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    Published on: October 10, 2018

    various Canadian casinos offering real money games reports that France-based supermarket retailer Casino has opened a new checkout-free store in Paris, featuring “image recognition technology” and allowing “shoppers to buy with an App and pay online or at a self-service check-out.”

    Called Le Casino 4 and located near the Champs-Élysées, the store “has three floors and offers 6,000 products. It’s open 24 hours, seven days a week. And it boasts a selection of organic products, a ‘smart wine and spirits cellar,’ and sample dishes prepared by a chef. There is also a showroom for products from French ecommerce site Cdiscount and a free coworking space.”

    The story notes that customers can take products home but also “have the option of ordering home delivery through a digital wall, where they can scan items and schedule delivery.”

    KC's View:
    I obviously haven’t been in this store, but this strikes me as a good example of a retailer looking to find ways to reinvent itself … which is something that every retailer needs to consider. Not every experiment will succeed, but remember the Jeff Bezos line: “It isn’t an experiment if you know how it is going to turn out.”

    Published on: January 8, 2020

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    Published on: January 8, 2020

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    Published on: January 8, 2020

    Booker T Washington Founder of Tuskegee Institute Using Education as a Key Instrument for Black Elevation

    Booker T. Washington was one person whose abilities and energy have taken him far beyond the limitations life placed on him. He rose up from slavery and illiteracy to become the foremost educator and leader of black Americans at the turn of the 19th century. For decades, he was the major African-American spokesman, lecturer, Civil Rights/Human Rights Activist, Educational Administrator, Professor, Organization Executive/Founder and Author/Poet.

    His childhood is recorded in his autobiography, Up From Slavery which this writer had the fortune of reading in his early years in an abridged edition at the second form of the Prince of Wales School at Kingtom, western Freetown in Sierra Leone West Africa from which end Washington's ancestors may well have hailed.

    Booker T. Washington was born a slave on April 5, 1856 on the Burroughs tobacco farm which, despite its small size, he always referred to as a "plantation" at the community of Hale's Ford, Virginia. This was in what he described as "the most miserable, desolate, and discouraging surroundings." His mother Jane was a black slave who worked as a cook for a small planter. His father was a white plantation owner whom he never knew. Under the laws then, his mother's status also made young Booker a slave. His childhood was thus one of privation, poverty, slavery and back-breaking work, for from birth he was the property of James Burroughs of Virginia. His mother, Jane, raised him, and was put to work as early as possible.

    Since it was illegal for a slave to learn to read and write Booker T. Washington received no education. For as he writes: "The early years of my life, which were spent in the little cabin, were not very different from those of other slaves." He went to school in Franklin County - only to carry books for one of James Burroughs's daughters. "I had the feeling that to get into a schoolhouse and study would be about the same as getting into paradise," he wrote.

    In April 1865 when the Emancipation Proclamation was read to joyful slaves in front of the Burroughs home he was seven years old. President Abraham Lincoln it was who issued the Emancipation Proclamation, which freed the slaves. It could not be enforced until the end of the Civil War by the Thirteenth Amendment. The former slaves were at first jubilant about being free but it quickly became apparent that there was no place for most of them to go.

    There was more singing in the slave quarters than usual as the great day drew nearer. It was bolder, had more ring, and lasted later into the night. Most of the verses of the plantation songs had some reference to freedom

    After the reading of the proclamation speech Washington remember being told that they were all free, and could go when and where they pleased. "My mother, who was standing by my side, leaned over and kissed her children, while tears of joy ran down her cheeks. She explained to us what it all meant, that this was the day for which she had been so long praying, but fearing that she would never live to see."

    After emancipation, his family was so poverty stricken that they could not make it on their own. So Booker Washington moved out with his mother and three siblings to join his stepfather in Malden, West Virginia, where he had found work packing salt. The young boy took a job in this salt mine. Work began there at 4 a.m. so that he could attend school later in the day. The nine-year old Washington spent long, exhausting days packing salt.

    He worked with his mother and other free blacks not only as a salt-packer in this salt mine. He also worked in a coal mine. He even signed up briefly as a hired hand on a steamboat. Then he became employed as a houseboy for the wife of General Lewis Ruffner, who owned the salt-furnace and coal mine. Many other houseboys had failed to satisfy the demanding and methodical Mrs. Ruffner, but Booker's diligence and attention to detail met her standards. Encouraged to do so by Mrs. Ruffner, when he could, young Booker attended school and learned to read and to write so that soon, he sought even more education than was available in his community.

    Always an intelligent and curious child, like many blacks after Emancipation he yearned for an education. So despite the exhausting days, he used his free time to go to school in the evenings. He was frustrated when he could not receive good schooling locally. So when he was 16 his parents allowed him to quit work to go to school. They had no money to help him, so he traveled 500 miles, often by walking, to enroll at the Hampton Normal and Agricultural Institute in Virginia. He did not know if he could get in, and if he got in he didn't know how he was going to pay for it. He arrived with only 50 cents in his pocket. The head teacher suspicious of his country ways and ragged clothes admitted him only after he had cleaned a room to her satisfaction.

    "Students with little income such as Washington could get a place there by working to pay their way.", says one of a college application essay writers and history expert. So he was given a job as a janitor to enable him earn enough to pay his school fees. He thus paid his tuition and board there.

    The normal school (teachers college) at Hampton was founded for the purpose of training black teachers and had been largely funded by church groups and individuals such as William Jackson Palmer, a Quaker, among others. In many ways he was back where he had started, earning a living through menial tasks, but his time at Hampton led him away from a life of labor. Hampton Institute was started and run by General Samuel Chapman Armstrong. Armstrong and the institution he created were to become the one great influence in Washington's life. Armstrong believed in work, study, hygiene, morality, self-discipline and self-reliance - in large amounts. It was not a place for slackers. Armstrong's purpose was to train black teachers, but he believed every student should have a trade as well. Washington imbibed these principles so well in him that later, when he developed the Tuskegee Institute it emphasized these same qualities and convictions.

    Booker T. Washington who had only managed to get a primary education that allowed his probationary admittance to Hampton Institute proved such an exemplary student, teacher, and speaker that the principal of Hampton recommended him to Alabamans who were trying to establish a school for African Americans in their state to lead them to establish a school for African Americans in their state.

    In 1881, he was hired as the first principal of a school being founded in Alabama, under a charter from the Alabama legislature for training teachers, the first time a black was being offered such a high position.They found the energetic and visionary leader they sought in Washington as he became the first principal of the Tuskegee Normal and Industrial Institute which he built from scratch into the most reputable and stable higher institution for blacks in the United States.

    In 1895, Washington was asked to speak at the opening of the Cotton States and International Exposition, an unprecedented honor for an African American at that time. His Atlanta Compromise speech there explained his major thesis, that blacks could secure their constitutional rights through their own economic and moral advancement rather than through legal and political changes. Washington's address was widely welcomed in the African American community and among liberal whites North and South. Whites approved of his views. Thus he won over diverse elements among southern whites, whose support for the programs he envisioned and brought into being especially in the area of education he harnessed easily. He was supported by W.E.B. Du Bois at the time but several years later the two started having differences. Washington's conciliatory stand angered some blacks including Du Bois who feared his conciliatory stance would encourage the foes of equal rights. Whilst Washington valued the "industrial" education oriented toward actual jobs available to the majority of African Americans at the time Du Bois demanded a "classical" liberal arts education among an elite he called The Talented Tenth. Both sides sought to define the best means to improve the conditions of the post-Civil War African-American community. However, despite not condemning Jim Crow laws and the inhumanity of lynching publicly, Washington privately contributed funds for legal challenges against segregation and disenfranchisement, such as his support in the case of Giles v. Harris which went before the United States Supreme Court in 1903..

    Washington the public figure often invoked his own past to illustrate his belief in the dignity of work. "There was no period of my life that was devoted to play," he wrote. "From the time that I can remember anything, almost everyday of my life has been occupied in some kind of labor." This concept of self-reliance born of hard work was the cornerstone of his social philosophy.

    Although not everyone agreed with Booker Washington, he became a respected leader who helped many schools and institutions gain donations and support from the government and other private donors. From this position of leadership he rose into a nationally prominent role as spokesman for African Americans.

    Washington's philosophy and tireless work on educational issues helped him enlist both the moral and substantial financial support of many philanthropists such as self-made men from modest beginnings as Standard Oil magnate Henry Huttleston Rogers and Sears, Roebuck and Company President Julius Rosenwald.

    Washington associated with the richest and most powerful businessmen and politicians of the era who also funded his causes, such as in supporting, running and equipping the institutions of higher education at Hampton and Tuskegee. Besides being seen as a spokesperson for African Americans, he became a conduit for funding educational programs. His contacts included such diverse and well-known personages as Andrew Carnegie, William Howard Taft, John D. Rockefeller, Henry Huttleston Rogers, and Julius Rosenwald, to whom he made the need for better educational facilities well-known. As a result, countless small schools were established through his efforts, in programs that continued many years after his death.

    A representative case of an exceptional relationship was Washington's friendship with the millionaire industrialist and financier Henry H. Rogers (1840-1909). Henry Rogers, a self-made man, had risen from a modest working-class family to become a principal of Standard Oil, and had become one of the richest men in the United States. Around 1894, Rogers heard Washington speak at Madison Square Garden. The next day, he contacted Washington and requested a meeting, during which Washington later recounted that he was told that Rogers "was surprised that no one had 'passed the hat' after the speech." The meeting began a close relationship that was to extend over a period of 15 years. Although he and the very-private Rogers openly became visible to the public as friends, and Washington was a frequent guest at Rogers' New York office, his Fairhaven, Massachusetts summer home, and aboard his steam yacht Kanawha, the true depth and scope of their relationship was not publicly revealed until after Roger's sudden death of an apoplectic stroke in May 1909.

    A few weeks later, Washington went on a previously planned speaking tour along the newly completed Virginian Railway, a $40 million dollar enterprise which had been built almost entirely from a substantial portion of Rogers' personal fortune. As Washington rode in the late financier's private railroad car, "Dixie", he stopped and made speeches at many locations, where his companions later recounted that he had been warmly welcomed by both black and white citizens at each stop.

    Washington revealed that Rogers had been quietly funding operations of 65 small country schools for African Americans, and had given substantial sums of money to support Tuskegee Institute and Hampton Institute. He also disclosed that Rogers had encouraged programs with matching funds requirements so the recipients would have a stake in knowing that they were helping themselves through their own hard work and sacrifice, and thereby enhance their self-esteem.

    $1,000,000 was entrusted to Washington by another prosperous contact, Anna T. Jeanes (1822-1907) of Philadelphia in 1907. She hoped to construct some elementary schools for Negro children in the South. Her contributions together with those of Henry Rogers and others funded schools in many communities where the white people were also very poor, and few funds were available for Negro schools.

    Julius Rosenwald (1862-1932) was another self-made wealthy man with whom Washington found common ground and from whom he received much support. By 1908, Rosenwald, son of an immigrant clothier, had become part-owner and president of Sears, Roebuck and Company in Chicago. Rosenwald, a philanthropist, was deeply concerned about the poor state of African American education, especially in the Southern states.

    In 1912 Rosenwald was asked to serve on the Board of Directors of Tuskegee Institute, a position he held for the rest of his life. Rosenwald so adequately endowed Tuskegee that Washington could now spend less time traveling to seek funding. This allowed him to devote more time towards the management of the school. Later in 1912, Rosenwald provided funds for a pilot program involving six new small schools in rural Alabama, which were designed, constructed and opened in 1913 and 1914 and overseen by Tuskegee. The model proving successful, Rosenwald established The Rosenwald Fund, to replicate it all over the South. The school building program was one of its largest programs. Using state-of-the-art architectural plans initially drawn by professors at Tuskegee Institute, the Rosenwald Fund spent over four million dollars to help build 4,977 schools, 217 teachers' homes, and 163 shop buildings in 883 counties in 15 states, from Maryland to Texas. The Rosenwald Fund used a system of matching grants, and black communities raised more than $4.7 million to aid the construction of these schools which became known as Rosenwald Schools. By 1932, the facilities could accommodate one third of all African American children in Southern U.S. schools.

    Each school was originally founded to produce teachers. However, graduates had often gone back to their local communities only to find precious few schools and educational resources to work with in the largely impoverished South. To address those needs, through provision of millions of dollars and innovative matching funds programs, Washington and his philanthropic network stimulated local community contributions to build small community schools. Together, these efforts eventually established and operated over 5,000 schools and supporting resources for the betterment of blacks throughout the South in the late 19th and early 20th centuries. The local schools soon grew to great sources of much community pride and were of priceless value to African-American families during those troubled times in public education. This work was a major part of his legacy and was continued (and expanded through the Rosenwald Fund and others) for many years after Washington's death in 1915.

    In 1901 he wrote Up From Slavery - his autobiography which became a bestseller. Up From Slavery, first published in 1901, is still widely read today. As a result of his work as an educator and public speaker, Washington became influential in business and politics. Washington did much to improve the overall friendship and working relationship between the races in the United States.He also became an advisor to the then President of the United States - Theodore Roosevelt in the process becoming the first black ever to dine at the White House with the President, though it created a huge stir. Many whites thinking that it was wrong for whites and blacks to mix socially, were horrified at their President for doing so. Roosevelt defended his actions at the time, and continued to ask for Washington's advice, but without inviting him again. As Washington's influence with whites and blacks grew he reaped several honors.

    Eventually Washington's leadership of blacks began to be undemined by the attitude of whites to the progress of blacks. It became apparent that the whites that had gained control of Southern institutions after Reconstruction did not ever want the civil and political status of blacks to improve - regardless of how hard they worked or how much character they had. They passed laws to keep them from voting and to keep them from mixing with whites in schools, stores and restaurants.

    Washington's critics. charged that his conservative approach undermined the quest for racial equality. Washington was criticized by the leaders of the NAACP, which was formed in 1909, especially by W.E.B. Du Bois, who demanded a harder line on civil rights protests. After being labeled "The Great Accommodator" by Du Bois, Washington replied that confrontation would lead to disaster for the outnumbered blacks, and that cooperation with supportive whites was the only way to overcome pervasive racism in the long run. Although he did some aggressive civil rights work secretively, such as funding court cases, he seemed to truly believe in skillful accommodation to many of the social realities of that age of segregation. While apparently resigned to many undesirable social conditions in the short term, he also clearly had his eyes on a better future for blacks. Through his own personal experience, Washington knew that good education was a major and powerful tool for individuals to collectively accomplish that better future.

    "In all things purely social we can be as separate as the fingers," he proposed to a biracial audience in his 1895 Atlanta Compromise address, "yet one as the hand in all things essential to mutual progress." Even though his methods partly arose from his need for support from powerful whites, some of them being former slave owner, it is now known, that Washington secretly funded anti-segregationist activities. But he never wavered in his belief in the attainment of freedom: "From some things that I have said one may get the idea that some of the slaves did not want freedom. This is not true. I have never seen one who did not want to be free, or one who would return to slavery."

    However, by the last years of his life, Washington having moved away from many of his accommodationist policies, speaking out with a new frankness, attacked racism. In 1915 he joined ranks with former critics to protest the stereotypical portrayal of blacks in a new movie, "Birth of a Nation." He also spoke out against lynchings and worked to make "separate" facilities more "equal."

    Washington was now the dominant figure in the African American community in the United States, especially after he achieved prominence for his Atlanta Address of 1895. To many politicians and the public in general, he was seen as a popular spokesperson for African Americans. Representing the last generation of black leaders born into slavery, he was generally perceived as a credible proponent of educational improvements for those freedmen who had remained in the post-Reconstruction, Jim Crow South.

    Throughout the final 20 years of his life, he maintained this standing through a nationwide network of core supporters in many communities, including black educators, ministers, editors and businessmen, especially those who were liberal-thinking on social and educational issues. He gained access to top national leaders in politics, philanthropy and education, and was awarded honorary degrees. Critics called his network of supporters the "Tuskegee Machine."

    Washington did much to improve the overall friendship and working relationship between the races in the United States. When Washington's autobiography, Up From Slavery, was published in 1901, it became a bestseller and had a major impact on the African American community, and its friends and allies. Washington in 1901 was the first African-American ever invited to the White House as the guest of President Theodore Roosevelt. His autobiography, Up From Slavery, is still widely read today. As a result of his work as an educator and public speaker, Washington became influential in business and politics. In addition to Tuskegee Institute, which still educates many today, Washington instituted a variety of programs for rural extension work, and helped to establish the National Negro Business League in 1900 in an effort to inspire the "commercial, agricultural, educational, and industrial advancement" of African Americans. For his contributions to American society, Washington was granted an honorary master's degree from Harvard University in 1896 and an honorary doctorate from Dartmouth College in 1901.Booker's leadership also earned him honorary degrees from Harvard University and Dartmouth College. He wrote several books, and several more books have been written about him.

    Shortly after the election of President William McKinley in 1896, a movement was set in motion that Washington be named to a cabinet post, but he withdrew his name from consideration, preferring to work outside the political arena.

    Washington was married three times as revealed in Up From Slavery, where he gave all three of his wives enormous credit for their work at Tuskegee emphasizing that he would not have been successful without them.

    Blacks were solidly Republican, but after 1890 many lost the vote in the deep South .Washington emerged as their spokesman and was routinely consulted by Republican national leaders about the appointment of African Americans to political positions throughout the nation. He worked and socialized with many white politicians and notables. He argued that the surest way for blacks eventually to gain equal rights was to demonstrate patience, industry, thrift, and usefulness and said that these were the key to improved conditions for African Americans in the United States and that they could not expect too much, having only just been granted emancipation..

    Despite his travels and widespread work, Washington remained as principal of Tuskegee. This had serious strain and stress on him. Washington's health was therefore deteriorating rapidly; so much so that he collapsed in New York City and was brought home to Tuskegee, where he died on November 14, 1915 at the age of 59. With the permission of his descendants, examination of medical records indicated that he died of hypertension, with a blood pressure more than twice normal, confirming what had long been suspected. He was buried on the campus of Tuskegee University near the University Chapel. At his death Tuskegee's endowment exceeded US$1.5 million. His greatest life's work, the work of education of blacks in the South, was well underway and expanding. A man who overcame near-impossible odds himself, Booker T. Washington is best remembered for helping black Americans rise up from the economic slavery that held them down long after they were legally free citizens.

    In 1934, Robert Russa Moton Washington's successor, arranged an air tour for two African Americans aviators, and afterward the plane was christened the Booker T. Washington. On April 7, 1940, Washington became the first African American depicted on a United States postage stamp. The first coin featuring an African American was the Booker T. Washington Memorial Half Dollar minted by the U.S. from 1946 to 1951. He was also depicted on a U.S. Half Dollar from 1951-1954. On April 5, 1956, the hundredth anniversary of Washington's birth, the house where he was born in Franklin County, Virginia was designated as the Booker T. Washington National Monument. A state park in Chattanooga, Tennessee was named in his honor, as was a bridge spanning the Hampton River adjacent to his alma mater, Hampton University. In 1984, Hampton University dedicated a Booker T. Washington Memorial on campus near the historic Emancipation Oak, thus establishing, "a relationship between one of America's great educators and social activists, and the symbol of Black achievement in education." Numerous high schools and middle schools across the United States have been named after Booker T. Washington. At the center of the campus at Tuskegee University, the Booker T. Washington Monument, called "Lifting the Veil," was dedicated in 1922. The inscription at its base reads: "He lifted the veil of ignorance from his people and pointed the way to progress through education and industry."

    References

    - Washington, Booker T. The Awakening of the Negro, The Atlantic Monthly, 78 (September, 1896).

    - Up from Slavery: An Autobiography (1901).

    - Washington, Booker T. The Atlanta Cotton States Exposition Address (Sep, 1895).

    - The Booker T. Washington Papers University of Illinois Press online version of complete fourteen volume set of all letters to and from Booker T. Washington.

    - James D. Anderson, The Education of Blacks in the South, 1860-1935 (1988)

    - Mark Bauerlein. Washington, Du Bois, and the Black Future" in Wilson Quarterly (Autumn 2004)

    - W. Fitzhugh Brundage, ed Booker T. Washington and Black Progress: Up from Slavery 100 Years Later (2003).

    - Louis R. Harlan, Booker T. Washington: The Making of a Black Leader, 1856-1900 (1972) the standard biography, vol 1.

    - Louis R. Harlan. 'Booker T. Washington: The Wizard of Tuskegee 1901-1915 (1983), the standard scholarly biography vol 2.

    - Louis R. Harlan. Booker T. Washington in Perspective: Essays of Louis R. Harlan (1988).

    - Louis R. Harlan. "The Secret Life of Booker T. Washington." Journal of Southern History 37:2 (1971). in JSTOR Documents Booker T. Washington's secret financing and directing of litigation against segregation and disfranchisement.

    - Linda O. Mcmurry. George Washington Carver, Scientist and Symbol (1982)

    - August Meier. "Toward a Reinterpretation of Booker T. Washington." The Journal of Southern History, 23#2 (May, 1957), pp. 220-227. in JSTOR. Documents Booker T. Washington's secret financing and directing of litigation against segregation and disfranchisement.

    - Cary D. Wintz, African American Political Thought, 1890-1930: Washington, Du Bois, Garvey, and Randolph (1996).

    - Booker T. Washington High School

    - Booker T. Washington's West Virginia Boyhood

    - Works by Booker T. Washington at Project Gutenberg

    - Up from Slavery, Project Gutenberg edition

    - Up from Slavery, Electronic Edition

    - Booker T. Washington's 1909 Tour of Virginia on the newly completed Virginian Railway

    - Dr. Booker T. Washington papers - comments about Henry Rogers

    - National Park Service Booker T. Washington Birthplace

    - Legends of Tuskegee

    - Booker T. Washington's Gravesite

    The African American Almanac, 7th Ed., Thomson Gale. Reproduced in Biography Resource CenterThomson Gale.

    - The Booker T. Washington papers digital archive, University of Illinois Press searchable index to complete annotated text of all important letters to and from Washington and all his writings.

    - A Criticism of the Atlanta Compromise by W.E.B. Dubois

    - Booker T. Washington Delivers the 1895 Atlanta "Compromise" Speech from the American Social History Project / Center for Media and Learning (Graduate Center, CUNY) and the Center for History and New Media (George Mason University)

    Published on: January 8, 2020

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    Published on: January 9, 2020

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    Published on: January 9, 2020

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    Published on: January 9, 2020

    New Post Content

    Published on: January 20, 2020

    Fast Company reports that Ikea, the Swedish furniture retailer that made its reputation with enormous stores with football field-sized parking lots - Tina Fey once joked that Idea is "where marriages go to die" - is testing a new format in a Vienna location that has zero parking spaces.

    The store, in a new seven-store building, is part of the company's effort "to shrink its carbon footprint, including the pollution from customers driving to suburban stores … The location is next to a tram stop and a three-minute walk from a subway station; like other parts of the city, it’s easily accessible by bike. Anything that customers can’t easily carry away will be delivered from a new logistics center farther away (and soon, as with other Ikea stores, those deliveries will happen via electric delivery vans)."

    The story says that two of the building's floors will be used as a hostel, and the roof will be used as a public park. And, the architects tell Fast Company, "the design is sustainable in another way: Unlike a standard big-box store, the design is aesthetically interesting enough that people should want to keep it around in the future rather than tearing it down."

    Published on: January 21, 2020

    by Kevin Coupe

    On Saturday morning, Frieda Rapoport Caplan passed away. She was 96, and leaves behind not just a family company that continues to push the boundaries in terms of new and unfamiliar produce items imported into the US, but also a life in which she pushed boundaries in terms of what was appropriate and acceptable.

    I feel the loss enormously. Frieda was my friend.

    In 1962, Frieda launched Frieda's Produce Specialties in Los Angeles. It was the first wholesale produce company owned and operated by a woman.

    The Los Angeles Times, in its obit, describes her as "the woman who broke the glass ceiling in the testosterone-doused produce world and forever changed the way Americans eat fruits and vegetables … a tenacious maven credited for introducing kiwis, mangoes, habanero and shishito peppers, passion fruit, bean and alfalfa sprouts, baby carrots, sugar snap peas, starfruit, blood oranges, shiitake mushrooms, turmeric, and hundreds more fruits and vegetables into the supermarket mainstream. Into the bellies of American consumers."

    Frieda, the Times writes, "was loquacious, driven and loved to take risks … In heels and a skirt, she revolutionized the way the produce world did business, adding recipes and cooking instructions on packages of exotic produce to tame the distrust of an unsuspecting public."

    CBS Sunday Morning produced a piece about Frieda that was supposed to run last fall, but was held until they had more time to devote to the piece; now an appreciation of a wonderful life, the piece ran yesterday, and you can watch it here.

    I'm not exactly sure how we became friends. I think we saw each other at the occasional industry event, and suddenly I was getting emails from this wonderfully opinionated woman in her late eighties and early nineties, relentlessly curious, making suggestions about things to read, people to get to know, offering critiques about this story or that commentary, and even telling me when she didn't like the picture I was using, and expressing approval when I changed it.

    I last saw Frieda on November 16. I knew she'd been laid up by a broken leg and subsequent complications, and so I stopped by her house in Southern California to say hi. It wasn't just a quick visit with an ailing friend. She asked me questions about MNB stories she'd read, told me about books she'd been reading, and was thoroughly engaging - I think I was there for a couple of hours.

    When I heard that Frieda has passed away, it hit me like a freight train … I know she was 96, but I fully expected that she’d be around for many more years. She had such a wonderfully indomitable spirit, infectious enthusiasm for life, and mischievous sense of humor - she was the kind of old person that I would like to be, which is to say not really old at all. Sometimes the parts wear out, but the heart and soul continue on. In Freida’s case, they will be sustained by the business she created and that her family - Karen and Jackie and Alex - shepherd and grow. But they also will find life in those of us lucky enough to know her.

    She opened our eyes to what is possible. I'll always treasure her friendship.

    Published on: January 21, 2020

    David Glass, who replaced founder Sam Walton as CEO of Walmart in 1988 and shepherded the company through a time of growth and expansion into the grocery business, has passed away. He was 84, and had been suffering from pneumonia.

    The Wall Street Journal writes that "during his 12 years as CEO, annual sales soared to $165 billion from $16 billion as Walmart built supercenters, combining groceries with general merchandise, and expanded international operations and the Sam’s Club chain.

    "When Mr. Glass became CEO, Walmart was the third-largest U.S. retailer after Sears, Roebuck & Co. and Kmart Corp. Within a few years it surged past both."

    Glass joined Walmart as CFO in 1976, personally recruited by Walton. After succeeding him, Glass "stayed out of the spotlight and for years worked at a desk said to have been bought for $75 at a garage sale. When he had visitors at the office, he was known for fetching their coffee down the hall at a vending machine rather than asking an underling to serve beverages."

    After retirement, Glass satisfied a longtime passion for baseball by buying the Kansas City Royals for $96 million in 2000. In 2015, the Royals won the World Series. Glass sold the team last year for $1 billion.

    Published on: January 21, 2020

    The Wall Street Journal reports that Best Buy CEO Corie Barry is being investigated by the board of directors following charges that she "had an inappropriate romantic relationship with a fellow executive, who has since left the electronics retailer."

    According to the story, the charges were made via an anonymous letter saying that "Ms. Barry had a romantic relationship for years with former Best Buy Senior Vice President Karl Sanft before she took over as CEO last June … Mr. Sanft, former senior vice president of retail operations, had no comment for this article. He left Best Buy in early 2019 and is now the chief operating officer of 24 Hour Fitness Worldwide Inc."

    Barry also did not comment about the charges, except to say she was cooperating with the investigation. The Journal notes that "she succeeded Hubert Joly, who led a turnaround at the retailer and still serves as its executive chairman. Mr. Joly’s predecessor as CEO resigned abruptly in April 2012 after the board opened an investigation into his personal conduct. The company was exploring whether he misused company assets in the course of an alleged relationship with a female subordinate."

    Published on: January 22, 2020

    by Kate McMahon

    It’s that time of January when we seek to forecast the food and drink trends that will be captivating America – and captured on Instagram – in the coming year.

    Prognostication is risky business, I know, but someone has to sift through the “listicles” promoted by chefs, retailers, foodies, PR firms, food and beverage trade groups, mainstream media critics, the folks at Pinterest and UberEats and “social media influencers.”

    Here goes:

    •  It’s raining purple. As in the multiple hues of lavender, violet and plum produced by the ube, the sweet purple yam being hailed as the “current flavor of the moment” and the “new most Instagrammable food.” Ube is a staple in Filipino jams, sauces and desserts. When mashed or boiled, this tuber produces a mild, sweet flavor like white chocolate or taro – but purple. Curious? Checkout out one of 358,000 #ube posts on Instagram.

    (It is a lovely coincidence that Frieda's Specialty Produce is a major distributor - <a href="https://www.friedas.com/ube-or-not-ube-that-is-the-questionand-friedas-is-answering/" target="_blank"> and explainer </a> - of ube in the US.  Purple, as it happens, was founder Frieda Rapoport Caplan's favorite color.  As you probably know, she passed away last weekend at age 96 … and MNB remembered her <a href="http://mnb.grocerywebsite.com/News/Detail/59046/2020-01-20/" target="_blank"> here</a>.)

