business news in context, analysis with attitude

MNB reported yesterday that has begun testing near Seattle a pilot program called Amazon Fresh that will deliver perishable groceries to consumers, including organic and non-organic fruits and vegetables, dairy products, ice cream, meat and seafood. The program, under development since at least earlier this year by Amazon’s grocery team, expands upon the gourmet grocery business and non-perishables business that the company already has in place. And, for the first time, the company is delivering products directly to customers instead of relying on a third-party service such as UPS or FedEx.

MNB user Lisa Malmarowski responded:

It will be interesting to see what happens. Hopefully they can improve their service recovery system. I've always been a fan of Amazon for those occasional convenience things I need ( I'm one of those people that prefers to shop at the local bookstore!), and I've always received things as promised, quickly. We all know the good things Amazon does.

A recent order proved to me that a company is only as good as the last transaction and how they handle a problem is really where the rubber meets the road.

I ordered 3 books that I couldn't find locally, one was a gift. In order to get the gift book in time, I chose to forgo the super saver shipping and opt for a faster route. Two days later, I received a note saying that all 3 books would not be available for about a week - well after when I needed the gift. So I wrote and asked to qualify for the super saver shipping since they would not be expedited.

Suffice it to say, 3 emails later, a scolding from a call center worker from overseas somewhere, and finally an email back refunding my lousy $5.64 with a reminder that they were doing me a BIG favor because I chose the wrong shipping, I'll be hesitant to order from them for a while.

And that would make me super wary of ordering groceries.

That's okay, let 'em get big - makes more room for quality local stores to shine - especially when it comes to genuine, personal service.

MNB user Alexandra Minch wrote:

A company called FreshDirect has been providing this type of service in lower Manhattan for years. It has been a big hit with the residents of Battery Park, especially those without cars.

I know that, and have written about the company admiringly.

Here’s where Amazon could be different, I think. It has an enormous amount of information on millions of customers, and it can offer a highly customized online shopping experience that can pull various segments and venues together, in a way that almost nobody else can or has even thought about. Now, this has extraordinary challenges attached to it, both in terms of infrastructure and economics, to name just two major areas.

But I’m impressed. And I think the opportunity could be transformational, if it expands and if it works.

In a story about Wal-Mart’s success in the consumer electronics arena, MNB offered the following commentary: Wal-Mart’s biggest problem in the consumer electronics business, from my point of view, is the lack of credible, educated and engaged sales help. Until they get that licked, I’ll be shopping for these items elsewhere.

One MNB user responded:

I agree that "credible, educated and engaged sales help" is essential in choosing any new technical device.

However, don't you think that lots, read "most", customers have a pretty good idea of what they want, thru prior comparison shopping of good electronics stores, especially in the field of new HDTV sets, which are so new to most all of us, when they go to Wally World to buy on price alone? And use Consumer Reports and the likes for reliable "technical" review of products.

I think some do, some don’t. But I think that even those who know what they want would be put off by the Wal-Mart employee I ran into in its consumer electronics section who expressed surprise that Sony made flat screen plasma televisions.

Another MNB user wrote:

As long as the internet is able to provide a wealth of information about products and technologies, store personnel will never be more than a tertiary at best source of info. Trying to buy a new TV recently I was stunned to find that no two salespersons at Circuit City offered the same explanation for the differentiating technology between comparably priced products. Wal-Mart is benefiting from every other retailer that has trained customers not to expect much from store personnel.


I’m just old-fashioned about this stuff. I have a guy who works in the TV department at a local retailer who seems to know everything I need to know, and who matches everybody else’s prices. He’ll be there next week, next month, next year when I need a new TV. And, the store is a one-unit operator, so I feel good about supporting a fellow independent.

MNB featured a radio commentary yesterday that addressed a new IRI study saying, in essence, that rather than trying to be all things to all people, retailers looking to compete in a cutthroat environment ought to instead try to be more meaningful to the most meaningful shoppers.

