Wednesday Morning Eye-Opener: Reports From The E-Culture
Published on: February 2, 2011
Two interesting news notes that are eye-opening in terms of the cultural and technological shifts that are affecting us all ... even if we don't know it.
• According to eWeek, Amazon.com says that it is selling more Kindle e-books than it is paperback books - 115 e-books for every 100 paperbacks. The news comes six months after Amazon said it was selling more e-books than it was hardcover books.
And here's the kicker: eWeek also notes that "research firm Gartner estimates that e-reader sales will increase 68.3 percent in 2011, to more than 11 million units."
Which means that considerable growth - not just in the Kindle, but in all of its competitors - remains.
• The other story is from the Wall Street Journal and seems almost unfathomable:
"The Internet is about to run out of new addresses, a milestone that is spurring Web giants like Facebook Inc. and Google Inc. to develop new versions of their sites and prompting carriers like AT&T Inc. and others to upgrade networks.
"This week, the organization that oversees Internet addresses is expected to dole out its last batch of existing Internet protocol addresses, a step akin to telephone companies running out of numbers to give customers."
The Journal writes that "Internet protocol addresses are numerical labels that direct online traffic to the right location, similar to the way a letter makes its way through the postal system. Such routing is generally invisible to users—when they type in www.facebook.com, for instance, they are actually connected to a computer located at the numerical address 66.220.149.32. It is those numbers that are in dwindling supply.
"While there is a new Internet addressing system ready to go that greatly expands the number of addresses, it isn't compatible with the existing system. So in June, Google, Facebook, Yahoo Inc. and others will switch over to the new addresses for one day in the first wide-scale test of the new network, dubbed IP version six, or IPv6."
A permanent shift to the new network, the Journal reports, which is akin to the move to 10-digit telephone numbers, "is necessary because of a quirk in the way the Internet is designed. The Web is made up of networking equipment like routers and servers that decode electronic signals using an addressing system developed more than 30 years ago."
It is not as if the web is in danger of collapsing from its own weight ... but it is a reflection of precisely how enormous the internet - which many of us take for granted - has become, and how fast.
These stories paint an unmistakable picture of a cultural and technological shift with profound implications for how consumers shop, how people sell, and the very nature of ongoing communications between buyers and sellers. And if you're not paying attention, trying to figure out how to keep up, then you really are operating with your eyes closed.
In San Diego, The City Council Blinks
Business Week reports that, as expected, "the San Diego City Council has repealed an ordinance that strictly regulated construction of Walmart Supercenters in the nation's eighth-largest city." The repeal occurred because Walmart had collected enough signatures on a petition to force a referendum on the ordinance; the City Council decided that rather than spend millions of dollars that it does not have on a special election, it made more sense to simply repeal the regulations.
Walmart has said that while it does not have locations identified, it would like to build 12 stores of varying sizes in San Diego over the next five years.
Yet another way in which San Diego is different from Chicago and New York.
The politicians apparently have less backbone. (Or, I guess you could argue, greater fiscal sense.)
At the moment, however, looking out my window at the ice storm and seeing the blizzard hitting the Chicago on the TV screen, there isn't much question in my mind that San Diego seems like a much better idea...
What Would They Tell Benjamin Braddock Now?
Interesting story in the Arizona Republic the other day about how a Mesa, Arizona, man, Danny Clark, has come up with a way to make plastic bottles biodegradable, which he believed "would reduce the impact on landfills, curb roadside litter and reduce the amount of plastic garbage that eventually washes into the oceans."
According to the story, this environmental and entrepreneurial initiative "has run into opposition from a large and unexpected source: the $400 billion recycling industry, which fears that making plastic bottles biodegradable will reduce the stream of plastic refuse used to make everything from carpet to clothing to new bottles. In addition, the industry fears that changing the makeup of plastic bottles could make it more difficult to recycle them.
"With plastic-bottle sales already slowing and only a small amount being recycled, the industry is meeting threats to its profits head-on, actively campaigning against attempts ... to make bottles biodegradable."
File this in the "no good deed goes unpunished" file.
The shame is that two initiatives with positive environmental implications end up at loggerheads, But I suppose that there isn't much you can do about that when people's livelihoods are involved.
This will shake out the way it is going to shake out. But one piece of data from the Republic story stands out to me - that only "28 percent of bottles manufactured in the U.S. end up being recycled, the Association of Postconsumer Plastic Recyclers said. The other 72% wind up in landfills or as litter."
I think I'm with Danny Clark on this one.
Sources Tell MNB…
...that a senior executive with C&S Wholesale Grocers shortly will be departing the company to take a job with Supervalu, despite the feeling in some circles that this is like getting on the Titanic mid-cruise.
