business news in context, analysis with attitude

Published on: October 26, 2016

by Kate McMahon

I was rushing into the local Costco when the sign stopped me in my tracks: Martha Stewart would be autographing her new cookbook “Vegetables” at the big box warehouse two days hence.

That Martha Stewart. The indefatigable domestic diva. At the Norwalk, Connecticut, Costco, which shares a Route 1 intersection with Walmart, McDonald's, a bowling alley and a gas station.

The 11 a.m. book signing was for Costco members only.  My curiosity piqued, I returned last Wednesday and joined the line of shoppers clutching the new hardcover cookbook celebrating all things vegetable (retail price$29.50, Costco price $16.49). (For the record, the book also is available on Amazon - for $19.20, almost three dollars more than at Costco.)

With a backdrop of boxed cameras and two perfect autumnal flower arrangements on the table, Martha Stewart greeted each customer, engaged in conversation and personalized each book with her perfect-penmanship signature. Even under the harsh fluorescent lighting, the impeccably-coiffed 75-year-old looked great.

When she was sentenced to federal prison in 2004 for charges related to an insider stock trading case, conventional wisdom was that Martha Stewart’s billion dollar media/lifestyle empire would collapse and her golden image forever would be tarnished.

Wrong on both counts.

I think there are two reasons Martha Stewart and her brand not only survived the scandal but continue to flourish. The first is hard work. Ever since she started a catering business in her Connecticut basement in 1976, Stewart has been known for her attention to detail and 20-hour-a-day work ethic. She branched out from her first cookbook to magazines, television, branded merchandise, accessories and furnishings.

The second, and equally important reason, is her ability to reach out to new audiences while maintaining brand integrity.

Just consider the recent brand developments:

• The expansion of Martha Stewart Cafes across the country, featuring coffee made from her favorite, fresh-ground beans, tea (including her own breakfast blend) and pastries from “hand-selected local bakeries.”

• The launch of Martha and Marley Spoon meal kits, a partnership with the established Marley Spoon delivery service to compete against Blue Apron, Plated and Hello Fresh, among others. Their newest offering: A Thanksgiving dinner box featuring her favorite recipes, including her classic stuffing with dried cherries, cream cheese mashed potatoes and brown butter apple pie.

But I think my favorite has to be the trailer released by VH1 this week for her new unscripted celebrity guest cooking show “Martha and Snoop’s Potluck Dinner Party,” which premieres on VH1 Nov. 7. It’s pretty hilarious to see the goddess of good taste teamed up with her co-host and longtime friend, rapper Snoop Dogg, tossing back cocktails in their bathrobes and dishing from their respective on-set kitchens.

It is a good lesson for retailers and manufacturers looking to expand their audiences and attract new people to their brands.

Clearly, Martha Stewart will reach a much-hipper audience on VH1 than on morning network television or in a suburban Costco. It also, inevitably, will improve her rap/slang vocabulary.

Is that a good thing? To quote Martha: “Fo Shizzle” (translation: for sure).

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

Published on: October 26, 2016

by Kevin Coupe

United Airlines has created a new title and role at corporate headquarters, as it focuses on a strategy that it thinks increasingly is necessary in today's cluttered media environment.

Chief Storyteller.

The job has gone to Dana Brooks Reinglass, who used to be an executive producer for Oprah Winfrey-owned Harpo Studios. Her job will be to "oversee the airline's internal and external social media and digital communications," the Chicago Tribune reports.

Jim Olsen, United's senior vice president of corporate communications, says that the goal is to get people to see "the new, united United" differently.

"The idea is using stories to give employees and customers a window seat to how we're doing things and changing things and making a positive difference," he says. "Data points are important proof points, but what's really interesting to people and what they remember are stories ... ... It's a little bit of a mindset shift in how we communicate internally and externally."

The Tribune notes that United is not the first company to institutionalize the storyteller role; others that have done it include Microsoft, IBM, Verizon and enterprise software company SAP.

Reinglass says in a prepared statement that "in this digital age of immersion and participation, I still feel that sharing your story inspires the most powerful emotions and moves people to action."

