business news in context, analysis with attitude

We had a story yesterday about retailers asking customers for their email addresses, hoping to be able use them to build a database of loyal customers…and we suggested that any retailer that wasn’t trying to compile such a list ought to get out of the business.

Not a popular opinion.

MNB user Don Brandt responded:

Don't really like the idea of indiscriminately giving out my e-mail address. It seems the more I do this the more junk that comes my way. I now have two newsletters from respected companies that I can't stop. They don't respond to my requests or they say I'm removed from the list but continue sending e-mails. If my e-mail address is required to do business with someone and it doesn't seem appropriate, I just go elsewhere.

Another MNB user wrote:

Re: your comment (that) “any retailer not doing this kind of simple stuff ought to just get out of the business right now.”

I hope not. A lot of America would starve next week if that happened. The abysmal level of loyalty and consumer marketing sophistication, especially on line, is all the more surprising since it often exists within retailers who are otherwise quite competent.

I often illustrate this by pointing out how Stop & Shop has continued to send me dog food coupons for the past dozen years. My cats are always offended. This is the same company that tried to help customers to manage their diets and got a black eye for publishing personal information about purchases where it wasn’t secure.

I personally opt-out of most email marketing, but not all, and the ability to do that is key – no company, however well intentioned, should assume I want anything from them unless I agree – the default should require opt IN. But if they were smart, they would give me information I can use (like recall notices matched to my purchase history, for instance, or allow a diabetic to search for special products, and in that way they provide something positive that makes me WANT to hear from them.

Before they get my email address I want a clear privacy policy, an opt-out default, and a reason to allow them to risk bothering me that works for ME not just for THEM.

MNB user Philip Herr wrote:

I question whether customers are likely to be that willing to supply them. With an organization I absolutely LOVE and trust -- LL Bean -- I refuse to give my e-mail. Just because I regard it as I do my phone number -- private. So whenever I am asked whether I'd like to receive an e-mail confirmation of my order, I refuse. I'd rather you don't contact me thanks.

MNB user Bob Peterson wrote:

Kevin, I have to disagree with your view that every retailer should be asking for email addresses as part of whatever loyalty marketing scheme they use.

First, from a loyalty marketing perspective most retailers don’t or can’t use what they are already collecting in any meaningful manner. Will having our email address suddenly create the ability for them to do anything more than electronically send notices of price reductions? I seriously doubt that one more line in a database will change anything from a loyalty marketing perspective.

Second, from my perspective as a consumer, I doubt that an email thank you from a retailer’s mass emailing system will have any more impact than the current snail mail advertising materials generated by the loyalty marketing program.

Finally, I would guess a significant number of privacy astute consumers will not provide their real email addresses. In the same manner that my home phone number is unlisted/unpublished (and is never disclosed), I guard my primary personal email address with an equal passion. If forced to provide an email address I provide one for a throwaway service (Hotmail, Yahoo, etc.) where everything is setup to go into a junk folder that is automatically emptied. This is the same approach I would take to a retailer’s loyalty program request for information.

Bottom line, there needs to be something more valuable than normal price reductions before more information is provided by me.

Let us clarify our position. We would agree that just collecting email addresses isn’t enough. We agree that a retailer needs to have a sophisticated and consumer-sensitive program in place that uses these email address to communicate real, actionable information – not just more discounts. And we agree that a number of consumers won’t want to hand over their email addresses, and that’s okay one of the reasons that so-called “permission marketing” works is that permission has to be asked for and received.

What we are arguing for is a smarter approach by retailers that uses the advantages of the Internet and email to create a real and more effective relationship with shoppers.

We also got a number of emails about our assessment of the importance of a clean bathroom…

MNB user Phillip Censky wrote:

If you haven't had the chance to read Kitchen Confidential by Anthony Bourdain, you may want to give it a chance. A career chef in NYC, Bourdain dishes the sordid details of professional kitchens, as well as gives a few pointers to culinary amateurs. Definitely not "G" rated, however.

In the book, Bourdain makes the astute observation that how a restaurant keeps its restrooms is a good indicator of the operation in general. If the staff can't maintain cleanliness in public areas like restrooms, imagine what the kitchen and pantry look like behind closed doors.

MNB user Paul Schlossberg wrote:

Smart retail operators know that a great experience includes more than wares they sell (food in this case). Some foodservice operations get it. Some don’t.

Much of my work has been in foodservice sales and marketing. That trained me to enter restaurants through the kitchen door instead of the front door. Client assignments still get me inside foodservice kitchens from time to time. There are many squeaky clean kitchens. Some, unfortunately, are less than that high standard. We all have probably seen TV news exposes on dirty kitchens. Those stories usually run during sweeps ratings periods. A number of “back of the house” rules on food safety and proper handling have stayed with me.

A job in restaurant operations taught me an important new set of “front of the house” rules, including:

1. Look up when you walk in the front door. If the light fixture and
upper moldings are dirty, then the kitchen is dirty too. Let’s
face it, not many people are trained to look up when they enter an
establishment selling or serving food.
2. Always check out the bathrooms. If the bathrooms are dirty, rule
#1 applies. Like a bad cup of coffee can ruin a good meal
experience, a trip to a dirty bathroom leaves a very bad impression.
3. Run your hand under the tabletops and under the chairs. If dirty,
rule #1 applies again. This particular task is not for the faint
of heart.

There are some exemplary restaurants. We had dinner at Lucas Carton in Paris (one of the two best dining experiences we ever had). The ladies, including my wife, returned to the table. They were enthusiastic in describing the splendid (and very clean) restroom. A visit to men’s room was recommended. We (regretfully now) did not do so.