And I said:

Wow! What a concept.

Now, I want to be clear about this. I’m not being mean to IRI. I’m sure I could find plenty of studies done by its competitors in which the central conclusions seemed equally obvious. This just happens to be the one that crossed my laptop most recently … I think it probably is good that IRI is doing studies about such things, and trying to bring it to the attention of the food industry. Because while it seems like an obvious conclusion – that to compete in 2007 and beyond it is critical to do something different from everyone else – there are too many retailers who don’t believe it or act on it effectively.

I suggested that in addition to doing better data collection and analysis, as recommended by IRI, retailers also need to do a better job of hiring store managers who have as their highest priority connecting with customers, identifying best shoppers, and developing relationships with these customers that evolve and grow over time. It means developing business leaders, not just store managers.

And, I concluded: It seems obvious. But as Arthur Conan Doyle once wrote, “There is nothing so deceptive as an obvious fact.” In this case, the obvious is elusive. But it also is one of the highest priorities that retailers can set for themselves.

MNB user Glen Terbeek responded:

IRI is right on and so are you right on. Focusing on Best Shoppers is an obvious business practice. The problem is that the "Best Shoppers" are different, store by store. And that is in direct conflict with the traditional organizations and measurements in most supermarket chains; where the stores work for headquarters, rather than where the central support staff works for each store.

To focus on Best Shoppers, the stores need to be in control of their own markets.

Otherwise stores will continue to be all things to all people, and only perform to average, not potential.

Why are all the central support personnel located in a central office building anyway?

MNB user Dustin Stinett chimed in:

You said:

"Sometimes, I’m amazed when a study comes out that seems to state the obvious, and the results seem to surprise people."

You mean kind of like when I found out that people are surprised when they discover that clearly labeled "Purified Drinking Water" comes from a local water source and not the Magic Purified Drinking Water Tanks in the sky? 😉

Dustin is making a not very veiled reference to my coverage of PepsiCo’s decision to change the label of its Aquafina water to concede that it is filtered tap water, a decision Coke is not emulating with its Dasani water. I think it is a transparency issue, but he thinks it is much ado about nothing.

Maybe I just hang out with lesser informed people, but almost everyone I’ve spoken to about this issue thought that Aquafina and Dasani were spring waters, not purified tap water. Not that PepsiCo or Coke claimed this…but they look like Poland Spring and Evian, so people sort of assumed.

Transparency, in my view, is not just about telling the truth. It is sometimes about correcting misconceptions when and where they exist.

But we digress…

Another MNB user wrote:

Research has many functions - confirms what we know, answers questions we want to know about, and uncovers stuff we didn't know about but need to know. Knowing your core consumer and being relevant to them through strategic differentiation is hitting the sweet spot and that is what branding is all about. You are right on about stores and chains needing to develop talent with strong business acumen...including marketing and branding...(they are not the same thing).

True. Sometimes we all need to be told something we should know by someone who has the advantage of distance and objectivity. (Hell, it is sort of how I make a living, though being a pundit and professional troublemaker is a little different from being a consultant. My accountant says it means I’m an underachiever…)

I got the following email this week that I thought worth sharing:

Last week my company sent 20+ associates to the College of William and Mary's Mason School of Business for a course in Strategic Retail Management.

Across the street was a Wawa which several of us shopped each morning. The first day, a store employee was observing one of my colleagues shopping the energy drink selection. The employee came over and asked her if she had tried the Wawa energy drink. My colleague said she had not. The store employee said "here, take our Wawa energy drink to sample, no charge". I immediately wondered why my company does not have a program like this and how could I implement one in the near future.

What a great way to sample and introduce your private label products to your customers. Wawa must have complete confidence in the quality of their private label products.

My "hats off" to Dick and Howard for training their employees and the Wawa culture that they have ingrained in their organization.

Bet that store employee never took a course in Strategic Retail Management, and may never have used a consultant to figure out how to sell stuff.