    •  Plant. Based. Everything. Expect more meat-less proteins to be rolled out on a daily basis. This trend started with plant-based milks and skyrocketed with the success of both Beyond Meat and the Impossible Burger meat alternatives. The industry is notching double-digit growth and has gone from niche to mainstream. General Mills just announced it was investing in Good Catch plant-based seafood, Dunkin’ now offers a meatless Beyond Sausage Sandwich, and even the local Stop & Shop has a separate Plant-Based Meats section. 

    •  Shirley Temple 2.0. Sophisticated mocktails are gaining popularity at swanky watering holes. At-home imbibers are also pouring kombucha, a bubbly fermented tea, booze-free drinks such as Kin and Hoplark’s sparkling HopTeas in several flavors, and adding botanical-infused elixirs such as Rock Grace to their sparkling water.  Low-alcohol beverages are also gaining market share, and low-sugar, low-calorie hard seltzers such as White Claw are the new must-have beverage for many millennials.

    Also on the 2020 hot list:

    •  Pea protein: Replacing whey and collagen in smoothies and fortifying meat-alternatives.

    •  No end to gnocchi: Competitors trying to keep up with Trader Joe’s, which owns the cauliflower gnocchi market and has added chocolate and kale versions.

    •  Flour power: Alternative flours made from watermelon seed, green bananas, sweet potatoes and cauliflower.

    •  Some like it cold: Cold brew coffee is the new go-to order.

    •  Some like it hot: As in Nashville Hot, the fried chicken that will scorch your lips.

    Reviewing last year’s food trend column, the following predictions did indeed come true:

    •  CBD Rules: Cannabis-infused drinks and food are everywhere, despite the FDA’s objections.

    •  Gut Instincts: Probiotics and prebiotics moved from the health food store to supermarket staples.

    •  Got (insert plant) Milk?: Oat milk continues to up-end the category, and it is now on the menu at select Starbucks and Dunkin’ shops.

    Not surprisingly, the following 2019 predictions did not make it to the mainstream:  Food and wine from the former Soviet Republic of Georgia … hummus-based desserts … fake bacon snacks made from mushrooms and egg whites … and cheese-tea – cold tea topped with cream cheese and a pinch of salt.

    You can't win them all.

    Published on: January 22, 2020

    by Kevin Coupe

    If you've been doing something as long as I've been doing MNB - 18 years and counting - it is impossible to remember every story we've run and every commentary I've written.   We put stuff out there, hope we're right, hope we move the needle a bit, and then move on.

    Sometimes, we get surprised.

    Yesterday, I got an email from an MNB reader that read as follows:

    <i>Am on a cruise celebrating my mother-in-law’s 95th birthday, and they are having “chic night.” I packed a bit light but have a nice sport coat.

    I asked my wife if I could borrow a pair of her panties to use as a pocket square, to which she replied, “Who in the hell taught you that one?”

    To which I replied “MorningNewsBeat.”

    Well played sir. Well played.</i>

    And he sent me a picture.

    Okay.  I'll take his word for it, but I had no idea what the hell he was talking about.

    So I did the logical thing.  I went to the MNB archives, and looked up "pocket square."

    And found a column by Michael Sansolo from February 18, 2015, in which he was writing about finding creative, unexpected solutions to problems and he used the following as a metaphor:

    <i>A few years back my friend discovered that he, like me, was unable to correctly fold a pocket square to provide the little color accent sticking out of his jacket. Somehow he learned that Victoria’s Secret seamless silk panties are the perfect solution. No matter how they are folded or stuffed into his jacket pocket, they always create the perfect look. And the choice in colors is staggering.

    The added benefit, he says, is walking into a Victoria’s Secret store in a blazer to look for colors and practice. The salespeople simply cannot believe what’s going on.

    But here’s the thing. My friend ends up with an easy solution to a problem by simply approaching it in an unexpected way. It’s the essence of creativity, innovation and a really, really good inside joke.</i>

    Go figure.  MNB ventured into GQ territory, and apparently it stuck.

    Talk about an Eye-Opener.  I'm glad we could be of assistance.

    Published on: January 22, 2020

    Lucky's Market, which lost a major investor when Kroger announced it was divesting its stake in the retailer, said yesterday that it will close down 32 of its 39 stores in nine states.

    Florida, where Lucky's had its greatest presence with 21 stores, will see 20 of those units shuttered.

    <i>USA Today</i> writes that "the natural and organic foods grocer was founded in 2003 by husband and wife Bo and Trish Sharon. The store is known for its 'Sip & Stroll' program that allows customers to drink a pint of beer or glass of wine while shopping."  

    Kroger CEO Rodney McMullan said he decided to get out of the investment because "we just didn't think it created a good return."

    Published on: January 22, 2020

    <i>WGN-TV News</i> reports that Meijer has introduced a new mobile application designed to inform customers of price reductions on food products that are coming close to their expiration dates, pitching it as a way to cut down on food waste.

    According to the story, "The initiative allows customers to purchase food nearing its sell-by date - like meat, produce, seafood, deli and bakery products - at up to 50 percent off on the Flashfood app, and then pick them up at Meijer stores."  The goal is to have the app available to customers at all of its 246 stores by the end of the year.

    <i>WGN</i> reports that "customers go to the app, select a Meijer store, choose the items they want to purchase and pay for them directly on the app at up to 50 percent off. Then, they go in store to pick up their items and confirm their order with customer service.

    The purchased food is stored in a refrigerator or storage rack located in the front of the store until picked up by the customer."

    Published on: January 22, 2020

    From FMI, which used to be known as the Food Marketing Institute:

    "FMI today launches a renewed brand identity as FMI - The Food Industry Association, reflecting its strategy to more broadly represent the food marketplace and embrace a more interconnected supply chain. FMI views retail as the heart of the food industry and recently expanded its membership in response to retailers’ needs, helping them facilitate access and connectivity with suppliers and other business partners.

    "'FMI provides the most productive forum for connecting and holding constructive dialogue across the food industry,' FMI President and CEO Leslie Sarasin remarked on the association’s announcement regarding a renewed focus.  'Driven by consumer relevance, we are in the business of food, wherever it is bought, sold or produced, and we are well-positioned to represent everything in the shopping basket – and work closely with every participant in the marketplace'."

    Joe Sheridan, president and COO of Wakefern Food Corp. and chairman of the FMI board, said, "Over the last two years, we’ve inspired a recommitment, a renewal of vows among the FMI membership. We’ve even changed who can be a member in the association as a logical step in a direction we’ve been traveling for years, offering greater parity between retailers and their product supplier partner members at the Board of Directors level.”

    FMI says that it will maintain its focus on public policy lobbying … "issues that matter" such as food safety … serving as a "forum for high-impact industry dialogue" … and continuing to be a "thought-leader in consumer and operations research."

    The FMI rebranding comes on the heels of a similar rebranding by the Grocery Manufacturers Association (GMA), which now is the Consumer Brands Association (CBA), and has announced a broadening of its focus into nonfoods, among other changes.

    Published on: January 22, 2020

    USA Today reports that "greeting card and stationery chain Papyrus is closing its stores," with most of the 254 unites being shuttered within the next six weeks.

    In a prepared statement, owner Schurman Retail Group said, "“Despite our Herculean efforts to realign our Papyrus and American Greetings stores to fit today’s shopping environment, Schurman Retail Group had to make the difficult decision to close all 254 of our stores in North America."

    Some context from the USA Today story:  "Many Americans gave up cards in favor of digital alternatives, or they send fewer cards between major holidays such as Christmas and Valentine’s Day, analysts said.

    "Major retailers, including CVS and Walmart, have cut back or considered cutting back on shelf space for greeting cards, and card companies have closed hundreds of locations.  Retail space occupied by greeting card stores declined by more than 27% from 2013 to 2018, according to real estate data firm CoStar Group."

    Published on: January 22, 2020

    <i>Fortune</i> is out with its annual list of the world's most admired companies, and the top 10 list includes, in order:  Apple, Amazon, Microsoft, Walt Disney, Berkshire Hathaway, Starbucks, Alphabet, JPMorgan Chase, Costco, and Salesforce.

    Apple, the magazine, has owned the top spot for 13 straight years.

    Other prominent companies making the to 100:  Coca-Cola (12), Netflix (16), Walmart (18), Nordstrom (20), Home Depot (21), Target (22), Procter & Gamble (23), Johnson & Johnson (26), Unilever (31), CVS (38), McDonald's (41), PepsiCo (43), and Publix (48).

    The rankings are said to be based on executives, directors, and analysts who were asked "to rate enterprises in their own industry on nine criteria, from investment value and quality of management and products to social responsibility and ability to attract talent. A company’s score must rank in the top half of its industry survey to be listed."

    Published on: January 22, 2020

    •  From <i>Variety</i>:

    "Netflix beat its forecast for overall subscriber additions for the fourth quarter of 2019, while it brought in fewer than expected U.S. streaming customers.

    "The company added a net 420,000 streaming customers in the U.S. and 6.26 million overseas in the year-end 2019 quarter. Netflix had previously forecast a total of 7.6 million paid net adds for Q4 (600,000 in the U.S. and 7.0 million internationally) … The company ended 2019 with 167 million streaming customers worldwide (including 61 million in the U.S.).

    Published on: January 22, 2020

    •  From <i>CNBC</i>:  "Starbucks announced Tuesday that it will strive to become “resource positive,” storing more carbon than it emits, eliminating waste and providing more clean freshwater than it uses."

    “By embracing a longer-term economic, equitable and planetary value proposition for our company, we will create greater value for all stakeholders,” said Starbucks CEO Kevin Johnson.

    The story notes that "the coffee chain is among the growing number of companies that are announcing sweeping sustainability goals as consumers grow increasingly concerned about climate change. BlackRock, the world’s largest investment firm, announced a week ago it plans to overhaul its investing strategy to make sustainability the new standard. On Thursday, Microsoft said it is trying to remove more carbon from the atmosphere than it emits by 2030."

    Published on: January 22, 2020

    <i>…with brief, occasional, italicized and sometimes gratuitous commentary…</i>

    •  Kroger yesterday announced that Pam Matthew, president of its Central Division, will be retiring after 40 years with the company, and will be succeeded by Colleen Juergensen, the current president of its Dillons division.

    In turn,  Juergensen will be succeeded by Steve Dreher, currently the vice president of the Dillons division.

    •  In the UK, the <i>BBC</i> reports that Sainsbury CEO Mike Coupe will retire later this year and be succeeded by the head of Sainsbury's retail and operations, Simon Roberts.

    The transition is scheduled to take place in May.

    The story points out that Coupe "has led Sainsbury's for almost six years, during which time he oversaw a failed attempt to merge with rival supermarket Asda … His exit was announced a day after Sainsbury's said it was cutting 'hundreds' of management roles to reduce costs."

    <i>It sounds from all the coverage that folks in the UK believe that Coupe may have overstayed his welcome a bit.  Well, I'd just like to say that Coupe - to whom I do not believe I am related - is welcome us at family reunions, if he's looking for a port in the storm.</i>

    Published on: January 22, 2020

    •  The CBA is focusing on CBD to make sure it is A-OK.

    The Consumer Brands Association (CBA), which used to be known as the Grocery Manufacturers Association (GMA), said yesterday that it has formed an advisory board "to guide the organization’s work to enhance safety and ensure appropriate oversight in the burgeoning cannabidiol (CBD) market for consumer packaged goods (CPG)."

    Joining the CBD Advisory Board are: Mick Cornett, former Oklahoma City mayor; Edward Davis, former commissioner, Boston Police Department; Tom Galvin, executive director, Digital Citizens Alliance; Karen Tandy, former administrator, U.S. Drug Enforcement Administration; and Michael Taylor, former deputy commissioner, U.S. Food and Drug Administration."

    “The individuals that we have assembled have decades of experience in tackling issues like the one we face today — the smart regulation of CBD,” said CBA CEO Geoff Freeman. “Each of the advisory board members bring a unique perspective that will be crucial in helping inform and guide the CPG industry’s advocacy approach on this rapidly evolving issue.”

    Saying that research shows that Americans are confused about the most critical components of CBD - "92% of Americans incorrectly assume, or have no idea, if CBD is regulated at the federal level, and 66% assume CBD products are safe" - CBA has called for "increased funding for scientific research into CBD and additional resources for the U.S. Food and Drug Administration’s enforcement and regulation of CBD in consumer products."

    Published on: January 22, 2020

    Terry Jones, one of the founders of Monty Python, has passed away.  He was 77, and had been suffering from dementia.

    The <i>Hollywood reporter</i> this morning writes:  "Although rarely receiving the same acclaim as Monty Python's other members, Jones also was widely regarded within the group as its underrated but passionate heart, known for his good-natured enthusiasm and a deep well of intelligence across a broad range of subjects … Among his most famous performances in the series was as an inept, bumbling cardinal in the Spanish Inquisition (seen wearing a leather WWI pilot's hat and goggles); a member of the Hell's Grannies, a marauding group of old women terrorizing the streets of London; an overly apologetic French waiter in a sketch involving a dirty fork; a Yorkshireman who had to 'get up out of the shoebox in the middle of the night and lick the road clean with our tongues;' and as a nude piano player with an erratic face in scenes often used to break up sketches."

    Jones co-directed (with Terry Gilliam) <i>Monty Python and Holy Grail</i>, and was the sole director of two other Python films, <i>The Life of Brian</i> and <i>The Meaning of Life</i>.  And, he directed numerous films and television shows and wrote children's books, screenplays and non-fiction books.

    Published on: January 22, 2020

    <i>…will return.</i>

    Published on: January 22, 2020

    Yesterday morning I mentioned here that I was getting my regularly scheduled colonoscopy.

    Thanks to all of you who sent nice notes - and a number of appropriate and some inappropriate jokes - about the procedure.

    The good news is that when I emerged from anesthesia, the doctor told me that I was clean as a whistle, with no polyps, and that he would see me in five years.

    Which are the words you want to hear, and that make all the prep worthwhile.

    As I said yesterday, a colonoscopy is not something to be afraid of, or to delay or avoid. It's really important, when you reach a certain age or your specific health issues call for it, to make an appointment and get one. I've been getting them every few years since 2004, and while I won't go so far as to say I look forward to them, I do think they are a critical part of my ongoing efforts to stay healthy.

    An example of how important it can be came from an MNB reader, who wrote:

    <b>Can’t agree with you more about urging everyone to get their colonoscopy! I had my first one a year before it was required, at 49, due to, let’s just say worrying symptoms. They found a 5cm cancerous mass and removed 14 inches of my colon with no chemo or radiation necessary and now I’m happy, back to my normal routine, and cancer free for 4+ years. If I had waited until I turned 50 – the recommended time for a first colonoscopy – my results would not have been so positive. I cannot echo your PSA more loudly! Please, no matter your concerns, go! Knowing is better than not knowing in my opinion in most situations life throws our way.

    Glad to hear you’re making every effort to stay healthy. I am too, and I hope to continue reading MNB for many years, nay decades, to come!</b>

    Published on: January 22, 2020

    Digital strategies aren't just about creating alternatives to the bricks-and-mortar shopping experience.  Done effectively, they can actually bring people back to the store, while also eliminating customer anonymity, creating rich and actionable data, and deepen relationships between the store and consumer in a way that transcends the simple transaction.

    Our newest Retail Tomorrow podcast, which brings together a terrific panel of experts from a wide range of disciplines, was recorded at Google’s New York City offices during the recent National Retail Federation (NRF) Show.  Our guests:

    •  Matt Alexander, co-founder of Neighborhood Goods, an unusual and fascinating take on physical retailing with stores in Dallas and New York.

    •  Patrick Flanagan, senior vice president of digital marketing and strategy for Simon,  which has more than 200 properties in 37 states and Puerto Rico.

    •  Tom Furphy, CEO and Managing Director of Consumer Equity Partners, a member of the Retail Tomorrow podcast family and a regular contributor to "The Innovation Conversation" on MNB.

    •  And Jalna Silverstein, a leader in Ernst & Young’s Transaction Advisory Practice and its Real Estate, Consumer Experience and Retail Strategy.

    <b>You can listen to the podcast <a href="https://www.retailtomorrow.org/podcast/online-to-off-line-all-the-lines-in-between" target="_blank"> here</a>.</b>

    <i><b>This Retail Tomorrow podcast is sponsored by the Global Market Development Center (GMDC).</i></b>

    <i>Pictured below are our panel members, from left:  The Content Guy, Matt Alexander, Tom Furphy, Patrick Flanagan, Jalna Silverstein.</i>

    Published on: January 22, 2020

    The Major League Baseball Hall of Fame announced its 2020 class yesterday and Derek Jeter, who helped lead the New York Yankees to four World Series championships, was elected with just one vote short of unanimity in his first year of eligibility.  Jeter had a .310 career batting average,  3,465 career hits, had 17 straight seasons with at least 150 hits and 13 seasons scoring at least 100 runs.  He was a 14-time All Star.

    Also elected was Larry Walker, the Colorado Rockies slugger who also spent part of his career with the Montreal Expos and St. Louis Cardinals.  Walker is a one-time NL MVP, and was elected in his q0th and final year of eligibility.

    Players on the ballot who were not elected - a 75 percent minimum among voters is required - included Barry Bonds, Roger Clemens, and Curt Schilling, as well as Bobby Abreu, Josh Beckett, Heath Bell, Eric Chavez, Adam Dunn, Chone Figgins, Rafael Furcal, Jason Giambi, Raul Ibanez, Andruw Jones, Paul Konerko, Cliff Lee, Carlos Pena, Brad Penny, Andy Pettitte, J.J. Putz, Brian Roberts, Gary Sheffield, Alfonso Soriano, Sammy Sosa, Jose Valverde.

    Induction in Cooperstown is scheduled for July 26.  Also scheduled to be inducted into the call are Ted Simmons, who caught for the St. Louis Cardinals, Milwaukee Brewers and  Atlanta Braves over 21 seasons, and Marvin Miller, the late director of the Major League Baseball Players Association;  both were elected by a smaller committee last year.

    Published on: January 23, 2020

    This commentary is available as both text and video; enjoy both or either ... they are similar, but not exactly the same.  To see past FaceTime commentaries, click here.

    Hi, , Kevin Coupe here, and this is FaceTime with the Content Guy.

    Y'know, more and more it seems like the stuff we used to count on no longer can be counted on.

    I find this disconcerting.

    For example … did you know that 98.6 degrees Fahrenheit no longer is the average normal human body temperature?

    I find this disconcerting.

    A story in the Wall Street Journal explained that "body temperature is a crude proxy for metabolic rate, and if it has fallen, it could offer a clue about other physiological changes that have occurred over time."

    The thing is, we all know that people are taller, fatter and live longer than they used to, and scientists say that this drop in average normal human body temperature is related to all these things … though the story also points out that they're not sure which one is the cause and which one is the result.

    I find this disconcerting.

    The thing is. 98.6 has been held as the standard for normal average body temperature for more than 150 years.  And now, suddenly, studies are suggesting that it is 97.5 degrees.

    Of course, there could be other factors at work.  Like how people's temperatures are taken.  There used to be two ways - orally and rectally.  (It wasn't that long ago that doctors - and I'm thinking here of our family pediatrician when I was a little kid - believed that rectally was the only way to go.

    Even as a little kid, I found that disconcerting.

    Now, though, there are all sorts of ways to take a person's temperature.  You can stick the thermometer in people's ears, or run it across their foreheads.  So maybe that has something to do with the change in numbers.

    What I also find interesting is that not everybody has gotten the message.

    MNB readers know that earlier this week I got as colonoscopy.  As they were getting me ready, they took my temperature, and it was 98.2.  And so I mentioned the fact that the numbers have changed, and the nurse gave me a strange look and said, "I hadn't heard that."  

    I find that disconcerting.

    You can't count on anything anymore.  Not in how you take people's temperatures, nor how you view and cater to customers' desires and needs.

    Disconcerting, right?

    That's what is on my mind this morning.  As always, I want to hear what is on your mind.

    Published on: January 23, 2020

    by Kevin Coupe

    It has gotten a lot of attention in the media that Delta, which consistently is rated as the best US airline, announced that it will pay its employees roughly two months of addition pay as a bonus - or about $1.6 billion.  It's the largest amount that the company ever has paid out in bonuses, but it isn't an anomaly - for six years in a row, Delta has paid out more than $1 billion in bonus money after a strong performance.

    But Inc. has a story pointing out that while the money is important, what may be even more critical to the company's culture is an attitude that actually reflects an employee-centric approach.

    "In response to a LinkedIn post calling him a rock star, Delta CEO Ed Bastian responded with two short sentences:  'Appreciate the shout out...but Delta would be nothing without our 90,000 people. They deserve all the credit'."

    Those are magic words, Inc. writes, because they are backed up by action/money.

    They reflect an approach that a) praises the people on the front lines, b) rewards the people on the front lines, and c) empowers the people on the front lines to solve problems and suggest solutions.

    These are incredibly important.  And while the investor class - which apparently doesn't define the bottom line in a customer-facing business the same way Delta does - has suggested that the money used for such generous bonuses could be better paid out to stockholders - CEO Bastian has resisted these entreaties.

    Y'know why?

    It's because employees "deserve all the credit."

    Delta says it.  Delta means it.  Delta's actions reflect it.

    And that's should be an Eye-Opener to every customer-facing business.

    Published on: January 23, 2020

    New York's iconic Fairway Market said this morning that it "has filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York to complete its strategic sale process.  The Company has entered into a stalking horse asset purchase agreement with Village Super Market, Inc. to sell up to 5 New York City Fairway stores and its Distribution Center for approximately $70 million.  In addition, the Company will execute a Court supervised sale process to continue to negotiate for the sale of its remaining store locations."

    The company says that its stores will remain open and operating - with the assistance of 25 million in debtor in possession financing - as the sale process unfolds.

    Abel Porter, Fairway's CEO, said in a prepared statement that "after careful consideration of all alternatives, we have concluded that a Court-supervised sale process is the best way to meet our objectives of preserving as many jobs as possible, maximizing value for our stakeholders, and positioning Fairway for long term success under new ownership."

    Robert Sumas, CEO of Village Super Market - which operates ShopRite and Gourmet Garage stores in the New York metropolitan area - said in a statement, "Perry and Nick Sumas opened the first Village Market in 1937, and our family continues to believe deeply in the importance of neighborhood grocery stores.  We appreciate that Fairway's loyal customers are concerned about the future, and if we are successful in our bid, we are committed to keeping Fairway, including its name, unique product selection and value, a part of this community."

    Fairway started as a fruit and vegetable stand during the Great Depression, and grew into an iconic New York City presence, serving a number of its neighborhoods in a way that many residents found to be both irresistible and inimitable.  But in 2007, when the founding Glickberg family sold an 80 percent stake in the company to a private equity group, things almost immediately downhill, as the new owners focused on expansion (at one point considering a national growth strategy) without any of the marketing and merchandising savvy and panache that the family had mastered.  It went public … then went bankrupt … then was bought out of bankruptcy … and then started closing some of the suburban stores that were the biggest drain on its operations and profits.

    Published on: January 23, 2020

    The New York Times has a terrific story about how the "direct-to-consumer brand revolution is one of the most dominant forces in the retailing business today. It began with a handful of start-ups, then grew to dozens, then hundreds — from mattresses (Casper) to bras (ThirdLove) to electric toothbrushes (Quip) to vitamins (Ritual) to tampons (Lola) to luggage (Away) to sneakers (Allbirds) to makeup (Glossier) to hair color (eSalon) to pet food (Farmer’s Dog) — and even thousands, counting the brands filling the endless digital aisles and shelves of Amazon Marketplace."

    In analyzing the power of these brands, the story notes that they succeeded because "technology and globalization were leveling the playing field. You didn’t need to start with a big advertising budget to get the attention of consumers. You didn’t need a manufacturing plant. You didn’t need to spend millions of dollars on research and development. You didn’t need a retailer to carry your product … By targeting a corporate giant’s weakness — high prices or inconvenience or a stodgy image — a clever start-up with the right strategy, the right message and the right product value could create a new national brand virtually overnight."

    Great piece, and you can read it here.

    Published on: January 23, 2020

    Politico has a story about how Atlanta has worked to solve a lack of access to healthy food by coming up with a unique solution - pop-up produce stands located in the city's transit system.

    According to the story, "Since 2015, Atlanta commuters using some of the city’s metro stations have been able to buy fresh produce at pop-up markets inside or just outside the station. The program, Fresh MARTA Market, is the city’s solution to a persistent food-access problem in Atlanta’s poorer communities where fresh food is often scarce and the incidence of diet-related illnesses is high. One in 3 adults in Atlanta are obese and three-quarters do not eat the recommended daily servings of vegetable or fruit, according to a 2017 study by the Food Well Alliance."

    In 2018, the story says, the program "sold 46,000 pounds of produce, most of it from local urban farmers - an increase from the first year, when it sold 8,000 pounds and returned almost $8,000 to local farmers … The markets allow small farmers - there are an estimated 52 urban farms and 300 community gardens in the city - to sell their produce wholesale to MARTA without having to sell it individually or the hassle of selling to co-ops or school systems."

    Published on: January 23, 2020

    The Washington Post this morning reports that "Burger King is cutting the price of its faux-meat burger as sales start to dip following last year’s introduction."

    The nation's biggest Burger King franchisee said that it now is selling about 28 per-day per-store, down from 32 at the introduction, and it recently added the Impossible Whopper to its two-for-six dollars promotion;  when it launched, the Impossible Whopper was selling for $5.59 apiece.

    Some context from the Post story:  "Across the U.S., restaurants and grocery stores are rushing to add plant-based options. It remains to be seen whether their popularity is a long-lasting trend."  However, "despite the rising popularity of faux meat, Americans are also eating more real meat than ever. Total red meat and poultry consumption is expected to rise to 225.6 pounds per person this year from 224.3 pounds in 2019, according to USDA data. Even at Burger King, there’s no evidence that the meat-free option has led to less meat consumption."

    Published on: January 23, 2020

    In case you're interested …

    During the recent National Retail Federation (NRF) show in New York, Tom Furphy and I brought our "Innovation Conversation" to the Mercatus booth, where we had an extended discussion with company president/CEO Sylvain Perrier, and senior director of marketing Mark Fairhurst about using a customer-centric approach to retailing as a way of competing against Amazon.

    It was a fun chat, and worth listening to, I think, here.


    Published on: January 23, 2020

    …with brief, occasional, italicized and sometimes gratuitous commentary…

    •  In Rochester, New York, the Democrat and Chronicle reports that an updated Wegmans website and mobile application seem to be creating some consternation among Wegmans' shoppers, who are a notably passionate and loyal bunch.

    According to the story, "regular users’ comments on Twitter, the Apple App Store and Google Play paint a picture of exasperation, about everything from how the digital coupon-clipping feature works to saved shopping lists disappearing to the checkbox tap zone being too small. One person tweeted that a search for 'Brillo pads' brought up results for menstrual pads.

    "'Uh oh! Looks like we've got some tweaking to do!' the chain tweeted in response."

    Wegmans is doing the promised tweaking, and has the advantage of knowing that it has established enduring relationships with its shoppers - as long as it is responsive to their concerns and addresses the issues that shoppers are raising, everything will be okay.  One Wegmans said that "this is a starting line, not the finish line. We’ll keep listening."  And that is about as smart an approach to these things as I can imagine.

    Published on: January 23, 2020

    …with brief, occasional, italicized and sometimes gratuitous commentary…

    •  From CNBC:  "Fast-casual restaurant chains like Chipotle Mexican Grill and Sweetgreen have been stealing customers from full-service restaurant chains like Outback Steakhouse and IHOP. To fight back, some casual dining chains have been launching spinoff restaurants that copy that business model."

    Examples:  Applebee’s Express, Flip’d by IHOP, Aussie Grill by Outback, and Social Monk Asian Kitchen, created by Cheesecake Factory.

    The advantages of such an option:  "Fast-casual restaurants are smaller in size, with less seating and fewer employees serving customers, which means that they are cheaper to operate than a full-service restaurant. Menus are usually designed for convenience and fast service, and customers order at a counter, sometimes moving along an assembly line."

    But it doesn't always work, according to CNBC:  "Cracker Barrel announced in October that it planned to scrap Holler & Dash, the fast-casual spinoff it launched in 2016, after it acquired Maple Street Biscuit, a fast-casual chain with a focus on breakfast and brunch."

    I'm a big fan of retailers that test new concepts and formats, looking for ways to reach out to shoppers in ways that extend a brand's equity while trying something completely different.

    •  Fast Company has the story of Fresh Bowl, which "offers vending machine salads and other on-the-go meals in returnable glass to hungry commuters as a way to cut down on our immense food packaging waste."  Fresh Bowl launched in New York City less than a year ago, and apparently, if you can make it there you can make it anywhere - the company "has big plans to expand. Currently, there are just five kiosks in the city, but cofounder Zach Lawless says the company aims to have 50 vending machines by the end of this year, and a total of 100 in 18 months."

