentially is a vending machine that makes cosmetics recommendations and then sells them to waiting riders.

"The project, called the L’Oréal Paris Intelligent Color Experience, is being described by the participants as an entry in the realm of interactive shopping outside of traditional stores," the Times writes. "It is another example of a trend known as experiential marketing, which seeks to give brands more tangible form beyond retail shelves … The installation, 7 feet tall by 14 feet wide, can be stocked with up to 700 items; plans call for 27 types of L’Oréal Paris mascara, eye shadow, lipstick and nail polish. The items will be priced at $5.99 to $9.99 each, and purchases will be made with credit cards."

I think L’Oréal was demonstrating technology like this at a CIES event years ago … I thought then, and think now, that it is an interesting concept. Not sure that this particular subway station is ideal positioning, but I suppose that they know better than I do about this.


• The New York Business Journal reports that "Campbell Soup Co. said it has completed the sale of its European simple meals business to private equity firm CVC Capital Partners for 400 million euros, or about $552 million … The agreement does not include Campbell’s recently acquired Kelsen Group, which will continue its operations in Denmark and the export of its products to countries in Europe and throughout the world. Campbell said it will continue to export Pepperidge Farm products throughout Europe and Campbell’s products in the United Kingdom, the Middle East and Africa."


• Retailing Today reports that shopper analytics firm ShopperTrak is predicting that "the busiest holiday shopping days will occur between Dec. 20 and Dec. 24, and retailers should prepare accordingly. Additionally, with a shortened shopping season and only four weekends between Thanksgiving and Christmas — down from five last year — retailers must be ready to capture holiday spending during a narrower window of time.

"ShopperTrak expects consumers will make slightly fewer store visits in November and December this year (1.4% fewer than in 2012), but this trend will not translate into a decline in spending. The company predicts national retail sales this season will rise 2.4%, compared to the same holiday months last year."


• McDonald's said yesterday that it will join with Kraft Food next year to test the sale of McDonald's-brand packaged coffee in US supermarkets. Whole bean, ground and single cub coffee will be among the options.

McDonald's being a major competitor to supermarkets for share of stomach, I have to wonder why supermarkets would want to carry such a product and give it visibility, credibility and sales dollars. After all, for what shall it profit a man, if he shall gain the whole world, and lose his own soul?


• The Los Angeles Times reports that "the world is facing a shortage of wine.

"Global production has dipped to its lowest level in over 40 years, largely after poor weather ravaged European vineyards, according to a report by Morgan Stanley released this week."

Not only are global supplies likely to be smaller, but prices ares almost certainly going to get higher.

Published on: October 31, 2013

…will return.

Published on: October 31, 2013

The Boston Red Sox became the 2013 World Champions of Major League Baseball last night with a 6-1 victory over the St. Louis Cardinals, winning game six of the best-of-seven-game World Series.

While this is the third World Series win for the Red Sox in a decade, it is the first time that the team has clinched at home in Fenway Park since 1918 when, as Tim McCarver pointed out during the broadcast last night, Babe Ruth was brought into the game in the eighth inning as a defensive replacement.

The win capped off an emotional season for the Red Sox, a team that began the year as a marked underdog, and for Boston, where the bombings during the Boston Marathon that left three people dead and more than 250 injured left the city quite literally shell-shocked. "Boston Strong" then became a catch-phrase that seemed to energize and focus both the city and the team, which seemed ever more convinced, with every passing day, that in the words of the Bob Markey song that echoed around Fenway every night, "every little thing gonna be all right!"

Published on: October 31, 2013

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