Responding to yesterday’s Innovation Conversation, MNB reader David Spawn wrote:
I can’t wait for my enhanced experience with my “refrigerator, washer & dryer, coffee maker, filtered water pitcher, vacuum cleaner, electric toothbrush and more” to begin. The eye-opening outcomes will surely be worth the wait. I sure hope my coffee maker will tell me it needs to be cleaned instead of my seeing the grime build up in it and knowing it needs to be done and being reminded in a calm, monotone HAL 9000 voice:
Day 91 – “David, you really ought to run the de-scaler soon,”
Day 92 – “David, I told you yesterday that you ought to run the de-scaler soon,”
Day 93 – “David, why aren’t you listening to me? I’m sorry but I refuse to make coffee for you until you run the de-scaler”
Day 94 – “David, I left de-scaler in your coffee this morning. I hope it ruins the taste for you so that you will listen to me and follow my commands.”
The enhanced relationship with my filtered water pitcher promises only be even more enlivening I’m sure. Yours in old crank-dom.
Be a lot easier on everyone if you’d just de-scale your damned coffee pot.
On the subject of the American Express swipe fee ruling, MNB reader Jim DeLuca wrote:
While Amex charges the most swipe fees, all the rest have multiple rates. And the cards that provide "points" for customer use also charge the retailer more; some more than others. I think that the cards with the biggest "rewards" have the highest swipe fees. And for years I was unhappy that my little store was helping pay for my customers' vacations, etc. Then one day, I decided that I could not beat this, so I personally joined and got a credit card with the most points…
My Amex swipe fee is 2.3%.
The range for my Visa, MC and Discover is 1.48% to 2.95%. Most cards are around 1.9%.
At my scale of business, we do about $10k per month with Amex. If we could switch all of that to the 1.48% cards (not possible anyway), we would save $82 per month. If we could switch to the 1.9% cards, we could save $40.
My choice is to keep the Amex customers because while we might not lose all of them because they probably have a high reward Visa as well, but to cover that $40 loss, I just need to lose $110 in Amex business per month: probably 4 transactions in a month at our average basket size. I do think that Amex customers purchase more than an average basket too, so…
Welcome AMEX shoppers.
From another reader:
On the Amex issue, I can’t see where this even comes close to anti-trust as there are other payment options available - even other credit cards. I see this as a Coke and Pepsi play - years ago, these two companies tried to dictate shelf space to retailers based on contractual agreements. Retailers (Cub Foods here in MN) pushed back hard and even threw one out for a period of time (I think it was Pepsi - but I am not positive) until they all agreed to what equal shelf space meant - and that it meant the retailer controlled the equation.
Like Costco, if I was a retailer I would not accept Amex with this piece in their contract. Probably 25% of the places I go (outside of Costco) do not accept one of the cards - and most of these are Amex refusals. I carry an Amex - but never use it (back up only). This should never have made it to the Supreme Court - this is a retail control thing where only the retailer can halt it.
And from another:
I have had a American Express Platinum Card for more than 15 years. My $500 yearly fee covers $200 in airline credit, $200 in Uber credits, free access to airline lounges around the world and a host of other benefits. I receive three time the value of my yearly fees almost every year.
If a retailer does not want to take my card I simply go elsewhere. Costco is still begging me for their card but my benefits are better than theirs. Besides, my checks are linked to my American Express account and I receive credit when shopping at Costco. So much for their better card.
Regarding my criticisms of Target’s grocery offering, one MNB reader wrote:
Vendor funds, promotional allowances, still don't like them in this day and age. My company keeps buyers working until they reach a certain dollar amount of vendor funds in a given day, or you don't leave. Store management bonus on the obvious financial goals, in addition to items that are being pushed due to vendor funds. The produce department is starting to look like a grocery department, new vendor items every week, dry goods obviously. Not a great way to do business, and I'm sure you already know all this. Making money on the buy not the sell, not the way to go.
From another reader:
In terms of Target and talent, Target for years has sort of ignored “grocery store” merchandising. They do not hire for that talent at store level (and restrict the creativity of the ones they do hire) and they do not have a very solid understanding of it at corporate - at least as it applies to execution and the art or theater of in-store merchandising. I can’t say they don’t care but this is not a skill they value as much as they value the ability to squeeze the supplier community.
I would be more concerned with creating that inviting experience that solid merchandising creates, focus on building basket and then focus on building traffic for the grocery section. To clarify, they have not yet called me for advice (although I have offered my assistance a few times).
Finally, one MNB reader had this response to my piece yesterday about Stumptown Coffee in Portland, Oregon:
We were at the Stumptown in your photo last summer and I agree - it lost a little something with the upgrade.
