business news in context, analysis with attitude

Published on: November 24, 2014

by Kevin Coupe

The New York Times reports that Barnes & Noble, hoping to combat Amazon and get people into its stores during the upcoming holiday season, has "recruited 100 prominent authors - including Donna Tartt, David Mitchell, Dan Brown, E. L. James, Jeff Kinney, George W. Bush and Hillary Clinton - to each sign roughly 5,000 copies of their latest books. The company will distribute the 500,000 signed books among its more than 650 retail stores," and will promote them for the upcoming Thanksgiving holiday weekend that is the traditional beginning of the holiday shopping season.

The story goes on to note that "independent bookstores are also counting on authors to draw customers for the holidays, a period when many of them make as much as 30 percent of their annual sales. As part of the American Booksellers Association’s 'Indies First' holiday initiative, about 1,200 authors will sign books, greet customers and, in some cases, work behind the counter at more than 400 independent bookstores around the country this Saturday."

Oren Teicher, chief executive of the American Booksellers Association, tells the Times that author appearances and signed copies were "among the best weapons brick-and-mortar stores had against online retailers."

“Books are identical no matter where you buy them,” he says. “You don’t get a different or better ending if you buy them from us."

That last sentence could be applied to a lot of retail experiences. It is largely true of many stores - think most supermarkets, drug stores, c-stores - that they all sell the items. The Eye-Opening differences have to be found in the services and service they offer, and in the ways they brand themselves as being unique and differentiated.

Getting authors to sign books may not solve all their problems, but this certainly is one way for booksellers to differentiate themselves as opposed to Amazon.

And, I can tell you this - most authors are thrilled to do it. Michael Sansolo and I will tell you that signing books is one of the things we enjoy the most.

And, by the way, we appreciate all the folks who ordered copies of "Retail Rules!" and "Business Rules!" in time to get the signed and delivered in time for the holidays. The "official" deadline for getting signed books has passed, but if you want one for the holidays, just shoot me an email and I'll do my best to make that happen. (The rules may have said that orders had to be in by the end of last week, but I'm a big believer that sometimes you have to break the rules…)

Published on: November 24, 2014

Though Amazon has been much criticized in recent weeks because its continued investment in products and services has made it increasingly difficult to generate the profits that investors crave, the company seems to be continuing its strategy unabated.

For example…

Reuters reports that Amazon plans to offer "a new ad-supported video streaming service early next year" that will be separate from its Prime membership program, which also offers access to video.

Prime membership costs $99 a year; it is unknown at this point whether Amazon plans to charge for the new video service.

According to the story, "The new service will compete directly with Hulu and Netflix, whose charges start at $7.99 a month for customers in the United States."

And, there are published reports that Amazon is planning the creation of a travel website that will offer hotel accommodations and charge the hotels a 15 percent booking fee. The focus, at least in the beginning, is said to be independent hotels and small chains that don't have the marketing budgets of major chains; such a move would position Amazon as competing with the vast array of travel sites currently operating, but would take advantage of its comprehensive database of customers.

Published on: November 24, 2014

The Wall Street Journal reports that "after years of developing advertising and marketing that appeals to all ages," Anheuser Busch InBev "plans to concentrate future Budweiser promotions exclusively" on the 21-27 age bracket. "That means it will not trot out the traditional Budweiser Clydesdales for this year’s holiday advertising. It means February’s Super Bowl ads will feature something more current than last year’s Fleetwood Mac. It means less baseball and more raves with DJ group Cash Cash."

The company wants to address the fact that "the self-proclaimed King of Beers is more of an afterthought among young consumers at Jake’s and bars across the U.S.: Some 44% of 21- to 27-year-old drinkers today have never tried Budweiser," the company acknowledges. And, "Budweiser has a 7.6% share of the $100 billion U.S. beer market, down from 10% five years ago, and 14.4% a decade ago, according to Beer Marketer’s Insights."

Published on: November 24, 2014

The Wall Street Journal has a story about Megan J. Brennan, who is becoming the first female postmaster general in the history of the US Postal Service (USPS), charged with "transforming the Postal Service to meet the biggest financial challenges in its history, as Americans send fewer and fewer letters." Those financial challenges include dealing with billions of dollars in losses each year, driven in part by changing demand for USPS products and services, and in part by "a congressional mandate that it prepay more than $5.5 billion each year for retiree health benefits."