In this case, booking a seat on United instead of on another airline. It won't replace such requirements as competent pilots, on-time performance, luggage that gets to where it is supposed to, friendly flight attendants, and reasonably comfortable seats. But if the people within the company understand that how they they do their jobs and interact with customers both reflects and shapes the company's story - and affects the degree to which United is successful and their jobs continue to exist - then perhaps they will approach their work with greater engagement.

It is a lesson that many businesses can and should learn.

In a phrase, it is an Eye-Opener.

Published on: October 26, 2016

Tech Crunch reports this week that "Only a month after Google expanded its home delivery service, Google Express, across a wide part of the Northeastern U.S., the company is today bringing its Amazon competitor to a number of new states in both the Southeast and Northwest. As of today, Google Express is launching in portions of Alabama, Kentucky, Utah, Florida, Georgia, North Carolina, South Carolina, Tennessee, Idaho, Montana, Oregon, and Washington.

"With these added regions, Google Express will now reach 70 million more people, the company says. Combined with the markets where the service was already live, Google Express today covers around 90 percent of the United States."

Among the companies using Google Express as a platform on which to build an e-commerce strategy are Costco, Whole Foods, Kohl’s, PetSmart, Sur La Table, Fry’s, Road Runner Sports, Walgreens, L’Occitane, Payless ShoeSource, and Guitar Center.

The story notes that "While Amazon makes same-day delivery a perk for its Amazon Prime members, that requires customers to subscribe to Amazon’s $99 per year membership program. Google instead lets shoppers choose between buying a $95 annual membership, or paying a delivery charge of $5 (or more, at times.)

"Google Express shoppers also have to abide by store minimums, which are typically around $15 but can be as high as $35."

Published on: October 26, 2016

Kroger said yesterday that the number of its stores offering its ClickList click-and-collect e-grocery service now stands at more than 300, with even greater expansion planned in 2017, according to an article in Investopedia.

Tim McGurk, a Kroger spokesperson, is quoted as saying, “A wide demographic of customers use the service but it seems especially popular for young families, busy professionals, and individuals with mobility issues. There are several options for online grocery shopping, but Kroger customers can choose from up to 40,000 items, including fresh produce, meat, seafood, and deli items. We believe this variety of fresh products sets ClickList apart from other services.”

Published on: October 26, 2016

Amazon said yesterday that orders using its Dash Buttons - a technology that allows customers to place buttons in convenient in-home locations and simply press them to place orders that will replenish supplies - are up more than five times during the past year.

The increase likely reflects both increased usage of the buttons as well as an expanded selection of products available via the buttons. Amazon also said this week that it has added 60 brands - including Cheez-Its, Folgers, Milk Bone, Pop-Tarts and Powerade - to the program, bring the number of brands available via Dash Buttons to more than 200.

The buttons cost $4.99 apiece, a fee that is refunded with the first order made using them.

Published on: October 26, 2016

FreshDirect, the pure-play, New York-based e-grocer, said yesterday that it is expanding its FoodKick same-day delivery service to Manhattan, after testing it out in a variety of Bronx and Queens neighborhoods.

FoodKick delivers smaller orders, made up of prepared meals and essentials, as well as curated products from a number of outside suppliers, to people via bicycles and mopeds, often within an hour or two. The goal has been to compete more effectively against both Amazon Fresh and the variety of food retailers that do business with Instacart.

Published on: October 26, 2016

There are reports out of Germany that discounter Lidl plans to begin testing a click-and-collect service in Hamburg, Germany ... allowing local shoppers to order both groceries and fresh produce online and then pick up the products at the store.

This is a step forward in Lidl's e-commerce strategy; previously, in Germany, it only has been selling wine online.

To this point, Lidl has denied any plans to expand its e-commerce initiatives beyond the German marketplace.

Published on: October 26, 2016

The Boston Globe reports this morning that vegan meal kit company Purple Carrot has struck a deal to sell its boxes in Whole Foods stores in Massachusetts.

According to the story, "It’s an interesting move for Purple Carrot, which has until now relied on an e-commerce subscription model to serve its customers. Like other meal kit companies, such as Blue Apron, Chef’d, and HelloFresh, Purple Carrot’s users typically sign up to receive the boxes of perishable food items at home, paying about $10 per person, per meal."

