business news in context, analysis with attitude

Published on: June 1, 2016

by Kate McMahon

When Candace Payne recently donned a Chewbacca mask in a suburban Dallas parking lot, she let loose a laugh heard around the world.

Her resulting viral video earned her fame and the name “Chewbacca mom” and proved the power of authenticity and social media. For Kohl’s, Facebook and the makers of Star Wars merchandise, it was a marketing moment that dreams are made of.

To recap for those who may possibly have missed the video, the mother of two and enthusiastic Star Wars fan went into her local Kohl’s for a pair of yoga pants and wandered over to the toy aisle. She bumped into a Chewbacca mask, heard it growl and thought, “I need to have this for myself” as a birthday gift.

She tried the $30 electronic mask on in her car, and captured her spontaneous, hysterical laughter in a selfie-video. She posted it to Facebook Live, where it has been seen by 153 million people and counting, shattering the previous record of 10 million views on the relatively new Facebook Live platform.

Kohl’s, which has been hoping its new social media efforts can reverse sluggish sales, mobilized within 24 hours to capitalize on Candace’s contagious laugh, delivering more Chewbacca masks, Star Wars merchandise and $2,500 in gift cards to her home. The retailer posted that video on its Facebook page, yielding a whopping 33 million views with the hashtag #AllTheGoodStuff, which is part of its loyalty program marketing campaign.

Consumers responded enthusiastically, and Amobee Brand Intelligence reported digital engagement surrounding Kohl’s spiked 101% over that weekend compared to the previous week.

Candace and her mask hit the TV circuit, appearing on news shows, with Ellen DeGeneres and James Corden, and with the actor who played Chewbacca, Peter Mayhew, and Star Wars director J.J. Abrams. The resulting videos on YouTube have racked up tens of millions of views and mentions for Kohl’s, which sold out of the masks.

The video had a “halo effect” with demand for the masks for Amazon, Walmart and Toys R Us, and selling for as much as $200 on eBay.

The video has been an unexpected boon for Facebook, which opened up its live streaming features to regular folks like Candace earlier this year. Previously, only celebrities and verified pages could post live videos. Ironically, the video from a supremely likable, 37-year-old stay-at-home mom eclipsed the celeb efforts.

I think there are two takeaways from this story. The first is the importance of authenticity – Candace Payne’s delightful joy in the product was the real deal, better than any scripted endorsement. Millions around the world responded because her laughter was genuine, and contagious. Authenticity matters whether you are selling Star Wars masks or virtually any consumer product.

The second business lesson is the importance of being nimble in today’s competitive retail environment. Yoda tells us, "Always in motion is the future," and that certainly is the truth in modern retailing. Complacency never is rewarded.

I had read that Kohl’s, a Midwest-based retailer with a middle-of-the-road image, was stepping up its social media efforts. I was surprised and impressed with its immediate, smart response to its Chewbacca mom moment. Candace’s birthday gift card paid dividends worth millions in free advertising and good will.

To coin a phrase, they used the Force. And at least for this episode, the Force was strong in them.

Comments? As always, send them to me at kate@mnb.grocerywebsite.com .

Published on: June 1, 2016

by Kevin Coupe

Amazon founder/CEO Jeff Bezos told a technology conference this week that he bought the financially troubled Washington Post precisely because he would like to make it "a more powerful national — and even global — publication, and that The Post was well situated to be a watchdog over the leaders of the world’s most powerful country," according to a report in the New York Times.

“If it had been a financially upside-down salty snack food company," Bezos said, "I would not have bought it."

Bezos' motives for buying the Post have been called into question lately, with GOP presidential candidate Donald Trump suggesting that it was only so that Bezos could exert political pressure that would help protect Amazon from antitrust scrutiny; Trump essentially promised to target Bezos and Amazon if he gets elected president. (See Nixon's enemies list for historical context.)

But Bezos has responded that he welcomes scrutiny of Amazon, and that Trump's statements were “not an appropriate way for a presidential candidate to behave."

“It’s just a fact that we live in a world where half the population of this planet, if you criticize the leader, you’ll go to jail or worse,” Bezos told the conference. “We live in this amazing democracy with amazing freedom of speech, and a presidential candidate should embrace that.”

Indeed. The timing of Bezos' comments was propitious, since Trump also spent much of a press conference yesterday excoriating much of the media for what he said was near-libelous coverage of his campaign. Which was interesting considering that Trump has benefitted to such an enormous degree from free media accorded him through coverage of his speeches and rallies around the country. But it was clear yesterday that while Trump likes coverage, he does not like scrutiny.