Regarding the ongoing battle between the Federal Trade Commission (FTC) and Whole Foods about the retailer’s proposed acquisition of Wild Oats, one MNB user wrote:

So Whole Foods can't purchase Wild Oats because the FTC thinks it would be anti competitive, but Murdoch can buy Dow Jones & Company?

Are you suggesting that Murdoch gets a pass because he may be more in synch with the Bush administration than John Mackey is?

I’m shocked, shocked.

I keep saying that if the judge in the case shops for his own food, he’ll dismiss the FTC’s claims because he’ll know how easy it is to buy organic and natural food in places other than Whole Foods and Wild Oats. To which MNB user Bob Vereen responded:

Your comment about the judge shopping for food reminds me of how often it is that politicians, as well as lawyers (and now judges) reveal how out of touch with common sense and day-to-day life matters and reality they are.

MNB user Dan Onishuk weighed in:

Kevin, you are wrong about this merger. It should not take place. Prices will go up because there will be a definite absence of competition. Someone has to pay for the merger if the courts/FTC would allow it. My guess - "naturally,” the customer.


I think there is an equally strong argument that Whole Foods could use the increased buying power to lower prices.

But even if it does not, isn’t it only likely that Whole Foods would be raising prices? And that the likes of Wal-Mart and Safeway and Kroger and Sunflower and everybody else in the business would see an enormous opening for a more reasonably priced natural/organic foods operation?

More comments on Michael Sansolo’s piece the other day about “generation gapping,” as one MNB user wrote:

While Michael Sansolo’s piece “Generation Gapping” certainly captures the issue of “pop-culture,” he neglects to mention the “dumbing-down” that has been going on for a couple of generations. We live in a sound-bite/bullet-point/quick-take world because that’s all that can be handled by the attention spans of generations ‘X,’ ‘Y,’ and ‘Zzzzzzz.’

In our elementary, middle, and high schools, the Scientific Method has been replaced by “Scientific Consensus.” Political Science is taught by people who apparently learned theirs from John Lennon. U.S. History is at best glossed over and at worst rewritten. World War II, the most important event of the 20th Century, is covered in a week’s time (or less). Ask a Gen-Xer what started the American Civil War and he’ll likely tell you it was because “Lincoln freed the slaves” (for those who believe that to be the case, I would remind you that the war had raged for seventeen months before Lincoln signed the Emancipation Proclamation). I fear it’s just a matter of time before English 1A is replaced by Texting 1A. How does one text “We Are Screwed”?

But whose fault is it? The answer to that burning question is found by looking in the mirror.

The Baby Boomers who are lamenting the fact that it will be Gen X “taking care” of them in their golden years have forgotten that it was the Baby Boom generation who taught Gen X everything they don’t know.

After they first saved the world and then rebuilt it, the “Greatest Generation” (the name coined by Tom Brokaw for the WWII generation) made it so easy for us that taking most aspects of life for granted—a luxury the Greatest Generation never enjoyed—became second nature. Somewhere along the line we decided that we had to make things even easier on our offspring. School is easier. Work is easier. Making money is easier. Finding food is a lot easier. And now we are paying the price.

We had a story the other day about a possible new way to avoid skin cancer – combine strenuous exercise with caffeine consumption. The National Cancer Institute (NCI) has done research showing that when tested on mice, “the combination of exercise and caffeine increased destruction of precancerous cells that had been damaged by the sun's ultraviolet-B radiation.”

My first thought, however, was this: Who knew that mice got sunburned?

Now, a few people sent me pictures of hairless mice with severe sunburns. Which was, to be honest, really gross.

And some people wrote in to express outrage. One MNB user wrote:

Mice only get sunburned when humans use them for tests. Yes, I do not eat meat.

And another MNB user wrote:

Why is it in a modern world we continue to depend on ridiculous test on animals to make decisions about humans? What a joke!
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