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Letter to the editor

Six highlights from the National Retail Federation convention

By MARK ALBRIGHT, On Retail
Published January 16, 2008

As the retailers prepare for what may be a rough year, Mark Albright reports from the National Retail Federation's 97th annual convention in New York. Some highlights.

1. Many retailers are trying to figure out how to exploit the popularity of social-networking sites online without appearing lame. But are they ready for mob shopping?

That's a growing phenomenon in China, where sites with names such as "teambuild" gather groups of 400 to 500 customers eager to buy hot electronics such as TV sets or Wii game systems. The site then auctions off the group's willingness to buy immediately in return for a 10 to 30 percent discount. Group members are alerted by Internet or text message of an exact time and store to show up to claim the bargain.

Sometimes they appear in mass at a store with no notice, then present the store manager with a take-it-or-leave-it proposal.

"It's a safe bet you'll see this come to the states soon," said Pat Conroy, vice chairman of Deloitte Research.

2. Marketers have been tough in protecting any depiction of their precious brands for decades, but that's going by the wayside in the age of irreverent YouTube videos.

Consider how Coca-Cola handled those guys in white lab coats and goggles whose Diet Coke-mixed-with-Mentos geyser video got a professional juggler and lawyer from Buckfield, Maine, invited to network talk shows after their handiwork generated 4-million page views in a week.

Every few years somebody discovers that several Mentos plunged into a 2-liter Diet Coke erupts in a 20-foot flume within seconds. Coke either looked the other way or wrote a cautionary letter. However, two days after the video of the choreographed, precision fountain of 101 Diet Coke bottles and 523 Mentos went viral, Coke signed the creators up to make a promotional video.

3. Procter & Gamble Co., the maker of everything from Crest and Duracell to Tide, is getting into the carwash business.

The first Mr. Clean Performance Car Wash opened in suburban Cincinnati a few months ago, aimed at finally creating a female-friendly carwash that also sells a lot of P&G products. P&G is investigating selling franchises for its Ritz-Carlton version of a carwash that cost $2-million, twice the going rate.

Features in the sparkling white customer lounge are joy sticks for kids that shoot colored suds and rinse sprays at vehicles being washed, a coffee and snack bar selling Millstone Coffee, and a choice of three flat-screen TV broadcasts. A big digital sign out front is updated in real time with the exact investment of time a carwash would take at the moment.

4. It used to be unthinkable that a retailer would stop selling products a fifth of all Americans buy regularly.

But Wegman's, a regional supermarket in the Northeast that is Publix's main rival in national customer loyalty polls, decided last month to stop selling all tobacco products.

"Wegman's acted on a reflection of what most of its customers think about smoking," said Fred Balboni, director of IBM's retail practice. "That's' different."

5. Christmas holiday spending got even worse Tuesday when the U.S. Commerce Department put out December numbers for sales of general merchandise. The agency also lowered the previously released estimate for November sales. That means what would have been a 4 percent gain for the two-month season instantly deteriorated to a 3 percent gain.

6. Ben Stein - onetime game show host, Nixon speechwriter and now a New York Times economics columnist - said Ben Bernanke is the first Federal Reserve chairman in history committed to using low interest rates to fight oil-price-induced inflation. That's one reason Stein thinks a recession is "extremely doubtful" in this election year.

Mark Albright can be reached at albright@sptimes.com or (727) 893-8252.

[Last modified January 15, 2008, 22:45:03]