The next time you enter a store or restaurant where is food is sold or served, look up. This will show you almost all you need to know about how well the managers on site are attending to the details of managing (and cleaning) the store .

MNB user Denise Remark-Lundell wrote:

Kevin, you are correct about Jungle Jim's restroom, it did make me laugh! Yet another clever idea by Jungle Jim.

On a more serious note--there is a Korean restaurant near me that serves very good food. However, one evening I had to use the restroom there & was so grossed out that I have never returned to restaurant. I figured that if their standards were so bad for the bathroom, the kitchen probably wasn't far behind (no pun...really).

I maintain that the bathroom:kitchen standards/cleanliness ratio is one not to be ignored.

Interesting email from MNB user Bill Wyman regarding a comment yesterday about how Wal-Mart momentarily seems more concerned about investors than customers:

A little reported fact; Wal-Mart’s margins are now almost the same as Kroger’s. We all know how well Wegman’s, Publix and HEB do against Wal-Mart because of their focus on understanding and meeting consumer needs coupled with their better merchandising skills. Now Wal-Mart’s margin advantage vs. the largest food retailer Kroger has almost vanished. In the fiscal year ending in 2000 Wal-Mart enjoyed a 3.7 margin point advantage vs. Kroger, in the latest quarter (7/04) it’s down to .4. Wal-Mart may be shifting some of its focus to the financial community (margin management) and away from what made them successful.

Regarding consumer acceptance of genetically modified foods, one MNB user wrote:

I worry that the people who think that GM foods are "basically safe" don't have a clue as to what they are or as to the harm they might do in the years to come. We already know what pesticides and herbicides (used on our produce) do to our bodies and to the farmers and to the land....why do people think they can mess with Mother Nature?

MNB user Jim Lukens had a thought about Lunds’ plan to open two downtown stores in Minneapolis:

Glad to hear that Lunds is moving forward on their downtown project. For decades Lunds has been successful in their "uptown" location, primarily because Tres Lund understands his customers needs and makes sure that each of his stores becomes part of the neighborhood "fabric." There is no prototype Lunds store, each is custom tailored to suit the needs of its community.

Although Byerlys (also owned by Tres) receives more trade press for their upscale offerings, Lunds has the ability to overcome the supercenter competitors.... namely Super Target (also headquartered in Minneapolis) because of their unique product offerings, world class service and passion for food. Some say that Wegman's is the finest in the states but I'd place Lunds and Seattle's Central Market stores with them at the top. Minneapolis is national headquarters to Supervalu, Nash Finch and Target. Congrats to Tres and his team for taking on a project that others refused to tackle.

One MNB user had some thoughts about Ahold’s troubles:

As a longtime Tops shopper and supplier, it's sad to see what they've become. The Tops experience today starts with a walk through a smoke-filled area where the employee smoking lounge is within 30 feet of the front doors. Upon entering, the first thing you see is the carry-out cafe and coffee bar, where more employees linger. As for the store - it's what you can't find. Where are the Chinese cookies? Now, they don't carry them. Before that, the price went from $1.99 to $2.29 (who else in this industry can get a 15% price increase?). What about hard crust European rolls? "I guess we don't carry them anymore" says the one clerk who isn't smoking or drinking coffee. I've been given more rain checks in the past 3 months than I've ever had before from Tops. The store manager says his fill rate from C&S is sometimes only 80% - no real surprise.

Tops had some of the sharpest buyers and merchandisers in the industry working there - now people from Central PA say they can do it better... guess again. The same could probably be said for Landover. Marc Smith is a great guy - I've known him a long time. But, they don't just have people problems - they have customer problems.

Free advice for Ahold - if you want to acquire somebody, fine, do it. Just next time, don't do it on the backs of your employees or with inflated prices to the consumer.

We had a story yesterday about a Boston Globe report that “in broad swatches of urban America and in decrepit industrial towns, people with low incomes struggle and frequently fail to eat a nutritious diet -- the kind necessary to prevent heart disease, diabetes and obesity. Research shows poverty makes people more vulnerable to all three.” It is “a plight borne of scarcity -- not enough money, not enough decent food in neighborhood stores, not enough knowledge about what constitutes a healthy meal or the time to fix it.”

Our comment: Poverty isn’t a new American condition. It always has existed, especially for immigrants who came to this country with little on their backs and less in their pockets. We wonder, in fact, if maybe the new American condition is ignorance.

Just a thought here… Lack of proper nutrition is certainly a problem, but we wonder if the lack of emphasis on the family meal may be equally as big a problem in some of these situations.

One MNB user responded:

This is a huge opportunity for grocery stores to do good. This could take many angles from education to support to something like Second Harvest. If more companies felt this was a priority we could solve many long term problems.

Another MNB user wrote:

I agree with the basis of your comments around education being necessary to help deal with nutrition deficiencies among those who struggle with poverty. One thing I would add, however, is many of the lowest priced meals tend to be unhealthy. Let's face it, we know that pasta and pasta products can go a long way on a low budget, yet, we also know the ramifications of diets high in that concentration. Same is true for ready meals and many frozen food products, they are highly processed and as a result, not the best foods for health. As I glide down the supermarket aisles, I see many carts lacking dairy, produce and fresh meat items. We know the costs associated with those food groupings. The carts without those items tend to have breads, pastas and sodas.

So-- education is critical. There are also some other issues that make it a bit more complicated.

Yet another MNB user wrote:

Why couldn’t some of the supermarkets become partners with the schools in those urban areas and teach nutrition there. Have classes after school or part of the curriculum. An advantage to that might just be a future customer and/or a very good employee. In some of the schools, the only meal the students get is what they get at school. The meals that they would make at school could be taken home. I am sure it would be a write off to the supermarket and good community pr.
KC's View: