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Friday, November 09, 2018

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Friday Eye-Opener: D-Game, Part 2


I’m sort of feeling bad about this. Again. But I’m going to do it anyway.

Again.

(Guess I’m not feeling that bad…)

You may remember that about a year ago, I did a piece about my local Ahold Delhaize-owned Stop & Shop, where I found a cart corral that was so dirty that I didn’t even want to take one. (There weren’t a ton of carts there, but that was because many of them were scattered in the parking lot, not because the store was at all crowded.) And inside, the store was selling - from a prominent position - Amazon gift cards.

I wrote at the time:

“All I could think was that if retailers want to win in an increasingly cutthroat competitive environment, they have to bring their A-game. Every hour of every day. That means, at the very least, being neat and clean and in-stock and with helpful, friendly employees who are getting it done. As opposed to bringing a D-game that does little to persuade the customer that this is where I should be bringing my business.”

I wrote it. I meant it.

But then, Stop & Shop went and did it again.

On Wednesday, November 7, I went to pick up some Land O’Lakes light cream for Mrs. Content Guy. This is a specific brand choice - she likes how it froths up when I make her coffee in the morning, and she likes the story behind the brand.

(I did a piece about six weeks ago about a Land O’Lakes advertising campaign featuring “a celebratory anthem about how women are contributing to an age-old industry,” making the point the women portrayed in it “are the actual farmers who are members of the Land O’Lakes cooperative.” This was a piece that Mrs. Content Guy actually read, and it affected her consumer preferences.)

When I went to the dairy department of the store, I found four containers of light cream carrying a “use by” date of October 18, 2018. (See below.)

It was, to be clear, November 7, 2018.

But it gets worse.

On October 30, I’d gone to pick up light cream from the same store. When I was there, I found - believe it or not - four containers of light cream carrying a “use by” date of October 18, 2018.

Yup.

On that day, I picked up those four containers and brought them up to the front customer service desk and pointed out that they were out of date by almost two weeks. They seemed a bit mystified by the fact that I’d gone to all that trouble, but I left those containers on the counter and went about my business.

Now, more than a week later, those four containers - or at least, four containers carrying the same date - were back in the dairy department.

So, I did it again. The nice woman behind the counter listened to me and responded, “Oh. That’s not good.” When I explained that I may have found the same containers there more than a week earlier, she shook her head. “We have a new person working in that department,” she said.

“But that doesn’t explain how the containers seem to have made their way back to the department from this counter,” I said.

She didn’t really have an explanation. Or a response. But she did promise that it would not happen again.

I have two points here.

One is that this really isn’t about Stop & Shop. I’m sure this happens in a lot of places. It just so happens that I occasionally go into this store … which I’m sure, at this point, they wish I wouldn’t.

But again, here is the question that I would ask every retailer:

Are you absolutely sure that your stores are not guilty of the same sins?

But the bigger issue is the same one that I pointed to a year ago.

If retailers want to win in an increasingly cutthroat competitive environment, they have to bring their A-game. Every hour of every day. That means, at the very least, being neat and clean and in-stock and with helpful, friendly employees who are getting it done. And with products that haven’t exceeded their expiration dates, and that certainly have not been returned to the case after a customer has pointed out a problem.

What they can’t do is bring their D-game, which does little to persuade the customer that this is where I should be bringing my business.

The product here may be light cream, but it strikes me as a heavy, Eye-Opening object lesson about how not to compete.








Study: Amazon’s Price Advantage Doesn’t Extend to Grocery

Profitero is out with a new study concluding that “Amazon is still the overall industry price leader, averaging 13% less expensive than other major online retailers in the US.”

The study “compared prices on 100,000 products across 16 retailers from April – June 2018” and found that “Amazon had the lowest prices on the broadest selection of popular items, winning 11 out of 15 categories studied. Walmart.com had the most competitive prices to Amazon’s, with prices averaging 2.3% higher. Jet had prices 4.2% higher than Amazon, while Target averaged 11.9% higher.

Amazon, however, is not getting it done in grocery: “In February 2018,” the study points out, “Profitero noted that Walmart, Jet and Target were locked into fierce price competition with Amazon within online grocery. Since then, Jet.com has separated from the pack, lowering grocery prices by 5%.”

There were a few other exceptions “where Amazon wasn’t the lowest priced in market. For instance, Chewy.com was 2.3% cheaper in pet supplies and Jet.com had lower prices than Amazon in beauty (.4%) and music & CDs (2.6%).”

The study also found that “Amazon continues to dominate specialty retailers: Amazon’s price advantage was most notable versus specialty stores. On average, Amazon was 13.3% cheaper on appliances and 15.2% cheaper on electronics versus Best Buy; 18.4% cheaper on sporting goods versus Dick’s.”

KC's View: Since Amazon largely is a price-follower rather than a price-leader, this illustrates the degree to which it can use its algorithms to identify what competitors are charging and then adjust its prices accordingly in the places where it matters. None of this is random or accidental, I think … it is all consciously determined by Amazon, and highly specific.

Peapod Gets A New President

Ahold Delhaize announces today that Selma Postma has been appointed to the role of Brand President of its Peapod division, affective on January 1, 2019.

According to the announcement, Postma “joins the Peapod brand after a career of almost two decades at Albert Heijn, the leading food retailer in the Netherlands and one of Ahold Delhaize's great local brands. Since 2014, (she) was General Manager of Albert Heijn Online, where she helped to accelerate online sales to more than 20% annually. Her teams also led the transformation of Albert Heijn into an omnichannel retailer by optimizing ah.nl and the popular mobile app ‘Appie,’ and developing solutions such as voice assistance, delivery subscriptions and more.”

KC's View: Strikes me that there is a lot going on with Peapod these days, which suggests to me that they may be about to make some interesting moves. And what Postma has done in the past sounds like she’s perfectly positioned to drive some new initiatives.

Sometimes, Smoke Doesn’t Get In Your Eyes

Heartening news from the Centers for Disease Control and Prevention (CDC).

Pun intended.

Axios reports on new CDC data showing that just 14 percent of US adults said that they have smoked a cigarette in the last 30 days - the lowest number in history.

“The big picture,” Axios writes, is that “smoking’s decline has been slow and steady — as 67% of American adults smoked in 1965 and just 15.5% did so last year.”

The numbers are not quite as encouraging among young people: “About 10% of young adults aged 18 to 24 smoked cigarettes in 2017, down from 13% in 2016.” And there remains a problem with the numbers, because “there is no way to tell if the decline in cigarette use correlates to the increase in e-cigarette use, even when tobacco companies tout vapes are an alternative to smoking … 2.8% of Americans reported using e-cigarettes within the last 30 days, making them the third-most used tobacco product.” And, “about 47 million Americans are still using some type of tobacco product, like e-cigarettes or smokeless tobacco.”

But the numbers seem to be declining.

KC's View: Good. The numbers can’t go low enough, but this is a good start.

In related news, the New York Times reports that “the Food and Drug Administration plans to ban sales of most flavored e-cigarettes in retail stores and gas stations around the country, in an effort to reduce the popularity of vaping among young people. The agency also plans to require age-verification measures for online sales to try to ensure that minors are not able to buy the flavor pods.”

Also good.

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From Export Solutions...

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Worth Reading: Good Jeans

Advertising Age has a story about how Levi Strauss has “moved beyond its single-product roots into a more diversified mix of apparel offerings, including a robust global T-shirt business nearing $1 billion in sales. At 165 years old, Levi's is a lifestyle brand for the masses,” Extraordinarily relevant for a brand of its age.

An excerpt:

“Few brands - and logos - have had such enduring appeal, especially at a time when the apparel and retail landscape is littered with the bones of denim rivals. Levi's was near the graveyard itself nearly two decades ago. A merchandising overhaul that moved away from trendy but forgettable offerings into a collection with a more long-lasting, classic appeal, combined with an invigorating marketing platform and focus on digital innovation, have helped the brand avoid such a fate.”

The story makes the point that Levi Strauss has managed to retain and improve its position in consumers’ minds and hearts through persistent innovation and aggressive marketing, even as competitors have ramped up their efforts and crowded the field with new brands and styles. in fact, the company even has chosen this moment in its history to be more upfront with political stands, taking a position on gun control that annoyed some of its longtime customers.

Fascinating brand lesson, and you can read all about it here.

KC's View: I’m utterly devoted to 541’s … wear them almost every day, and it feels good to be patronizing a company that is an American icon.

E-conomy Beat

Digital Trends reports that “Google Home and Sephora have announced a new alliance centered around the Google Home Hub.”

According to the story, you can now “use the Google Home wake-word to call up any of Sephora’s library of makeup tutorials,” which you can watch “on the Google Home Hub’s 10-inch diagonal display … You also can manage videos playing on your Google Home Hub with voice commands. So you can pause, skip ahead, or replay an important section of a video when you want your look to be just right.”

Sephora is even selling the Google Hub - an unusual item for a makeup retailer - online and in some of its stores.

The MNB Walmart Watch

• Walmart plans to hold a party on Thanksgiving. Lots of them.

CNBC reports that Walmart “will hold events in stores on Nov. 22, Thanksgiving Day, from 4 p.m. to 6 p.m. with free coffee and cookies.” The story notes that “Walmart will officially kick off Black Friday deals in stores at 6 p.m. that Thursday. Online, Walmart will be rolling out Black Friday deals at 10 p.m. ET on Nov. 21, earlier than it's ever done before.”

"We're trying to allow folks on the East Coast to shop a little earlier," says Steve Bratspies, chief merchandising officer of Walmart US. “Whether [people] go online or in stores, we're agnostic to that."


CNN has a story about how Marc Lore, who runs Walmart’s e-commerce business in the US, remains high on a new in-house business called Jetblack, described as “ a chat-based personal shopping service targeted at time-strapped moms in New York City … Members can text Jetblack when they run out of Cheerios or toothpaste, or need a last-minute gift recommendation for a kid's birthday. Jetblack promises same or next-day delivery with free returns.”

Membership - in Jetblack costs $50 a month, which likely limits participation to people of means, but that doesn’t matter. Walmart, the story says, “is betting that Jetblack will give the company insights into ‘conversational commerce’ - shopping through text messages, online chats, and voice commands - that could become the next wave of retail … The service relies on artificial intelligence and team of buyers to respond to members' text requests with a curated menu of choices pulled from Walmart.com, Jet.com, as well as other retailers like Pottery Barn.”

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From Samuel J. Associates...

"It’s a bad time to be in the business of selling groceries, and the headlines are as bleak as you’d expect: "The Retail Apocalypse Is Coming for Grocery Stores" ... "Grocery Retail ‘Bloodbath’ Is Here" ... Conversely, it is a great time — arguably the best time ever — to buy groceries."
- New York Magazine/Grub Street


At Samuel J.Associates, we have a response to this assessment:

Bull.

We think it is a great time to be selling groceries, whether you are a retailer or a supplier. That’s because a more educated and demanding consumer, no matter the demographic, will reward businesses that are innovative, disruptive, and in touch with what people need, even if they don’t know they need it.

And, we know this: Those businesses require, and are fueled by, great people.

People who don’t just get the job done, but who set the tone in an organization, establish cultural and business priorities, who build teams, and who are able to not just adapt to competitive realities, but see the future and thrive in it.

And yes, ignore dire warnings about a "retail apocalypse" and see opportunities.