    According to the story, "A big reason Fresh Bowl feels ready to add its kiosks in more subway centers and office building lobbies—and, soon, retail locations—is because so far, its model seems to be working. Fresh Bowl aims to reduce waste and give greater access to healthy food by stocking vending machines with salads, grain bowls, and breakfast oats in reusable glass jars that can be returned for a discount off your next grab-and-go meal. Overall, across its current locations, Fresh Bowl has seen a jar return rate of 85%."

    The company just got more than $2 million in seed funding, which will fund the expansion, and it hopes to use customer data being gathered by the vending machines to craft more targeted offerings that also will fuel its growth.

    Published on: January 23, 2020

    •  Albertsons announced that it has hired Alice Chan, a 16-year PepsiCo veteran who most recently was senior director of sales strategy for its Frito-Lay division, to be VP of sales and marketing for own brands, a new position at the company.

    •  The Consumer Brands Association (CBA) yesterday announced that Ellen Davis, most recently senior vice president at the National Retail Federation and president of the NRF Foundation, will join the association as executive vice president, industry engagement.

    Published on: January 23, 2020

    Yesterday I recounted how an MNB reader, on a cruise and needing a pocket square to dress up his blazer, asked his wife if he could borrow a pair of her panties … and when she asked him where he'd learned that trick, he replied, "MorningNewsBeat."

    This surprised me, because I didn't remember offering any such advice … but I did a little research and discovered that Michael Sansolo, in a column five years ago about finding innovative solutions, wrote about as friend of his who figured out that "Victoria’s Secret seamless silk panties are the perfect solution" when you need a pocket square.  "No matter how they are folded or stuffed into his jacket pocket, they always create the perfect look. And the choice in colors is staggering."

    As I said yesterday, go figure. MNB ventured into GQ territory, and apparently it stuck.

    One MNB reader responded:

    That is absolutely the funniest thing that has ever appeared in MNB!

    From another:

    Congrats to Sansolo – but I really want to send kudos to the gent who remembered that and pulled it off!

    MNB reader Bob McGehee wrote:

    In the early 80’s, I saw Frank Abagnale (check forger extraordinaire and author of and subject of movie “Catch Me If You Can”) end his talk with the warning that “Things are not always as they seem”.  He then pulled from his suit coat pocket the aforementioned ladies panties.  Everything old is new again.

    In Abagnale's case, of course, he probably said they were from Victoria's Secret, but they were just a knock-off.

    Published on: January 23, 2020

    Digital strategies aren't just about creating alternatives to the bricks-and-mortar shopping experience.  Done effectively, they can actually bring people back to the store, while also eliminating customer anonymity, creating rich and actionable data, and deepen relationships between the store and consumer in a way that transcends the simple transaction.

    Our newest Retail Tomorrow podcast, which brings together a terrific panel of experts from a wide range of disciplines, was recorded at Google’s New York City offices during the recent National Retail Federation (NRF) Show.  Our guests:

    •  Matt Alexander, co-founder of Neighborhood Goods, an unusual and fascinating take on physical retailing with stores in Dallas and New York.

    •  Patrick Flanagan, senior vice president of digital marketing and strategy for Simon,  which has more than 200 properties in 37 states and Puerto Rico.

    •  Tom Furphy, CEO and Managing Director of Consumer Equity Partners, a member of the Retail Tomorrow podcast family and a regular contributor to "The Innovation Conversation" on MNB.

    •  And Jalna Silverstein, a leader in Ernst & Young’s Transaction Advisory Practice and its Real Estate, Consumer Experience and Retail Strategy.

    You can listen to the podcast here.

    This Retail Tomorrow podcast is sponsored by the Global Market Development Center (GMDC).

    Enjoy!

    Pictured from left: 
    The Content Guy, Matt Alexander, Tom Furphy, Patrick Flanagan, Jalna Silverstein.

    Published on: January 24, 2020

    by Kevin Coupe

    Excellent piece in Forbes that asks a relevant question - in a world where people seem to be more focused than ever on sustainability issues, will that force them to make a choice about convenience and the one day/free shipping guarantees to which so many of the same people have become addicted?

    There is conflicting data cited in the story:

    "A study by Future Commerce released last week found that 7% of respondents with Prime members are unsure if they will renew their membership, with some going on to say that they can wait an extra day for shipping." 

    "The report also found that consumers increasingly care more about sustainable business practices, with 42% having browsed or purchased from physical second-hand, thrift or consignment shops, and 47% saying they actively focus on buying fewer, better things."

    But…

    "Future Commerce also found in its consumer survey that the top three requirements for e-commerce websites are free shipping (58%), free returns (46.75%) and two-day delivery (30.39%)."

    And, as companies such as Amazon and Walmart invest millions in faster shipping, it drives smaller - and less-well funded - competitors to do the same.

    "Amazon and Walmart are not making its decisions in a vacuum," the story suggests.  "Consumer demand for one-day shipping would have to be apparent to execs in order to justify the huge investment required to get from two-day to one-day shipping. And it’s unknown which demographics are using one-day shipping. Are the younger generations who are self-reporting a tendency toward sustainability actually following through with this logic in their daily purchases?"

    The conclusion?

    "Shoppers are calling the shots. And unless we start putting our money where our mouth is, we’ll all be dealing with more boxes, more delivery trucks, and the long-term environmental effects of our decisions today."

    Ultimately, the Eye Opener from the story is this:  "Consumers - indeed, citizens - are pretty much able to rationalize anything."

    Which is true.  And ultimately a little depressing.

    Published on: January 24, 2020

    From the Wall Street Journal:  

    "The Trump administration is moving to curb the sale of imported counterfeit goods over the internet, warning electronic commerce platforms and warehouse operators of greater scrutiny and penalties if they don’t help ferret out fakes … The Trump administration is seeking to pressure e-commerce giants including Amazon.com Inc., which increasingly hosts lucrative third-party sales on its platform, as well as financial firms, logistics services and other companies that are positioned to help stem the rising tide of counterfeits and pirated goods."

    The story says that "the Department of Homeland Security is set to release a report Friday outlining its immediate actions and longer-term goals for enlisting e-commerce players to combat counterfeit products that officials say undermine U.S. technology and manufacturing, harm bricks-and-mortar retailers and endanger consumers."  This report will lay out the government's plans to “seek all available statutory authorities to pursue civil fines and other penalties against these entities," and will "explicitly permit the government to seek injunctive relief against third-party marketplaces and other intermediaries dealing in counterfeit merchandise.”

    KC's View:

    The argument here long has been that retailers would be better off being highly vigilant on the counterfeit issue, being better about preventing them and being as transparent as possible about product provenance.  And, I've suggested that if they didn't do this, they would have only themselves to blame if the government stepped in and imposed new rules, regulations - and penalties.  

    Which sort of seems like where we are at the moment.

    Some will argue that this is a Trump administration initiative aimed directly at Amazon and Jeff Bezos, but that may not matter.  When you know you have an enemy, you don't hand them a weapon and tell them what your weaknesses are.

    Published on: January 24, 2020

    Kroger yesterday announced that one of its new Ocado-powered robotic customer fulfillment centers will be built in Frederick, Maryland.

    It is the sixth such warehouse to be announced;  Kroger and Ocado have said they intend to have as many as 20 in the US.  It will be about 350,000 square feet, and likely will take some two years to build.

    "We are excited to bring Kroger and Ocado's latest automated warehouse to Frederick. This site will be key to delivering amazing grocery experiences to households across Maryland, Pennsylvania and the District of Columbia," said Luke Jensen, CEO of Ocado Solutions.

    And Robert Clark, Kroger's senior vice president of supply chain, manufacturing and sourcing, said, "Through our strategic partnership, we are engineering a model for the region, leveraging advanced robotics technology and creative solutions to redefine the customer experience."

    KC's View:
      One of the things about this that strikes me as interesting is that there are virtually no Kroger stores north of this location - they're all to the south and west.   But I continue to wonder if these warehouses - designed to facilitate more efficient and effective delivery of e-commerce services - could be used to allow Kroger to create a pure-play e-commerce offering for markets that it does not yet serve.

    Published on: January 24, 2020

    Fox News reports that the New York City Council passed by a 43-3 margin a bill requiring the city's retailers to take cash.

    The story says that the "rationale for joining San Francisco and Philadelphia, as well as the states of New Jersey and Massachusetts, in opposing cashless shopping: It’s unfair to residents who don’t have bank accounts or to those who simply prefer cash."

    The move disregards the retailers who "argued that cashless shopping helped improve safety at stores because cashiers would not have to handle cash and managers would not have to take cash deposits to a bank, risking loss or theft.

    But, Fox News writes, cash remains highly relevant for many consumers:  "Paper money is used for nearly a third of U.S. purchases, with debit and credit cards accounting for 31 percent and 28 percent, respectively."

    KC's View:
      I understand that not everyone has access to credit and debit cards because they don't have bank accounts, and those people need to be respected.  But it does feel at some level that the communities banning all-cash stores are resolutely trying to keep at least one foot firmly planted in the past.

    As some places ban cashless stores, Amazon is investing in biometric technology that would use people's palms as identifiers. Which would mean, for example, that in an Amazon Go store where people need the mobile app to gain entry, they'd now just have to use the palms of their hands.

    I know which approach I think reflects a clear-eyed view of the future.


    Published on: January 24, 2020

    The Wall Street Journal this morning reports that even as major CPG companies declare that they will rid themselves of non-core businesses and "unfashionable brands" that are a drag on profits, there actually is a surprising lack of divestment activity in the sector.  In 2019, for example, such activity was 74 percent lower than in 2018.

    Why?

    The Journal writes that "portfolio sales have stalled above all because it is hard to make the math work. Selling assets for low-yielding cash typically reduces leverage and therefore earnings per share. This problem is compounded by high stock-market valuations in the consumer staples sector. Disposals of weak assets at lower valuations theoretically destroy shareholder value."

    KC's View:
      Which sort of sounds like companies that are behind the eight ball when it comes to competing and making a profit, may find it harder than expected to rectify whatever disadvantages they have.  Disadvantages that they may have created for themselves in many cases, by being less in touch with what consumers want and less focused on actual innovation than they should have been.

    Published on: January 24, 2020

    The Atlantic has a long piece about Amazon founder/CEO Jeff Bezos that ponders what his "master plan" is.

    Bezos, the story says, has compiled an amazing portfolio:

    "Today, Bezos controls nearly 40 percent of all e-commerce in the United States. More product searches are conducted on Amazon than on Google, which has allowed Bezos to build an advertising business as valuable as the entirety of IBM. One estimate has Amazon Web Services controlling almost half of the cloud-computing industry — institutions as varied as General Electric, Unilever, and even the CIA rely on its servers. Forty-two percent of paper book sales and a third of the market for streaming video are controlled by the company; Twitch, its video platform popular among gamers, attracts 15 million users a day. Add The Washington Post to this portfolio and Bezos is, at a minimum, a rival to the likes of Disney’s Bob Iger or the suits at AT&T, and arguably the most powerful man in American culture."

    Here are four excerpts from the story, which is totally worth reading in its entirety:

    •  "To the U.S. president, he is a nemesis. To many Americans, he is a beneficent wizard of convenience and abundance. Over the course of just this past year, Amazon has announced the following endeavors: It will match potential home buyers with real-estate agents and integrate their new homes with Amazon devices; it will enable its voice assistant, Alexa, to access health-care data, such as the status of a prescription or a blood-sugar reading; it will build a 3-million-square-foot cargo airport outside Cincinnati; it will make next-day delivery standard for members of its Prime service; it will start a new chain of grocery stores, in addition to Whole Foods, which it already owns; it will stream Major League Baseball games; it will launch more than 3,000 satellites into orbit to supply the world with high-speed internet."

    •  "Bezos loves the word relentless — it appears again and again in his closely read annual letters to shareholders — and I had always assumed that his aim was domination for its own sake. In an era that celebrates corporate gigantism, he seemed determined to be the biggest of them all. But to say that Bezos’s ultimate goal is dominion over the planet is to misunderstand him. His ambitions are not bound by the gravitational pull of the Earth … Bezos worries that in the coming generations the planet’s growing energy demands will outstrip its limited supply. 'We have to go to space to save Earth,' he says."

    •  "Relentless might be the most Amazonian word, but Bezos also talks about the virtues of wandering.  'Wandering is an essential counterbalance to efficiency,' he wrote in a letter to shareholders this year. When I spoke with workers based at Amazon’s Seattle headquarters, they said what they appreciated most about their employer was the sense of intellectual autonomy it allowed. Once they had clearly articulated a mission in an approved six-pager, they typically had wide latitude to make it happen, without having to fight through multiple layers of approval. The wandering mentality has also helped Amazon continually expand into adjacent businesses — or businesses that seem, at first, unrelated. Assisted by the ever growing consumer and supplier data it collects, and the insights into human needs and human behavior it is constantly uncovering, the company keeps finding new opportunities for growth."

    •  "In the end, all that is admirable and fearsome about Amazon converges. Every item can be found on its site, which makes it the greatest shopping experience ever conceived. Every item can be found on its site, which means market power is dangerously concentrated in one company. Amazon’s smart speakers have the magical power to translate the spoken word into electronic action; Amazon’s doorbell cameras have the capacity to send video to the police, expanding the surveillance state. With its unique management structure and crystalline articulation of values and comprehensive collection of data, Amazon effortlessly scales into new businesses, a reason to marvel and cower. Jeff Bezos has won capitalism. The question for the democracy is, are we okay with that?"

    You can read the piece here.

    And … the New York Times has a story about him this morning that looks at how Bezos' image and behavior have changed in recent years, turning him a geek into tabloid fodder.  Here is an excerpt:

    "When Jeff Bezos and his former wife, MacKenzie, celebrated what would be their last anniversary together around Labor Day 2018, they arrived at a Miami nightclub with no fanfare. His table was booked online, which is 'totally what tourists do' and 'totally dorky,' the club’s celebrity liaison said in an interview at the time.

    "Almost a year later, Mr. Bezos arrived at a hot Miami seafood restaurant in grander fashion, on a 90-foot-long Leopard superyacht in what The Miami Herald called 'the most extravagant entrance ever'."

    Make of it what you will.  You can read that story here.

    Published on: January 24, 2020

    No one has any experience with the future.

    The advertising run-up to the Super Bowl has begun, and one of the commercials getting the most attention is from Planters, which shows the death of its longtime mascot, Mr. Peanut.

    You can see it above:  Mr. Peanut is driving the Nutmobile, accompanied by actors Wesley Snipes and Matt Walsh (Veep), when the vehicle goes off a cliff.  All three find themselves hanging onto a tree branch, which cannot support their weight … and it goes on from there.

    Some sort of memorial service for Mr. Peanut apparently will be shown in a Super Bowl commercial.

    AdWeek writes that "the loss of Mr. Peanut is a major moment for the brand. Planters first introduced Mr. Peanut to audiences in 1916, meaning that the mascot has been around since the midst of World War I, making him of the longest-standing brand mascots of all time."

    KC's View:
      I'm going to make a prediction right here.

    He ain't dead.  Somehow, he survives … maybe as a new peanut butter, but he survives.

    I would also suggest that this has been done before - when William Shatner "died" in a similar way in a Priceline commercial that you can see here.

    The question is whether the audience will feel entertained … cheated … or will even care at all.

    Published on: January 24, 2020

    …with brief, occasional, italicized and sometimes gratuitous commentary…

    •  E-commerce provider and delivery company Instacart said yesterday that it is beginning the rollout of what it is calling Instacart Meals, described as "a new grocery meals product that powers easy ordering, delivery and pickup of made-to-order food. The launch marks Instacart's move into grocery meal delivery, helping retailers bring more in-store aisles and experiences online for customers across North America."

    According to the announcement, "As a first step, Instacart has collaborated with Publix to introduce the product with a new digital deli counter including its popular Publix subs. The product will roll out to Publix locations across Florida in the coming weeks and to nearly all Publix stores across the Southeast in the months ahead, following a Florida pilot … The new Instacart Meals product makes it easy for customers to order specialty counter items alongside their groceries and household essentials, all to be delivered or picked up from the store."

    Yup.  It gets Instacart into meal delivery.   And it also allows Instacart to compile supermarkets' customer data to further arm itself to compete with those same supermarkets at some point.  It has weaponized such customer data in the past, and there is no reason to think it can't or won't in the future.

    Published on: January 24, 2020

    •  Fox Business reports that Walmart is "rolling out gym memberships to its 1.5 million U.S. employees and their families starting a $9 a paycheck, which is about $234 a year based on 26 paychecks annually."

    The story quotes Adam Stavisky, Walmart's senior vice president of U.S. Benefits, as saying, "We’re committed to providing associates and their families access to high-quality medical coverage along with tools and resources to manage their health and well-being.  The Walton Life Fitness Pass is another example of how we’re working to help our associates and their families."

    Published on: January 24, 2020

    •  The National Retail Federation (NRF) is predicting that the close to 194 million people planning to watch the Super Bowl this year "expect to spend an average $88.65 on food and beverages, merchandise and party supplies, for a total $17.2 billion nationwide.

    •  In the UK, the Times and Star reports that Morrisons plans to eliminate some 3,000 management jobs even as it plans to hire as many as 4,000 new store employees.

    David Lepley, Morrisons group retail director, tells the paper that "this proposal means more frontline colleagues improving product availability and helping customers."

    The story notes that there have been layoffs at a number of the UK's retail grocery companies, including Sainsbury and Walmart-owned Asda Group, as retailers do price-and-margin battle with German discounters Aldi and Lidl.

    Published on: January 24, 2020

    Jim Lehrer, who co-hosted and hosted the "PBS NewsHour" for decades, putting an emphasis on sober-minded journalism delivered with integrity, informed analysis and an almost studied lack of entertainment value, has passed away at age 85.

    Lehrer was perhaps best known to mass audiences for his moderation of presidential debates - he did a dozen of them between 1988 and 2012.

    In addition to his career as a newsman, Lehrer wrote some 20 novels, several plays and three memoirs.

    Published on: January 24, 2020

    Digital strategies aren't just about creating alternatives to the bricks-and-mortar shopping experience.  Done effectively, they can actually bring people back to the store, while also eliminating customer anonymity, creating rich and actionable data, and deepen relationships between the store and consumer in a way that transcends the simple transaction.

    Our newest Retail Tomorrow podcast, which brings together a terrific panel of experts from a wide range of disciplines, was recorded at Google’s New York City offices during the recent National Retail Federation (NRF) Show.  Our guests:

    •  Matt Alexander, co-founder of Neighborhood Goods, an unusual and fascinating take on physical retailing with stores in Dallas and New York.

    •  Patrick Flanagan, senior vice president of digital marketing and strategy for Simon,  which has more than 200 properties in 37 states and Puerto Rico.

    •  Tom Furphy, CEO and Managing Director of Consumer Equity Partners, a member of the Retail Tomorrow podcast family and a regular contributor to "The Innovation Conversation" on MNB.

    •  And Jalna Silverstein, a leader in Ernst & Young’s Transaction Advisory Practice and its Real Estate, Consumer Experience and Retail Strategy.

    <b>You can listen to the podcast here.

    <a href="https://www.retailtomorrow.org/podcast/online-to-off-line-all-the-lines-in-between" target="_blank"> here</a>.</b>

    This Retail Tomorrow podcast is sponsored by the Global Market Development Center (GMDC).

    Pictured below are our panel members, from left:  The Content Guy, Matt Alexander, Tom Furphy, Patrick Flanagan, Jalna Silverstein.

    Published on: January 27, 2020

    by Kevin Coupe

    It got a lot of attention last Friday when, at the World Economic Forum in Davos, Switzerland, Goldman Sachs CEO David Solomon said that the company plans to enact a new requirement for companies that it take through an IPO - they will have to have at least one "diverse" board candidate.

    "We’re not going to take a company public unless there’s at least one diverse board candidate, with a focus on women,” Solomon told CNBC, saying that the new rule will go into effect on July 1.

    It is, however, only a temporary requirement - as of 2021, Goldman Sachs will require two diverse board members.

    "We might miss some business, but in the long run, this I think is the best advice for companies that want to drive premium returns for their shareholders over time,” Solomon said.

    The New York Times noted that this is becoming a trend, that "money-management firms BlackRock and State Street plan to vote against directors at companies without a female director. And California-based public companies with all-male boards face a $100,000 fine."

    Seems to me that this is an important statement, not just because of the specific changes it will require of companies that want to work with Goldman, which last year was the largest underwriter of US IPOs.  

    It also send a valuable broader message - that companies with a diversity of views will tend to do better in terms of long-term performance.

    There was a story from CNBC late last year that reinforced this message:

    "For every female CEO in the U.S. there were 19 male chief executives, while there were 6.5 male CFOs for every woman in the role at the end of 2018, the report said.

    "In the two years following a new CEO appointment, the stock price for companies that appointed female chief executives outperformed those that appointed men by an average of 20%, the data showed.

    "When women were appointed as chief financial officers (CFOs), companies saw different benefits, the report said … In the 24 months following the appointment of a female CFO, these companies outperformed those with newly-appointed male CFOs by 8% on share price returns, the research said. They also outperformed by 6% on profitability in the same period," because they "drove more value appreciation, better defended profitability moats, and delivered excess risk-adjusted returns for their firms."

    The very definition, I think, of an Eye-Opener.

    Published on: January 27, 2020

    Bloomberg reports that Walmart "is testing out a higher minimum starting wage for certain jobs in hundreds of stores as part of a broader overhaul of roles and responsibilities across its massive U.S. workforce."

    The company said that in about 500 stores, "some associates in the fresh, front-end and replenishment areas will see their hourly pay rise from $11 an hour to $12."

    According to the story, the raises are a test, and "right now the company has no plans to raise its minimum starting wage across the board to its 1.5 million U.S. employees, the biggest private workforce in the nation. The redefined roles carry more responsibility, Walmart has said, which justifies the higher compensation. Still, the move could be Walmart’s first step toward boosting its starting pay, which it last raised in 2018."

    KC's View:

    The story makes the point that Walmart is reclassifying the roles with the higher wages, calling them "team associates," and stressing that they are going to have more responsibilities in their stores.

    I hope it also is a higher recognition that these stores are only going to be as good as the people who manage them and work there.  I'd bet that only a tiny percentage of Walmart shoppers could name anyone in its executive suite, but their experiences are affected by in-store employees every time they  walk in the front door.

    Published on: January 27, 2020

    Bloomberg this morning reports that "more than 350 Amazon.com Inc. employees contributed public statements focused on the company’s climate practices, defying company policy and escalating a feud between management and a coalition of concerned workers."

    The statements were posted on the Medium website, and come just weeks "after it emerged that Amazon had threatened workers who had talked to the Washington Post with disciplinary action or termination if they continued to speak publicly about the company without authorization."

    The employees defying company orders are described as "members of Amazon Employees for Climate Justice, an organization that has been campaigning for more than a year to get Amazon to cut ties with fossil fuel companies and commit to limiting its contribution to greenhouse gas emissions."

    In a statement, Amazon says that "while all employees are welcome to engage constructively with any of the many teams inside Amazon that work on sustainability and other topics, we do enforce our external communications policy and will not allow employees to publicly disparage or misrepresent the company or the hard work of their colleagues who are developing solutions to these hard problems."

    Amazon has maintained that it is working hard on environmental issues, with CEO/founder Jeff Bezos announcing "an initiative aimed at making his company a net-zero carbon emitter by 2040."

    KC's View:

    As big a fan and user of Amazon as I am, I would never argue that it is the most sustainability-conscious company out there - so much of its business model is built on actions that run contrary to the things that sustainability activists talk about.  It is all about priorities … and I, like a lot of people, sometimes make selfish choices that prioritize convenience over the environment.

    I don't think Amazon is going to fire anyone, at least not right away.  I hope there are no repercussions.  There would be too much blowback, and Amazon would be seen as not being the kind of company many of us think it is.

    Bezos needs to find a way to embrace these folks, and make them part of the solution … as opposed to treating them like they are part of the problem.  Employees - and customers - expect more of the companies with which they do business, and leaders have to factor that in to how they behave.

    Published on: January 27, 2020

    The Wall Street Journal this morning reports that "hundreds of regional grocery stores in cities from Minneapolis to Seattle are closing or selling pharmacy counters, which have been struggling as consumers make fewer trips to fill prescriptions and big drugstore chains tighten their grip on the U.S. market."

    The regional chains, the story says, "are too small to wrest competitive reimbursement rates on drugs, they aren’t connected to big medical networks or insurers, and they generally lack walk-in clinics and other health services that draw many customers to CVS and Walgreens locations."

    In addition, "Consumers are increasingly getting 90-day supplies of their medicines or getting prescriptions delivered in the mail. Those trends are resulting in a decline in foot traffic to supermarket pharmacies, which were typically located at the back of stores. Meantime, profits are ever harder to come by as the health-care industry consolidates."

    KC's View:

    I totally get the economic motivations for closing down pharmacies.  Even when they were being opened, I remember execs telling me how pharmacies took the longest of store departments to become profitable, but were worth the wait because they created a different kind of bond between shopper and store.

    When stores close down their pharmacies, they need to find new and different ways to create and sustain those bonds.  The prescription for success is better connections and strong differentiation … not just paring away the stuff that doesn't work.

    Published on: January 27, 2020

    The Wall Street Journal this morning has a piece about how retailers' CFOs need to "exercise caution when it comes to investments and expansion, and closely watch the economy," continuing to monitor "freight costs, commodity costs, 'shrink' - also known as theft - and other expenses that could make a dent in profit margins."

    While the economy continues to hum along in a lot of sector, there also have been a number of major retailers that "posted disappointing holiday sales"; in addition, there continue to be retailers that are closing many of their stores.  The fact is, the <i>Journal</i> writes, "global trade conflicts, an upcoming presidential election and mixed signals on consumer spending are painting a murky picture for retail finance chiefs."

    Experts tell the Journal that "as online purchases make up an increasingly large share of total retail sales, CFOs are making company-specific investments to strengthen their top line and to hold their ground against rivals and e-commerce giants. Companies such as Lowe’s Cos . and Target Corp. have been expanding their internal technology teams to build point-of-sale software and inventory-management systems.

    "CFOs will continue to lead initiatives such as loyalty programs, and they will further efforts to allow more shoppers to buy products online and then pick them up in the store."  But they also need to be "especially cautious about expanding their businesses and deciding whether to add or shutter storefronts."

    KC's View:

    One of the things that stood out to be in the story was the analyst who described a world in which there is "a tale of two CFOs" - there is a clear delineation between the companies that have been preparing for the future and are moving forward, and those that are grappling just to stay above water.

    I am also reminded of something that Scott Moses, managing director at PJ Solomon always talks about - the vast and often crippling difference between companies that have access to low-cost capital, and those that do not, and therefore are at an enormous disadvantage.  CFOs at the latter companies may not be sleeping particularly well these days

     The widening gap between retailers running strong franchises and maintaining steady cash flows and those fighting to survive has engendered “a tale of two CFOs."  It reminds me of the Shakespeare line from "Henry IV, Part II" … "We have heard the chimes at midnight"…

    For a lot of these companies, they heard the chimes at midnight because the times were good and the living was easy.  But now, they hear the chimes in a different context, because death looms.

    Published on: January 27, 2020

    The New York Times has a story about sports apparel company Under Armour, which was "once heralded as the next Nike."  Now, however, "Under Armour has faltered, hurt by slumping sales and unflattering revelations about its corporate culture."

    The company, according to the Times, has "faced tough scrutiny, resulting in lawsuits from shareholders, who accuse the company of misleading investors, and media coverage around real estate deals involving the company and (its CEO's) private holdings. Questions have also arisen about a culture that allowed strip club visits to be expensed on corporate credit cards and, more recently, a disclosure by The Wall Street Journal that federal authorities are conducting investigations into accounting practices."

    The Times writes that "there is no one cause of Under Armour’s struggles. Some factors, like the bankruptcies of the retail giants Sports Authority and Sport Chalet in 2016, were out of the company’s control.

    "But interviews with several current and former Under Armour employees as well as competitors, advisers to athletes, and financial analysts also point to a company that tried to do too much too fast. It expanded into sports in which it had little expertise and failed to articulate a strategy for its expensive tech acquisitions. It eschewed the athleisure trend, which has buoyed sales at Nike and Adidas, and struggled to translate its brand to an international audience."

    The story is worth reading here.

    KC's View:
     

    The story quotes CEO Kevin Plank as saying, "The world did not need another competent apparel or footwear manufacturer.  What the customer needs is a dream."

    Which I agree with.  But what he didn't seem to understand is that means matter, not just ends.  And these days, more than ever, customers and investors are able to learn more than they ever knew in the past about not just the performance of a company, but the embedded culture.  These things matter.