Brennan says that the USPS has to "evolve and operate more like a private-sector business," the story says, and her attitude has been shaped in part by "a yearlong M.B.A. program at the Massachusetts Institute of Technology in 2002."

The Journal writes: "A key tool is the agency’s sprawling network, she says, which enables it to deliver to nearly every house, every day. That delivery network allows the agency to compete with rivals United Parcel Service Inc. and FedEx Corp., as well as to team up with them to deliver packages from local post offices to residential doorsteps. It also means that the agency can do same-day deliveries, such as in a test program for early-morning grocery deliveries it launched in San Francisco this summer with Amazon.com." And, the story says, the USPS "will continue to invest in a targeted way, despite being short on cash. Much of that will go toward continuing to update a network designed for letters, not packages. The agency is currently bidding on vehicles to replace some of its aging fleet - about 140,000 vehicles are more than 20 years old."

“We’ve got to compete for business every day, and clearly we have to develop products and services that consumers want,” Brennan tells the Journal. “While we’re challenged, I would say that there’s plenty of upside.”

Published on: November 24, 2014

The Wall Street Journal this morning reports that the Federal Aviation Administration (FAA) is looking to propose rules that would require drone operators "to have a license and limit flights to daylight hours, below 400 feet and within sight of the person at the controls … While the FAA wants to open the skies to unmanned commercial flights, the expected rules are more restrictive than drone supporters sought and wouldn’t address privacy concerns over the use of drones, people familiar with the matter said.

"The agency also plans to group all drones weighing less than 55 pounds under one set of rules. That would dash hopes for looser rules on the smallest drones, such as the 2.8-pound Phantom line of camera-equipped, four-rotor helicopters made by China’s SZ DJI Technology Co. Similar-sized devices are seen as the most commercially viable drones and have surged in popularity in the last two years."

According to the story, "FAA officials expect to announce proposed rules by year-end. The proposal will kick off a public comment period that is likely to flood the agency with feedback. It could take one or two years to issue final rules. In a statement, the FAA said it is working to 'integrate unmanned aircraft into the busiest, most complex airspace system in the world—and to do so while we maintain our mission—protecting the safety of the American people in the air and on the ground. That is why we are taking a staged approach to the integration of these new airspace users'.."

“I feel like there’s a colossal mess coming,” says Michael Drobac, executive director of the Small UAV Coalition, an advocacy group for drone makers and innovators, including Google Inc. and Amazon.com Inc. He tells the Journal that he thinks the new rules will be “so divorced from the technology and the aspirations of this industry…that we’re going to see a loud rejection.”

Published on: November 24, 2014

• The Chicago Tribune reports that union-backed OUR Walmart is planning major protests against the retailer on Black Friday this week, with the biggest expected to take place in Chicago, Dallas, Denver, Los Angeles, Minneapolis, Washington, D.C., and Tampa, Fla.

The goal of the protests is to get Walmart to raise its minimum hourly wage to $15 and "provide more consistent hours and full-time jobs," the story says.

Published on: November 24, 2014

• Reuters reports that discounter Aldi is developing plans to enter the Chinese market, though it is not expected that it will start opening stores there until 2018.

According to the story, "A move into China would add a fourth continent to Aldi's network after Europe, America and Australia and signal a shift from a focus on mature markets. It would also launch it into a market in which global giants such as Carrefour and Tesco have struggled to succeed and where discount supermarkets have not yet taken off."


• Bloomberg reports that Amazon has "agreed to change some of the rules for workers at the Web retailer’s warehouses in the U.S. so that employees can communicate about pay and working conditions without fear of retaliation."

In a settlement reached with the National Labor Relations Board (MLRB), Amazon "also agreed to rescind a verbal warning given to a staff member at a Phoenix warehouse who voiced concerns about security in the parking lot following thefts from vehicles … The deal could open the door for Amazon’s workers to unionize, because the settlement requires the online retailer to post notices at its fulfillment centers notifying employees that they have the right to form unions and work with each other for collective benefits."

Published on: November 24, 2014

• Aldi Inc. announced that Jason Hart, the president of Aldi US, has been promoted to become CEO of Aldi US.

The announcement notes that Aldi currently "is in the early stages of an accelerated strategic growth plan in the US … ALDI plans to open 650 new stores across the country, including expanding to Southern California, bringing its total number of US stores to nearly 2,000 by the end of 2018."

Published on: November 24, 2014

I wrote the other day that I was less sympathetic to Kmart employees not wanting to work on Thanksgiving than I was to other retail employees, simply because it seems to me that Kmart could be one lousy holiday season away from extinction.