The story suggests that the move by Whole Foods reflects the likelihood that supermarket chains are seeing the meal kit business as both threat and opportunity.

Published on: October 26, 2016

And there's even more e-grocery news out there...

• Amazon said yesterday that it is expanding its restaurant delivery service into Brooklyn, New York, saying that "Prime members in Brooklyn can now enjoy free one-hour delivery from more than 130 popular restaurants, including Roberta's Pizza, Blue Ribbon Brasserie, Momofuku Milk Bar, Talde, Miriam, Hill Country BBQ & Chicken, and many more.

"Using the Prime Now mobile app or visiting the Prime Now website, Brooklyn customers can view participating restaurants, browse menus, place orders, track the status of their delivery, and watch as their delivery courier travels from the restaurant to the delivery address in real time ... Once an order is placed, the food will be delivered to the customer in an hour or less. Prime Now Restaurant Delivery offers customers transparent pricing--there are no menu markups or hidden service fees and delivery on all orders is free."


• Amazon said this week that it is expanding its AmazonFresh service to Chicago and Dallas, adding those cities to a list of served communities that includes Seattle, New York, Philadelphia, Stamford, Trenton, seven regions across California – Los Angeles, Riverside, San Diego, San Francisco, Sacramento, San Jose, Stockton – as well as Northern Virginia, Boston, Baltimore, and London.

The announcement says that with AmazonFresh, customers "can order a wide range of items, including everything from fruits, vegetables, meat, seafood, baked goods, and dairy products to beauty products and household goods. AmazonFresh offers same-day or next-day delivery, with convenient delivery windows, including the option of either attended or unattended delivery. Customers can place an order in the morning and have it delivered as early as that same evening, or order before going to bed and have the items on their doorstep in time for breakfast the next day.


• Reuters reports that Amazon said today that it is "partnering with luxury food group Fauchon, organic food chain Bio c'Bon and wine retailer Lavinia to extend the product range of its Prime Now express delivery service in Paris and its suburbs ... Amazon has been stepping up its activity in France in recent years and speed delivery has become a new battleground among retailers seeking to boost sales."

The move adds some 5,000 food SKUs to the 18,000 already being offered by Amazon Prime Now in Paris.

Published on: October 26, 2016

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

• The Associated Press reports that the Conference Board is saying that consumer confidence backed off a little bit this month, dropping to 98.6 after rising to 103.5 in September.

According to the story, "The September figure was the highest since confidence stood at 103.8 in January 2015. The September confidence number was revised down from an initial estimate of 104.1, the highest in nine years.

"The October figure reflected a drop in consumers’ assessment of business conditions and employment prospects. Even with the small decline, consumer confidence was still at a level expected to support consumer spending and economic growth in coming months."

The big question is what consumer confidence looks like on November 9.

Published on: October 26, 2016

Yesterday, MNB took note of a Washington Post report saying that Amazon, having made a major push into the fashion business, apparently can make one relatively significant claim. Slice Intelligence, the e-commerce analytics firm, says that Amazon apparently has become nation's top seller of leggings with 11.6 percent of US purchases; Nordstrom, at number two, has 10.8 percent.

"Amazon also is doing pretty well in the denim business - it ranks third nationally with a 9.3 percent market share, behind only Old Navy and Nordstrom, and ahead of Gap, Macy’s, Kohl’s and Levi’s. The story notes that leggings and denim are seen as a potential indicator for how Amazon may be performing in other apparel categories."

There is a major goof in my reporting of this story ... I accidentally left out an important word.

In fact, the Post reported that Amazon apparently has become nation's top online seller of leggings.

The numbers reflected online sales of denim and leggings, not total sales.

Thanks to MNB reader Dana Probst for pointing this out to me. I think the story remains interesting and instructive about Amazon's marketing power, but the difference between total sales and online sales is significant.

Mea culpa, mea culpa, mea maxima culpa.

Published on: October 26, 2016

MNB reader John Moffitt wrote:

I enjoyed your article on Amazon’s logic behind betting on bricks and mortar which appeared 10/24.
 