It is likely to be a tough year to be in the media. Trump hates the media, and says so. Hillary Clinton hates the media, doesn't say so, but is far less accessible than Trump. Bernie Sanders resents the media for, in his opinion, acquiescing to the Clinton campaign's versions of events far too often. And lets face it ... most of the public doesn't like the media, either. (Except, of course, the media they agree with. Which is sort of like how most people say they hate Congress, but keep voting back in their congressman or congresswoman because they're not as bad as everyone else.)

From my perspective, I'm glad that Bezos bought the Post. He's hardly the first really rich person to follow this path. (William Randolph Hearst and Rupert Murdoch are just two of similar ilk from different generations.) These days, it takes a really rich person to keep a newspaper in business ... and I'll take Bezos at his word that he has no intention of directing editorial coverage (until he does, at which point I'll take issue with him). And I think it is a good thing that he is bringing some of the technological and consumer-facing smarts that helped build Amazon to the newspaper business, which has always been my first professional love.

Not every newspaper is a good one, and not every reporter is accomplished and ethical. (Nor is every politician, nor every governmental entity, nor every institution of any kind.) Sometimes they screw up royally and like everybody else in this technological age, they see their work held up to much greater public examination than ever before.

But as far as I'm concerned, the majority of reporters are doing their best to open our eyes every day to what is going on around us, trying to get it right.

And I say that as someone who is constantly yelling at his television and throwing down his newspaper in disgust because of questions not asked and conclusions not reached.

I also confess the MNB bias here. I used to be a newspaper reporter ... and for the record, Michael Sansolo and Kate McMahon both were reporters and editors in their early careers. So in the broad scheme of things, we agree with the notion that journalists are there to comfort the afflicted the afflict the comfortable.

Published on: June 1, 2016

The Seattle Times has a story about Amazon's Marketplace business, on which more than two million merchants are selling products and gaining access to the enormous number of online shoppers who make Amazon their first option.

The Marketplace, according to the Times, is "helping the tech and retail giant, already the largest online retailer, become also the world’s essential commerce and logistics hub. Amazon takes a cut of their sales and increasingly handles even the storage and shipping of their merchandise."

This week, the Times writes, Amazon is going one step further, gathering 500 of these merchants "in a forum at its downtown Seattle campus where they will be coached on how to grow their businesses, hear about where things are going, and air their hopes and concerns in the presence of Amazon brass."

The story notes that the Marketplace has become an enormous competitive advantage: "Analysts with Piper Jaffray have estimated Amazon’s famously thin operating margins will rise from 1.3 percent in 2014 to more than 5 percent over the next several years, driven in part by Marketplace’s relatively high margins, as well as the growth in the cloud-computing unit and other profitable businesses."

Published on: June 1, 2016

The New York Times this morning reports that three years after the deaths of more than 1,100 employees exposed dangerous labor conditions in Bangladesh, prompting a number of retailers - including Walmart - to pledge to improve safety conditions in factories there, those promises largely have not been kept.

The Times writes that human rights groups say that "safety, labor and other issues persist in Bangladesh and other countries where global retailers benefit from an inexpensive work force. A series of new reports by the Asia Floor Wage Alliance, a coalition of trade unions and other research and advocacy groups, has put a new spotlight on the conditions. In Bangladesh, the group says, tens of thousands of workers sew garments in buildings without proper fire exits. In Indonesia, India and elsewhere, pregnant women are vulnerable to reduced wages and discrimination. In Cambodia, workers who protested for an extra $20 a month were shot and killed."

Yesterday, the story continues, "the Wage Alliance released its latest report, which accuses Walmart of benefiting from forced labor and other abusive practices in a number of Asian countries. In Cambodia, for instance, workers at factories who make products sold at the company are required to work 10 to 14 hours a day in sweltering heat, without access to clean drinking water or breaks..."

Walmart responded to the allegations with a statement maintaining that "its standards for suppliers 'specifically address working hours, breaks, the cultivation of a safe and healthy work environment, and freedom of association.' The retailer said that it does not own or operate facilities in Cambodia or Bangladesh, but that it expects suppliers to 'uphold these standards in the factories from which they manufacture products'."

Published on: June 1, 2016

The New Yorker has a piece about Whole Foods' new 365 format, the first of which opened last week in Los Angeles, concluding that it seems designed to reflect and attract a "millennial mind-set," especially when it comes to the virtual and digital.