The announcement is expected to happen soon, and sources say that the move reflects Supervalu's conviction that it cannot let things get worse ... not only does it hurt the company's value, but also any chances it might have at selling off some of its operations at an acceptable price.
Canned Initiatives
The Associated Press reports that there is an interesting move taking place in some segments of the craft beer brewing community - to metal cans.
According to the story, one example of this shift is Maine's Baxter Brewing, where founder/president Luke Livingston says that "cans are good for the beer, the environment and consumers, because they're easy to take to places like camping trips and golf outings. Still, cans in some quarters have to overcome the stereotype of chugging contests or a beer-bellied John Belushi crushing cans on his forehead in the 1978 movie Animal House."
Livingston says that his retort to doubters is that "draft beer comes out of a keg. And what's a keg? A keg's just a big can, it's a big metal container."
Furthermore, "cans improve quality, Livingston said, because the beer isn't tainted by light and is exposed to less oxygen than bottled varieties. They're also more conducive to bringing on canoe or camping trips, to the beach, on boats or on the golf course.
"As for the environment, Livingston said, cans take less fuel to ship because they are lighter than bottles. Consumers, he added, are twice as likely to recycle cans as bottles."
You gotta be kidding me.
First, they tell me that wine bottles with screw tops are as good or better than those with corks.
Now they're saying that beer is as good in cans as in glass?
This is almost more than I can handle. The very foundations of my existence are being shaken.
A Blueberry Is A Blueberry Is A Blueberry. Right?
Shine from Yahoo! has a story noting that while a lot of companies promote the presence of blueberries - a "superfood" high in antioxidants and Vitamin C - in their products, not all blueberries are created equal.
"Have you actually read the labels on those supposedly blueberry-filled products?" Shine asks.
"Some of them, like Target Blueberry Bagels and General Mills Total Pomegranate Blueberry Cereal, might be fooling consumers into thinking the food has something it doesn't. While manufacturers state they're still within the U.S.'s admittedly loose labeling laws, many of those blueberry-promoting products are made without genuine blueberries.
"The Consumer Wellness Center recently produced a Food Investigations video that looked at the actual blueberry content of several widely available packaged foods. This expose shows how Kelloggs, General Mills, Betty Crocker, and other brands advertise plump, whole blueberries in their cereals and mixes, but deliver dextrose, corn flour, partially hydrogenated soybean oil, sugar, citric acid, artificial flavor, and food colorings Blue #1 and Red #40 instead.
"As the video states, 'When consumers buy blueberry cereals, muffins, and mixes, they're under the impression that they're buying real blueberries. No ordinary consumer realizes they're actually buying blue coloring chemicals mixed with hydrogenated oils and liquid sugars. That's why this common industry practice of faking the blueberries is so deceptive'."
I have no doubt that the companies are living within the letter of the law, but I also think that if these kinds of stories get any traction in the mainstream media, it won't make the food industry look very good ... and will lead to more calls for stricter regulation and more specific labeling.
Sainsbury Continues To Gain Ground In UK
The Wall Street Journal reports that U.K. supermarket chain J Sainsbury PLC was the only retailer to increase its market share in the 12 weeks ended Jan. 23, according to Kantar Worldpanel market share data Tuesday.
"The market share of the U.K.'s No. 3 supermarket retailer rose to 16.6% over the 12-week period - from 16.3% a year earlier - its 24th consecutive rise."
Tesco and Walmart-owned Asda Group stayed even with 30.5 percent and 16.9 percent, respectively. William Morrison Supermarkets saw a slight drop from 12.5 percent to 12.4 percent, and Waitrose saw an increase from 4.1 percent to 4.2 percent.
The Journal writes that "discount retailers Aldi, Netto and Lidl market share rose to 6.1%, from 5.8% a year earlier.
Amazon Looks To Compete With Netflix
The Los Angeles Times reports that Amazon.com "has held talks with the Hollywood studios and several independent companies about acquiring library content for a subscription movie streaming service similar to Netflix, according to people familiar with the matter.
"The online retail giant has already scooped up rights to some independently produced movies but has yet to strike a deal with any of Hollywood's big six studios, those people said.
"Amazon has told studio executives that the company wanted to launch the service in early to mid-February but has delayed those plans until at least later in the month to deal with some technical glitches and to acquire more content. It is still unclear when the service will go live. Studio executives say they are weighing several issues as they consider signing up with Amazon, including whether the retailer will be willing to pay as much for content as Netflix, and how it might affect the sale of DVDs and the value of current and future distribution deals with cable networks."
The simple fact seems to be that Amazon wants to compete with everyone that sells anything. Be afraid. Be very afraid.
• The Women Grocers of America (WGA) announced that Stephanie Skylar, president/CEO of Chief Super Market, Inc., a family-owned, regional supermarket chain with 12 stores in northwest and west central Ohio, will be presented with the WGA Woman of the Year Award on Tuesday, February 15, 2011. Skylar will receive her award during the Chairman's Dinner and Gala at the 2011 National Grocers Association (N.G.A.) Annual Convention and Supermarket Synergy Showcase in Las Vegas.