    Published on: January 27, 2020

    Clayton M. Christensen, the Harvard Business School professor who wrote "The Innovator’s Dilemma," which cemented his reputation as superstar management guru, has passed away at age 67.  The cause was complications for leukemia.

    An excerpt from the New York Times obituary:

    "The Innovator’s Dilemma" … was published during the technology boom of the late 1990s. It trumpeted Professor Christensen’s assertion that the factors that helped the best companies succeed - listening responsively to customers, investing aggressively in technology products that satisfied customers’ next-generation needs - were the exact same reasons some of these companies failed.

    "These corporate giants were so focused on doing the very things that had been taught for generations at the nation’s top business schools, he wrote, that they were blindsided by small, fast-moving, innovative companies that were able to enter markets nimbly with disruptive products and services and grab large chunks of market share. By laying out a blueprint for how executives could identify and respond to these disruptive forces, Professor Christensen, himself an entrepreneur and former management consultant, struck a chord with high-tech corporate leaders."

    The Times also has this observation about Christensen:

    "On the last day of his management class every semester, he wrote, he asked his students to “turn those theoretical lenses on themselves” and answer three questions:  'First, how can I be sure that I’ll be happy in my career? Second, how can I be sure that my relationships with my spouse and my family become an enduring source of happiness? Third, how can I be sure I’ll stay out of jail?'

    "He noted that several former classmates, including Jeffrey Skilling, the former chief executive of Enron, had spent time in prison.  'These were good guys — but something in their lives sent them off in the wrong direction,' he wrote.  Ultimately, the realization that his ideas had generated enormous revenue for companies that used his research left him dissatisfied.  'I know I’ve had substantial impact,' he wrote.  'But as I’ve confronted this disease, it’s been interesting to see how unimportant that impact is on me now. I’ve concluded that the metric by which God will assess my life isn’t dollars but the individual people whose lives I’ve touched.

    "'Don’t worry about the level of individual prominence you have achieved,' he continued; 'worry about the individuals you have helped become better people'."

    Published on: January 27, 2020

    At its annual Midwinter conference in Arizona, FMI-the Food Industry Association presented a number of Executive Leaderships Awards.

    •  Kevin Davis, president and Co-CEO, Bristol Farms, received the Sidney R. Rabb Award, which recognizes "contributions to the industry, consumers and community."

    •  Mark Skogen, president and CEO, Festival Foods, received the Robert B. Wegman Award, lauded for pushing "for new and innovative in-store experiences to better serve the customers."

    •  Craig Boyan, president, H-E-B, received the Glen P. Woodard, Jr. Award

    for his involvement in public affairs initiatives.

    •  Al Carey, PepsiCo's retired North America CEO, received the William H. Albers Award, "for sparking collaboration between brands and retailers, as well as front-line associates that trickled directly down to the consumer."

    •  Henry Johnson, the retired president of W. Lee Flowers & Co., received the Herbert Hoover Award, for having "embedded his humanitarianism and passion for philanthropy in his leadership."

    •  Natalie Menza-Crowe, RD, MS, director of health and wellness, Wakefern Food Corp, received the Esther Peterson Award for creating "dynamic programs that educate and inspire consumers and associates to embrace the importance of healthy eating to make balanced nutritional decisions."

    Published on: January 27, 2020

    •  The Wall Street Journal this morning reports that "new warehouse construction across North America is expected to outstrip demand over this year and next, according to a new report that suggests a yearslong boom in industrial space fed by e-commerce growth may be shifting in favor of tenants."

    The numbers are clear:  More than 300 million square feet of warehouse space is expected to be opened this year, and another 272 million square feet next year, but tenants are expected to lease only 272 million and 218 million square feet, respectively.

    The Journal writes that "tight space has driven down vacancy rates and driven up rental prices, but companies said last year that the industrial real-estate market was getting closer to a balance between supply and demand."

    Published on: January 27, 2020

    •  USA Today reports that Walmart-owned e-commerce business Hayneedle, which sells specialty home products, has begun a series of layoffs that will result in some 200 people being out of work.  The move comes as Walmart integrates Hayneedle's operations into those of its own website, though it will continue to operate Hayneedle's separate website.

    Published on: January 27, 2020

    …with brief, occasional, italicized and sometimes gratuitous commentary…

    •  In Oregon, the Malheur Enterprise reports that a federation of Oregon retail employees is circulating a petition that would call for a state ballot initiative that would "limit each grocery store to two of the checkout kiosks."

    According to the story, "The AFL-CIO contends self-checkout kiosks make customers feel socially isolated, particularly elderly people, and that the kiosks let stores rely more on part-time workers and leaves workers “feeling devalued.” They also claim self-checkout stands make it easier for minors to buy alcohol and for people to steal from stores."

    “We have been consistently concerned about the impacts of technology and automation on the livelihoods of working people, especially when they have no voice in how technology is used in their workplaces,” said Graham Trainor, president of the Oregon AFL-CIO. “You can see expansion of self-checkout machines in stores across the country and in Oregon.”

    What a crock.  This likely is less about keeping elderly people connected and keeping people employed (especially at a time of such low unemployment) than it is about helping the AFL-CIO maintain some power and leverage.  But it may pass … Oregon, after all, is one of two states (the other is New Jersey) that doesn't allow people to pump their own gasoline.

    Published on: January 27, 2020

    •  Hy-Vee announced that longtime executive Jay Marshall, the company's EVP and co-COO, has been named vice chairman.

    The company also said thatCraig Clasen, senior vice president of Retail Business Development, and Brett Bremser, executive vice president and CMO, have retired.

    Current Executive Vice President Darren Baty has been named the new CMO.

    Published on: January 27, 2020

    From the Los Angeles Times, about  basketball star Kobe Bryant, who died yesterday in a helicopter crash that also killed his 13-year-old daughter, Gianna, and seven others:

    "By the end of his 20-year career - all of it spent with the Lakers - Bryant was a five-time world champion, two-time Olympic gold medalist with the U.S. team and 18-time All-Star. He ranks fourth on the NBA’s all-time scoring list; he was surpassed just this weekend by Laker star LeBron James.

    "In a manner befitting both his sophisticated background and the city where he spent his adult life, the 41-year-old had transitioned from athletic stardom to a post-basketball career that included an Oscar for the animated short <i>Dear Basketball</i>, a series of children’s books that became New York Times bestsellers and a growing business empire."

    Magic Johnson called Bryant "the greatest Laker of all time."

    Published on: January 27, 2020

    We had a story the other day about how Delta gave out the equivalent of two months' salary to employees as a bonus, with the CEO saying that they get "all the credit" for the company's superior performance.

    One MNB reader wrote:

    Good for Delta and American to achieve record profits and employee bonus payouts. Wish they invested some of that money in offering a better product !…For those of us lucky enough to travel overseas, it is sad 

    that none of the USA airlines rank in Top 10 globally in terms of service and “product”.

    Singapore Air, Cathay Pacific, Emirates, Etihad, British Airways etc…….  all “much better”.

    It’s not that USA airlines couldn’t match or surpass other global airlines …..USA airlines choose to focus on profit.

    In many other industries, USA companies are leaders in service and innovation, our airlines are mediocre on the global playing field.

    MNB reader Monte Stowell wrote:

    Being a million miler on Delta Airlines, I would like to recall a wonderful Delta experience.

    I had several years ago. I was flying to Honolulu from Portland, OR, through LAX to Honolulu. This trip was going to earn me this coveted million miler status. About an hour or so, the stewardess came on the inter-com and mentioned that I had just earned the million miler status. They broke out champagne for everyone on the plane, and there was a round of applause from many of the passengers. The stewardess gave me a congratulatory letter from Delta and told me I would be receiving the gold card later in the mail. Customer service at its finest. Small gestures make a big difference, as this story was told by me to many of my fellow employees. Great employees make a big difference to their customer and also to the culture of a company. Count me in for what Delta is doing to share their good fortune.

    I think I saw this in a movie…wasn't Sam Elliott the pilot?

    Published on: January 27, 2020

    Digital strategies aren't just about creating alternatives to the bricks-and-mortar shopping experience.  Done effectively, they can actually bring people back to the store, while also eliminating customer anonymity, creating rich and actionable data, and deepen relationships between the store and consumer in a way that transcends the simple transaction.

    Our newest Retail Tomorrow podcast, which brings together a terrific panel of experts from a wide range of disciplines, was recorded at Google’s New York City offices during the recent National Retail Federation (NRF) Show.  Our guests:

    •  Matt Alexander, co-founder of Neighborhood Goods, an unusual and fascinating take on physical retailing with stores in Dallas and New York.

    •  Patrick Flanagan, senior vice president of digital marketing and strategy for Simon,  which has more than 200 properties in 37 states and Puerto Rico.

    •  Tom Furphy, CEO and Managing Director of Consumer Equity Partners, a member of the Retail Tomorrow podcast family and a regular contributor to "The Innovation Conversation" on MNB.

    •  And Jalna Silverstein, a leader in Ernst & Young’s Transaction Advisory Practice and its Real Estate, Consumer Experience and Retail Strategy.

    You can listen to the podcast here.

    This Retail Tomorrow podcast is sponsored by the Global Market Development Center (GMDC).

    Pictured below are our panel members, from left:  The Content Guy, Matt Alexander, Tom Furphy, Patrick Flanagan, Jalna Silverstein.



    Published on: January 28, 2020

    by Michael Sansolo

    In 1894, London faced an emerging problem of stunning concern. At the time, the streets of the city were clogged with horse-drawn conveyances of all types. The roughly 50,000 horses in London all had digestive systems, which meant that the streets of London also were being clogged by horse waste.

    The problem wasn’t confined to London, of course. New York was estimated to have 100,000 horses producing 2.5 million pounds of manure daily not to mention the added problems of horse urine and dead horse corpses. The Times of London captured the concern of the day by predicting that by 1944 the streets of the city would be constantly buried under nine feet of manure.

    Obviously that didn’t happen.  The automobile was invented.  And while automobiles weren't invented specifically to address the horse manure problem, this averted crisis can be seen as a good example of how even the most dire problems can be mitigated by smart solutions.

    It also reminds us of how important it is to look forward and see where the storm clouds are massing, so we can come up with solutions sooner rather than later.

    Supply Chain Drive.com recently reported on a similar coming crisis, which got me thinking about those horses in London.  Thanks to the explosion of delivery services, cities around the globe are just beginning to grapple with the challenge of what to do with all the traffic that entails. As Supply Chain Drive explains, New York is a prime (pardon the pun) example. As customers increasingly turn to delivery of goods, companies need find ways of handling that treacherous last mile.

    It’s easy to see this already. The last two apartment buildings where my daughter has lived both remade their lobbies to accommodate the flood of packages arriving every day. Supply Chain Drive extrapolated what all those deliveries are going to mean to already-crowded city streets and projected that endless gridlock is in our future.

    The website quotes a New York-based professor who pointed out that this rush to delivery makes it clear that old fashioned shopping trips done one shopper at a time are actually more efficient. So too is the notion of finding new ways to consolidate shipping to permit drivers to make many deliveries in a single trip.

    For the moment, there is no solution at hand. Shoppers increasingly like and rely on delivery services and those services, in turn rely on roads and drivers - two commodities that are increasingly in short supply.

    Rather than simply look at the London manure crisis as a model for hope, we would be better served to consider the likely realities of this situation. Increasingly congested roads will only lead to additional delivery problems at all parts of the supply chain and will only increase the pressure from existing driver shortages. So it behooves all of us to focus on logistics and how to possibly wring even more inefficiencies out of the system.

    Go figure, it might even give stores an ability to provide environmentally aware shoppers with an important reason to do their own shopping rather than outsource it to, say, Amazon. 

    But most importantly, it reminds us to keep looking to the horizon for the problems and opportunities coming at us in tomorrow’s world and to find solutions that work for both our customers and us.

    Michael Sansolo can be reached via email at <A HREF="mailto: msansolo@mnb.grocerywebsite.com "> msansolo@mnb.grocerywebsite.com </A>.  His book, “THE BIG PICTURE:  Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available here.

    And, his book "Business Rules!" is available from Amazon here.

    Published on: January 28, 2020

    by Kevin Coupe

    Interesting piece in the Washington Post about "the differences between millennials’ financial trajectory and those of earlier generations: In 1990, baby boomers, whose median age was 35, owned nearly one-third of American real estate by value.

    "In 2019, the millennial generation, with a median age of 31, owned just 4 percent."

    The story makes the point that "millennials, many of whom are entering their prime home-buying years, are likely to make up some of that gap by the time they see 35. But they’re not likely to reach 30 percent of the housing market — or even the 20 percent attained by the smaller Generation X at the same point in their lives."

    The big factor in this shift, the <i>Post</i> writes, is debt:

    "Millennials’ massive debt burdens also make it difficult to them to save for a down payment at any housing price. For households headed by someone younger than 35, median debt ballooned from $21,000 in 1989 to $39,000 in 2016. During that same time period, the percentage of under-35 households with student loan debt more than doubled, from 17 percent to 45 percent, and their median debt more than tripled, from $5,600 to $18,500."

    And, even as "baby boomers slowly age out of homeownership," making available a "projected $13.5 trillion in housing inventory," the fact is that "millennials and younger generations might not be able to afford them."

    The question that retailers need to ask themselves:  What else will these folks be unable to afford?

    This trend, of course, will raise other questions.  Like, what will happen to an economy that largely depends on consumers for growth if a significant percentage of the population cannot afford to purchase the item that for most people becomes a major way to build wealth?  What will happen when these factors run headlong into an economic recession?

    How will retailers - many of them already in economic distress because of changing consumer habits and the requirement that they invest more and more capital just to keep up and remain relevant - adjust and compensate?

    I have no answers for these Eye-Opening questions.  But I think they are worth asking, and beginning the search for the different answers that will work for different retailers.

    Published on: January 28, 2020

    The Wall Street Journal this morning has a story about how grocers looking to be more effective in e-commerce fulfillment "are testing micro-fulfillment systems that can spit out as many as 4,000 orders a week but can still be housed in the back of stores or in urban areas where space is at a premium. The store owners are evaluating whether automation can help tamp down costs while speeding up deliveries and they are turning to a new set of startups aiming to make e-commerce fulfillment more efficient in a small footprint."

    The story notes that while e-grocery sales are still relatively small - about 3.5% of overall food and beverage sales - they are growing, which leaves retailers "scrambling to retool operations" that will be appropriate to what consumers seem to need and want - whether it be click-and-collect, delivery, or both, using store-pick or central-pick, and then adapting those solutions to the specific requirements of fresh food while maintaining some level of profitability in a low-margin sector.

    Micro-fulfillment centers are seen as being a fast and relatively economical way of addressing these problems.  For example, Takeoff Technologies’ 10,000-square-foot systems "cost around $3 million and can be up and running in about four months … The centers hold some 15,000 different products and require about a dozen workers to operate, including some manual picking."

    This approach is finding favor with some major players - Albertsons, Wakefern and Ahold Delhaize all are working with Takeoff to develop micro-fulfillment centers.

    KC's View:

    Seems to me that smart retailers will be making concerted pushes into the micro-fulfillment space, and maybe even ought to be looking at expansion plans with an eye toward replacing some new store plans with dark stores that are keyed to the e-commerce business.  I'd be setting up systems that are appropriate to both click-and-collect and delivery, and especially to auto-replenishment models, that can create stronger connections to the shopper.

    Of course, if you doubt that e-grocery will pretty quickly grow to five, 10, 15 even 20 percent of sales, then keep doing business the same way you're doing it.  It'll be okay.  Really.

    Published on: January 28, 2020

    Bloomberg has a story about Lavka, described as Russia's answer to Amazon, which is delivering groceries to Moscow consumers within 15 minutes of them being ordered.

    Owned by Yandex, Russia's largest technology company, Lavka has "spread small warehouses across the capital stocked with about 2,000 items and uses bike couriers to deliver orders. Its strategy is to build market share by being a digital convenience store—the place consumers turn to for ingredients, toothpaste or even a packet of condoms delivered straight to their door."

    The story notes that Yandex has "upended the local taxi market and launched a variety of other digital services, including restaurant deliveries, as it surpassed 127 billion rubles in sales ($2 billion). The latest push comes as Russia’s once-slow embrace of e-commerce  accelerates. While many companies offer delivery of online grocery orders, consistently doing it this quickly breaks new ground."

    Bloomberg writes that Lavka has not made a profit yet, but the company is hopeful that this will change as usage becomes more common and volume increases.

    The story notes that "each warehouse is about 150 square meters (1,600 square feet), roughly the size of a small convenience store, and serves an area within a radius of about a mile, facilitating quick deliveries. By comparison, online supermarket Perekrestok.ru fills Moscow orders via truck from three distribution centers ranging from 4,000 to 18,000 square meters."

    KC's View:

    Sounds like these are Russia's version of micro-fulfillment centers … 

    Published on: January 28, 2020

    The Orlando Business Journal reports that "Publix Super Markets has confirmed it is under contract to buy five Lucky's Market leases in Florida; and German discount grocery chain Aldi has confirmed it is in negotiations for several of the locations in the state, as well."

    The news comes as Lucky's filed for Chapter 11 bankruptcy yesterday and said it would close its Colorado headquarters.

    The Denver Business Journal reports that Lucky's yesterday said it owes about $30  million to its 50 biggest creditors, has between 10,000 and 25,000 creditors in total, has assets worth between $100 million and $500 million and liabilities between $500 million and $1 billion.

    The story notes that Kroger, "which announced late last year was selling its stake in the company, is listed as holding 55% of the equity interests in the Lucky Market Parent Company. Lucky's Founder Holdings LLC owns the remaining 45% stake in the parent company."

    Published on: January 28, 2020

    Fast Company has a story that starts by pointing out something that is common knowledge:  "It’s true that in the coming decades, the U.S. will indeed get browner—a shift that is already well underway. In 2018, non-Hispanic white Americans accounted for about 60.4% of the population, as per Census Bureau estimates. That’s a notable drop from 2000, when they comprised 69.1% of the American populace.

    "In two decades, we’ll be on the cusp of a demographic milestone: the advent of a white minority. According to 2018 census projections, the non-Hispanic white population will fall to about 49.7% by the year 2045."

    If indeed the American population will look markedly different, Fast Company writes, "a similar transformation will likely follow in the workplace. In recent years, the corporate world has had endless conversations about the importance of diversity, first positioning it as a moral imperative and then making the business case. Many companies and executives have repeatedly pledged their commitment to diversity and inclusion efforts, often with little to show for it. Soon they’ll have no choice but to act."

    It will be critical, the article suggests, to act with the knowledge that a non-white population is not monolithic in any way.  Greater diversity also won't just be about color - there will be more women in the workplace than ever, and more older people.  And research suggests that a prosperous America will, maybe more than ever, be dependent on the immigrant population.

    "All this means that in the coming decades, businesses that have given lip service to promoting diversity will likely have to widen their hiring pipelines, out of sheer necessity," Fast Company writes.

    You can read the story here.

    KC's View:

    I got an email from an MNB reader the other day suggesting that diversity initiatives can be a slippery slope, because they sometimes can lead to inexperienced and unqualified people being moved up.  And sure, that can happen … but it isn't like business isn't rife with examples of white males who moved up way beyond their capabilities and talents?  (Ever read "The Peter Principle?")

    The fact is, diversity initiatives actually open leaders' eyes to a much vaster population of people who can enrich a company's culture and, because they may see the world in different ways, also do wonderful things for a company's bottom line.

    Published on: January 28, 2020

    The New Yorker has a lovely piece about Fairway Market, the iconic New York City that has entered bankruptcy, the victim of some combination of greed and mismanagement and neglect that lasted just long enough to make it almost impossible for the current owners to rescue it, making a sale of some stores and a closure of others inevitable.

    Fairway, the story says, was "one of those odd original New York institutions that grew up organically, on the sidewalk, unlike the Whole Foods and Trader Joe’s stores that have competed with it in recent years, which were dropped down on the street from a retail empire headquartered elsewhere. No less a magus of social history than Simon Schama once wrote of Fairway that it if it were possible to award the congressional Medal of Honor to a food market, Fairway would already have won one for its service to appetite, and that its cheese department alone turned 'Rabelaisian excess into a stationary New York festival of aroma, color and texture'."

    The "democratic energy" at Fairway, the story says, "was so extraordinary that someone coming home to New York from a place like, say, Paris - where the division between the gastronomic and the generic, the élite and elementary is still strong - would be knocked sideways by the coexistence of those seemingly contradictory principles."

    "Such private enterprises, from coffeehouses and grocery stores to high-end department stores, with their vast common spaces … create the social capital that supports our common life - the possibility of bumping into people with whom we share a common citizenship but don’t often share a common space or pursuit. The accumulated social capital of such spaces becomes our common life. The single man buying cheese and the family buying paper towels in bulk stand in line together."

    In the end, Fairway's bankruptcy "seems likely to cost the employees far more than it will the investors - not to mention the customers."

    It is a thoughtful piece, and you can read it here.

    Published on: January 28, 2020

    •  The Associated Press reports that Chipotle has been fined $1.3 million by the Massachusetts Attorney General because of more than 13,000 child labor violations at its restaurants in the state.

    According to the story, "The fine detailed that Chipotle had employees under the age of 18 working past midnight and for more than 48 hours a week. Teenagers told investigators their hours of work were so long that it was preventing them from keeping up with their schoolwork. The company also regularly hired minors without work permits … The violations also include failure to keep accurate records and pay timely wages. Lastly, the company was ordered a voluntary $500,000 payout to a state youth worker fund dedicated to education, enforcement and training."

    •  The Wall Street Journal reports this morning that the US Department of Justice is looking into a possible merger of bankrupt Dean Foods, the top-selling US milk processor, and Dairy Farmers of America, the largest U.S. dairy cooperative by membership.  The two were said to be in deal discussions after Dean Foods filed for bankruptcy protection late last year, but antitrust regulators reportedly are "discussing with farmers and retailers the potential impact of such a deal on milk prices and competition in the dairy business."

    The story says that "some farm groups have raised concerns that a tie-up between Dean and DFA might lead to an excessive concentration of milk buyers in parts of the country. As U.S. milk consumption has fallen about 40% over the last four decades, fluid-milk production has shifted to a smaller number of bigger plants."

    •  The Washington Post reports that while Kellogg's "made a commitment to phase out by 2025 wheat and oats on which farmers have used glyphosate as a drying agent," the company "neglected to tell the industry groups that support wheat and oat growers."

    Those groups are not pleased.

    Caitlin Eannello, the director of communications at the National Association of Wheat Growers, says that her organization maintains that "glyphosate is very safe, and there’s no real alternative. If it were to be totally eradicated, producers would probably stop growing. [Kellogg’s] made an announcement without talking to us."

    The story points out that "glyphosate is the active ingredient in Roundup, the Bayer-Monsanto weedkiller that is the most heavily used herbicide in the United States … A 2018 study by the Environmental Working Group found glyphosate in all but two of 45 samples of products made with conventionally grown oats, most at higher levels than what EWG scientists consider protective of children’s health. They also found a third of the 16 samples made with organically grown oats had glyphosate, but at much lower levels."

    Published on: January 28, 2020

    •  Charles “Chuck” Fry, co-founder of Fry’s Food Stores, which is now owned by Kroger, passed away last week.  He was 92.

    Published on: January 28, 2020

    Digital strategies aren't just about creating alternatives to the bricks-and-mortar shopping experience.  Done effectively, they can actually bring people back to the store, while also eliminating customer anonymity, creating rich and actionable data, and deepen relationships between the store and consumer in a way that transcends the simple transaction.

    Our newest Retail Tomorrow podcast, which brings together a terrific panel of experts from a wide range of disciplines, was recorded at Google’s New York City offices during the recent National Retail Federation (NRF) Show.  Our guests:

    •  Matt Alexander, co-founder of Neighborhood Goods, an unusual and fascinating take on physical retailing with stores in Dallas and New York.

    •  Patrick Flanagan, senior vice president of digital marketing and strategy for Simon,  which has more than 200 properties in 37 states and Puerto Rico.

    •  Tom Furphy, CEO and Managing Director of Consumer Equity Partners, a member of the Retail Tomorrow podcast family and a regular contributor to "The Innovation Conversation" on MNB.

    •  And Jalna Silverstein, a leader in Ernst & Young’s Transaction Advisory Practice and its Real Estate, Consumer Experience and Retail Strategy.

    You can listen to the podcast here.

    This Retail Tomorrow podcast is sponsored by the Global Market Development Center (GMDC).

    Pictured below are our panel members, from left:  The Content Guy, Matt Alexander, Tom Furphy, Patrick Flanagan, Jalna Silverstein.

    Published on: January 29, 2020

    Content Guy's Note: The goal of "The Innovation Conversation" is to explore some facet of the fast-changing, technology-driven retail landscape and how it affects businesses and consumers. It is, we think, fertile territory ... and one that Tom Furphy - a former Amazon executive, the originator of Amazon Fresh, and currently CEO and Managing Director of Consumer Equity Partners (CEP), a venture capital and venture development firm in Seattle, WA, that works with many top retailers and manufacturers - is uniquely positioned to address.

    This week, Tom Furphy and I decided to do our Innovation Conversation via Skype;  Tom was at the FMI Midwinter Conference in Arizona … and I had a conflict that kept me from attending.  But we had what I think was an engaging conversation about the energy and determination that Tom detected among retailers in attendance, as they face off against new and often harsh competitive realities.

    One note:  A slight glitch in the wifi service caused one small part of Tom's comments to be garbled.  The reference he made was to Karen Short of Barclay's Investment Bank, and a report she wrote that was highly critical of Instacart.  You can learn more about that report here.

    Published on: January 29, 2020

    Fast Company writes about Bond - not the fictional spy, but rather "a new urban shipping company that wants to make online shopping both more sustainable and less annoying for customers."

    Some context:  "When someone in the neighborhood places an order in the morning with one of the brands working with the service, they can get a delivery the same afternoon—and schedule the time that the local bike courier will arrive with the package, chatting in real time with the courier, if needed. If someone misses a delivery, the package will go back to the storefront rather than a more distant distribution center. Returns can also be scheduled for pickup."

    The system is enabled by a "growing network of 'nano distribution centers,' serviced by the electric vehicles."  This network "means that delivery inside the neighborhood can be much more efficient. At night, when roads are clear, trucks make larger deliveries to the distribution centers. During the day, when streets are crowded, the small cargo trikes can avoid the pollution of trucks or vans stuck in traffic, and can operate more nimbly, making deliveries faster. The company has calculated that one of the logistics companies that it works with has reduced its use of trucks by 22%."

    Bond, the story says, "grew out of an online grocery service in Tel Aviv called Shookit. At first, the delivery company was struggling with the cost of its delivery … Shookit decided to experiment with storing its inventory directly inside neighborhoods instead of using more traditional warehouses and then use electric trikes, and saw that it worked: deliveries were more efficient, and customers were so much less frustrated with delivery times that customer retention increased 60%. The founders decided to spin off Bond to work with other brands that were struggling with the typical problems of online delivery, like missed packages.

    "Bond can deploy its distribution centers in basements, unused space in office buildings or parking garages, or, somewhat ironically, storefronts that may now be empty because neighborhood stores were pushed out of business by online shopping."

    KC's View:

    This yet another variation on the micro-fulfillment center / ghost kitchen / dark store trend that seems to be getting traction among a lot of retailers, as they seem to understand that local really does matter - in a lot of ways.  These are just variations on the small neighborhood stores that used to dot the landscape and form the backbone of American retailing.

    I will be interested to see how this trend is adapted by and for small retailers that have limited resources.  As long as their brands are front and center, instead of being subsumed into a brand that wants to pre-empt them, there may be interesting ways to slice this particular loaf of bread.

    Though … it also occurs to me that this is a model that could be adapted by packaged goods brands that would like to disintermediate traditional retailers and go directly to consumers.

    Published on: January 29, 2020

    BoiseDev reports that Albertsons has "brought its pre-packaged meal kits back to local stores," positioning them as "a reworked brand" that remains "largely the same. A bundle of ingredients along with a recipe to prepare a meal at home. The company did tweak one component: ingredients now come pre-chopped."

    It is just the latest twist in Albertsons' meal kit journey.  It bought meal kit company Plated in 2017 for $200 million, started rolling its products out to stores in several markets, but then pulled them.

    KC's View:

    I've long been of the opinion that meal kit concept was essentially a good idea that got tarnished by the overreach of companies like Blue Apron.  I like that Albertsons is getting back in.

    Published on: January 29, 2020

    From Fortune:

    "Who knew that the rise of Amazon would turn out so well for Walmart and Target?

    "It was only a few years ago that both of those titanic big-box retailers were in peril, losing customers in droves to the e-commerce giant. But the past decade’s radical reshaping of how Americans shop, a change fueled by Amazon’s inexorable ascent, has paradoxically resulted in Walmart and Target - along with a few other big U.S. retailers - evolving to become stronger and more successful companies than ever. The massive shock of e-commerce’s encroachment, analysts agree, gave them the jolt they needed to reinvent themselves."

    The story characterizes this as "a stunning return to form for both Walmart and Target," which, perhaps implausibly, are "getting more shoppers to come to their stores."