I can’t wait for my enhanced experience with my “refrigerator, washer & dryer, coffee maker, filtered water pitcher, vacuum cleaner, electric toothbrush and more” to begin. The eye-opening outcomes will surely be worth the wait. I sure hope my coffee maker will tell me it needs to be cleaned instead of my seeing the grime build up in it and knowing it needs to be done and being reminded in a calm, monotone HAL 9000 voice:
Day 91 – “David, you really ought to run the de-scaler soon,”
Day 92 – “David, I told you yesterday that you ought to run the de-scaler soon,”
Day 93 – “David, why aren’t you listening to me? I’m sorry but I refuse to make coffee for you until you run the de-scaler”
Day 94 – “David, I left de-scaler in your coffee this morning. I hope it ruins the taste for you so that you will listen to me and follow my commands.”
The enhanced relationship with my filtered water pitcher promises only be even more enlivening I’m sure. Yours in old crank-dom.
Be a lot easier on everyone if you’d just de-scale your damned coffee pot.
On the subject of the American Express swipe fee ruling, MNB reader Jim DeLuca wrote:
While Amex charges the most swipe fees, all the rest have multiple rates. And the cards that provide "points" for customer use also charge the retailer more; some more than others. I think that the cards with the biggest "rewards" have the highest swipe fees. And for years I was unhappy that my little store was helping pay for my customers' vacations, etc. Then one day, I decided that I could not beat this, so I personally joined and got a credit card with the most points…
My Amex swipe fee is 2.3%.
The range for my Visa, MC and Discover is 1.48% to 2.95%. Most cards are around 1.9%.
At my scale of business, we do about $10k per month with Amex. If we could switch all of that to the 1.48% cards (not possible anyway), we would save $82 per month. If we could switch to the 1.9% cards, we could save $40.
My choice is to keep the Amex customers because while we might not lose all of them because they probably have a high reward Visa as well, but to cover that $40 loss, I just need to lose $110 in Amex business per month: probably 4 transactions in a month at our average basket size. I do think that Amex customers purchase more than an average basket too, so…
Welcome AMEX shoppers.
From another reader:
On the Amex issue, I can’t see where this even comes close to anti-trust as there are other payment options available - even other credit cards. I see this as a Coke and Pepsi play - years ago, these two companies tried to dictate shelf space to retailers based on contractual agreements. Retailers (Cub Foods here in MN) pushed back hard and even threw one out for a period of time (I think it was Pepsi - but I am not positive) until they all agreed to what equal shelf space meant - and that it meant the retailer controlled the equation.
Like Costco, if I was a retailer I would not accept Amex with this piece in their contract. Probably 25% of the places I go (outside of Costco) do not accept one of the cards - and most of these are Amex refusals. I carry an Amex - but never use it (back up only). This should never have made it to the Supreme Court - this is a retail control thing where only the retailer can halt it.
And from another:
I have had a American Express Platinum Card for more than 15 years. My $500 yearly fee covers $200 in airline credit, $200 in Uber credits, free access to airline lounges around the world and a host of other benefits. I receive three time the value of my yearly fees almost every year.
If a retailer does not want to take my card I simply go elsewhere. Costco is still begging me for their card but my benefits are better than theirs. Besides, my checks are linked to my American Express account and I receive credit when shopping at Costco. So much for their better card.
Regarding my criticisms of Target’s grocery offering, one MNB reader wrote:
Vendor funds, promotional allowances, still don't like them in this day and age. My company keeps buyers working until they reach a certain dollar amount of vendor funds in a given day, or you don't leave. Store management bonus on the obvious financial goals, in addition to items that are being pushed due to vendor funds. The produce department is starting to look like a grocery department, new vendor items every week, dry goods obviously. Not a great way to do business, and I'm sure you already know all this. Making money on the buy not the sell, not the way to go.
From another reader:
In terms of Target and talent, Target for years has sort of ignored “grocery store” merchandising. They do not hire for that talent at store level (and restrict the creativity of the ones they do hire) and they do not have a very solid understanding of it at corporate - at least as it applies to execution and the art or theater of in-store merchandising. I can’t say they don’t care but this is not a skill they value as much as they value the ability to squeeze the supplier community.
I would be more concerned with creating that inviting experience that solid merchandising creates, focus on building basket and then focus on building traffic for the grocery section. To clarify, they have not yet called me for advice (although I have offered my assistance a few times).
Finally, one MNB reader had this response to my piece yesterday about Stumptown Coffee in Portland, Oregon:
We were at the Stumptown in your photo last summer and I agree - it lost a little something with the upgrade.
- KC's View:
