business news in context, analysis with attitude

Even before Kate wrote her column this morning about Target's Lilly Pulitzer issues, one MNB user weighed in on the same subject:

I can’t quite understand Target’s POV during the entire thing. There are some observations I’ve made that just don’t add up in my mind. First off, they created a storm of demand for the products – online, magazine and TV adds. The look books were released weeks ago and I, like many shoppers, had it marked on my calendar. However, when Sunday morning rolled around and I got onto the website at 7am, I realized I couldn’t purchase anything I wanted. The website had already been taken down and everything was sold out. Pictures were flowing on social media of shoppers frowning at empty racks and items were showing up on EBay (don’t get me started on that!). So, you know what I did? Nothing. I didn’t go to Target that day. I knew I couldn’t find what I wanted, so there was no reason. The result is that Target lost some of my wallet that day. Had I gone I would have done a lot of additional shopping, but the fact that it was such a mess eliminated my desire to enter the store. That’s one piece I don’t understand. By not having better control of inventory, they kept shoppers from coming into their stores and spending more money. It just doesn’t make sense to me. If I am Target and have decided to sell 100 dresses at $30 dollars then I know the most I will make from the actual dresses is $3,000. What they are banking on (I am assuming) is that they will get even more money from shoppers once they are in a store. It’s a fair assumption, but it will only occur if shoppers actually come into the store. That motivation was eliminated by their (for lack of a better word) dumb decision to limit inventory (I’ve heard only two of each size was provided to stores). Sure they sold out and will see a bump from that, but that number is predictable based on what they had decided to put on shelf. Does they know how much they missed out on by shoppers avoiding the store all together?

The second piece I found irritating is the number of people calling into radio stations who talked about website hacks which allowed them to purchase items before they were supposed to be turned on for sale. Now, maybe they weren’t really hacks, who knows, but perception is reality. Target just reached a settlement for the data breach that occurred in 2013, now I am hearing that their site was hacked again, but this time for early shopping access? So….can I really trust them with my personal data again? Not to mention they created the demand, they knew it was going to be crazy – be better prepared with your infrastructure!
The Lilly collaboration was successful because it’s a well-known brand. More so than many of the designer collaborations they release. Not to mention, the styles are mainstream. I think you’d be hard pressed to find a woman who doesn’t appreciate a cute shift dress in the summer! So of course there was mass appeal. Many people were excited to engage with the brand because the price point exceeds their budget for clothing. Many of those who shop Lilly regularly viewed this as an opportunity to stock up on a brand they love and save a bit of money (I can buy 5 dresses for what 1 usually costs in!). The truth is, those people will still shop regular Lilly stores without blinking an eye (myself included). However, I will think twice before going back to Target. They created a frenzy and I don’t really see who benefited from it besides them. Which makes them seem selfish and focused on their interests alone.

On the subject of GMO labeling, and suggestions that it would be too expensive to put them on US products, MNB user Jessica Duffy wrote:

You know…..many U.S. manufacturers already label their products for GMOs to export them to other countries that require labeling. It really isn’t a valid argument anymore….

Also a little company called Whole Foods which shortly will make GMO labeling a requirement ... so if you sell to Whole Foods, you're going to have to make the transition anyway.

Regarding Chipotle, and a lot of the positive coverage it has received lately, MNB reader Peter Talbott wrote:

Fascinating to me how we fawn over Chipotle.  If I told you there was a restaurant in your neighborhood that (according to the New York Times this week), had an average order of 1070 calories, 2400 mg of sodium, and 75% of the daily recommended intake of saturated fat, you wouldn’t even ask what it was called….

Another reader had a similar observation:

Chipotle’s GMO position presents their products as nutritious and healthy, but in reality, the typical burrito with a protein, rice, beans, and salsa is around 1800 mg in sodium and close to 900 calories.  (I would bet your readership has not reviewed Chipotle’s actual nutrition.)   And as high sodium leads to high blood pressure which leads to all kinds of health problems, Chipotle has an opportunity for a new slogan - “GMO Free Coronary Heart Disease”.

MNB user Benjamin Loy wrote:

I agree with Chipotle’s intentions and wish them luck in finding a reliable source of GMO-free corn. With 93% of the US corn crop consisting of GMO product even if they were to find a GMO-free source the odds of this not being mixed with GMO-corn in a silo or fertilized with GMO-free pollen will probably be very slim if any GMO corn exists in the surrounding area.

On the subject of Walmart's proclaimed new focus on fresh foods, one MNB user wrote:

Will have to do and prove to me that their produce is fresh and healthy before I will even consider trying it...again.

Does not save me money to have crappy tasting produce, full of poisons and will rot within days.

I will pay more in the short run to , be sure that it is healthy, and GOOD tasting. More $$$ up front, but save in the long run, not just in $$$.

From another:

Wal-Mart's produce department is the most disappointing of all their departments. Most of their produce does not look fresh in the store. They really need to do a better job in this area. I won’t buy any of their produce as it will more than likely be unfit to eat before I eve get it home, much less than after a day in the refrigerator.

A few MNB readers had some thoughts about the pilot program that will have Amazon using DHL to deliver packages to the trunks of Audi automobiles. One wrote:

I’ve been following this since Volvo started testing in Europe. There seem to have been very few problems and good customer acceptance of the technology and service. While the variable routing challenges of finding a car could be daunting, the fact is that most of these deliveries are made to vehicles sitting in their usual daily parking spot from 9-5 M-F. Now if they figure out perishables…

From another:

Wouldn’t it be cool if they combined this with the drone program and delivered packages to rolling vehicles on the autobahn?

Regarding Tesco's decision to significantly trim its grocery selection, MNB user Tom Herman wrote:

I’ve read the book and seen this movie.  I know exactly how it’s going end.  Name me one retailer that drastically reduced SKU’s and had improved sales and earnings?  Enough said!

Tesco also had to admit that its Ireland profits were not what it had claimed ... because it had claimed supplier payments as profit, which is not the same thing.

MNB user Scott Proch wrote:

Ex-Fleming associate here.  Warning! Warning!!
MNB user Gregg Raffensperger wrote:

I guess they learned well from their US brethren....sad.

We reported yesterday about how Kroger will acquire most of dunnhumbyUSA from the Tesco-owned United Kingdom-based analytics firm, a move that is said to give Kroger greater flexibility and give Tesco the ability to sell off dunnhumby as it looks to reduce costs and raise cash. A new Kroger-owned business called 84.51° will operate with those assets as its foundation, with the name coming from the longitude of the new entity's location.

One MNB user had another explanation:

Before I saw your explanation that 84.51 refers to the company’s longitude, I Googled “84.51” and found this synchronistic reference to 24 CFR (Code of Federal Regulations) 84.51 - Monitoring and reporting program performance.


And finally, from MNB reader Mary Manning, this reaction to yesterday's posting of the John Oliver / "Last Week Tonight" piece about the high cost of low prices:

This segment about retailers and their pursuit of lower prices which results in the exploitation of workers overseas was right on target. One part Oliver mentioned is that we as consumers bear a huge part of the responsibility for this exploitation. We all need to think about spending more on products that we know are manufactured in a responsible way, and avoiding buying goods that have prices that are "too good to be true". In my opinion, this point just never gets enough attention in the media. Also, I wish he didn't swear so much, so I could show this to my students.

I kind of wish he didn't swear so much, too. But I'd still show it to college students ... there are no words with which they are unfamiliar, and I'd just warn them about it at the beginning. If they want to leave, no harm, no foul.
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