    You can read the entire story here.

    Published on: January 29, 2020

    H-E-B has a Super Bowl commercial this year, featuring "Desperate Housewives" star Eva Longoria, designed to publicize its My H-E-B mobile application.

    The gimmick:  a sweepstakes that will allow one person to win a lifetime of free groceries from H-E-B.  To enter, all people have to do is download the app.

    The ad will run in more than a dozen Texas markets during the second half of this Sunday's Super Bowl between the San Francisco 49ers and the Kansas City Chiefs.

    A teaser commercial can be seen above.

    Cory Basso, H-E-B's group vice president of marketing and advertising, said in a statement that "at H-E-B, we’re always looking for ways to go big and show our appreciation for our amazing customers."

    Published on: January 29, 2020

    The BBC reports that Starbucks has closed some 2,000 of its China stores, or roughly half its fleet there, "to protect its staff and support government efforts to contain the coronavirus."

    The coronavirus, which has symptoms that include fever, cough, shortness of breath and sometimes pneumonia, has caused China to close down more than a dozen cities as a way of containing spread of the disease, which reportedly has lead to the deaths of more than 130 people.  There have been some 6,000 reported infections.

    China represents about 10 percent of Starbucks' annual revenue.

    KC's View:

    Starbucks isn't the only one.  A ton of companies are pulling back their Chinese operations or considering it, including Apple and Toyota … which is going to have an impact on their financial results and especially their projections.


    Published on: January 29, 2020

    Bloomberg reports that in "a rare setback" for Beyond  Meat and the faux meat business in general, Canadian doughnut chain Tim Horton's has "stopped selling Beyond Meat products at its coffee and donut shops across two of Canada’s biggest provinces," Ontario and British Columbia.

    In an official statement, the company said that "we introduced Beyond Meat as a limited time offer. We are always listening to our guests and testing new products that align to our core menu offerings. We may offer Beyond Meat again in the future."

    The Bloomberg story notes that "the chain had been serving the Beyond Burger and a Beyond Meat breakfast sandwich made with the company’s imitation sausage products. After an initial launch starting in June at nearly 4,000 Canadian locations, the items were scaled back to the provinces of Ontario and British Columbia in September."

    KC's View:

    They say they may bring it back, but the real implication here is that faux meat is too faux for Canadians, and certainly not in synch with the demands of Tim Horton's core consumers.  Which is probably one more reason for McDonald's to be cautious about getting into the plant-based meat business.  (Though, if I'm not mistaken, Canada is where McDonald's has been doing a lot of its plant-based testing.)


    Published on: January 29, 2020

    The Washington Post this morning reports that Gojo Industries, which sells Purell hand sanitizing products, has been ordered by the US Food and Drug Administration (FDA) to stop making "unproven claims that the hand sanitizer can prevent diseases like Ebola, norovirus and MRSA."

    The warning extends to all ways in which Purell is marketed, including "social media materials, blog posts and frequently asked questions on the product and corporate website."

    Purell, the story notes, has been claiming that its use can reduce student absenteeism by 51 percent, and, in "germ-infested athletic environments … could help to reduce MRSA and VRE by 100 percent."

    FDA's response:  Not so much.

    Gojo put out a statement pointing out that the FDA's criticisms were aimed at its marketing efforts, not the safety or quality of its products.

    The contretemps come, the story notes, "as the United States is bracing for one of its worst flu seasons in decades and worldwide concerns grow amid a coronavirus outbreak that has killed at least 100 people in China, where the outbreak originated."

    KC's View:

    Purell has become a verb, it is so popular these days.  Overstatement would not seem to be required.

    Published on: January 29, 2020

    •  Forbes has a piece that elaborates on rumors that Amazon plans to launch "a luxury platform," with a dozen "luxury brands" involved, as well as a dedicated warehouse and a $100 million ad campaign … The new elevated fashion platform will reportedly give brands more control of their listings and presentation on Amazon."

    One of the likely results of this program will be that "third-party sellers offering one of those yet unidentified dozen brands can basically close up shop since Amazon’s algorithms will give special preference to those featured brands."  Which is one way of dealing with the counterfeit problems that Amazon continues to have.

    This all happens as Amazon has "continued to expand its third-party marketplace, which in 2018 accounted for about half of its retail sales and currently 87% of its fashion listings. It launched Amazon Fashion, which includes styling-service Prime Wardrobe and Personal Shopper by Prime Wardrobe, as an answer to Stitch Fix. Amazon also introduced The Drop for curated limited-edition streetwear styles and developed over 100 of its own private-label fashion brands.

    "With its fingers in many fashion pies, Amazon quietly became the nation’s leading apparel retailer, topping $30 billion in sales, according to estimates by Wells Fargo and seconded by Morgan Stanley."

    Published on: January 29, 2020

    •  From Fox Business:

    "Walmart has asked the 9th U.S. Circuit Court of Appeals to reconsider its Jan. 6 decision to uphold a ruling to give California truck drivers $55 million in back pay … A California federal jury in November 2016 ruled the retail giant must pay $55 million for failing to pay about 850 California truck drivers their full compensation including $5.8 million for pre- and post-trip inspections, $3.9 million for mandatory breaks and $44.7 million for layovers, violating state law … Walmart argued in a Jan. 21 filing with the appeals court that the court made inaccurate rulings on several key issues, specifically regarding the issue of whether Walmart is responsible for its drivers during breaks and layovers."

    Published on: January 29, 2020

    •  The Globe Gazette reports that Hy-Vee "will acquire six former Shopko locations in Iowa, which will re-open under its Dollar Fresh brand by late summer.  In the upcoming weeks, the former Shopko locations are set to undergo renovations," including those in Hampton, Cresco, Oelwein, Waukon, Dyersville and Vinton.

    Hy-Vee says that the Dollar Fresh banner is "designed to offer customers in smaller communities a fresh, new product selection at low prices. Customers will find a full selection of grocery items, a bakery section with a full range of fresh-baked items, a dollar sections, a Wall of Value, ready-to-eat meal offerings and other services."

    Published on: January 29, 2020

    We had an Eye-Opener the other day about what happens when consumers' desire for convenience (like same-day delivery) runs headlong into their interest in sustainability initiatives (which would not include same-day delivery).

    MNB reader Charles Davis wrote:

    Regarding your Friday "Eye Opener" and your quote, "Shoppers are calling the shots. And unless we start putting our money where our mouth is, we’ll all be dealing with more boxes, more delivery trucks, and the long-term environmental effects of our decisions today.

    "Ultimately, the Eye Opener from the story is this: "Consumers - indeed, citizens - are pretty much able to rationalize anything.

    "Which is true. And ultimately a little depressing."

    I completely agree and it makes me sad as well. It made me think of the famous Pogo quote, "We have met the enemy and he is us". Unfortunately, fundamentally humans are the problem. Fortunately, we are also the solution. Which gives me some hope to go with my sadness.

    From MNB reader Molly Renaud:

    Great eye-opener today.   To add to our depression did you hear about the Doomsday Clock being set 100 seconds until midnight?

    But as a consumer, I am here to say I am trying to put my money where my mouth is when it comes to sustainability.  I’m focused on source reduction.  I’ve stopped wish-cycling and I am trying to buy less.  Things I’m focusing on this year – reducing my addiction to fast fashion (good bye stitch fix but yes, I am still rationalizing one more in six months). I’m trying to get my husband to stop using paper towels or at least buying recycled ones.  He uses Prime but I do not.  I’m starting to make my own cleaning and beauty care products.  I have time to think about this—let’s be clear.  A lot of people don’t.  But once you start looking at your own habits you start asking how the entire system works.  Maybe just maybe manufacturers/producers should be making things or putting things in things that can actually be recycled? Or maybe packaging should be made from recycled content so we create markets for this stuff and aren’t using virgin resources?  What makes something recyclable isn’t because it has a symbol on it—there needs to be an infrastructure to handle it and a market for it.  Maybe if we get better at recycling it will off-set our addiction to free shipping.  As I am sure source reduction is not for everyone.

    Keep your eye on Maine and California as it relates to Extended Producer Responsibility for Printed Paper and Packaging (PPP).

    California failed to pass EPR for PPP last year, but the Senate in CA just pushed through some EPR elements for their struggling bottle bill this past week and will most likely take on PPP again.

    Maine may be the first state to pass an EPR law for PPP based on what the legislature advanced this week.

    The trade association of producers forming a sustainability coalition last week that you wrote about—hopefully, as you stated, they are looking at ways they can improve recycling in America/lessen the impact of their packaging but they are probably looking to fight or get out ahead of EPR for Printed Paper and Packaging (PPP).

    I am gradually changing my consumption habits but given climate change I should be moving faster.  We all should.   Brands may want to ease gradually into product stewardship, but they could be forced suddenly if states start passing EPR laws. 

    Time will tell… if the clock stays ticking, that is!

    From another reader:

    I think it is really interesting to think about how the younger generation will begin to think about the convenience of fast shipping. I listen to a podcast with my children from NPR called "Wow in the World" that puts an entertaining lens on today's scientific discoveries and realities. Your article brought to mind an episode we listed do a while ago where Mindy, the main character, orders a whole much of stuff she doesn't need because it was a good deal and Guy Raz helps her understand the environmental impact of her purchases. Not only were my children entertained, but it gave me pause. I started to ask myself some critical questions, namely, "Do I need this?" and "What is an alternative solution to this need that is more sustainable?" I have since scaled back on my Amazon purchases and only place orders now once I have a number of different items in my cart that can hopefully ship together. It is worth a listen if you have the time.

    MNB reader Rich Heiland wrote:

    I cannot recall anything I ever ordered from Amazon or anyone else where next day delivery was life or death. I can live without it without batting an eye. I also can live without a lot of the “packaging inside of packaging inside of packaging” that seems to accompany a lot of orders.

    The reality of sacrificing for sustainability is that if each one of saw a five percent drop in “lifestyle” to contribute we all still would have lifestyles the envy of a lot of the planet.

    Published on: January 29, 2020

    Digital strategies aren't just about creating alternatives to the bricks-and-mortar shopping experience.  Done effectively, they can actually bring people back to the store, while also eliminating customer anonymity, creating rich and actionable data, and deepen relationships between the store and consumer in a way that transcends the simple transaction.

    Our newest Retail Tomorrow podcast, which brings together a terrific panel of experts from a wide range of disciplines, was recorded at Google’s New York City offices during the recent National Retail Federation (NRF) Show.  Our guests:

    •  Matt Alexander, co-founder of Neighborhood Goods, an unusual and fascinating take on physical retailing with stores in Dallas and New York.

    •  Patrick Flanagan, senior vice president of digital marketing and strategy for Simon,  which has more than 200 properties in 37 states and Puerto Rico.

    •  Tom Furphy, CEO and Managing Director of Consumer Equity Partners, a member of the Retail Tomorrow podcast family and a regular contributor to "The Innovation Conversation" on MNB.

    •  And Jalna Silverstein, a leader in Ernst & Young’s Transaction Advisory Practice and its Real Estate, Consumer Experience and Retail Strategy.

    You can listen to the podcast here.

    This Retail Tomorrow podcast is sponsored by the Global Market Development Center (GMDC).

    Pictured below are our panel members, from left:  The Content Guy, Matt Alexander, Tom Furphy, Patrick Flanagan, Jalna Silverstein.


    Published on: January 30, 2020

    This commentary is available as both text and video; enjoy both or either ... they are similar, but not exactly the same.  To see past FaceTime commentaries, click here.

    Hi, I'm Kevin Coupe and this is FaceTime with the Content Guy.

    I was fascinated by a story in USA Today the other day that talked about how some CEOs - despite the fact that there seems to be less concern about a 2020 recession than there was just a few months ago - are already getting ready.

    Some examples…

    •  "Choice Hotels plans to announce Monday that it’s launching a new mid-priced extended-stay hotel chain called Everhome Suites that it says can perform well even if the economy slows or heads south – a big drawing card for franchisees."  The average room rate will be $85 a night, and the entry is seen as having real potential in a business where close to "20% of hotel stays are at least seven nights but just 9% of all rooms are in extended-stay properties."

    •  "OC Facial Care Center of Orange County, California, recently began offering a 30-minute version of its most popular 60-minute facial. The streamlined service cuts the price to $99 from $130 for members and to $150 from $350 for nonmembers."

    •  "Experi, a tour operator in Bainbridge Island, Washington, typically raises prices 5% to 10% a year … But the firm, which is now selling tours for 2021, is holding prices steady or reducing them in some cases."  The reason?  The company got killed in the last recession, and management - understanding that this particular boom has lasted 10 years - doesn't want to get caught again with its metaphorical pants down.

    There are other companies cited in the story, from realtors to wifi providers, all of whom are working to be prepared.

    I think this is smart, and not just because we talk a lot here on MNB about getting ready for the inevitable downturn that is coming.

    I'm not trying to be Chicken Little here.  Just realistic about how recessions are cyclical, and the current up cycle has been going on for some time.  Add to that the enormous amount of student debt that has been racked up by younger consumers, and how this is affecting their ability to spend, and you have the potential of a real economic perfect storm just over the horizon.

    One of the things that the companies mentioned in the piece seem to have in common is an understanding that even if the economy starts to wilt, their customers are going to continue to have aspirations.  They're still going to want to travel or get facials or whatever.  Consumers may have less money in a down economy, but they'll still have expectations, and the retailers that will be rewarded may well be the ones that have an aspirational approach to marketing their products and services.

    I think this could be especially powerful for food retailers, who, if they're smart, will figure out ways to curate great food and great wine in a way that caters to reduced disposable income while still catering to great expectations and aspirations.

    That's what is on my mind this morning.  As always, I want to hear what is on your mind.

    Published on: January 30, 2020

    by Kevin Coupe

    The New York Times reports that Atari - the video game pioneer that came up with Pong and Asteroids - is getting into the hotel business.

    The story says that Atari soon will "begin construction on its first-ever video-game themed hotel," promising "a lodging experience that combines a one-of-a-kind video-game themed destination with immersive virtual and augmented reality experiences."

    There will, apparently, be more than one of them.  The first will be in Phoenix, with additional properties planned for Las Vegas, Denver, Chicago, Austin, Seattle San Francisco, and San Jose.

    The company says that the plan is "to create an 'ecosystem' in which players could 'eat, sleep and play,' though the size of the hotels would vary depending on the market and region."  Some rooms with be futuristic and some will be retro;  "some locations will have state-of-the-art venues and studios to accommodate e-sports events."

    Three comments:

    First, I have to be honest - a video game-themed hotel sounds pretty much like hell to me.

    Second, I'm surprised that Atari is still around, much less expanding into new areas.  (If you'd asked me, I would have bet that Atari went out of business years ago.  Who knew?)

    Third … I'm guessing that this may end up being very successful.  (In part because I find it so foreign to my existence.)  The video game and e-sports world is large and, best I can tell, getting larger … and so it makes sense for Atari to find new ways to cater to its customers, new ways to build enthusiasm for its ecosystem.

    It is an interesting approach … identify your sweet spot - that place where your brand equity has the greatest currency with customers - and figure out ways it can be expanded into new and potentially lucrative categories.

    It'll end up being an Eye-Opener.  But as Dorothy Parker once said, "What fresh hell can this be?"

    Published on: January 30, 2020

    Bloomberg has a story about FedEx founder/CEO Fred Smith, who reinvented the parcel delivery business but now is "getting disrupted himself by e-commerce and the rise of online shopping. He’s taking a pounding from Wall Street for FedEx’s disappointing performance, while analysts praise archrival United Parcel Service Inc. for reversing a decline in profit margins."

    And now, he is deliberately steering his company away from the e-commerce  lanes that Amazon has dominated, "drawing the battle lines, positioning FedEx as a kind of anti-Amazon ally for big-box retailers and pledging that his strategy will soon enable FedEx to overtake UPS."

    It hasn't been a great couple of years:  "FedEx’s international business has been plagued by setbacks, including a 2017 cyber attack and a costly air-fleet expansion that was undercut by Donald Trump’s trade wars. Back home, a falling out with Amazon.com Inc. drained $900 million off the courier’s top line."

    It is hard to say which company Smith sees as FedEx's primary enemy:  "The two biggest parcel delivery companies in North America are forging dramatically different paths as they adjust their business models to the tsunami of e-commerce. Their success will help decide the market war between Amazon and Walmart Inc., and perhaps the future course of the entire retail industry.

    "While UPS is deepening its ties to Amazon, FedEx has broken away, instead working to strengthen its relationship with brick-and-mortar retailers to help them win at e-commerce. While UPS wants to stay neutral with customers, Smith is banking on an us-against-Amazon mentality."

    Part of what FedEx is doing is taking more control over its business processes:  "UPS is relying more on the U.S. Postal Service, especially for Sunday deliveries, while FedEx is taking back about 2 million packages a day that it had been handing off to the government agency for final delivery. With the increased volume, FedEx can better leverage its more than 600 sorting and delivery facilities around the U.S. to help retailers with shipments from stores to residences."

    You can read the entire Bloomberg story here.

    KC's View:
      I may be wrong about this, but is it presumptuous for FedEx to assume that Walmart or other big retailers won't put the same kind of pressures on it long-term that it received from Amazon?

    I do think that on the face of it, FedEx seems smart for taking a path less traveled … it can be problematic, and certainly not differentiating, when everybody does the same thing.  And in general, I like when companies take ownership of their key functions, as opposed to outsourcing it.

    I also think that there definitely is a role for companies that can serve an organizing role for small retailers that may be short of investment capital but want to find ways to compete with Amazon and its brethren.  FedEx, to borrow a phrase often employed here on MNB, will have to offer a lot more resources to its customers, as opposed to just offering its usual menu of products.

    Published on: January 30, 2020

    Great piece from Bloomberg, filed from the Patagonia region of South America, where, on the Los Condores ranch - a place described as vast, treeless, with vistas of the snow-capped Andes' and "star-studded, bone-chilling nights" - there is an experiment taking place.

    They've planted grape vines.  "One row is all chardonnay, the next riesling and the next pinot noir — 150 vines in all."

    There's no reason to think that they can grow wine in such an inhospitable place.  But the owners are making a bet, albeit a "bold" and "ominous" one - that the "wicked effects of global warming" will eventually mean that "a world-class vineyard can flourish here."

    And in this case, "eventually" means perhaps as long as 50 years.

    In a world where short-term plans and profits often seem to be all that matter, this is a piece really worth reading, if only for a sense of perspective.  You can read it here.

    Published on: January 30, 2020

    The Harvard Business Review has a story about how, after a time when independent bookshops seemed like an endangered species - first because of the emergence of big box competitors such as Barnes & Noble, and then because of the runaway success of Amazon - something "miraculous" has happened.

    Starting in 2009, HBR writes, "after falling for decades, the number of independent bookstores started to rise, climbing 49 percent in the next decade to nearly 2,500 stores nationwide."

    Ryan Raffaelli, a professor in the Organizational Behavior Unit at Harvard Business School, tells HBR that there are lessons in the resurgence for other retail sectors under threat.  It all comes down to three factors, he says:  Community, Curation, and Convening.

    Some specifics:

    •  "Community: As longtime community stalwarts, bookstores have been at the vanguard of the 'buy local' movement, pioneering events such as Small-Business Saturday, and making their customers feel virtuous about spending money in their own neighborhoods … The notion goes beyond a bond with customers to include other important community actors, such as schools, chambers of commerce, and civic organizations, reinforcing the social fabric and engendering a strong sense of customer and community loyalty."

    •  "Curation: Despite the increasing sophistication of online algorithms, online platforms have been unable to replicate the knowledge and passion of indie bookstore employees, says Raffaelli … By contrast, he says, Amazon’s reputation as 'the everything store' can sometimes work against it, overwhelming consumers with too many options and an impersonal experience."

    •  "Convening: Indie bookstores are increasingly serving as points for convening, expanding beyond author events to host book groups, children’s story hours, birthday parties, music events, knitting circles, culinary demonstrations, and other events … bookstore owners are increasingly seeing their competition not as Barnes & Noble, but as Netflix and other entertainment apps that tie people to their couches."

    KC's View:
      The independent bookshops that I like most, that I think are most effective, are the ones that are most targeted.  Like mystery bookshops, for example, which would be my favorite.  I love going through the Mysterious Bookshop in New York City, or The Poison Pen in Scottsdale.  I'm less enamored of small independents that have a little bit of a lot, but not a ton of focus.  (That may just be me.  And it certainly doesn't apply to my favorite independent,  Powell's in Portland, Oregon, which is enormous and delightful.)

    But the sense of focus and curation is, to me, the most applicable lesson for other kinds of retail.  It takes stores beyond the simple role of being a source of product, and into the more nuanced role of being as resource for the shopper.  Which is the best place to be, I think.

    Published on: January 30, 2020

    •  MoviePass, which tried to reinvent the economics of going to the movies - allowing moviegoers to see multiple movies in a month for s flat fee - is no longer.

    The company filed for Chapter 7 bankruptcy protection, which will dissolve the entity and use the assets to pay off creditors.  Helios and Matheson Analytics, which owns the business, "listed its total assets at $396.5 million and total debts $276.8 million in its bankruptcy filing," according to Variety.

    The story says that "ultimately, MoviePass’ cash-burning business model proved unsustainable … Originally MoviePass launched with a one-movie-per-day plan for $30-$40 per month then cut that to the too-good-to-be-true $9.95 monthly for a daily movie. Then in August 2018, MoviePass switched that to just three movies each month for $9.95, prompting a wave of cancellations. Last year, it rolled out a refashioned 'unlimited' option, for $14.95 per month, to again allow customers to see one movie daily but warning that movie choices would be restricted based on system-wide capacity'."

    Published on: January 30, 2020

    •  The Coloradan reports that "Lucky's Market founders Bo and Trish Sharon plan to buy back seven specialty grocer stores, including the Fort Collins and north Boulder locations that remain open following the corporation's Chapter 11 bankruptcy filing Monday … The company announced last week it would close many of its stores. On Monday, it voluntarily filed for Chapter 11 bankruptcy protection and agreed to sell six Florida stores to Aldi and five Florida stores to Publix Super Markets."  The Sharon, Aldi and Publix transactions support nearly 2,000 jobs. 

    According to Scott Moses of PJ Solomon, which is acting as M&A investment banking advisor to Lucky’s on the transactions, the Sharon bid is a stalking horse in the Lucky’s Chapter 11 process.  There are active discussions taking place with other potential buyers.

    •  The Washington Post reports that Nordstrom is getting into the business of selling used clothes.

    According to the story, "Nordstrom will begin selling secondhand apparel online and in its New York flagship store this week, the latest attempt by the 119-year-old company to appeal to changing consumer tastes and capitalize on one of the few bright spots in retail. It joins Macy’s, J.C. Penney and Madewell, among others, in carving out a place for used clothing, shoes and handbags alongside new ones.

    "Resale sites such as ThredUp, Poshmark and the RealReal have become destinations as eco-friendly alternatives to fast fashion. As resale becomes mainstream - the market is expected to triple in three years - department stores are a natural next step."

    •  Add McDonald's, Ikea, Pizza Hut and Ikea to the list of retailers temporarily closing down stores in China because of the coronavirus outbreak.

    USA Today reports that "McDonalds's has closed all of its restaurants in Hubei Province, home to the city of Wuhan, the epicenter of the outbreak. While that represents hundreds of locations, roughly 3,000 McDonald's restaurants throughout China remain open."

    And CNN reports that Ikea is "shutting down" all of its 30 stores across China, saying hat it will "pay close attention to the epidemic situation."  Ikea's e-commerce operation will remain online.

    The CNN story notes that "in China,  Ikea is a popular place for shoppers to nap and hang out for long periods of time on the many bed, sofa and furniture displays. Such shopping habits would be counterproductive to containing the coronavirus, as experts and officials advise people to avoid crowded areas."

    From the New York Times this morning:

    "The World Health Organization is meeting again on Thursday to decide whether to declare the coronavirus epidemic an international public health emergency, as China said that another 38 people had died from the virus.

    "The global health agency met twice last week but was split about whether to declare an emergency, saying it did not have enough information to decide. Such rulings can rally a global response, but also put countries at the center of any outbreak under even greater scrutiny.

    "China said Thursday that the total number of deaths from the coronavirus had risen to 170, with cases now confirmed in every province and region in the country. More than 7,700 people have been sickened in mainland China, while 68 cases have been reported around the world."

    Published on: January 30, 2020

    Michael Wright, a University of Minnesota football star turned lawyer who became CEO of wholesaler Supervalu in 1981, has passed away.  He was 81, and died of complications from pneumonia.

    The <i>Star Tribune</i> writes that Wright was CEO of Supervalu "until 2000 and oversaw an acquisition spree that built Supervalu to $20 billion in annual revenue. It was the nation’s largest food distributor at that time and the tenth-largest retail grocer, with Cub Foods as its flagship."

    Published on: January 30, 2020

    …will return.

    Published on: January 30, 2020

    Digital strategies aren't just about creating alternatives to the bricks-and-mortar shopping experience.  Done effectively, they can actually bring people back to the store, while also eliminating customer anonymity, creating rich and actionable data, and deepen relationships between the store and consumer in a way that transcends the simple transaction.

    Our newest Retail Tomorrow podcast, which brings together a terrific panel of experts from a wide range of disciplines, was recorded at Google’s New York City offices during the recent National Retail Federation (NRF) Show.  Our guests:

    •  Matt Alexander, co-founder of Neighborhood Goods, an unusual and fascinating take on physical retailing with stores in Dallas and New York.

    •  Patrick Flanagan, senior vice president of digital marketing and strategy for Simon,  which has more than 200 properties in 37 states and Puerto Rico.

    •  Tom Furphy, CEO and Managing Director of Consumer Equity Partners, a member of the Retail Tomorrow podcast family and a regular contributor to "The Innovation Conversation" on MNB.

    •  And Jalna Silverstein, a leader in Ernst & Young’s Transaction Advisory Practice and its Real Estate, Consumer Experience and Retail Strategy.

    You can listen to the podcast here.

    This Retail Tomorrow podcast is sponsored by the Global Market Development Center (GMDC).

    Pictured below are our panel members, from left:  The Content Guy, Matt Alexander, Tom Furphy, Patrick Flanagan, Jalna Silverstein.


    Published on: January 31, 2020

    by Kevin Coupe

    There are a lot of issues that retailers have to deal with, but here's one that could challenge a commonality to a lot of business models - the ability of people to drive to their local store.  (And, if you think about, the growing need for retailers to deliver products to customers via cars and trucks.)

    Let me explain…

    Fast Company is a terrific source of interesting and provocative information, such as the story currently online about how "the automobile is such an important part of American culture, life, and commerce that it can be hard to really grasp all the negative externalities of our driving habits: Commuters in Los Angeles now spend 119 hours each year stuck in unmoving traffic … There are as many as 2 billion parking spaces in the U.S. (eight times more than there are cars), often on valuable urban land that could otherwise be used—along with excess road space—for housing or parks. Pollution from tailpipes is linked to hundreds of thousands of deaths globally each year. SUVs, alone, now emit more than 700 megatons of greenhouse gases annually, more than the total emissions of the U.K. and the Netherlands. More than 1.25 million people are killed in road crashes each year."

    Yikes.

    But, the story points out, even the most vexing and entrenched problems have solutions … if communities are willing to invest in them.  (Investments, one should point out, that have to be cultural as well as economic.)

    Which is why "some cities and neighborhoods are beginning to rethink where cars can go—and redesigning streets to prioritize other uses, from public transportation to parks. It’s happening around the world, including on major streets in cities like San Francisco and New York, but happening at the largest scale in several European cities. Here are a few of the most interesting examples."

    In cities such as Paris, Amsterdam, Barcelona, Brussels and Helsinki, officials are testing various approaches to developing car-free spaces and times.  (You can get more specifics here.)

    But the point is that if cars are choking a wide variety of communities,  those same communities are beginning to respond.  And not just cities.  There are also are suburbs where we are beginning to see urban-style, multi-use campuses emerging, where people will be encouraged to walk or ride their bikes, as opposed to drive their cars.

    Is the car going away?  Of course not.  Certainly not anytime soon.

    But it seems likely that the trend is going to grow, and every retailer - from the single-store operator to behemoths like Amazon, Walmart and Kroger - probably needs to start thinking and planning for such a world.

    Just considering the possibilities could be an Eye-Opener.


    Published on: January 31, 2020

    As it released its Q4 results, perhaps the most impressive number touted by Amazon yesterday was this one:  it now has 150 million Prime members worldwide.

    CEO/founder Jeff Bezos said yesterday that more people joined Prime during the fourth quarter last year than in any other quarter - apparently driven by faster delivery guarantees, including same-day in many markets.

    Variety writes that "in addition to free shipping on products, Amazon Prime members get access to thousands of titles on Prime Video, including the company’s originals. According to Bezos, Prime members watched twice the number hours of original movies and TV shows on Prime Video in Q4 compared to the year prior, though the company would not provide more info on viewing."