At Samuel J. Associates, we have a winning record of connecting great talent and innovative businesses ... as well as innovative talent with great businesses. We exceed your expectations so that you can do the same thing for your customers.

No bull.

Click here to find out more.

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FastNewsBeat

• Western New York-based Tops Markets said yesterday that “the United States Bankruptcy Court for the Southern District of New York has confirmed the Company’s Plan of Reorganization. Tops expects to complete its restructuring and emerge from Chapter 11 shortly.”

Frank Curci, Tops’ CEO, said in a prepared statement that “through this process, we have accomplished several key objectives, including significantly reducing our debt, creating a viable cost structure and efficiently optimizing our store portfolio. Importantly, we provided an opportunity for employment to every associate who was interested and impacted by store closings at other nearby stores. Our restructuring will create an even more exceptional shopping experience for our customers and assure that we will continue to serve our communities like no one else can.”


Reuters reports that “Coca-Cola is planning to launch a range of energy drinks for the first time on its own brand name as it intensifies efforts to break away from its traditional fizzy sodas and shift to health-focused trends.” The company reportedly “plans to launch new drinks which would be branded ‘Coca-Cola Energy’ and ‘Coca-Cola Energy No Sugar’ and made with naturally-derived caffeine and guarana extract.”


USA Today reports that Sears Holdings “said Thursday that it will shutter another 40 Sears and Kmart stores in February, on top of the 142 locations it previously announced would be closing by the end of this year,” appearing “to be making good on its goal to emerge from bankruptcy a vastly smaller company.”

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From City of Hope...

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From ReposiTrak...

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Your Views: Manual Transmission, Automatic Delight

Got the following email regarding our story about Amazon’s new toy catalog:

I have a 9 and 6 year old and they received the Amazon catalog yesterday.  They pulled their pens out and circled all that they wanted from Santa this Christmas.  Since they only watch YouTube and Netflix they don’t see that many toy commercials.   My son noticed the Amazon Smile logo and realized it was an Amazon catalog.  And promptly said “Mom this is great, I know I’m going to get all this stuff for Christmas, ‘cause Santa orders from Amazon.”

Needless to say Amazon has created future customers.
 
These are also the kids who think you can get anything delivered the same day: groceries, dinner, toys = just ordered it from your phone.


Also got this email from MNB reader Chris Risk:

Kevin – you missed another piece about this catalog and how they just ever so simply raised the bar – but did it in a way that made you remember. Amazon put a page in the middle with stickers. My kids LOVE stickers. I’m constantly peeling them off EVERYTHING. But this means they can take the stickers and stick them next to the presents they want, and mum and dad can check through for inspiration. It also means they don’t have to get a marker pen to circle the ones they want – as stickers are removable, marker pens can often leave a more lasting impact when used by a 3 year old! Catalog experience = elevated.  That Bezos is gonna make some money someday.

Probably right.



On another subject, from another reader:

Thinking about Dollar Shave and their product vending machines… what a novel way to sell high theft items with less packaging!

Good point.



I got a lot of email about yesterday’s FaceTime commentary about my Mustang’s manual transmission.

MNB reader Arthur Bernstein wrote:

Been a regular reader of yours for years, but gotta say you hit the nail on the head in your FaceTime column about the decline of manual transmissions when you said “It probably depends on how profitable and regular those customers happen to be”.

I’m in the market for a new car, preferably with manual, and I wouldn’t call myself a particularly profitable customer for auto manufacturers as I tend towards the more economical side, but it sure seems like a large % of the relatively few models left where you can still get stick are either performance (i.e. muscle) cars or things with brand names like BMW, Audi, etc, which come with higher price tags and an implied higher level of disposable income – just the kind of customers that it might be worth continuing to support.
 
A generalization I know, but just reinforcing that your assessment was spot on.  And as someone who still drives a manual and really like how more connected to driving I feel when doing it, I hope they stick around!


