MNB reported on how the UFCW is campaigning for a national ban on electronic shelf labels, calling them a vehicle for “surveillance pricing” that will cost jobs and raise consumer prices.
I commented:
The UFCW is wrong on this issue, as are the lawmakers siding with the union.
Not in their opposition to price gouging. But in their view of how technology affects the issue.
It simply is unreasonable to expect that retailers will or should abandon the use of technologies that allow them to be more efficient and effective in how they adjust pricing.
I’ve said this here before, and I’ll say it again. Electronic shelf labels allow retailers not just to raise prices, but to lower them. Retailers and the trade associations that represent them have not done a good enough job of stating this truth plainly and effectively.
The basic tenets of capitalism allow retailers to raise and lower prices, and to maximize their profits. Plus, every price increase is not price gouging. And the realities of the marketplace are that if one retailer raises prices unreasonably, other retailers will step in to offer lower prices. It’s called competition.
When price increases cross the line into gouging, there should be laws to handle that. If retailers collude to artificially keep prices high across the board, there should be laws to prevent that. And are.
I don’t think AI is any kind of panacea – I think I’ve made that pretty clear here in the past. But I’m not sure it is practical or reasonable to say that retailers should not use it.
One place where I do agree, in principle – the use of facial recognition software ought to be disclosed by stores. (And not subtly.)
Look, I understand and appreciate the impetus behind these initiatives. But from my perspective, they are too broad and unnuanced.
MNB reader Ed McCormick wrote:
Excellent view on the UFCW attack on ESL. The consumer will benefit, the stores will benefit.
Thank you do expressing that so well.
One MNB reader responded:
Reminds me of the time and argument of taking individual price markings off products when scanners were introduced. Same argument, hopefully the same result. I remember Giant Landover removing individual price markings with a lower price campaign saying they were passing on the savings to consumers.
From another reader:
Isn’t the original (and largest font size) ESL, the gasoline stations price signs?
How is this any different?
From yet another reader:
Kevin, call it what it is. The UFCW opposition to electronic tags is all about a reduction in associate hours. Each week traditional supermarkets spend countless hours switching out shelf tags. This work contributes little productivity in operations nor anything to customer service but must be done in prep for each new ad. Resources that can be better applied to customer facing tasks. Kohl’s has been operating with electronic tags for years with no complaints of price gouging. If the unions want higher wages work with the chains to raise productivity.
And one more:
Any retailer who routinely increased highly focal, key items to high levels would be committing competitive suicide. Smart retailers set prices related to their key competitors, considering how likely it is that the consumer knows the price of the item and how important the price is to them. You must be competitively priced on a 2 liter of Coke and a pound of ground beef and not so much on shoe polish or some exotic fruit. The fact that these prices can more easily be changed using ESLs does not mean that retailers will price gouge on key items. They won’t.
Responding to Michael Sansolo’s column this week about how Southwest Airlines has sabotaged its brand identity by changing policies that were seen as reflecting differentiated values, one MNB reader wrote:
As we all know it’s always about the money. They have smashed their brand. They are now just as complicated as all the other airlines. I live were the main company is Southwest. I have flown it for years. I have loved it. Now I will source flights before I just used SW. gain the customer is not considered. I would like to see the survey numbers along with the ages of users, and percentage of users by age. I can tell you as a “seasoned” person I like it just the way it was!!
Thanks for letting me vent. I agree with you 100%
MNB reader Bob Wheatley wrote:
You have unwrapped a topic of the ages – differentiation – in your download on Southwest’s il-advised move to shave off the edges of its legacy brand positioning. As you point out, maybe they saw the revenue angles from mainstream carriers on how to extract more dollars from travelers and said we should drink from that trough. In doing so they violate the sacrosanct, ‘law-of-physics’ rules about brand value and position in pursuit of a jack-of-all-trades move and now flirting with master of none.
The lesson here is so significant and lost on so many brands and retailers that forget about the uniqueness that existed possibly at their inception and in the relentless passage of time to try and appeal to wider audiences, moves the business behavior to the vanilla middle where that uniqueness is submerged while commoditization of their business persona takes hold.
The biggest mistake in here is not so much that differentiation isn’t understood, but that so many tend to land on trivial, marginal bits of distinction thinking this constitutes victory as a differentiated brand. All of us as humans share in our DNA a penchant for recognizing what’s truly different, what breaks the rules, what follows a different drummer. I prefer to call it pursuit of radical differentiation because the push seems necessary in the midst of far too much sameness and similarity in how retailers especially go to market.