The quote by Amazon’s Jeff Bezos is so true with regards to companies staying relevant … “I’ve made billions of dollars of failures at Amazon.com.  Literally.  What matters is companies that don’t continue to experiment or embrace failure eventually get in the position where the only thing they can do is make a Hail Mary bet at the end of their corporate existence.  I don’t believe in bet-the-company bets.” 
 
Reminds me of another saying … “Companies often fail because they’ve been operating in denial far too long.”




Regarding the potential of self-driving tractor trailer trucks, MNB reader Frank S. Klisanich wrote:

Thousands of pounds in a truck trailer going down a highway.... driven by a computer. Not sure if I should be alarmed or relieved?




Another MNB user wanted to weigh in on the stories about CVS taking tobacco out of its stores as a way of positioning itself as a purpose-driven company:

Taking the cigarettes out seems a strong start for a Health Focused Company - but also potentially a slippery slope as who decides what is actually Healthy.....?

Cola's, Candy, Salty Snacks, Alcohol, etc.... what will be next....?

We asked this not long ago to high-level CVS management - their answer was very satisfying ... Any product that is bad for a person's health from the first moment of use will be their target.

Items taken in moderation - like all the items I listed - will continued to be carried....

And though I am quite sure there will be people saying most these items are bad from the start, we can all agree that cigarettes fit their model well....




Commenting on MNB's broader sports coverage, one MNB reader yesterday asked if I'd ever consider referring to the Washington Redskins as "Washington" and not the "Redskins" because so many people find the latter word to be offensive. The same person argued that Blazing Saddles is offensive because of its language ... though I argued that it, in fact, is one of the funniest movies ever made because it mocks the words that many find to be offensive. (I also wondered if the debate would be talked about during the World Series, since the Cleveland Indians are playing.)

MNB reader Jeff Gartner wrote:

Kevin, there's a big difference between Redskins and Indians. Look up the origin of Redskins and how it refers to the bounty put on bringing in scalps of Native Americans.

True. Though I think the use of "Chief Wahoo" as a Cleveland team mascot is the thing that troubles some folks.

That's the point made by MNB reader Mary Schroeder:

The main difference between the two is that one is a pejorative.  Redskins is a word used by bullies, not at all dissimilar from the n-word.
 
While Indians is only a little less-worse, Chief Wahoo is awfully offensive.
 
Go Cubs.

Another MNB user wrote:

On the comment calling the NFL team Washington instead of Redskins, give me a break on that writers thoughts. Do we not refer to all NFL teams by name and not town, New England or Patriots? Forget the World Series starting up, look into collegiate sports teams names. Where does it end? You are correct, Blazing Saddles is an American classic and a mockery. Like other things, it is usually one of us aging white guys complaining about the words used. I suggest the writer looks up what the American Indians think on the sports names they have shown support for, not what some politician or over sensitive politicly correct band wagoner thinks! You cannot re-write history, learn from it yes, but erase it, not.

And, from MNB reader Mike Sommers:

The MNB reader who compared Westboro Baptist Church protesting at funerals of fallen service men and women to NFL players kneeling during the national anthem is making a ridiculous comparison.  Those two actions are in no way comparable (not today, and not tomorrow) and it is arguments and stances like this are dividing people.  It seems that people think NFL players can only do things they agree with, like wearing pink to support Breast Cancer research, stand during the national anthem, or support the United Way.  But if they dare kneel during the special song, or what if instead of wearing pink to support breast cancer they all wore rainbow colors to support the LBGT community or took a stance against the Dakota Access Pipeline which is threatening Native Tribes in North Dakota’s clean water supply, I’m sure another uproar would occur.  If this country claims to stand for free speech and people are willing to die for it, then those same people need to understand people unlike them have views that are different than theirs, and they are just as right to support and protest as anybody else is, whether we like and agree with it or not.  That is supposed to be part of what makes America, America.

Which I think is where I started out on this - saying that it always kind of bothers me when folks who normally embrace the notion of freedom of speech have a problem when folks with whom they disagree actually practice it.

Published on: October 26, 2016

Last night, in the first game of the 2016 World Series, the Cleveland Indians defeated the Chicago Cubs 6-0, taking a 1-0 series lead in the best-of-seven series.