From another reader:

Personally I love manual transmissions. My first car was a 68 Charger that my Dad and I converted into a manual from an automatic. Not an easy task! Almost every vehicle I’ve owned since then has been stick. The fact that my next car might not be available that way makes me a bit sad. ( I know this wasn’t the point of your article.. but just wanted to give a shout out to stick shift drivers..)
 
And from another:

All I know KC is I love driving a stick shift, it feels like I'm driving the car and not the other way around!

MNB reader Philip Bradley wrote:

I was really tuned in to your piece on the stick shift this morning (and the fact that your two sons can’t drive stick!) - this is from a Dad who insisted that my then 16-year-old daughters take their driver’s test in my stick shift Honda, as opposed to their mother’s auto transmission Oldsmobile.  Their classmates were astonished: “You have to take your driver’s test with a STICK SHIFT?!”  And this was in the mid-80s!!  I finally gave up driving a stick car five years ago, partly because I’ve remarried, and my wife can’t drive stick; and partly because the traffic in Minneapolis is so heavy at times that slush is a godsend.

I really like how you used the anachronism of the stick shift as a business lesson—thanks again for finding interesting and instructive business lessons in all aspects of daily life!


MNB reader David White wrote:

I also have a stick (I'm 57), took it to have a oil change...the guy asked me to drive it in because he couldn't drive a stick...that's ok...been when he came back to the waiting room he informed me it was time to have automatic transmission serviced...I told him " sure...let me know when you find it!" Afraid I'll no longer be doing business with them!

Will I live to see the day when no manual transmission are available....guess I'm a dinosaur…..


But not all by yourself.

And, from another reader:

Your ‘Face Time with the Content Guy’ on Manual Transmissions and the need for corporations to continue to serve dwindling consumer bases and what you referred to as “Antiquated” technology got me thinking as well.

I wouldn’t call Manual Transmissions antiquated technology, but different technology that evolves along with newer technology.  Early transmissions were 3 on the tree, with clunky clutches and as Automatics began to take off, manuals were often offered as a money saving alternative.  Today we have 6 or more speed manual transmissions, with tight gear ratios, rev matching, better performance, and a driving experience that the true aficionado would never give up. 
I’ve written to you before about my BMW 340i; 3 liter, twin turbo inline six with the sweetest six speed manual you can imagine.  I paid quite the premium for that car and to borrow from another car company’s ad from a few years back, when I turn on my car, it sure does return the favor.

Move past cars and there are a host of “antiquated” technologies that still have a huge following. Analog record albums are once again making strong headway with true audiophiles.

E-Books and Tablets are a lot more convenient than Books and newspapers, but there’s still a lot to be said for holding a newspaper or actual book in your hands that I don’t think will go away anytime soon.
 
Sailboats were supposedly made obsolete over 100 years ago by the steam engine, but tell that to all the recreational sailors out there who love their cruising boats and are willing to spend money for the experience.  I remember getting to the destination on a sailing cruise, and the skipper of a powerboat who had landed just after me was bragging how he got where he wanted to go 4x faster than me.  My reply was no, I was where I wanted to be the minute I stepped aboard, it was the journey and experience I was after, not making time to the destination.  I think driving your Mustang is a similar experience.

Agreed, Businesses need to understand their customers and where it makes sense to invest and cut back.  They also need to understand who their customers are, and in some cases who their future customers may be.  It wasn’t all that long ago (at least from my perspective) when convertible tops all but went away.   Somehow a whole new generation figured out how much fun it is to drive with the wind in your hair.

From The MNB Sports Desk

In Thursday Night Football, the Pittsburgh Steelers defeated the Carolina Panthers 52-21.