    Q4 sales reached $87.4 billion, up 21 percent from the same period a year ago.

    Net income increased to $3.3 billion in the fourth quarter, compared with net income of $3.0 billion in fourth quarter 2018.

    For the full year, net sales increased 20% to $280.5 billion, compared with $232.9 billion in 2018.  Net income increased to $11.6 billion, compared with net income of $10.1 billion in 2018.

    MarketWatch writes that Amazon returned "to growth after a decline in the previous quarter broke a streak of more than two years without a profit drop. After slowing down its spending in 2018, following the acquisition of Whole Foods Market Inc. and other efforts, the company enjoyed record annual profit of more than $10 billion.

    "In 2019, however, the company resumed spending to halve delivery times to Prime members and bolster its workforce, which harmed earnings in the third quarter."

    Amazon Prime is available in addition to the US, in Canada, the U.K., Ireland, Germany, Austria, India, Japan, Italy, Spain, France, Mexico, Singapore, Australia, the Netherlands, Luxembourg, the United Arab Emirates, Brazil and Australia.

    KC's View:

    The 150 million Prime member ought to drive home for competing retailers something that they should've realized a long time ago - your customers also are Amazon customers.  And even if there are a few who are not, you should operate on the premise that they are - which means you need to differentiate yourself at every turn.

    Especially because, as one expert observed yesterday, it appears that "the fixed costs in building out their last-mile infrastructure are beginning to normalize earlier than expected.”  Which gives them even more of a financial advantage.

    And because Amazon isn't stopping - it continues to grow and innovate and iterate.

    If you don't do the same, you may not survive.  And it will be suicide, not homicide.

    Published on: January 31, 2020

    The Los Angeles Times has a story about ghost kitchens now serving Southern California, describing them as "shared commercial kitchen spaces for rent (that) primarily serve online customers and are a new category of commercial real estate that looked sexy to investors when the concept piqued widespread interest two years ago as a promising growth opportunity."

    The story notes that the concept has not taken off to the degree that some would've expected just a few years ago, but that seems to be more because of the economics of delivery as opposed to the efficacy of shared commercial kitchens.  There seems to be no hesitancy about the concept in the investment class - hundreds of millions of dollars have been raised by entrepreneurs who still believe in it.

    The advantages of ghost kitchens seem clear - the kitchen facilities are cheaper to run than it would cost to retrofit a restaurant's kitchens to deal with take-out and delivery of food.  There is the advantage of sharing space with like-minded businesses, with the ability to lend and borrow items when necessary and/or appropriate. Landlords handle a lot of the infrastructure issues, and they are relatively easy and fast to move into. 

    And, there is the ability to test new concepts with low risk.  For example, the Times writes that Canter's delicatessen, which has been operating in LA for some nine decades, is using its ghost kitchen to test a new online-only brand called Grilled Cheese Heaven, which also serves burgers, salads and quesadillas.

     “You’re already paying rent and labor,” Marc Canter tells the Times. “Why not?”

    KC's View:

    I think the thing I like most about ghost kitchens - and dark stores, for that matter - is the ability they give businesses to be more flexible, nimble and experimental.   

    Retailers would be better served if they would view these facilities as giving them license to try new things, including online-only offerings that would differentiate them.  Way too many retailers are taking me-too steps that don't really do anything to differentiate themselves - can you spell "Instacart"? - as opposed to gravitating to opportunities to take big swings and small swings at being different.

    There's no reason that I can think of that ever retailer could not do its own version, whatever that means, of Grilled Cheese Heaven.  I mean, if a 90-year-old LA deli can, there's no excuse.

    Take a shot.  Be different.  Show some creativity and chutzpah.

    Published on: January 31, 2020

    From the New York Times:

    "In letters to state regulatory boards and in interviews with The New York Times, many pharmacists at companies like CVS, Rite Aid and Walgreens described understaffed and chaotic workplaces where they said it had become difficult to perform their jobs safely, putting the public at risk of medication errors.

    "They struggle to fill prescriptions, give flu shots, tend the drive-through, answer phones, work the register, counsel patients and call doctors and insurance companies, they said — all the while racing to meet corporate performance metrics that they characterized as unreasonable and unsafe in an industry squeezed to do more with less … State boards and associations in at least two dozen states have heard from distraught pharmacists, interviews and records show, while some doctors complain that pharmacies bombard them with requests for refills that patients have not asked for and should not receive. Such refills are closely tracked by pharmacy chains and can factor into employee bonuses."

    One Texas pharmacist wrote the following chilling words to the state's regulatory officials:  “I am a danger to the public working for CVS."

    The Times writes that the chains say that "patient safety was of utmost concern, with staffing carefully set to ensure accurate dispensing. Investment in technology such as e-prescribing has increased safety and efficiency, the companies said. They denied that pharmacists were under extreme pressure or faced reprisals."

    And the National Association of Chain Drug Stores (NACDS) trade association says that “pharmacies consider even one prescription error to be one too many” and “seek continuous improvement," adding that it is inaccurate to “assume cause-effect relationships” between errors and pharmacists’ workload.

    You can read the story here.

    See who and what you believe.

    KC's View:
      I know who I think is most credible, and it ain't the chains and their trade association.

    Published on: January 31, 2020

    Walmart's first-ever Super Bowl commercial will air during the big game on Sunday - and the focus is on the company's e-commerce business, with a focus on its click-and-collect functionality.  

    As Ad Age writes, it "is a licensing bonanza for entertainment companies with scenes or characters from a dozen movie or TV franchises, led by Disney's "Star Wars" and "Toy Story," plus extended appearances from NBCUniversal properties that include "Bill & Ted’s Excellent Adventure" and "Back to the Future." Scenes from or allusions to the films "Arrival," "Blade Runner," "Star Trek," "Guardians of the Galaxy," "The Lego Movie," "Mars Attacks," "Marvin the Martian" and "Men in Black" are also included. All are united by an interest in picking up curbside orders from Walmart."

    You can watch it at left.

    KC's View:
      They crammed about as much stuff in there as possible.  I am presuming that William Shatner was too expensive, because he is about the only thing missing.

    A friend of mine, who knows a lot more about this stuff than I do, makes the point that "the money being invested in the production of these spots, not to mention the cost of media and film and music rights is a testament that this category is on the ascend and competition for winning the consumer is at an all time high."

    Exactly.

    Published on: January 31, 2020

    •  Fox Business reports that when the winning coach in Sunday's Super Bowl gets a Gatorade bath in the closing moments of the game, the Pepsi-owned brand is the real winner.

    The story says that "since 1987, Gatorade baths that aired on television during the Super Bowl have generated more than $20 million in equivalent advertising value across television, radio and other mediums, according to calculations by Apex Marketing, an analytics firm. The Pepsi-owned company paid nothing to gain the additional exposure."

    The story notes that the first championship Gatorade dunk occurred in January 1987, when the New York Giants' Harry Carson doused head coach Bill Parcells after the Giants beat over the Denver Broncos in Super Bowl XXI by a score of 39-20.  Gatorade execs, the story says, were almost as surprised as Parcells.

    •  From the Los Angeles Times:

    "Plant-based burgers sizzled last year, boosting sales at fast-food chains such as Burger King and Carl’s Jr. Now, KFC wants to see if it can replicate that effect with fried faux chicken.

    "The nation’s largest fried chicken chain announced Wednesday that it had struck a deal with Beyond Meat to sell plant-based nuggets in more than 60 restaurants in the Charlotte, N.C., and Nashville markets. If the three-week test is successful, the plan is to offer the menu item at KFC’s roughly 4,000 U.S. outlets."

    Published on: January 31, 2020

    •  SpartanNash announced that it has hired David Sisk, the president/COO of OSC-WEBco, a sales company serving military and government channels, to be a corporate vice president and president of its $2.1 business serving USA military commissaries.

    Published on: January 31, 2020

    Fred Silverman died yesterday at age 82.

    If you don't know Silverman, the fact is that if you are of a certain age, you are familiar with his work - he is the only person who ran programming for all three major broadcast networks at a time when there were only three broadcast networks.

    Among the shows that got on the air during his various tenures at CBS, ABC and NBC, for better or worse:  “All in the Family,” “The Mary Tyler Moore Show,” “Happy Days,” “The Waltons, " “Roots," Matlock,” “In the Heat of the Night,” “Jake and the Fatman,” “Diagnosis Murder,"  “Maude,” “The Bob Newhart Show,” “Mannix,"  “Hawaii Five-0," “Rich Man, Poor Man,” “Roots,” “Charlie’s Angels” and “Starsky & Hutch.”

    Published on: January 31, 2020

    Got the following email from an MNB fave, Julie Lyle:

    I enjoyed your commentary and agree that CPG companies are facing tough  challenges today, as they have been too far removed from consumers for decades.  To be fair, big brands have been beholden to their retailer intermediaries who "own" the customer relationship (especially in the consumable sectors).  These retailers are often not forthcoming with shopper insights - or they themselves have not mastered a holistic view of their buyer personas and shopper journeys.

    As retailers accelerate growth of their own private label brands, which are often knockoffs of their CPG partner products, the CPG companies find themselves in a tough position.  They are sandwiched between competing with their own distributors as well as competing with digitally-enabled upstarts like Harry's and so many others.  It's time for CPG companies to find innovative ways to form meaningful relationships directly with consumers, and thereby capture the insights they need for product innovation, promotional efficacy, increased speed-to-market, and more.

    Which could lead to something often discussed but not acted upon - a concerted effort to disintermediate traditional retail.

    We had a piece the other day about the financial issues faced by many young people, which leaves them without the disposable income that helps to drive economic growth.  One MNB reader responded:

    Great discussion piece. I see many of the Democratic candidates offering to wipe away student debt as part of their campaign giveaways. Others have responded with how is that fair to all those students and/or parents that have sacrificed and saved to pay off their loans as they committed when they took out the loans.   We hear about the multitudes of students remaining living at home years after their graduation because they can’t afford to pay rent. And a large % of renting today because they can’t seem to save enough for the down-payment.

    Rather than target wiping out student debt why aren’t these candidates looking to solve the housing crisis. How about offering no down-payment loans for starter homes and reduced interest rate for the 1st five years. How about creating  affordable housing options like modular homes which have to be cheaper than some of the rents that are being charged in urban locations. My first condo was subsidized by our local bank offering 4% interest rates for the 1st 10 years when rates were as high as 14%. I found a way through my local bank to buy early on in my career when I had different barriers - exorbitant interest rates.

    Interesting idea.

    Responding to the comments here about the inevitability of a recession and the challenges retailers will face, MNB reader Matt Nitzberg wrote:

    Whenever the next recession comes, retailers who have been paying close attention to customer (shopper) data will be much better prepared to manage the belt-tightening that will inevitably accompany it. In the ~10 years since we shook off the worst of the last recession, these retailers have developed 3 advantages:

    •  They've developed a much deeper understanding of their price-sensitive shoppers as well as shoppers who have become more sensitive over time.

    •  They are 10 years further along in understanding which shoppers respond to which activations (by channel, content, incentive, etc.).

    •  They've used the data to help create a more stratified approach to private label brands, which are likely to capture market share from national brands as shoppers trade down on price points while retaining their aspirations for high quality products.

    On a different subject, I got the following note from an MNB reader:

    I applaud Kellogg’s for there move to ban the use of glyphosate in the production of grain for use in their products. However in my opinion they should do it immediately and not wait until 2026. This product is dangerous and is purported to be cancer causing.

    The list of countries banning the use of this product is long and growing longer each year. Most of the Glyphosate restrictions or bans throughout the world were introduced following the 2015 IARC report on Glyphosate. The IARC report concluded that Glyphosate is a “probable human carcinogen.” With this knowledge why are American companies allowing farmers to spray their crops with this product? As far as the comment from the National Association of Wheat Growers that this product is safe and that if totally eradicated “producers would stop producing” is ridiculous. 

    Wake up folks !!!! This is serious. Get this product out of our food chain now. Why is most of Europe and many other countries taking action and the US is doing nothing. Its time to stop the use of Glyphosates in this country in the production of our foodstuffs.

    Regarding what retailers can learn from the independent bookstore resurgence, one MNB reader wrote:

    Often times the Independent Book store is really the “beating heart” of the community.  I offer you Bookshop Santa Cruz which is a family owned Book store that has been serving the community for nearly 50 years.

    In 1989 when the Loma Prieta Earthquake hit Santa Cruz the original building was destroyed along with much of Pacific Ave which is the “Main St.”  Bookshop Santa Cruz had one opportunity to retrieve the books that were hidden in the rubble of the building.  They reached out to the community and dozens of volunteers brought their trucks, red wagons and the like to save the books for the tent that they operated out of until the facility was rebuilt.  The support from the Santa Cruz community has never wavered.  I suspect that many other communities have similar stories!

    And, responding to our story about the new Atari-themed hotel chain, MNB reader Scott Nelson wrote:

    What’s next, a Pokemon themed hotel?  That would be a worse hell.  Pikachu, Pikachu, Pikachu …

    In the words of my ancestors…Oy.

    Published on: January 31, 2020

    Digital strategies aren't just about creating alternatives to the bricks-and-mortar shopping experience.  Done effectively, they can actually bring people back to the store, while also eliminating customer anonymity, creating rich and actionable data, and deepen relationships between the store and consumer in a way that transcends the simple transaction.

    Our newest Retail Tomorrow podcast, which brings together a terrific panel of experts from a wide range of disciplines, was recorded at Google’s New York City offices during the recent National Retail Federation (NRF) Show.  Our guests:

    •  Matt Alexander, co-founder of Neighborhood Goods, an unusual and fascinating take on physical retailing with stores in Dallas and New York.

    •  Patrick Flanagan, senior vice president of digital marketing and strategy for Simon,  which has more than 200 properties in 37 states and Puerto Rico.

    •  Tom Furphy, CEO and Managing Director of Consumer Equity Partners, a member of the Retail Tomorrow podcast family and a regular contributor to "The Innovation Conversation" on MNB.

    •  And Jalna Silverstein, a leader in Ernst & Young’s Transaction Advisory Practice and its Real Estate, Consumer Experience and Retail Strategy.

    You can listen to the podcast here.

    This Retail Tomorrow podcast is sponsored by the Global Market Development Center (GMDC).

    Pictured below are our panel members, from left:  The Content Guy, Matt Alexander, Tom Furphy, Patrick Flanagan, Jalna Silverstein.


    Published on: January 31, 2020

    If you've never watched "The Good Place," the NBC-TV series that ended its four-year run last night, I'm going to urge you to catch up with it - I'm sure you can binge watch it on some streaming service.  Created by Michael Schur, "The Good Place" in many ways was the perfect TV series;  each of its seasons was only 13 episodes long, and the producers decided to end it way before it ever could wear out its welcome, much less its enormous originality.

    The premise was simple.  Four people - played by Kristin Bell, William Jackson Harper, Jameela Jamil and Manny Jacinto - find themselves in the afterlife, in "the good place," except that they all think they are there by accident, and that they should be in, well, the other place.  Their guides are played by Ted Danson and D'Arcy Carden, and the series starts out with the four not-very-good dead humans desperately doing everything possible not to be found out.

    From there, "The Good Place" went in unexpected directions, as the series ended up being a smartly written, very funny existential meditation on the difference between good and bad, about life and death and and the challenge of behaving ethically.  Sounds dry, I know, but it was anything but.  It had style and grace and a piercing intelligence, with elements of "Lost" and 'The Prisoner," but never losing sight of the fact that it was a comedy.  And the performances - they were never less than pitch perfect.

    Last night's finale - which built on everything we've seen in the 51 previous episodes - was as perfect an end note as I can imagine.  In its own way, it was a good as the storied finales of shows like "Cheers," "M*A*S*H," and "The Mary Tyler Moore Show" … I found myself simultaneously laughing and tearing up as I saw where things were going.  (That's all you're going to get from me.  No spoilers here.)

    "The Good Place" is going to stick with me for sometime, I think.  If you haven't watched it, I encourage you to do so - it will remind you that there is good in the world, and good in the afterlife.

    Joker.  I finally caught up with this much-lauded movie the other night, and I'm going to be honest with you - I cannot remember the last time that I found a major studio film, one that has gotten a lot of awards and nominations, to be so utterly, completely loathsome.

    I get what they were trying to do in creating a fresh origin story around a character known from the Batman mythology as the Caped Crusader's greatest enemy.  And I cannot deny that most of the performances - especially Joaquin Phoenix in the title role - are excellent, as are the production values showing a Gotham City that looks a lot like New York City in the seventies.  (Robert De Niro, essentially playing Johnny Carson, actually does something unusual for him - he is awful.  And awfully miscast.)

    But in showing us the mental and emotional decline of someone who goes from being simply troubled to being a cold-blooded murderer, I found myself wondering what the point was.  Is it society's fault?  Is it that the filmmakers wanted to deconstruct parts of the Batman legend?  Is it supposed to be a treatise on mental illness, and society's indifference to it?

    I have no idea.  I mostly found it to be troubling, gratuitous, and an ethical mishmash.  And by making the character the Joker instead of a criminal by some other name, it is like they are trying to give it a sheen of comic book accessibility, which I found kind of offensive.  The thing about Joker is, he needs Batman … their battle is what creates dramatic balance.  (You also could argue that Batman needs Joker.)  But a movie with just Joker?  Unbalanced, in every meaning of that word.

    I do not understand why so many people like this movie.  I hAted virtually every moment of it.  Joker will remind you of all that is bad in the world.   All I know is that it was two hours I'm never going to get back, and I felt like I needed a shower when it was done.

    I have a wine to recommend to you this week - 2012 Signature Cuvée Pinot Noir from Oregon's Willamette Valley Vineyards, which is a complex and richly structured wine - a blend of pinot grapes from a number of WVV's fields - that is versatile enough to be perfect with a great steak or a nice spicy salmon.  Wonderful. 

    That's it for this week … have a great weekend, and I'll see you Monday.

    Slàinte!

    Published on: February 3, 2020

    Earth Fare announced this morning that it is closing its 50 stores, and has begun running going-out-of-business sales at each of its locations.  The announcement comes barely after a year after the company, apparently in a  fit of wishful thinking, was saying it planned to double its store count.

    The Wall Street Journal this morning reports that Earth Fare said that "its efforts in recent years to expand and to improve customer service haven’t been enough to overcome its problem."

    “While many of these initiatives improved the business, continued challenges in the retail industry impeded the company’s progress as well as its ability to refinance its debt. As a result, Earth Fare is not in a financial position to continue to operate,” the company said in a statement.

    The Journal says that even as it sells off inventory and fixtures, Earth Fare is continuing to try to find a buyer for its stores.

    Context from the Journal story:

    "At least two other grocery chains have also started major restructurings in recent weeks.

    Fairway Market filed for bankruptcy last month with a $70 million offer to sell all five of its Manhattan stores and a distribution and food preparation center to the Village Super Market Inc., which operates stores under the ShopRite banner. Village Super Market could shrink its bid to just three stores in Manhattan.

    "Lucky’s Market, which has been backed by Kroger Co., filed for bankruptcy last week and is trying to close or sell about three dozen stores. Interested bidders include Aldi Inc. and Publix Super Markets Inc."

    KC's View:
      I don't know this chain well, but from what I gather, its biggest problem was that it didn't have a strong enough brand identity nor a compelling enough offering to compete in a fractured and fractious marketplace.  That's a recipe for disaster … if you don't stand for something, you're inevitably going to fall when the going gets tough.  And the going only is tougher with every passing day.,

     The Journal points out that last year Earth Fare decided to differentiate its offering by hiring a chief medical officer.  Clearly, these efforts at life support and resuscitation didn't work.  

    Guess they should've hired an undertaker.

    Published on: February 3, 2020

    by Kevin Coupe

    Inspiration can strike anywhere at any time.  It also can be a matter of responding to circumstances.

    In this case, the circumstances include the need for greater sustainability.  And the inspiration has to do with ice skating rinks.

    The company involved is called Glice, based in Switzerland, and essentially what it did was come up with a concept for skating rinks that don't require cold.  According to the New York Times, The "ice" on the rinks are made up of "polymer panels that simulate the slip and feel of ice."  The rinks require "no cold weather, special blades, electricity or water (other than for cleaning). When skating season is over, the panels can be stacked and stored. In fact, Glice makes skating season a year-round affair."

    Not only that, because the panels are basically plastic, they have more "give" than real ice, and so when you fall down, it doesn't hurt as much.

    Glice rinks are "arguably more ecologically conscious and certainly more convenient than traditional ice rinks, which require large amounts of water and electricity, as well as noisy, cumbersome machines including refrigeration systems and compressors."  While "critics argue that Glice rinks are still bad for the environment because they are made of, well, plastic …  the company replies that this plastic is durable, with panels lasting 12 years, after which you can flip them over, and use them for another 12."

    Not being an ice skater, I can't comment on the efficacy or desirability of the Glice technology.

    I'm just intrigued by the idea that these entrepreneurs saw an opportunity where a lot of us never would;  I drive by an ice skating rink almost every day, but it never occurred to me to think about the sustainability implications, especially as the world gets warmer and puts greater demands on our society.

    The Eye-Opening question it raises for me is, how many other opportunities are there that a little original thinking might identify, and in doing so, open up potentially game-changing business models?

    Published on: February 3, 2020

    New York Times columnist Ginia Bellafante had a piece over the weekend that examined the social and cultural impact of e-commerce, and she was not encouraged.

    The title of the column:  "What We Lose by Hiring Someone to Pick Up Our Avocados for Us."

    An excerpt:

    "The incursion of technology into every aspect of consumption has meant that only the indolent or pathologically tolerant wait for things.

    "Starbucks seems to prioritize mobile orders. So if you choose to order in person, you might find yourself walking straight to the cashier and then lingering for a bafflingly long time as one drink after another — none of them yours — lands in the mobile pickup area, waiting for whatever very busy person made an advance purchase he is late to claim.

    "At the same time that physical retail culture remains ostensibly in crisis, it seems to create fewer reasons to engage with it."

    Bellafante goes on:

    "The act of turning grocery shopping into an occupation threatens something larger — we are losing a way to bridge differences in a world already collapsing from its stratification. The guy who walks into a Starbucks to pick up his pre-ordered flat white as he conference calls into his AirPods doesn’t have to exchange a single word with the worker behind the counter or really even acknowledge her. He grabs his drink and gets on with it."

    She doesn't argue that e-commerce is all bad; she acknowledges that it can be useful for those who are "housebound, to single parents, to others paralyzingly constrained by time."  But she also suggests that e-commerce is turning us into a nation in which basic socialization takes place less often, which is not for the better.

    You can read the entire column here.

    KC's View:
      I'm normally a big fan of Bellafante's columns, but I think in this one she falls into the trap of assuming that most people engaged in mobile ordering and e-commerce are disconnecting from the world.  I don't think that's true.  In my local Starbucks, where I go maybe a couple of times a week, I almost always order via the app … but I also almost always engage the baristas and workers in conversation, chat with other customers, and sort of view it as a place far more social than where I work (which is out of my home, where it generally is just me and the dogs).

    There's also another reality that she ignores - that for a lot of people, the time saved using e-commerce gives them the time to play with their kids, go for a walk, read a book, take a jog … or do numerous other things that, frankly, are more rewarding than walking up and down the aisles of many stores.  (Unless, of course, the store is one that is compelling and differentiated.)

    Now, this isn't everyone.  Some e-commerce users are just lazy and disconnected from other people.  But it isn't a simple construct, and I think this needs to be acknowledged.

    This would, by the way, be a great ad campaign for Amazon - if they could somehow figure out how to quantify how many hours of boring, traditional shopping it has saved people, and then qualify how they were able to use those hours in more uplifting and fulfilling pursuits, it would be a really good commercial that might blunt some of the criticisms it gets.

    Just a thought.  (Maybe for next year's Super Bowl…?)


    Published on: February 3, 2020

    The Wall Street Journal has a story about how one trend - the growth of so-called ghost kitchens that handle delivery functions for existing restaurants - is matching up with another - the growth of vacant space in America's malls.

    Developers, the Journal writes, are saying that ghost kitchens "can create new interest in retail and warehouse space vacated by merchants that have struggled to compete with e-commerce."

    The story notes that "delivery now accounts for roughly 9% of the $282 billion U.S. fast-food sector and is growing faster than dine-in and drive-through sales, according to a recent Bernstein analysis … Restaurants are expanding their delivery offerings to generate sales despite the impact those orders often have on their operational efficiency and profits. The remote kitchens can reduce their real-estate costs while expanding their reach."

    KC's View:

    All that space has to be used for something.  Might as well be for ghost kitchens, dark stores and micro-fulfillment centers.

    Though it does seem to me that it is a buyer's market in a lot of places, and so these restaurants and stores ought to be able to get good deals.

    Published on: February 3, 2020

    From the Washington Post:

    "The prospect of hotter summers, warmer winters, drought and violent weather events have caused experts to warn of coming wine shortages and price increases, changing varietal character and, in some dire predictions, the extinction of some wines altogether.

    "Maybe there’s a fix, says a research paper in the journal Proceedings of the National Academy of Sciences.

    "The scientists’ computer models show that if we do nothing, global warming of 2 degrees Celsius would wipe out 56 percent of current wine-growing land; increase that to 4 degrees and an estimated 85 percent of grapes won’t be viable.

    "This team of researchers investigated whether using more heat-tolerant grapes would allow vineyards to adapt. They found that by reshuffling where certain grape varieties are grown, potential losses at 2 degrees of warming could be halved, and cut by a third if warming reached 4 degrees."

    The study says that if global warming proceeds as scientists expect, the wine industries likely to be most impacted will be "in Spain, Italy and parts of California that are already quite warm. But there are winners in warming scenarios: In Germany, northern Europe and the Pacific Northwest of the United States, where in some years they struggle to get enough sun hours to facilitate budding, fruit set and ripening, a warming trend might produce dramatically better wines."

    KC's View:
      The one thing you cannot do is close your eyes to this stuff.

    Last week, we had a story about a fellow in Patagonia who was planing grapes in an inhospitable environment, gambling that it will pay off in about 50 years.  

    Here's what I do know:  Doing nothing is not an option.

    Published on: February 3, 2020

    From the Boston Globe:

    "The floor-to-ceiling aisles of Post-its, pushpins, pencils, and printer ink? History. The endless rows of three-ring binders and hanging file folders? Gone.

    "Instead, there are light-filled co-working spaces with snack-stocked kitchens, digitally tricked-out meeting rooms, and podcasting studios. There are workshops on mindful organizing and 'Finding Your Customer.'

    "Meet the new Staples: It’s not just an office supply superstore anymore, it is, the company puts it, a 'destination dedicated to continued curiosity, growth, and development'."

    The fact is that Staples is dealing with the fact that e-commerce in general and Amazon in particular have had a big impact on its business model;  if you can order file folders and paper (if you actually need file folders and paper) online rather than going to the store, or can put printer ink on a Subscribe-and-Save automatic replenishment list, why do you need to travel to Staples?  On the other hand, if the retailer can appeal to "freelancers, small entrepreneurs, and others who work outside big corporations, including many young people who increasingly look to work - as opposed to religion or organized social groups - for community and affirmation," then maybe it has an outside shot at survival.

    “It’s not about product anymore. That’s something you can buy anywhere online,” says Michael Motz, chief executive of the Staples US Retail group.  “It’s about, how can we provide solutions for you? It’s the connection to your everyday life.”

    KC's View:
      I love Motz's comment … it is almost as if he'd read something we talk about a lot here on MNB, that retailers have to be "more than a source of product and have to turn into a resource for the consumer."  He's playing my song.

    What Staples is trying to do won't be easy.  For one thing, the evolution probably will be situational, depending on available real estate and the needs of local communities.  It also require taking a bit of a hit financially, since turning your business model on its head almost always takes time and costs money.

    Staples also is dealing with some headwinds.  It partnered with Workbar, a WeWork-style business, a few years ago, but then stepped away from that partnership.  And WeWork has had highly publicized issues with profitability amid an expansion plan that some would argue has run amok.

    I admire what Staples is trying to do.  The status quo simply isn't an acceptable option, and I think risk-taking is required.  I suspect the biggest problem Staples may have will be resisting the urge to try to be a little bit pregnant.  Management has to commit.

    Published on: February 3, 2020

    The New York Times reports that "the Wuhan coronavirus spreading from China is now likely to become a pandemic that circles the globe, according to many of the world’s leading infectious disease experts.

    "The prospect is daunting. A pandemic — an ongoing epidemic on two or more continents — may well have global consequences, despite the extraordinary travel restrictions and quarantines now imposed by China and other countries, including the United States.

    "Scientists do not yet know how lethal the new coronavirus is, however, so there is uncertainty about how much damage a pandemic might cause. But there is growing consensus that the pathogen is readily transmitted between humans.

    "The Wuhan coronavirus is spreading more like influenza, which is highly transmissible, than like its slow-moving viral cousins, SARS and MERS, scientists have found … The mortality rate for known cases of the Wuhan coronavirus has been running about 2 percent, although that is likely to drop as more tests are done and more mild cases are found."

