business news in context, analysis with attitude

Published on: December 17, 2013

by Michael Sansolo

There’s an old motivational poster that posed the question, “What happens when no one sells.”

The answer: “nothing.”

It’s a message that goes far beyond salespeople. In essence, we are all selling all the time. The only way to stand out in this increasingly complex world is to, well, stand out. That mean bring excitement and value - whether you are selling groceries, cars or even readership in a website.

It also means that sometimes what makes for great salesmanship in one place might be somewhat surprising elsewhere. At least, that was my reaction to the most over the top Christmas merchandising I’ve seen in a long time.

Now what made this so extraordinary wasn’t the carols I heard playing on the intercom, the large trees, the displays of gifts, workers in Santa hats or any other element. It was the location: the shopping malls and supermarkets of Shanghai, China, where I visited last week to make a speech.

Here’s the thing: China certainly isn’t an especially Christian country. Not so long ago it wasn’t a location for any religion at all, especially during Mao’s time. Yet now, it’s a winter wonderland of merchandising and spending.

Christmas in China is a celebration that would make some of you crazy, annoyed or angry. The “holiday” is largely about one and only one thing: buying. I asked a couple of the locals I was working with to explain what exactly they were celebrating. With one exception the answers were all about consumerism.

One person, to be fair, thought for five minutes and then told me she thought it had something to do with the birth of Jesus Christ. Beyond that, even she didn’t have much insight. Apparently the Charlie Brown Christmas video hasn’t made it here.

If this were any other holiday, the energy I saw might make for an interesting column on how to create a special event where none had previously existed. But I know for many of you, the notion of a Christmas celebration seemingly only based on the commercial side of the holiday will rankle. Heck, it bothered me and, let me make this clear, I am Jewish!

But this column is about selling, not religion, and I have to hand it to the Chinese merchant community when it comes to building excitement. They have clearly learned at light speed the importance of building an event, even if the event has nothing to do with your culture, your shoppers or anything. Create excitement and sales can happen.

It’s hardly the only example. November 11th is now also a special day in China, though it has nothing to do with Veterans Day or the Treaty of Versailles, which ended a war that didn’t include the Chinese.

Rather, November 11th or 11-11 has become Singles Day; named because of the four number 1’s. Originally a created holiday, Singles Day exploded thanks to a web-based Chinese retailer named the Alibaba Group. This year, Singles Day generated an estimated $6 billion in sales. In a country suddenly turned onto consumerism, holidays—created or borrowed—provide wonderful ways to build excitement, energy and sales.

And so, consider the lesson of how to build merchandising magic. Think about the world of holidays and festivals that you could employ to feature new products or cuisines.

It could make you very merry at unexpected times.

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: December 17, 2013

by Kevin Coupe

You may have heard that Beyoncé released a new album last week. It was noteworthy not just because it was Beyoncé, but because it was released in the middle of the night with no warning, no hype, no advance press. Despite the lack of hoopla, the record (and someone please explain to me why we still call them records) became the fastest selling album in Apple's iTunes history, reaching number one in 104 countries while selling more than 800,000 copies around the world in its first three days, including more than 600,000 in the United States.

But I'm not here - at least not at the moment - to celebrate how digital downloads have virtually supplanted physical CDs and vinyl. (And, for that matter, cassettes and eight-tracks.)

No, I'm here to take note of how Walmart and Target have responded to the release, which is exclusive to iTunes at least until December 18.

Billboard reports that the reactions have been very different. Walmart has said it is happy to sell the CD, and should have it in stores by the end of the week.

But Target? Not so much. The company said that it won't sell the album because it believes that records should not be made available digitally before being sold in stores. Such a strategy impacts sales, a spokesperson said, and so,m at least for the time being, customers will have to buy the new Beyoncé album elsewhere.

Now, I recognize that the two different approaches to this situation each are entirely legitimate. Target is saying that if the record label wants to explicitly give greater support to a channel that is aimed at hurting its business, it isn't going to play that game. And Walmart is saying that it is going to sell the stuff that it believes its customers want to buy, and the Beyoncé album clearly falls into that category.

But I have to admit that I'm certainly sympathetic to Target's approach in this case. Retailing is a cutthroat business, especially these days, and I think that sometimes retailers have to play hardball. I suspect that the record label will argue that the move hurts Target more than it hurts the Beyoncé album, and that may be true. But sometimes, retailers have to draw the line.

It is not entirely analogous, but I saw some echoes of this story in an Advertising Age piece about how McDonald's plans to begin selling its McCafe coffee in supermarkets next year, and how Kevin Newell, Mickey D's US chief brand and strategy officer, says that this is primarily a way to drive "greater awareness and sell more coffee in our restaurants."

Well, I'll bet that makes supermarket retailers feel all warm and fuzzy inside.

If I were a supermarket retailer, I'd use this statement as an excuse to say that we won't be carrying McDonald's coffee anytime soon. After all, why would I want to give visibility, awareness, credibility and even sales dollars to a company that is after the same share of stomach that I am?

Now, I've made this argument before, about coffee from Dunkin' Donuts and Starbucks, about frozen pizzas branded with the name of national pizza parlors, and other products carrying the name of fast casual restaurants. It is all about share of stomach, and I see no long-term strategic advantage to helping them make money and grow market share.

Such an approach might hurt short-term sales, and might annoy some customers looking for these products. But in the end, a best they can, retailers ought to sell and celebrate the products that make them different, not the ones that make them the same, or help the enemy.