It is, the magazine writes, a "thoughtful and clearly elaborately researched response to customers’ sensory overload—all those hand-chalked signs and pictures of farmers."

You can read the entire column here.

Published on: June 1, 2016

The Wall Street Journal reports that Mondelez International "is getting into the media business in hopes of reaching consumers who are increasingly avoiding advertising," and is focusing "on forming media partnerships to acquire, develop and distribute content that will promote its so-called 'power brands' like Oreo cookies and Trident gum. The idea is that becoming more of a publisher will open up new revenue streams.

"Mondelez will invest in content properties and intellectual property that will enable it make money from selling distribution rights, advertising and brand integrations."

“Consumers are consuming more media in more places than ever before and it’s more difficult than ever to reach them,” Laura Henderson, Mondelez’s global head of content and media monetization, tells the Journal. “The audience is in the driver’s seat choosing when, how and where to watch content. They can skip ads, block ads and avoid ads in their entirety. Advertising is no longer an assumed part of the content consumption equation. It’s wreaking havoc on the economics of the industry ... “We’re shifting from a media buyer to more of a content producer and investor. This type of an approach is really going to allow us to ensure that our [media] investment is more sustainable.”

Published on: June 1, 2016

• The Ann Arbor News reports that "Amazon.com Inc. is contracting with SpartanNash Co. to supply products to the e-commerce giant's distribution centers ... The work for Amazon includes supplying products to the company's distribution centers for them to sell. Staples said work for the Seattle online giant fits into the company's normal distribution model, although the mix of products are different from what is supplied to other wholesale customers."
"We are excited about our relationship with Amazon," Dave Staples, the SpartanNash COO, said during a recent investor call. "While still a relatively new account, the volume has been greater than we expected and we believe that it has significant growth potential ... This relationship is a great example of our commitment to pursuing solutions for difficult logistic issues, and we continue to look at opportunities to grow sales with other non-traditional customers."


• The Consumerist reports that Target is discontinuing its Curbside click-and-collect test, which "kicked off in October 2014 with partner Curbside, and was being tested in 121 stores in the San Francisco Bay Area, New York, New Jersey, Chicago, Philadelphia, and Los Angeles."

However, it doesn't mean that Target is abandoning the digital arena.

The company tells Consumerist in an email that it “learned a lot” from the pilot, but that “at this time Target is focused on making sure we deliver and execute on retail fundamentals," including the enhancement of other e-commerce offerings.

Published on: June 1, 2016

• The Associated Press reports that Netherlands-based Royal Ahold said yesterday that its first quarter net profit was up 13 percent to the equivalent of $269 million (US), on sales that were up 4.3 percent to $13 billion ... driven, the company said, in part by double-digit sales increases in its Peapod online business, as well as in its Dutch e-commerce businesses.


• The Associated Press reports that General Mills "is recalling about 10 million pounds of its flour over a possible link to an E. coli outbreak in 20 states. The recall is for several varieties of Gold Medal and Signature Kitchens flour that were sold at Safeway, Albertsons and other supermarkets. General Mills said E. coli hasn’t been found in any of its flour products, but is still recalling them out of 'an abundance of caution'."

Published on: June 1, 2016

• The Denver Business Journal reports that "Russ Dispense, president of King Soopers and City Market, has retired from his position after 15 years in the post and 51 years with parent company Kroger Co."

A successor has not yet been named.


• The Associated Press reports that Staples CEO Ron Sargent is stepping down, just weeks after the federal government successfully blocked the company from acquiring Office Depot for $6.3 billion because of antitrust and competitive concerns.

The company says that that Shira Goodman, president of operations for Staples in North America, will become interim CEO while the board seeks a permanent replacement.

Published on: June 1, 2016

The annual Food Market Institute (FMI) Connect show is this week, at Chicago's McCormick Place ... and I'm looking forward to having the opportunity to catch up with MNB readers who may be attending.

I'll be camping out at the MyWebGrocer booth, #1020 today from 1:30-2:30 pm ... I'll have some copies of my books to give away, and I hope you can stop by ...

Also ... if you want to come grab a beer or some other adult beverage tonight, I'll be at The Boss Bar, located at the corner of Clark and Hubbard in Chicago’s River North neighborhood, from 5-7 pm. Nothing formal, nothing stuffy ... just an opportunity to hang out together and decompress from FMI.

Hope to see you in Chicago.

Published on: June 1, 2016

....will return.