    The story makes the point that, not surprisingly, countries with more advanced health care systems are likely to be less hard-hit than those with m ore fragile medical infrastructures;  there also is some question about how warmer weather might tamp down on the disease's spread.  But it also is going to take time to find a vaccine, which means enormous percentages of the global population could be at risk.

    Published on: February 3, 2020

    …with brief, occasional, italicized and sometimes gratuitous commentary…

    •  From the Wall Street Journal (though it might as well be from the National Enquirer:

    "Michael Sanchez, the brother of Jeff Bezos ’ girlfriend, sued the Amazon.com Inc. founder for defamation, alleging his representatives spread false rumors to news outlets that Mr. Sanchez provided graphic nude photos of Mr. Bezos to the press.

    "The lawsuit, filed Friday in California state court in Los Angeles, also names as a defendant Gavin de Becker, a security consultant hired by Mr. Bezos. Mr. Sanchez, a talent manager, claims Mr. de Becker worked with Mr. Bezos to spread false statements about the public disclosure of Mr. Bezos’ affair with Lauren Sanchez, Mr. Sanchez’s sister."

    The story goes on:  "Mr. Sanchez’s lawsuit acknowledges that he helped publicize the relationship in an attempt to get out in front of news about the relationship.

    "His lawsuit concerns what he says was a campaign by Mr. Bezos and Mr. de Becker to blame Mr. Sanchez for turning over graphic nude photographs, which Mr. Sanchez denies doing. People familiar with Mr. Sanchez’s dealings with the tabloid said he showed a below-the-belt selfie of Mr. Bezos to the Enquirer, without providing a copy, but turned over other images."

    Three things.

    First, Bezos probably will be okay.  He reportedly made about $8 billion last week when Amazon's stock went up seven percent.

    Second, this is going to make Thanksgiving this year at the Bezos household kind of interesting.Third, wouldn't we all be better off if we lived in a world where nude selfies didn't exist, or at least did not become a matter for public discussion?  (You know.  Like what I'm doing right now.)

    Published on: February 3, 2020

    •  Fast Company has a story about retired baseball star Alex Rodriguez, who has just invested in  AB InBev’s Dominican Republic-based beer brand Presidente, becoming not just a minority shareholder but also chairman of the division, "tasked with working to grow Presidente’s presence in the United States, including the release of new products and materials."

    Rodriguez describes Presidente as a brand that in the Dominican Republic "is like Coca-Cola, like Pepsi, like Google, like the Yankees are here in America … When you are Dominican in this country - there’s almost 2 million Dominicans here, and almost 60 million Hispanics - we get to come to this great country where dreams come true, lifting a Presidente is like lifting the Dominican flag."

    The goal:  turn Presidente into the next Red Stripe, a Jamaican beer that has evolved into a global success story.

    Published on: February 3, 2020

    Mary Higgins Clark, who wrote more than 50 suspense novels and sold more than 100 million copies - the vast majority of them after she became a widow with three children in her late 30s - has passed away.  She was 92.

    She had a simple goal in her books:  "You want to turn the page," she told the Associated Press in 2013.  "There are wonderful sagas you can thoroughly enjoy a section and put it down. But if you’re reading my book, I want you stuck with reading the next paragraph. The greatest compliment I can receive is, 'I read your darned book ‘til 4 in the morning, and now I’m tired.'  I say, 'Then you got your money’s worth'."

    Published on: February 3, 2020

    Got this email from MNB reader Jesse Sowell in response to Friday's "OffBeat"…

    I always look forward to your culture notes on Fridays. I, too, have loved "The Good Place" - haven't seen the finale yet…

    I expected to hate Joker, but it turned out to be near the top of my list of the best movies I saw in 2020. For the first 2/3 of the movie, I found Joker to be a great individual acting performance in an underwhelming, even slightly boring, film. Then the final act moved into the public sphere, and, for me, became a brilliant reflection on the state of the world today. Joker acts out what you get when the world divides so starkly: into haves and have-nots, right vs left, the vulnerable vs the bullies, and all the other us-vs-them's we are devolving into. The movie should have ended in the streets and not gone on to the last scene, which was the only part of the movie that felt comic book-ish to me. In the end, Joker may not be "the movie for our times", but I think it may be the movie we deserve.

    But I also totally get why you hated it. I think I could have seen Joker on a different day or in a different mood and felt the same way. Last year I hated Dunkirk, much beloved by everyone I know. To each their own.

    We'll just have to agree to disagree.   I loved Dunkirk.  (Which, by the way, was made by Christopher Nolan, who gave us a much more intriguing Joker, courtesy of Heath Ledger, in The Dark Knight.)

    Published on: February 3, 2020

    In Super Bowl LIV, the Kansas City Chiefs defeated the San Francisco 49ers 31-20, capitalizing on a fourth quarter comeback engineered by quarterback Patrick Mahomes, who became the youngest player named Super Bowl MVP just a year after he was the youngest player named league MVP.

    Published on: February 3, 2020

    Digital strategies aren't just about creating alternatives to the bricks-and-mortar shopping experience.  Done effectively, they can actually bring people back to the store, while also eliminating customer anonymity, creating rich and actionable data, and deepen relationships between the store and consumer in a way that transcends the simple transaction.

    Our newest Retail Tomorrow podcast, which brings together a terrific panel of experts from a wide range of disciplines, was recorded at Google’s New York City offices during the recent National Retail Federation (NRF) Show.  Our guests:

    •  Matt Alexander, co-founder of Neighborhood Goods, an unusual and fascinating take on physical retailing with stores in Dallas and New York.

    •  Patrick Flanagan, senior vice president of digital marketing and strategy for Simon,  which has more than 200 properties in 37 states and Puerto Rico.

    •  Tom Furphy, CEO and Managing Director of Consumer Equity Partners, a member of the Retail Tomorrow podcast family and a regular contributor to "The Innovation Conversation" on MNB.

    •  And Jalna Silverstein, a leader in Ernst & Young’s Transaction Advisory Practice and its Real Estate, Consumer Experience and Retail Strategy.

    You can listen to the podcast here.

    This Retail Tomorrow podcast is sponsored by the Global Market Development Center (GMDC).

    Pictured below are our panel members, from left:  The Content Guy, Matt Alexander, Tom Furphy, Patrick Flanagan, Jalna Silverstein.

    Published on: February 4, 2020

    by Michael Sansolo

    If necessity is the mother of invention, it is interesting to think about the parentage of reinvention because frankly, that’s exactly what a large number of businesses need to focus on today.

    Should you doubt this at all, let me suggest you re-read Monday’s MNB for just the right inspiration. Especially focus on three pieces featured by Kevin: the articles about the recasting of Staples office supply stores into solutions centers, the resurrection of increasingly irrelevant shopping malls into “ghost” kitchens and more, and even the <i>New York Times</i> article bemoaning the shift to shopping to e-commerce.

    I think there’s a common thread in those stories that take us back to the notion of reinvention.

    The Staples story is the easiest link. As much as any retailer, Staples is in the cross hairs of electronic commerce. After all, there isn’t much romance in buying reams of paper or dry-erase markers. Yet, I’d argue that Staples is worth a visit. The store closest to me now features a widening array of products that can find their way into my office, including snacks and drinks. Plus, Staples allows me to return used printer cartridges, which I find both useful and hopeful.

    But what I liked most about Kevin’s story was the notion of a solution center, something Staples has played with for a while.  We talk a lot here about the need for stores to supply more than products - and that leads to experiences and solutions. Sure people need to buy groceries, but they really want menu ideas that fit with their lifestyles. Likewise, they need those reams of paper, but they also want ideas that make workplaces more effective. 

    Staples may be on to something and that’s worth considering and possibly mimicking.  It isn't hard to imagine how this notion could be adapted by food stores.

    And that’s why the article about the increasing incursion of e-commerce in our lives needs also be part of our discussions. The author might or might not be right with her concerns about the soulless nature of shopping remotely, but it’s a challenge to traditional retailers to make the traditional shopping experience soulful. In other words, you cannot out-convenience e-commerce, so instead it is critical to find ways to make stores, displays and everything else so compelling that it trumps convenience.

    That’s no simple lift, but it’s absolutely essential. It requires marshaling all of assets, most especially our people and helping them become, to borrow from Staples, “solutions providers.” They need help shoppers find the answers and experience they seek.

    Lastly, reconsider the article on ghost kitchens popping up in shopping malls. The sad reality is that most malls are already experiencing the “ghost” part pretty well, thanks to ghost stores and shoppers who have disappeared. Once again, if necessity is the mother of invention, maybe desperation is the mother of reinvention. In order to have any viability malls are clearly looking for ways to reinvent by including supermarkets, gyms, health clinics,  senior housing , community colleges and lord knows what else. (The mall closest to me has recently added a bowling alley and a flight simulator. We briefly also had a shooting gallery, but that disappeared in weeks.) 

    Desperation is a terrible place to be unless it gets us thinking about “what ifs” in entirely new ways. Maybe it becomes the mother of some creative offspring.

    Michael Sansolo can be reached via email at <A HREF="mailto: msansolo@mnb.grocerywebsite.com "> msansolo@mnb.grocerywebsite.com </A>.  His book, “THE BIG PICTURE:  Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available here.

    And, his book "Business Rules!" is available from Amazon here.

    Published on: February 4, 2020

    by Kevin Coupe

    Digital Trends reports that Amazon has added a new capability to its Echo Show device, which includes video along with its smart speaker capabilities.  The new feature - the ability to scan item bar codes by holding it up in front of the Echo.

    According to the story, "To get started, all you need to do is say, 'Alexa, scan this to my shopping list.'  Then, just hold the bar code on the package up to the screen. Alexa may have some problems recognizing some private label products, but that isn’t a problem. You can still add the product to your list using voice commands."

    And then, Prime members can place their orders at Amazon and/or Whole Foods via the Echo, and even get free two-hour delivery in many markets.

    It is going to take a lot of time and people to make this a mainstream function … but I have to admit that I think it is pretty cool.  I tried it this morning on my Echo Show, and while it is a little glitchy, it inevitably will get smoother … and I can see getting into the habit very easily.

    It is what I call an Eye-Opener.

    Published on: February 4, 2020

    Bloomberg has a fascinating story of the behind-the-scenes maneuvering when Amazon decided to seek out enormous tax incentives when it was looking for a location to build a second headquarters, dubbed HQ2.  According to the story, the search for incentives originated because CEO-founder Jeff Bezos was envious of the $1.3 billion in incentives that Elon Musk for for building a gigantic battery plant in Nevada.

    An excerpt:

    "And so, when Amazon launched a bakeoff for a second headquarters in September 2017, the company made plain that it was looking for government handouts in exchange for a pledge to invest $5 billion and hire 50,000 people. The splashy reality-television-style contest generated breathless media coverage, attracted fawning bids from 238 cities across North America and ended with Amazon deciding to split the so-called HQ2 between New York and Virginia. Then progressive politicians attacked the $3 billion in incentives offered by New York, and Bezos pulled out.

    "Amazon was widely ridiculed for its failure to court New York politicians. To understand why that happened, Bloomberg interviewed 12 people familiar with Amazon’s effort. Their story, outlined here for the first time, depicts a team that became the victim of its own hubris. Bezos’s frustration with what he deemed meager government largess prompted executives to scrap lessons learned through the years in favor of an unapologetic appeal for tax breaks and other incentives."

    You can read the entire story here.

    '

    KC's View:

    It has been well established that Jeff Bezos is a huge "Star Trek" fan, and so I would suggest that in this case, it might've made sense for him to turn to it for guidance.

    It was Mr. Spock, after all, who in the second season episode, "Amok Time," said:

    <i>"… You may find that having is not so pleasing a thing after all as wanting. This is not logical, but it is often true."</i>

    Actually, it sounds pretty logical to me.

    Published on: February 4, 2020

    The Kansas City Business Journal reports that single-store independent McGonigle's Market there has been sold to 122-store, Iowa-based Fareway Stores.  Terms of the deal were not disclosed.

    In a letter to customers posted on his website,.  owner Mike McGonigle, who started working in his dad's store when he was 12, wrote, in part, "I have no regrets. I am proud of the business that I built. I am proud of the employees I have supported and who have supported me. I am proud to have survived as an independent retailer in the age of box stores and internet groceries. But, in this highly competitive world, it has become more and more challenging to keep it going and after some health issues in 2015, I centered my thoughts on an appropriate transition for the store.

    "As I contemplated the future of McGonigle’s, I felt the need to keep the family owned, independent aspect intact. I wanted to make sure my customers and my people were well taken care of. This is where the new owners fit in. Fareway is family owned and operated. Their core values align well with my commitment to quality, integrity and personal service. I am confident they will be good stewards of the McGonigle’s legacy."

    A liquidation sale has begun.  McGonigle's will be closed on February 21, and reopened in early March under the new ownership.

    KC's View:

    It is, unfortunately, a story that we are going to see more and more, as many independents realize that it is almost impossible to survive in the current environment.  The good news is that the store will continue to serve its community, and the people who work there will continue to have jobs.

    Could have been a lot worse.

    Published on: February 4, 2020

    Fast Company reports that "UPS just announced that it plans to order 10,000 electric vans from Arrival, a U.K. startup that builds electric vehicles from scratch."

    The story notes that this order reflects a tipping point of sorts - that "electric delivery vehicles are at a tipping point: The technology is now cheap enough that EVs can truly compete with gas and diesel trucks and vans."

    According to Fast Company, "The logistics company first began working with Arrival in 2016; today, UPS announced that its venture arm, UPS Ventures, also made a minority investment in the startup … The startup builds its own core components, with a modular design that uses a standard 'skateboard' base that can be topped with different cabins. Arrival’s CEO has said that its vehicles will be cheaper than diesel vehicles from competitors. UPS won’t comment on the purchase price, but simply says that Arrival is price competitive with UPS’s current vehicles."

    KC's View:

    I don't know about you, but when I see a delivery vehicle that is more environment-conscious, it makes me feel a little bit better about the negative impact I've probably had by placing my order online.  This is the kind of stuff that more and more consumers care about.

    Rationalization?  Sure.  But as Jeff Goldblum says in The Big Chill, "I don't know anyone who could get through the day without two or three juicy rationalizations. They're more important than sex … Ever gone a week without a rationalization?"

    Published on: February 4, 2020

    From the Associated Press:

    "Federal antitrust regulators say a proposed merger that would combine old-school shaving brand Schick with upstart Harry’s would end up costing consumers some skin.

    "The Federal Trade Commission on Monday sued to block Edgewell Personal Care Co.’s $1.37-billion acquisition of Harry’s, which was supposed to be finalized this year. The FTC argues that bringing two major shaving brands together would hurt competition.

    "Edgewell’s Schick is the No. 2 razor maker in the U.S., behind Gillette."

    In its statement, the FTC says that "the loss of Harry’s as an independent competitor would remove a critical disruptive rival that has driven down prices and spurred innovation in an industry that was previously dominated by two main suppliers, one of whom is the acquirer."

    KC's View:

    Really?  Could it be argued that since the other disruptive player in the sector, Dollar Shave Club, already has been purchased by Unilever, this is what is required to maintain a competitive balance?

    Just asking.  Only because sometimes it seems like the FTC is fighting the last war instead of allowing companies to fight the next one.

    Published on: February 4, 2020

    In Texas, the Community Impact newspaper reports that Macy's plans to debut a new Market by Macy's store in the Southlake Town Square there, about two dozen miles northwest of Dallas, at the end of the week.

    According to the story, "The store will provide a boutique shopping experience with Macy's-branded fashion. New products from specialty designers and local Texas brands for men, women, children and the home will also be available … Additionally, within Market by Macy’s, an exclusive beauty shop and brand will be introduced called Getchell’s Apothecary. The beauty shop and product is inspired by the first female executive to work in retail, Margaret Getchell … The 20,000-square-foot space also debuts an in-store food and beverage concept named Herald, as a nod to Herald Square. Herald will offer breakfast, lunch and snack menus daily as well as choices of craft beer and wine."

    The store reportedly also will feature an event space that can be used for everything from book signings to cooking tutorials.

    The Cincinnati Business Courier notes that this is the first of the format to be opened;  Macy's also "operates about 680 Macy's and Bloomingdale's department stores as well as 190 specialty stores under the Bloomingdale's Outlet, Bluemercury and Macy's Backstage banners."

    KC's View:

    Macy's is making a big deal about the fact that it wants this new store to "tell a story," which it sees as a very 2020 approach to marketing the department store experience.  I'll buy that (though I'm not sure I would've waited until 2020 to start crafting a narrative).

    The thing is, the new Macy's story does not exist in a competitive vacuum … it has to compete for time and eyeballs with not just other stores, but against a vast number of experiences that include but are not limited to shopping.  So, we'll see…

    Published on: February 4, 2020

    The National Grocers Association (NGA) has announced the winners of its 2020 Creative Choice awards, who will be honored later this month at the NGA Show in San Diego at a session hosted by MNB's own Michael Sansolo.

    The contest features 11 categories with two winners from each - one from a 1-15 store operator the other from an operator with more than 15 stores.

    Voting currently is open for the highest awards of the contest, the “Outstanding Merchandiser” and “Outstanding Marketer.”

    The winners are:

    Connections Through Social Media

    • 1-15 Store Winner: Hip Foodie Mom, Metcalfe’s

    • 15+ Store Winner: Healthy Tip Tuesday, Coborn’s

    Connections Through Digital Market or Mobile

    • 1-15 Store Winner: Donut Goes to Space on National Donut Day, Bowman’s Market

    • 15+ Store Winner: Daily Delights Loyalty Offers, Remke Markets

    Traditional Media - TV or Radio

    • 1-15 Store Winner: Grand Opening, Shoppers Value Foods

    • 15+ Store Winner: Butcher Makes it Better, K-VA-T Food Stores

    Traditional Media - Print

    • 1-15 Store Winner: We Believe, Newport Avenue Market

    • 15+ Store Winner: Peach Party, Sendik’s Food Market

    Grand Opening or Remodel

    • 1-15 Store Winner: Gateway West Grand Opening, Hornbachers Osgood

    • 15+ Store Winner: Grand Opening — Abingdon, Virginia Food City, K-VA-T Food Stores

    Local, Specialty, Emerging Products

    • 1-15 Store Winner: Coffee Crawl, Dorothy Lane Market

    • 15+ Store Winner: That’s Smart Launch, Coborn’s

    Seasonal Store Event

    • 1-15 Store Winner: Holiday Cheese Extravaganza Making the Big Cheese Bigger, Acquistapace

    • 15+ Store Winner: Taste of Italy, Brookshire Grocery Company

    Community Engagement

    • 1-15 Store Winner: Facebook Post Goes Viral, Dill’s Food City IGA

    • 15+ Store Winner: Big Grocery Cart, Brookshire Grocery Company

    Center Store/GM/Frozen/HBC Category

    • 1-15 Store Winner: Food Explorer Series, Dorothy Lane Market

    • 15+ Store Winner: Moonlight Madness Sale, Foodland/Food Giant

    Fresh Departments

    • 1-15 Store Winner: Food Explorer, Dorothy Lane Market

    • 15+ Store Winner: Pi Day, Cub Lake Street

    Special Recognition

    • Unilever Sustainable Living Award: Food for February, Rudy’s Markets

    • Kellogg’s Fighting Hunger and Feeding Potential: Spirit of Christmas Food Drive, Brookshire Grocery Company

    Published on: February 4, 2020

    •  MarketWatch reports that analysts are suggesting that in view of the fact that Amazon's grocery delivery orders - both via its own site and Whole Foods - doubled in 2019 compared to 2018, it seems likely that remodeling of Whole Foods stores to make them more delivery-friendly could be on the horizon.

    Context from the story:  "Online food and beverage sales are expected to reach $143 billion by 2025, according to data provided by Nielsen Total. That’s about 18% of the total $800 billion that is expected for both online and in-store spending.  The number of households that are shopping for groceries across online and in-store channels is already noticeably rising, reaching 44% of all U.S. households in 2019."

    •  The Associated Press reports that "Amazon’s U.S. workforce has topped 500,000 for the first time, up 43% from the year before and more than triple what it was five years ago, the company said Friday. It gained 150,000 workers last year, more than the size of Apple’s entire workforce."

    Published on: February 4, 2020

    •  The Washington Business Journal reports that Albertsons has decided to close down a distribution center in Maryland's Prince George's County, and will begin "supplying its D.C.- and Baltimore-area stores from a Pennsylvania distribution center."

    According to the story, centralizing distribution “will help fuel the company’s investments and benefit its e-commerce business, its brick-and-mortar stores, and its customers,” said Christine Wilcox, Albertsons’ general vice president of communications. “In addition, the partially automated facilities at this distribution center will create a more efficient supply chain that will allow us to reduce waste.” 

    •  The Dayton Business Journal reports that Kroger "has confirmed it will close one of its Dayton-area stores … its location on 1822 S. Limestone St. The closure will take effect March 3."

    According to the story, "The announcement comes one year after Kroger shuttered its Home Road location, which is on Springfield's north side. Kroger also closed its North Limestone Street store last year, bringing the total number of recent closures to three … The reason for the closure is due in part to a shift in priorities within the Kroger company," the story says, as Kroger tries to "reposition itself to handle call-in orders, delivery and other new ventures the company is making to compete with e-commerce companies such as Amazon and others."

    Published on: February 4, 2020

    •  Dave Lewis, the outgoing CEO of Tesco, is a little less outgoing than previously believed.

    The company announced that Lewis, who planned to step down this summer, instead will hang around into October.  The delay is designed to allow Lewis's successor, Ken Murphy, to fulfill the non-compete clause in his contract with Walgreens Boots Alliance, where he has been chief commercial officer.

    Published on: February 4, 2020

    Got the following email about the announcement that Earth Fare is closing down its 50 stores.

    One MNB reader wrote:

    Agree with you that Earth Fare was lacking in identity however I think you overlooked the "debt" portion of the problem. It's hard for these retailers to invest in creating consumer connections when their private equity backers have them so loaded up with debt that they can't maneuver.

    Totally agree.

    From MNB reader Jeff Weidauer, referring to my comment that Earth Fare’s "biggest problem was that it didn't have a strong enough brand identity nor a compelling enough offering to compete in a fractured and fractious marketplace.”

    Exactly – it’s  the reason for the failure of Lucky’s, Village Market, and (insert name here) as well.

    One of the things I wrote in my commentary yesterday was:

    …Last year Earth Fare decided to differentiate its offering by hiring a chief medical officer. Clearly, these efforts at life support and resuscitation didn't work.

    Guess they should've hired an undertaker.

    My friend and MNB reader Lisa Sedlar thought I was working too hard at being a weisenheimer:

    While it was clever as it relates to the previous sentence, It seems a tad insensitive to say that. A lot of folks worked hard to make the company work and thousands of people are going to be without a job as a result of them closing.

    Not something to be cute about in my book.

    Once again, I am reminded that I am only half as funny - and half as cute - as I think I am.

    Nothing like a reality check…

    Responding to our Staples reinvention story, MNB reader Howard Schneider wrote:

    I’ve been fascinated by watching office supplies retailers respond to a radically changing world. It’s not just Amazon, DTC subscriptions and other newer, more efficient selling models; the fact is, the primary demand for much of what these stores sell has gone away and will not come back. People and businesses simply need far less paper, ink, filing supplies, physical storage, etc.

    I see three approaches to the situation in the market: Office Depot/Office Max turned to consolidation; Staples is turning to innovation, trying to become a “third space” catering to needs beyond product; and Poppin has re-invented the product category itself, turning utilitarian items like staplers and file folders into fun, colorful vehicles of self-expression. Each of these approaches has its pros and cons, and in the end all three companies may go the way of buggy whip makers in the early 20th Century. But it’s fun and even inspiring to watch these creative efforts to survive.

    Yesterday we took note of a <i>New York Times</i> column by Ginia Bellafante that examined the social and cultural impact of e-commerce, and she was not encouraged.

    I wasn't buying everything she was selling (though I normally like her columns a lot), and neither was MNB reader Stephanie Steiner:

    Bellafante is missing a giant point…

    Starbucks is still handling the orders in the order received.  Those mobile orders were placed from somewhere else, likely before she walked in the door, and that is why she is waiting. Not because mobile is a bigger priority to Starbucks, but because it’s a bigger priority to their customers.

    When I frequent Starbucks, it’s very likely I’m going to order the exact same coffee order that I ordered last time, and the time before that and the time before that – I don’t change my order.  For this reason, the app is perfect: my order is stored, and my coffee order is placed with two, maybe three touches.  It’s unlikely she would be in the building yet, and I certainly am not.  I don’t even start my journey toward it until after I’ve ordered: then I leave my desk / car / whatever and walk to get it.

    Sometimes it’s ready when I arrive, sometimes it isn’t. I say good morning, socialize with others waiting, and tip via the same app. The coffee, food, and atmosphere is not necessarily better than the other options we have in Seattle, but the app is great.

    And finally, regarding the fake-ice-for-skating Eye-Opener we had yesterday, one MNB reader wrote:

    I have skated on these imitation ice rinks and they suck. If you do fall that crap gets all over your clothing. Never again.

    Another reality check.

    Published on: February 4, 2020

    You only have about 20 months to wait.

    Disney announced yesterday that Hamilton will be coming to movie theatres, premiering on October 15, 2021.

    It won't be a traditional film adaptation, though.  In fact, it already has been filmed - Hamilton will be a "live capture" of a 2016 stage performance of the show featuring the entire original cast, including Lin-Manuel Miranda in the title role and Leslie Odom Jr. as Aaron Burr.

    "Hamilton" hit Broadway in 2015, and promptly became an enormous sensation, reinventing the musical in many ways and making history instantly accessible to a broad swath of audiences.  (It also has gotten a lot of all-outs recently because of one of its songs, "The Room Where It Happens."  John Bolton's memoir of his time in the Trump White House is called "The Room Where It Happened."  And both sides in the recent impeachment trial cited Alexander Hamilton numerous times, albeit not in rhyme.)  The Broadway show won 11 Tony Awards as well as the Pulitzer Prize for drama.

    KC's View:

    Expect this to be an enormous hit.

    I will tell you that I've seen hundreds of shows in my life - it is one of my greatest cultural pleasures, and I'd go dozens of times a year if I could afford it - and "Hamilton" easily is one of the best things I've ever seen.

    I wrote about it here when I saw it a couple of years ago, in conjunction with the Produce Marketing Association convention where I interviewed Leslie Odom Jr. on stage, talking about innovation, disruption, diversity and storytelling through the prism of art and culture.  That's exactly what "Hamilton" exemplifies, and the PMA session was one of the best in which I've ever participated.  You can read about it here.

    Published on: February 4, 2020

    Digital strategies aren't just about creating alternatives to the bricks-and-mortar shopping experience.  Done effectively, they can actually bring people back to the store, while also eliminating customer anonymity, creating rich and actionable data, and deepen relationships between the store and consumer in a way that transcends the simple transaction.

    Our newest Retail Tomorrow podcast, which brings together a terrific panel of experts from a wide range of disciplines, was recorded at Google’s New York City offices during the recent National Retail Federation (NRF) Show.  Our guests:

    •  Matt Alexander, co-founder of Neighborhood Goods, an unusual and fascinating take on physical retailing with stores in Dallas and New York.

    •  Patrick Flanagan, senior vice president of digital marketing and strategy for Simon,  which has more than 200 properties in 37 states and Puerto Rico.

    •  Tom Furphy, CEO and Managing Director of Consumer Equity Partners, a member of the Retail Tomorrow podcast family and a regular contributor to "The Innovation Conversation" on MNB.

    •  And Jalna Silverstein, a leader in Ernst & Young’s Transaction Advisory Practice and its Real Estate, Consumer Experience and Retail Strategy.

    You can listen to the podcast here.

    This Retail Tomorrow podcast is sponsored by the Global Market Development Center (GMDC).

    Pictured below are our panel members, from left:  The Content Guy, Matt Alexander, Tom Furphy, Patrick Flanagan, Jalna Silverstein.

    Published on: February 5, 2020

    by Kevin Coupe<

    Is there any business that Amazon doesn't want to get into?

    Reuters reports that Amazon and Goldman Sachs Group are in "advanced talks" to begin offering loans to small- and medium-sized businesses.

    The interesting note from the story is the suggestion is that the loans would be targeted at companies that need resources to invest in things like … wait for it … technology.

    You know.  Like some of the stuff that Amazon offers.  Like Amazon Web Services (AWS).

    I'm not being cynical here.  More like admiring.

    Because when you think about it, if there are big companies that won't want to do business with AWS because they compete with Amazon in other venues, it will make sense for Amazon to develop relationships wherever possible with other businesses that may learn to depend on it.  For better or worse.

    (There's also, of course, the vig, which can be good for a bottom line.)

    The story also notes that this is part of a broader strategy at Goldman Sachs, which, teaming with Apple, "rolled out a virtual credit card to help build out the Wall Street bank's consumer business, which also consists of its online bank Marcus."

    Tentacles for everyone, spreading everywhere.