Moreover, what Southwest believes about these moves in my view is flawed thinking. It steps their brand further away from why they were successful in the first place. The call to action here is ‘be different’ and I mean truly different by violating the category rule book at every possible intersection. It’s the only way to own real estate in the consumer’s brain that can be sustained over time. Takes strong leadership to make that happen and stick with it.
Thanks for raising this important issue.
Another MNB reader wrote:
So true !!!
Current system is a mess.
I did a FaceTime the other day about a new study defining how many fathers and daughters have difficult relationships – it had little to do with business, but I thought the numbers were remarkably sad.
One MNB reader responded:
Amen to this story. I’d be CRUSHED without my relationships with my 3 girls.
Be present, be engaged, tell them you love them (frequently).
I did a piece last week pointing how the nation’s income disparity is reflected in how some high-end grocers manage to succeed even as many suffer from challenging economic circumstances, creating what is called a ‘K-shaped’ economy, in which higher-income households pull ahead while lower-income households fall further behind.
I commented:
Forget a K-shaped economy. I worry that we’ve created a Jenga economy, which may be economically unsustainable, not to mention culturally divisive over the long term.
I agree with Marion Nestle’s observation, that everything old ends up being new again. It has to be 30+ years ago that I visited what I think was called Blackhawk market, in Northern California, where the prices were off ther charts and the shopping carts (if memory serves) were plated in gold.
There always have been stores that catered to the most affluent in our society, and that in many ways offered aspirational models for other retailers. Nothing wrong with that, but somehow this moment seems different. Maybe it is the Journal observation that “Gen Zers and millennials are swimming in student debt and may never own homes, but they’re splurging on gut-healthy juices and rotisserie chickens.” Nothing wrong with splurging on a really great chicken from a supermarket, especially if you have a little money but not enough to buy a house; but seen within the context of the Globe story, I have to wonder if this cohort is spending money it does not have. Hence, the growth of the buy-now-pay-later segment, which strikes me as emblematic of our Jenga-like economy.
I’m not sure what retailers should do about this, except to be sensitive to the winds of change and understand that the best way to go forward is to be relentlessly customer-centric. Listening. Asking questions. Paying attention to the bigger contextual picture, not just what is happening in the aisles.
I’m not an economist, nor am I a futurist. But I am a pretty good guesser, and there’s something about this situation that strikes me as problematic. In a business sense, but also culturally and politically. When I read these stories, I keep hearing a song in my head:
Do you hear the people sing?
Singing a song of angry men?
It is the music of a people
Who will not be slaves again!
When the beating of your heart
Echoes the beating of the drums
There is a life about to start
When tomorrow comes!
MNB reader Jackie Lembke responded:
Love the “Les Miserables” reference. I also feel that beat, mostly because it seems those at the top are unable or unwilling to see those struggling. It is like they have both blinders and noise canceling headphones on. I am not sure where this is all headed, I am not even sure what all this is, but the drums are beating.
MNB reader Deborah Faragher chimed in:
Great wrap up, Kevin, invoking Les Miz!
Got a number of these – lots of “Les Misérables” fans in the MNB universe.
MNB reader Tim Callahan wrote:
A sad story that seems to have a larger divide everyday!
Agreed.
On Tuesday, I did a FaceTime suggesting that when a customer brings a competitor’s shopping bag into a store, that store’s checkout person ought to be empowered to offer a trade for a better bag.
One MNB reader responded:
Your idea for replacing reusable shopping bags is an excellent way to encourage loyalty. Here in New Jersey, stores are legally not allowed to give out paper or plastic bags. All shoppers need to use reusable bags. If they don’t have one, it is offered for a price. I don’t think retailers in New Jersey will be able to get over not charging for their reusable bags.
From another reader:
I think the bag idea is a great one. In a way it reminds me bring your deal in and we’ll beat it with a better product (Cell phone coverage battles). Your idea is better though.
In sort of the same view, but not, as a manufacturer I would be in stores all the time. Checking my products and competition, lay of the land per se. When I had the opportunity, if a consumer was in front of my category and deliberating, I would offer to buy my product for them to try (I didn’t spend allot). Of course they would accept my offer!
One at a time.
And MNB reader Phil Herr wrote:
When the era of reusable bags started, I tried to sell my clients (primarily center store goods) on creating bags as a publicity/advertising opportunity. To my chagrin, none took me up on it.
P.S. still look for your newsletter every weekday — force of habit.
Me, too – I sometimes have to remind myself that I’m not writing everyday.
The post Your Views: Do You Hear The People Sing? appeared first on MNB.
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