You can agree with Target's approach to the new Beyoncé, or not. But I think it is an Eye-Opener.

Published on: December 17, 2013

The Los Angeles Times reports that Toys R Us, which started the holiday shopping season by opening earlier than ever on Thanksgiving Day, will end the season by keeping all of its stores open for 87 hours straight, from 6 a.m. Saturday through 9 p.m. Christmas Eve.

And that's just in the heartland. In New York, the city that never sleeps, the retailer's Times Square store will have been open for 566 straight hours - from 8 am on December 1 through 10 pm on Christmas Eve.

Published on: December 17, 2013

There is a good piece in the Financial Times this morning that looks at the US retail industry and argues that what many retailers ought to be doing is closing stores, that such closings would be an important step in achieving profitability.

Not that this is likely to happen:

“The real barrier here is psychological," FT writes. "Retailers are led by a generation of chief executives that climbed the ranks in a go-go era of expansion. Their definition of success is opening more stores. They have not been trained to rationalise assets. Closing stores is heresy."

But maybe it shouldn't be.

You can read the entire story here.

Published on: December 17, 2013

The New York Times this morning reports on how Whole Foods has succeeded in its effort to bring its format to smaller cities in the US.

"Two years ago," the Times writes, "when Whole Foods announced that it wanted to expand to 1,000 stores from a little more than 300 and open in places where it was assumed that consumers had never heard of kale and wouldn’t dream of spending $6 for a pound of humanely raised pork, some investors scoffed. Its traditional grocery store competitors snickered at the strategy. And even those on Wall Street enamored with the chain’s success expressed doubts that its forays inland into smaller, less urban markets would succeed."

The story continues: "Like most grocery chains, Whole Foods does not release sales data on individual stores. But two years after disclosing its plans, it turns out that more shoppers do want, say, soda pop with no artificial coloring and flavoring and specialty meats, more than the experts had banked on. Cities like (Boise, Idaho), with its 212,000 residents, many of them college students and migrants from the cities where Whole Foods raised the bar on the grocery business, are embracing the company with an enthusiasm that has confounded the naysayers, propelled its stock price to heady highs and surprised even its executives."

Published on: December 17, 2013

The Associated Press reports that an organization called Oregonians for Competition, which is led by grocery stores in the state, has filed paperwork that it hopes will lead to a state referendum on the issue of privatizing liquor sales there.

According to the story, the group "said in a statement that it's filed five proposed initiatives and will select one to move forward with. The initiatives differ in details, but all would allow liquor sales in stores that already sell beer and wine and are at least 10,000 square feet. Existing liquor stores would be allowed to stay open, and some smaller shops like wine specialty stores would be able to sell liquor."

There was a similar and successful movement in Washington State two years ago.

The current system was created after the repeal of Prohibition, with hard liquor only available in about 200 state-licensed stores.

Published on: December 17, 2013

• The Economic Times reports that Walmart has gotten the go-ahead in India to acquire Bharti the almost 50-percent stake in their joint wholesale venture there. The joint venture originally was set up weigh an eye toward Walmart being able to have retail interests in India, where laws current prohibit foreign investments in retailing. When the regulatory situation did not change to Walmart's liking, the two companies decided to separate their interests.

The move leaves Walmart with sole ownership of 20 wholesale stores in India; Bharti will have, among many other interests, a chain of Easy Day-brand convenience stores.

Published on: December 17, 2013

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

• The Wall Street Journal reports that discount clothing store Loehmann's is likely to close down its 39 stores in the US next month, unable to find a buyer and having filed for Chapter 11 protection over the weekend. Going out of business sales are expected to start right after Christmas.

I know very little about Loehmann's, and am not sure I've ever been in one. But it certainly seems to be a case where the company did not keep up with changing times, and was beaten down both by bigger competitors and online retailers. It's what happens when you can't find a away to differentiate yourself…


• Sales of gift cards in 2013 are likely to surpass $118 billion, says a new report from CEB TowerGroup, which notes that this represents an eight percent improvement over 2012.

According to the report, "Open network branded cards grew from $41 billion to $44 billion; Retailer card volume grew from $36 billion to $39 billion; (and) Restaurant and miscellaneous segments held flat at $19 billion and $13 billion, respectively."


• CBS News reports that "a state appeals court has upheld a San Francisco law banning the use of non-compostable plastic bags at checkout stands in retail stores and grocery markets. The 2012 law, an expansion of an earlier measure, prohibits most single-use plastic checkout bags and requires stores to charge 10 cents for paper or compostable plastic bags."

Published on: December 17, 2013

• In Ireland, it is being reported by the Irish Independent that Dunnes Stores has poached Richard Collins, finance director at Musgrave-owned Superquinn, who will leave the company as Musgrave eliminates the banner and changes the stores to the SuperValu name.


• Advertising Age reports that Campbell Soup has hired Yin Woon Rani, a longtime media agency executive, to be its VP-integrated marketing, a newly created position. The story says that "the hiring is the latest move by CEO Denise Morrison to add new executive talent as she makes consumer marketing a top priority at the soup giant."

Published on: December 17, 2013

• Joan Fontaine, who found stardom in two early Alfred Hitchcock films - Rebecca and Suspicion - and had a long stage and screen career, has passed away. She was 96.

Published on: December 17, 2013

…will return.

Published on: December 17, 2013

In Monday Night Football, the Baltimore Ravens defeated the Detroit Lions 18-16.