According to the announcement, "the WGA Woman of the Year award recognizes an industry woman whose leadership has contributed to the success of her company. This woman must be a member of the National Grocers Association and other industry organizations whose participation and involvement contributes/contributed to the overall well-being of the grocery industry; and must be a community-focused citizen committed to serving the needs of her neighbors, associates and customers through involvement in community and civic affairs."
• The BBC reports that the UK Advertising Standards Authority (ASA) has told Walmart-owned Asda Group to change its advertising that promised "to refund customers the difference during their next shop if they found groceries cheaper at the other major stores." Tesco and William Morrison Supermarkets complained that the comparisons were too limited to be legitimate, and the ASA agreed.
Your Views: Music To Our Ears
Got the following email from MNB user Tom Devlin:
Being one of your loyal MNB fans I had to share a pretty funny visit to my local Apple store this week. I went in to purchase some USV/USB cables for our office and I have a business account with Apple so a few of the employees know me.
For some reason the strip on my American Express card was not working and at first they did not know what to do. In supermarkets when this happens they take a plastic bag in case there is some dust on the card and run it through the scanner. Well this did not work, then they called in a senior manager and she knew in the back room that had the machine where you did it manually with a carbon receipt and then signed it with a pen that had ink in it.... What humored me the most was two customers who were at the Genius bar watched and laughed stating they have not seen that machine in years.... The best part was three of the employees stood around and watched the show and the process with excitement. After the transaction was completed, one of the young girls who worked at Apple said and I quote.... Is that how they really use to do credit card payments ??? WOW THAT IS SO COOL !!!......
Then the topper.... a co worker says..... Then how did they send the e-mail receipt ??? !!! Maybe not funny for all but you had to be there... I am only sending this to you as you share your retail visit stories.... Today you have to smile at the little things in life we take for granted...
Great story. Thanks.
MNB took note yesterday of a Crain's New York Business story about Walmart continuing to make the case for why it should be allowed to open stores in NY, and opponents continue to fight back. According to the story, "Walmart Free NYC, a coalition of labor, small businesses and community groups, blasted the retailer Monday for its recently-announced partnership with Jackson-Hewitt, a tax preparation firm that dishes out refund anticipation loans to low-income people. The loans, which carry sky-high interest rates, drain $54 million a year from the city economy, according to a report by the Neighborhood Economic Development Advocacy Project."
One MNB user responded:
I truly don't have an opinion one way or the other about where Walmart should enter a market, that is truly between Walmart and that community. I do take exception with an argument that entering an agreement with a tax preparation provider somehow takes advantage of the lower income and serves as a valid reason to prohibit free trade.
I think this is symptomatic of our current economic problems. Too many home loans went bad because of the predatory habits of the financial institutes, REALLY???. It takes two to tango, and my family was in a position to take a whole lot more money than we needed during the housing "boom". But we didn't. We took what we needed, and we only took what we knew we could payback. Did someone charge me for using my own money, you betcha, that's what they do. It's my job to decide if it works for me or not, and if I make a poor decision (and trust me my road is littered with plenty of those), then I have to live with it, I have to decide how to work through it. It's not the government's nor other taxpayers', who by the way had nothing to do with my situation, responsibility to help me out…it's up to me.
I say all of this because I believe it's completely asinine for any community to take a stance that our people are too poor, and too disadvantaged to help or protect themselves from big business. Truly, I'm sick of it, there are plenty of really good reasons, sound reasons to decide that Walmart doesn't work in a community, line THOSE reasons up on one side of the ledger, and all the good reasons on the other and then decide what works for them.
Another MNB user chimed in:
I think this is a HUGE mistake. New York is not Walmart country and the internal costs (will ) eat them up. To make this work they will have to cut even more on expenses to help subsidize this move. Looking at the risk vs. reward, this is not a good move.
Got a number of emails responding to Michael Sansolo's Tuesday column.
One MNB user wrote:
In this morning's Sansolo Speaks piece relating to Will.I.Am, the singer responds to a NYTimes interviewer's question regarding the alleged overuse of drugs & alcohol in nightclubs; in part of his reply, he says "...I could go to a restaurant and eat all the wrong food and get freaking diabetes and high cholesterol." So, that's his answer to the charges being leveled against clubs? Simply going on the attack against restaurants? While ignoring the entire club allegation? How is this supposed to be a compelling rebuttal?
I have to believe that to the singer, his reply is completely definitive, and puts to rest any residual bad feelings about clubs; he & I would disagree here, however.