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“RETAIL 2020: What’s The Future (WTF)?” - A New Presentation by Kevin Coupe


In this fast-paced, interactive and provocative presentation, MNB's Kevin Coupe challenges audiences to see the fast-evolving retail world through a radical new technological, demographic, competitive and cultural prism. These issues all combine to create an environment in which traditional thinking, fundamental execution, and just-good-enough strategies and tactics likely pave the path to irrelevance; Coupe lays out a road map for the future that focuses on differential advantages and disruptive mindsets, using real-world examples that can be adopted and executed by enterprising and innovative leaders.

Constantly updated to reflect the hand crafted news stories covered and commented upon daily by MorningNewsBeat, and seasoned with an irreverent sense of humor and disdain for sacred cows honed over 30 years of writing and reporting about the best retailers and retail strategies, “RETAIL 2020/WTF” will get your meeting attendees not just thinking, but asking the serious questions about business and consumers that serious times demand. See a sample at left…




Here’s what Lori Stillman, Executive Vice President - Analytics, Insights and Intelligence, Advantage Solutions, has to say about a recent appearance:

"Kevin joined us as a moderator and facilitator for a two-day client executive event we hosted. His role in the success of the event went far beyond his time presenting and sharing his great wisdom and content. From the moment our planning process began and we selected Kevin as a key part of our program, he dove in and worked with our team to review session topics, ideate on programming and help ensure our overall event delivered on the goals we had established. His quick wit, deep industry knowledge and ability to synthesize conversations into key take-aways enabled us to hit a home run!”

And, from Joe Jurich, CTO of DUMAC Business Systems:

”Kevin recently participated in and spoke at our Annual User Conference.  Our group consisted of independent retailers, wholesalers, and software vendors – a pretty broad group to challenge in a single talk.  While his energy, humor, and movie analogies kept the audience engaged, his ability to challenge them to think differently about how they go to market is what really captured them!  Based on dinner conversations afterward, he appeared to have left everyone thinking of at least one new approach to their strategy!”

Want to make your next event unique, engaging and entertaining? Contact Kevin at kc@morningnewsbeat.com , or call him now at 203-253-0291.

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OffBeat: Life Lessons

My daughter, who is a para-professional special education teacher who is studying for her Masters degree in the subject, recently did something she rarely does. She recommended a movie to me. (Unlike her brothers and me, she’s not a movie person.)

But when she does it, I tend to listen. And so, the other day, while flying back from the west coast, having previously downloaded it, I decided to watch it on my iPad. And pretty quickly found myself completely pissed off at her, because it was so profoundly moving that I was sitting in 12D with tears rolling down my cheeks.

The move is Life, Animated, a 2016 documentary based on a book, “Life, Animated: A Story of Sidekicks, Heroes, and Autism,” by journalist Ron Suskind. The subject is Suskind’s son, Owen, who was diagnosed with autism at age and slowly devolved into be uncommunicative and withdrawn, no matter what his parents did to try to help him. But then, through a series of lucky accidents, they discovered something extraordinary - that Owen actually was connecting to the world, but doing so through Disney animated films in which he was identifying with plot points and characters.

Owen’s story is an extraordinary one, as we watch him - through home movie footage, interviews with family members and doctors, and both original animation as well as clips from Disney films - grapple with the world around him, finding his place and learning to achieve a measure of autonomy. The film does a nice job of not suggesting that Disney’s films are some sort of panacea - that would’ve made the film way too exploitive and commercial - but rather keeps the story narrow and always in context.

Life, Animated is one of the best films I’ve seen this year. It is touching, emotional and smart - and I kind of hope that a few years from now, they produce a sequel. I’d like to catch up with Owen and his family and see how things turned out.



I made a spicy, blackened salmon the other night - though I cheat in how I make it, because cooking it in a pan full of butter strikes me as the wrong way to go when it comes to heart health. It was really good, though, and the wine I served with it was a 2017 Walnut Block Collectables Sauvignon Blanc from New Zealand, which was smooth and just citrusy enough to balance out the salmon. I recommend it.



That’s it for this week.

Have a great weekend, and I’ll see you Monday.

Sláinte!

PWS 51