Which led MNB user Clarke Ross to write:

Really Kevin, you would be less sympathetic to a group of individuals that may lose their jobs completely! That’s Cold. You may want to rethink that!!!

Let me say that I am totally against shopping on Thanksgiving as I had to work on Thanksgiving for 21 years, Your statement is totally cruel and shows no compassion. While Kmart may not be the best, those folks are trying to take care of their families. Take your personal opinion out of the equation and think about all involved.

You're right. That was a little cold. (Though I think taking my personal opinion out of the equation sort of misses the point of writing commentary.)

But there are cold realities about Kmart's viability that have to be faced.

From another reader, on the same subject:

As someone who grew up in retail, I find the whole public discussion about whether stores should be closed on Thanksgiving to be disingenuous, to say the least. Retail is all about being open when consumers want to shop. Weekends, nights and holidays are part of the deal, and I’ve worked more of all of those than I can remember. Way back when I started, we were closed four days a year: Easter, Thanksgiving, Christmas and New Year’s. Those closings slowly went away over time, as did idea of closing at all; we were open 24 hours for a number of years. 

Maybe we should keep our televisions off so no one has to work at local stations as well. And what about emergency personnel – do we let them stay home? There is a large portion of the population that works when the majority of folks are off, including every night, every weekend and every holiday. For many people, this is okay. They adapt, or they appreciate being off when the rest of the world is working – there are upsides to this lifestyle. 

We don’t live in a 9 to 5 world. Many of us still work weekends, evenings and holidays through the magic of mobile devices and notebook computing (yes, that’s sarcasm). Let's stop worrying about Thanksgiving and whether the local store is open or closed, unless we plan to shop.

Again, I'm conflicted. I wish that stores could stay closed on Thanksgiving, but understand that competitive realities make this impossible in a lot of cases.

Also, if I'm going to be honest, I've gone to restaurants and movie theaters on Thanksgiving over the years, and I'm certainly glad that they were open and operating. (Though I cannot imagine ever shopping …. I don't even go into stores on Black Friday, just in principle.)




On the subject of whether keeping animals in gestation crates is cruel, one MNB user wrote:

I’ve been to hundreds of manufacturing/processing facilities over my career. I have to admit the ugliest, most grotesque facility I ever visited was a chicken kill plant in Arkansas. It was a major league grower. The birds are waiting on a truck at the dock in milk/egg crates, either two or four to a crate. Lots of noise. The worker has wire mesh gloves, reaches into the bottom of the crate, pulls the birds out by the feet and hangs them upside down on shackles which are attached to a moving trolley.  The chickens get stunned as you describe, then they go through a tunnel where a blade slices their throat. The hardest part to watch was the guy (he makes an extra .50 cents an hour) in a yellow and very bloody raincoat holding  a butcher knife. He stands at the end of the slicing tunnel, and he manually slices open the throat of any bird that missed the slicer. It is truly like a horror movie and the smell will make you throw up. I think I went 6 months without eating chicken after seeing that.

Yuck.




On another subject, an MNB user wrote:

Regarding the retreat by Westminster, Massachusetts' attempt to ban the sale of any tobacco product: You wrote "Tobacco is legal. It makes perfect sense for companies, like CVS, to decide not to sell tobacco because it is at odds with its image as a health care provider. But I'm not sure some sort of modern prohibition is the way to go, if for no other reason than we know how it went the last time."  I agree with you in that it absolutely should be up to the retailer as to what they sell in regard to legal products.

With that said, modern prohibition of legal products by government in various locales certainly exists tot his day.  There are many "dry counties" where one cannot legally purchase a rum and Coke, much less a bottle of Duckhorn Three Palms Merlot.  We seem to allow nanny state control in some places of health and virtue and not in others.  IMO, it should not be this way.  If the product is legal for sale, it should be allowed to be sold.

Published on: November 24, 2014

In Week Twelve of National Football League action…

Cleveland 26
Atlanta 24

Tampa Bay 13
Chicago 21

Cincinnati 22
Houston 13

Jacksonville 3
Indianapolis 23

Green Bay 24
Minnesota 21

Detroit 9
New England 34

Tennessee 24
Philadelphia 43

St. Louis 24
San Diego 27

Arizona 3
Seattle 19

Miami 36
Denver 39

Washington 13
San Francisco 17

Dallas 31
NY Giants 28

Published on: November 24, 2014

Published on: November 24, 2014