This method of rebutting someone else's contention on a subject -- simply throwing out an example of "similar bad behavior", frequently from the questioner's "realm" -- and letting it go at that (i.e., never addressing the alleged issue in the original question) seems to have become increasingly prevalent in discourse anymore, and while part of me finds it kind of humorous (and pathetic), another part of me is rather riled by it because I have to imagine that the replier (Will.I.Am in this example) probably goes away thinking he completely shut down the issue about alleged abuse at clubs, simply by throwing restaurants under the bus, whereas to me, at least, he has accomplished nothing of the sort. If I had been the questioner in this instance, and Will.I.Am had offered me the same reply, my reply to him would have been "...okay, so you're either saying both clubs & restaurants are guilty, or they're both innocent? I can go either way with you here; the only thing I can't accept -- but I'm afraid is exactly what you would have me believe -- is that restaurants are guilty, and yet at the same time, clubs are innocent, when the subject really amounts essentially to 'similarly bad behavior'. That just won't wash."
I have observed this debating device employed with increasing frequency in recent years, over a time when I would say the "Big Sort" (ref. a KC piece from sometime last year) was really taking hold across America, and more often than not, seems to be employed with a verbal ferocity that seems to dare the questioner to rebut back. Well, for my money, a rebuttal back is exactly what is being called for. I have no qualms with the singer's assertion that restaurants may indeed "be guilty" of serving sub-optimally healthy fare; that doesn't diminish in the slightest the original assertion that clubs "are guilty" of looking the other way at instances of drug & alcohol abuse. The restaurant diversion in the original reply does nothing to dismiss the charge against clubs, nor should it. The sad societal reality that is overcoming us, I fear, is simply that too many "questioners" anymore are simply willing to accept these lame responses from people being questioned without pushing back against them, and demanding a meaningful answer. So that said, to Will.I.Am, my reply would be "Okay, Will, we [you & i] are either both right, or we're both wrong, but at a minimum, in no event, are you right and I'm wrong. That work okay for you?"
MNB user Daniel McQuade wrote:
Sansolo Speaks? to Who? How old is he? He is embarrassingly out of touch, if he has children I feel bad for them to have such an "uncool" father.
He lost a lot of credibility with me.
But another MNB user wrote:
Great article…. Interesting perspective…. I'm a huge Black Eyed Peas fan and avid listener. They make good, feel good music. I'm 31 and from NY, so I was fully engrossed in the rise of Hip Hop / Rap during my childhood and college time frame and to some degree I still am. The interesting things is that overtime I've diverged from historical hip hop/rap and moved a lot closer to the BEP type of music. (Still a huge Jay Z fan though…) It is more uplifting. More energetic. More positive and to WIA's point, it makes you wanna get up and dance, socialize and experience the music with other people ... If you think about the buying power of the next generation as Baby Boomers exit the primary family shopping occasion, Music is a language that speaks and sticks. Its universal and it brings people together. That's something both Brands and Retailers need to pay attention to more.
And, from another MNB user:
Nothing wrong with Black Eyed Peas. A great choice for SuperBowl given their fan following! The first time my tween daughter played Boom Boom Pow, I thought the lyrics were ridiculous but found myself humming the song, now it's even a ringtone on my phone for some callers (to warn me to not pick up that call!) But that aside my kid introduced me to the likes of Lady GaGa, and even rap, I am quite taken up with some new Eminem and Usher songs.
At the same time I introduced her to Pink Floyd, Beatles, Bon Jovi, Springsteen, Doors, Coldplay and hey, she even has some of those songs on her iPod now. Every time I find myself going, "this is not real music" when she plays me one of her songs, I force myself to listen, and I have to admit that some of them have grown on me! I guess we have to take the same tack with new trends, consider their potential before we dismiss them as flavor of the month!
On another subject, one MNB user wrote:
In your Eye-Opener today (Tuesday), you mentioned a magazine company you worked for that would routinely follow layoffs and similar bad news with internal meetings seeming to be brimming with "turned the corner" optimism. I used to work for a retail company that seemed to similarly always be in financial peril, and we [the employees] got to noticing that in its quarterly press releases announcing the last quarter's results, despite there always being more than enough bad news to report, the releases always seemed to end on an undeniably positive note...something we rank & file types came to believe less and less. After enough of these "bad sandwich" press releases came out, we began to speculate that one day, the report would end with a comment to the following effect: "While we are disappointed that in the most recent quarter, same-store sales were off 10%, and we lost $50 million overall, we did see a definite uptick in paper clip sales during the final 15 minutes of the quarter, and see this as a clear positive trend going forward."
Needless to say, that trend never materialized into anything, and the company liquidated. 'Nuff said.
Responding to my stories about Taco Bell being sued for not having enough beef in its "beef," MNB user Lance Hollis McMillan wrote:
Bill Maher said it best. You get what you deserve when your meal costs less than gum."