    It's an Eye-Opener.

    Published on: February 5, 2020

    The Jacksonville Business Journal reports that Southeastern Grocers, which owns Winn-Dixie, is acquiring five of the Florida stores being closed by the now-bankrupt Lucky's Market.

    Those stores are in Naples, Fort Meyers, Gainesville, Lake Mary and Melbourne.  Terms of the deal were not disclosed.

    In addition to this acquisition, Lucky's said that its St. Petersburg store will be acquired by 11-store Hitchcock's Markets, and ethnic grocer Seabra Foods - which has stores in New Jersey, Rhode Island and Massachusetts, as well as one in Florida - plans to buy one in Orlando.

    The story notes that "Lucky's has previously announced deals with German discount grocer Aldi and Lakeland-based Publix Super Markets Inc. for 11 of its Florida stores, including the Neptune Beach store going to Publix."

    KC's View:

    One of the interesting things in the story is the note that the Lucky's stores are smaller than the units that Southeastern Grocers operates, which suggests that maybe the latter is thinking about some new sort of format to serve these communities … which could mean that it is looking at this move as not just an acquisition, but an opportunity to do something different, something relevant, something resonant.  As opposed to, say, just trying to squeeze 20 pounds of flour into a 15-pound bag.

    Published on: February 5, 2020

    Macy's said yesterday that it plans to close 125 stores over the next three years, roughly 20 percent of its fleet.  Macy's also will eliminate some 2,000 corporate jobs, and close a technology office in San Francisco and a headquarters office in Cincinnati - moves that it hopes will generate annual savings in the neighborhood of $1.5 billion, which it wants to plow back into the business.

    The CNBC story says that "the department store chain said it plans to exit weaker shopping malls, and instead will shift its focus toward opening smaller-format stores in strip centers … with a focus on growing its off-price business, known as Backstage, expanding outside of the mall and improving online."

    Macy’s has closed more than 100 stores over the past five years.  Some of the closings announced yesterday already had been made public, such as the downtown Seattle store, which, ironically, is in a building that has been gradually taken over by Amazon.

    KC's View:

    Cutting one's way to prosperity often has been tried, but doesn't usually succeed.  So I'm not persuaded by this announcement.

    In the end, Macy's future will be decided by whether consumers are persuaded.  As a shopper, I'm not wild about its stores … there seems to be a lot of vanilla, and not much in the way of a driving narrative that defines the brand and compels the shopping experience.  Now, it may just be that I'm not Macy's target shopper.  (I'd bet on that, in fact.)  But when I look around a Macy's, I wonder who is.

    Published on: February 5, 2020

    Four New Jersey Foodtown stores that have been operating as Nicholas Markets are being converted to Wakefern's The Fresh Grocer banner this month and next, the companies announced this week.

    The transition is part of a strategic repositioning that started last year when the Maniaci family, which owns Nicholas Markets, joined retailer-owned cooperative Wakefern Food Corp., making it the co-op's 51st member.  The Fresh Grocer banner is a trademark owned by Wakefern.

    “My customers know they get a top-notch, specialty grocery shopping experience at our stores, and we will continue to provide all the things our customers know and love while adding new and exciting features as we rebrand to The Fresh Grocer,” said David Maniaci, president and CEO of Nicholas Markets.  “This is the exciting next chapter in my family’s 77-year history in the grocery business. I want to thank shoppers for their ongoing support as we complete our rebranding efforts and make the change to The Fresh Grocer.”

    KC's View:

    "Fresh" is something that a really good food retailer can and should be able to do better than more conventional competitors, especially of the online variety.  So it is critical to emphasize that everywhere - including on the sign hanging over the front door.

    Published on: February 5, 2020

    There is a great piece in the New York Times about retail's problematic relationship with private equity, suggesting that financiers often have a lot of money but very little experience or common sense about how to be a merchant - though this does not stop them from overruling experts, sometimes in disastrous ways.

    One example:  Payless ShoeSource, which just recently emerged from bankruptcy and has its third ownership group in four years.

    An excerpt…

    "As in any corporate failure, there is no one cause. Over seven years, Payless went through a wringer of private equity and hedge fund stewardship that left it with inadequate technology, run-down stores and no financial cushion to survive an era of upheaval in retail.

    "But the collapse of Payless is more than a story of one discount shoe company that couldn’t hack it in a changing business environment. It provides disquieting clues about one of the great mysteries of the modern economy.

    "Why hasn’t the finance-driven capitalism of the last few decades created faster growth? What if the masters of financial efficiency are making choices that don’t actually create the more dynamic, productive economy they promise?

    "In extreme cases, what if they don’t really know what they’re doing at all?"

    You can read the story here.

    KC's View:

    Let's face it.  Retailers get involved with private equity because they're in trouble.  They need money.  They've been hammered by competition, they've made miscalculations, and maybe have been mismanaged.

    But if the money doesn't get used the right way, or if a brand's equity is squandered because of debt obligations, who exactly is being helped?

    The money people I respect are the ones that are focused on sustainable and workable business plans that keep stores open and people employed, that are mindful of both strategic and tactical imperatives (and know the difference).

    It doesn't help to toss a business a lifeline if it is attached to an anchor.

    Published on: February 5, 2020

    The Financial Times reports that the Best Buy board of directors has completed its investigation into misconduct allegations against its CEO,  Corie Barry, and said that it "supports the continued leadership of the Company by Ms Barry. To preserve the confidentiality and integrity of the process, the Board will have no further comment."

    Barry became CEO of Best Buy in June 2019, taking control of a company that has had some experience with sexual misconduct in its c-suite.  Last month, Best Buy said that Barry had been accused via anonymous letter of having an inappropriate romantic relationship with a fellow executive who subsequently left the company;  both were senior vice presidents at the time of the alleged relationship, and the other executive became CEO of a non-competitive business.

    KC's View:

    I was considering just slotting this into the "FastNewsBeat" section, but thought that it would be fairer to give the story clearing Barry the same kind of position that I gave the story about the original allegations. 

    That's especially because we got a number of emails that sort of piled on Barry before we knew any details about the charges.  I think sexual harassment in the workplace is a serious issue, and I would never minimize it, but not every relationship is harassment and not every allegation is true.

    I suspect that Best Buy's board took this very seriously because of the company's history, and so if it cleared her, it must be because she was in the clear.

    Published on: February 5, 2020

    Malls, facing closing stores and retail bankruptcies, are taking all sorts of different approaches to the problem.

    One way is to make the experience more, well, experiential.

    Another was is to find other uses for the real estate.  Like for community colleges, health care facilities, or even restaurant ghost kitchens.

    But now, mall operators Simon Property Group and Brookfield Property Partners,  along with the brand licensing firm Authentic Brands Group, have come up with another way to deal with the bankruptcy of Forever 21, which has operated large, often multi-level stores in almost half the malls they own.

    They're buying the company.

    NPR's Marketplace reports that they "have agreed to purchase the assets of Forever 21, the bankrupt clothing retailer, for $81 million."

    Analysts say that it is unlikely that the mall consortium will be able to return Forever 21 to past glories, but for now, "the lights stay on."  People stay employed.  And their malls look less like ghost towns.

    But … there are always possibilities.  <i>Marketplace</i> notes that "Simon Property Group and Brookfield have done this before. In 2016 they bought the bankrupt clothing chain Aéropostale. Since then, it has reopened more than 500 stores."

    Published on: February 5, 2020

    •  The New York Times this morning reports that "Walgreens will pay $7.5 million to settle allegations that for more than a decade it let an unlicensed pharmacist handle hundreds of thousands of prescriptions, including some for highly addictive painkillers, the authorities in California said on Monday, another setback for a company already facing broader accusations that it helped feed the opioid epidemic … As part of Monday’s settlement, Walgreens also agreed to institute a license-verification program and conduct annual audits, among other new oversight measures."

    According to the story, "The Santa Clara County District Attorney’s Office, one of two San Francisco Bay Area agencies that sued Walgreens, said that the employee, Kim Thien Le, 44, handled more than 745,000 prescriptions, including thousands for drugs like oxycodone, fentanyl, morphine and codeine, from 2006 to 2017. She was never licensed by the state pharmacy board as required by law, the authorities said."

    Published on: February 5, 2020

    We had a story yesterday about how Amazon's Echo Show now will be able to scan product bar codes and compile a shopping list, which prompted MNB reader Tom Murphy to write:

    You just blew past an interesting comment without making a point: “Alexa may have some problems recognizing some private label products…”.  Really, in this day and age?

    I am sure Alexa is powered by access to multiple industry databases that manage barcode to product relationships.  Back in the 1990’s, CPG companies were terrible at keeping accurate barcodes on products, especially with all the line-extensions and “new improved” version of stuff they dropped regularly to see what would stick on the consumer.  They tried to “game” the UPC number.

    In order to bypass POS restrictions, their lack of capability or just lack of discipline, for years retailers “gamed” they system on barcodes/UPCs…and accuracy, at best, was deplorable.  Now in the day of digital sales and consumer attitudes, allowing your business teams to game or fail to act quickly to register new private label products…could be part of the “slow death syndrome”!

    Come on retailers...wake up!

    Regarding the problems with skating rinks that use plastic instead of real ice, one MNB reader observed:

    Totally agree with the comment about the fake skating rinks being less than desirable.  On the one we tried, you don't 'slide' as much as you walk around it.  My teenagers mock me still, over a year later, for taking them there!!

    On another subject, from another reader:

    Regarding the MNB Culture Desk article about "Hamilton" coming to the movies … Very exciting news for those of us who need to get our culture at the movies. Broadway should take a page from the Met Opera and broadcast to the movie theaters. Although I love Opera now, I never saw myself as a opera fan or even thought about going to the Opera. But the Met  gave that opportunity to those of us who will never get to New York. Seeing Operas like La Boheme, Tosca, Madame Butterfly, most recently Porgy and Bess and so many more  broadcasts at the movie theaters has been a phenomenal and very affordable ($25.00 !!) experience. Broadway should do the same! I can hardly wait to see "Hamilton"!

    I actually saw the live "Porgy and Bess" broadcast in a movie theater last weekend … and am saving my comments about it for OffBeat on Friday.  But I agree with you about live streaming plays and musicals to movie theaters.

    And finally, yesterday I used a Jeff Goldblum quote from The Big Chill yesterday.  You know, this one:

    "I don't know anyone who could get through the day without two or three juicy rationalizations. They're more important than sex … Ever gone a week without a rationalization?"

    One MNB reader wrote:

    <b>Kevin, I used the Jeff Goldblum quote here in the office last fall, no one in the conversation knew the movie! It was painful.</b>

    It does hurt.

    Published on: February 5, 2020

    Digital strategies aren't just about creating alternatives to the bricks-and-mortar shopping experience.  Done effectively, they can actually bring people back to the store, while also eliminating customer anonymity, creating rich and actionable data, and deepen relationships between the store and consumer in a way that transcends the simple transaction.

    Our newest Retail Tomorrow podcast, which brings together a terrific panel of experts from a wide range of disciplines, was recorded at Google’s New York City offices during the recent National Retail Federation (NRF) Show.  Our guests:

    •  Matt Alexander, co-founder of Neighborhood Goods, an unusual and fascinating take on physical retailing with stores in Dallas and New York.

    •  Patrick Flanagan, senior vice president of digital marketing and strategy for Simon,  which has more than 200 properties in 37 states and Puerto Rico.

    •  Tom Furphy, CEO and Managing Director of Consumer Equity Partners, a member of the Retail Tomorrow podcast family and a regular contributor to "The Innovation Conversation" on MNB.

    •  And Jalna Silverstein, a leader in Ernst & Young’s Transaction Advisory Practice and its Real Estate, Consumer Experience and Retail Strategy.

    You can listen to the podcast here.

    This Retail Tomorrow podcast is sponsored by the Global Market Development Center (GMDC).

    Pictured below are our panel members, from left:  The Content Guy, Matt Alexander, Tom Furphy, Patrick Flanagan, Jalna Silverstein.

    Published on: February 6, 2020

    This commentary is available as both text and video; enjoy both or either ... they are similar, but not exactly the same.  To see past FaceTime commentaries, click here.

    Hi, I'm Kevin Coupe and this is FaceTime with the Content Guy.

    I've been doing these videos for almost exactly nine years.  I went back to check the date on the YouTube MNB channel, and not only did I see when I started doing these - January 27, 2011 - but the guy who was doing it had a lot darker hair.

    In skimming through the various videos, one of the things I noticed was that while my hair has gotten grayer, my wardrobe hasn't changed all that much.  It is mostly jeans and sport shirts, with the occasional blazer or sweater thrown in.  A lot of them are the same shirts - in fact, the shirt I wore yesterday is the exact same shirt I wore when I did a FaceTime on March 24, 2011 … a shirt from LL Bean.

    A lot of my wardrobe comes from LL Bean, and a lot of it is pretty old.  It sort of suits me - basic, functional, and sturdy.

    Some might even say, staid.  At least, that's the word that the New York Times used this week to describe the company, in an article about how, for the first time in its history, LL Bean clothing will show up on the runway at designer Todd Snyder's event at New York Fashion Week.

    Owen Kelly, an LL Bean vice president, described the decision this way:   “We are very loyal to our core customer and true to our outdoor ethos.  But this is an opportunity to take our classics and flip them, push them forward."  The company wanted to be careful with the brand, but also wanted "“to put Bean in front of a different set of eyes."

    Todd Snyder puts it this way:  "Don’t insult them, and at the same time take them to a new place."  The method:   “Forage, find, elevate.”

    And Kelly says it was a perfect fit:  "Todd shares our values and our mission of getting people outdoors and into an active American lifestyle."

    The Times writes that "the results were culled from meticulously organized collections of old catalogs, blankets, hunting gear and garments from most decades of the past century."

    It helps, experts say, that LL Bean is sort of prototypically preppy (though I've never thought of it that way), and fashionistas believe that preppy is coming back.

    I think that this is a valuable lesson for every brand, no matter how successful.  LL Bean, I think it is fair to say, is a pretty conservative company - still privately held, still in the Bean family.  But no matter how well you're doing, it always makes sense to get in front of new eyes, to grow your brand wherever it makes sense.  That's what Bean is doing by opening stores and testing different physical footprints, and that's what it is doing when its products walk down a New York fashion runway.

    The great tennis star Rod Laver once said that "the time your game is most vulnerable is when you’re ahead. Never let up."

    That's a great lesson for every brand.  Even those that are basic, functional, sturdy and successful.

    That's what is on my mind this morning, and, as always, I want to hear what is on your mind.

    Published on: February 6, 2020

    by Kevin Coupe

    There are generations of people who have no idea who Jim Croce was and who never have listened to his music.  Which is a shame.

    I was thinking about this the other day while I was listening to Croce on iTunes:

    You don't tug on Superman's cape

    You don't spit into the wind

    You don't pull the mask off that old Lone Ranger

    And you don't mess around with Jim

    Yahoo Finance has an interview with Scott Moses, head of the grocery & restaurants investment banking practice PJ Solomon (and an MNB fave), who talked about what retailers have to do in order to compete with Amazon.

    "You're never going to beat Walmart on price. You're never going to beat Amazon on convenience. The way that you win is on experience and on trust," he said, adding that "retail is all about customer retention, customer acquisition, and they're [Amazon] making that investment in order to get people to continue to buy."  

    While most retailers (in fact, most countries) don't have the access to investment capital that Amazon does, Moses's argument is that they certainly need to do the things that Amazon cannot or will not do, but that can help them retain and acquire customers.

    The fact is that Amazon hasn't figured everything out.  The story points out that "while online groceries sales from both Amazon Fresh and Whole Foods spiked this quarter, Amazon did not see the same increase from physical sales at Whole Foods, which it bought in 2017. Physical store sales declined slightly from the same quarter a year ago."

    In other words, Amazon does have vulnerabilities.  Or, as we like to say here on MNB, there is no such thing as an unassailable advantage.  That's the Eye-Opener.

    Remember that in the Jim Croce song (spoiler alert!), Jim ends up meeting up in a fight with Willie McCoy, who goes by the name of Slim … and the song ends:

    You don't tug on Superman's cape

    You don't spit into the wind

    You don't pull the mask off that old Lone Ranger

    And you don't mess around with Slim.

    Published on: February 6, 2020

    Engadget reports that "Instacart employees in the Chicago suburb of Skokie have voted to unionize through their local branch of United Food and Commercial Workers … The move only covers 15 staffers who operate at the Mariano's grocery store, but it's the first time Instacart employees have unionized in the US and could affect issues like turnover rates, work pacing and mysterious employee rating algorithms."

    The move makes the Instacart employees ;part of the United Food and Commercial Workers (UFCW), and theoretically gives them greater negotiating power.  The story makes the point that "only 12,000 of Instacart's 142,000 shoppers are employees capable of unionizing," but that this move could have broader implications, spurring more gig economy employees to consider unionization, which could impact how companies like Instacart operate.

    While Instacart said it will "honor" the vote and "respect[s] our employees' rights to explore unionization," Engadget suggests that Instacart managers visited the Mariano's store to argue against unionization.

    KC's View:

    One of the things that I would be worried about if I were Mariano's - or any other retailer doing business with Instacart - is that this scenario could lead to employee discontent at the delivery company, which could then have an impact on how those employees communicate brand messages to the customers to whom they are making deliveries.

    All this does is potentially create more ways in which retail brands have less control over the way in which they connect to the people who are supposed to be <i>their</i> shoppers.  And Instacart only wants to keep costs down so that it can create a bottom line that will look better to a company looking to acquire it or in a possible IPO.

    Published on: February 6, 2020

    Fox Business reports that 7-Eleven has opened its first cashierless-free store, for employees at its Irving, Texas, headquarters.

    According to the story, the Scan & Pay mobile application that drives the system "uses algorithms and 'predictive technology' to separate individual customers' purchases from other customers' purchases. Employees are still necessary for customers who wish to purchase cigarettes, lottery tickets and other products with age limits, according to the release."

    In a prepared statement, 7-Eleven Senior Vice President Mani Suri said that "this in-house, custom-built technology by 7-Eleven engineers is designed for our current and future customers.  Mobile Checkout is just one more way we can make someone's day a little easier and give 7-Eleven customers a convenient checkout alternative to waiting in line during a store's busiest times of day," adding that "introducing new store technology to 7-Eleven employees first has proven to be a very productive way to test and learn before launching to a wider audience."

    KC's View:

    The story equates what 7-Eleven is doing with the Amazon Go checkout-free stores, which may be a bit of a mistake.  There is a difference between having customers scanning and paying as they walk the store, and the checkout-free experience that the Go stores offer.

    That doesn't make the Scan & Pay experience less valuable.  It may end up being the most scalable.  But it doesn't seem to be the same as the more ambitious Amazon effort.


    Published on: February 6, 2020

    Barnes & Noble is having to back down from a diversity-oriented project that it hoped would be seen as positive and would improve its tarnished reputation.

    Here's the background…

    The company partnered with Penguin Random House to publish a series of classic novels -  including Lewis Carroll's “Alice's Adventures in Wonderland,” Mary Shelley's “Frankenstein” and L. Frank Baum's “The Wizard of Oz" - for which the covers would portray characters from the books as being dark-skinned.  None of the words would be changed, but the covers were meant to pose a provocative question:  Did you ever consider the ethnicity of the characters in these classic books?

    The thought was that for the most part, ethnicity was never mentioned in the books or factored into characterizations, but the assumption always was made - regardless of the the color of the reader - that they were white.  The new series of covers - marketed as "Diverse Editions" -  were meant to suggest to people of color that these characters could look like them and help them engage with the classic titles.

    To say the least, the effort backfired.

    The criticisms of the series focused on the fact that these novels were not representative of the black experience, and therefore minimized it by trying to suggest that the white experience was universal.  One critic called it “the classics in blackface.”  Others argued that it would have been more powerful and appropriate to republish and promote classic novels by black authors.  And it didn't help that the series was released for Black History Month.

    Barnes & Noble has pulled the books from its shelves and website.

    The company released a statement, saying that the new covers were "not a substitute for black voices or writers of color, whose work and voices deserve to be heard.

    “The booksellers who championed this initiative did so convinced it would help drive engagement with these classic titles … It was a project inspired by our work with schools and was created in part to raise awareness and discussion during Black History Month, in which Barnes & Noble stores nationally will continue to highlight a wide selection of books to celebrate black history and great literature from writers of color.”

    KC's View:

    Obviously, Barnes & Noble miscalculated here.  So did Penguin Random House.

    I have no doubt that their intentions were positive, that they wanted to make classic novels more accessible to children of color.  But it assumed that people cannot relate to characters who don't look like them or live like them.  One of the things that literature - and art in general - can do is give us access to lives and experiences unlike ours.  Our lives and insights are broadened, not narrowed.

    I totally agree that the companies would have been better off making books by black authors more available and accessible, which makes me wonder how many black people were in the room when these decisions were made.  I'm not judging here, because I don't know, but is it possible that this misguided attempt to be more diverse actually reflects a lack of diversity?

    Just asking.

    Published on: February 6, 2020

    Commercial Drone Professional reports that Unilever has been testing the delivery of its Ben & Jerry's ice cream cups via drone.

    According to the story, "During the demonstration, a multi-copter drone was fitted with a delivery box designed to carry three Ben & Jerry’s mini cups.  A flight path was set beforehand to allow the drone to carry the ice cream cups inside the Unilever’s US facility"

    While this was just a test, "with regulations around future drone flights expected to become more flexible, the consumer goods company is preparing for a drone logistics service that will deliver products to more customers faster."

    Unilever launched a delivery service called Ice Cream Now in 2017, and sees drones as being the next step in that continuum.

    KC's View:

    My first reaction to this story was, "Really?  Doesn't this seem a little self-indulgent?"

    My second reaction was that this seems totally aimed as those damned self-indulgent millennials.

    My third reaction was … if I didn't have any Graeter's Black Raspberry Chocolate Chip in the freezer (which I almost always do), or their Boldly Bearcat limited edition ice cream (which is our new family favorite), and I knew I could get use an app to get a drone to deliver it pretty quickly without my having to leave the house … well, that seems as fine a use of technology as I can imagine.

    Just sayin'.

    Published on: February 6, 2020

    •  In Connecticut, the Stamford Advocate reports that "Fairway Market could close its South End grocery and wine store and lay off approximately 150 employees there and shutter other locations if buyers for those sites do not emerge, the bankrupt chain has told state officials.

    "The plan counters a statement that Fairway made when it filed for Chapter 11 protection on Jan. 23, when it said that its stores were staying open and that it did not expect any 'service interruptions' during the bankruptcy proceedings. If the Stamford closing were carried out, it would strip the South End of its only supermarket."

    The story goes on:  "Fairway has agreed to sell for about $70 million its five stores in Manhattan and its product and distribution center in Bronx, N.Y. At the same time, it is 'actively marketing' its 13 other tri-state store locations, including Stamford."

    A closure would happen by the beginning of April.

    •  The Wall Street Journal reports that "the owner of the New York Stock Exchange has made a takeover offer for eBay Inc. that could value the sprawling online marketplace at more than $30 billion … Intercontinental Exchange Inc., known as ICE, has approached eBay in the past and did so again recently … The companies aren’t currently in formal talks, and there is no guarantee eBay would agree to a deal."

    Published on: February 6, 2020

    •  Forbes reports that "Walgreens Boots Alliance promoted Richard Ashworth, a veteran of the company’s U.S. pharmacy operations, to become President of Walgreens following an operations role he had with the global pharmacy chain."  He will, the company said, be "responsible for developing the strategies and plans for all Walgreens operations and will have full responsibility for the leadership, development and management of the business."

    •  The New York Daily News reports that Bobby Chacko, CEO of Ocean Spray Cranberries, has been fired "amid allegations that he violated the Massachusetts-based company’s policy against harassment."

    James White, who joined the Ocean Spray board of directors as an adviser last June, was named the interim chief executive.

    In a statement, the company said:  "“At Ocean Spray, we have pledged to hold everyone accountable and ensure that every decision is made in the best interest of the cooperative … It should be noted that Bobby Chacko helped to right the ship at Ocean Spray and set us on a new path. However, no matter how valuable someone’s contributions may be, we simply cannot accept a violation of our company policy."

    Published on: February 6, 2020

    •  Kirk Douglas, one of the last of the great movie stars from Hollywood's post-war golden age, has passed away at age 103.

    The New York Times obit points out that during the 1950s and ’60s, Douglas was "as big a star as there was — a member of a pantheon of leading men, among them Burt Lancaster, Gregory Peck, Steve McQueen and Paul Newman, who rose to fame in the postwar years."

    Among his movies:  Lust for Life, Spartacus, Paths of Glory, The Bad and the Beautiful, Lonely Are The Brave, Champion, Young Man With A Horn, Detective Story, Ace In The Hole, Seven Days In May, In Harm's Way, and Gunfight at the O.K. Corral.

    KC's View:

    I'm guessing that most people under a certain age will have no idea who Kirk Douglas was, or will just know him as Michael Douglas's father.   (People even younger than that may have no idea who Michael Douglas is.)

    But that's a shame, because he was Hollywood's image of the muscular, virile - and sometimes tortured - American for more than two decades.

    He also demonstrated moral courage in real life.  He produced Spartacus, and hired Dalton Trumbo - who had been blacklisted during the shameful McCarthy era - to write the screenplay and insisted that Trumbo's name would be on the credits.  It can be argued that such moves helped to break the blacklist.

    Two small pieces of MNB-centric trivia…

    For Champion, Douglas was trained by a former Light Welterweight champ named Mushy Callahan, who also staged the fight scenes.  Mushy Callahan had a son named Mike Callahan, who was one of the best teachers I ever had when I studied film at Loyola Marymount University.  (Mike had great stories during class about people like Kirk Douglas and Burt Lancaster that always made the subject come alive.)

    And, in the New York Times online obit, there is a picture from Detective Story that shows Douglas with William Bendix and a great character actor named Horace McMahon … who is the father of MNB's own Kate McMahon.

    Published on: February 6, 2020

    Digital strategies aren't just about creating alternatives to the bricks-and-mortar shopping experience.  Done effectively, they can actually bring people back to the store, while also eliminating customer anonymity, creating rich and actionable data, and deepen relationships between the store and consumer in a way that transcends the simple transaction.

    Our newest Retail Tomorrow podcast, which brings together a terrific panel of experts from a wide range of disciplines, was recorded at Google’s New York City offices during the recent National Retail Federation (NRF) Show.  Our guests:

    •  Matt Alexander, co-founder of Neighborhood Goods, an unusual and fascinating take on physical retailing with stores in Dallas and New York.

    •  Patrick Flanagan, senior vice president of digital marketing and strategy for Simon,  which has more than 200 properties in 37 states and Puerto Rico.

    •  Tom Furphy, CEO and Managing Director of Consumer Equity Partners, a member of the Retail Tomorrow podcast family and a regular contributor to "The Innovation Conversation" on MNB.

    •  And Jalna Silverstein, a leader in Ernst & Young’s Transaction Advisory Practice and its Real Estate, Consumer Experience and Retail Strategy.

    You can listen to the podcast here.

    This Retail Tomorrow podcast is sponsored by the Global Market Development Center (GMDC).

    Pictured below are our panel members, from left:  The Content Guy, Matt Alexander, Tom Furphy, Patrick Flanagan, Jalna Silverstein.

    Published on: February 7, 2020

    by Kevin Coupe

    Enjoy looking at MNB this morning.  It is, I am happy to tell you, the last time it is going to look quite like this.

    That's because on Monday morning, MNB will feature a considerable redesign.

    I'm pleased to announce that MorningNewsBeat has taken on a partner with a significant investment from Accelerate, which describes itself as offering retailers and brands turnkey solutions ranging from Direct Store Delivery (DSD) to Direct to Consumer (DTC) fulfillment, and everything in between.

    Go figure.  MNB is part of "everything in between."

    The fact is, the folks at Accelerate have recognized that, to use a phrase that we often use on MNB, it is critical to be not just a source of product, but also act as a resource.  And I am thrilled that as they build out their platform, they want to use MNB as a foundation.

    The Accelerate team tell me that this is because they see real, tangible value in the way MNB has approached the marketplace for the past 18 years - my goal always has been to illuminate, provoke, and entertain with highly readable prose, disruptive opinion, and an irreverent sense of humor.  They don't want to mess with that.  Not at all.

    So what does this mean for you as the reader, and me as the writer of most things on MNB?

    I can tell you with enormous confidence that in terms of content and attitude, it means very little.  But in terms of delivery, I think it will mean a lot - for one thing, the MNB website now is going to be dynamic for mobile, which readers have told me is a high priority for them.  And, Accelerate is going to be able to provide the kinds of resources that I think will only expand our ability to cover the business climate and communicate in a multitude  of ways, including more video and podcasts, and who knows what else as technology evolves.  (Me, I'm counting on coming to you via hologram before I'm done.)

    One favor.  In a few weeks, we're going to send you a short survey to get a sense of what you like and don't like, and how you use MNB.  (Of course, you don't have to wait until you get the survey to tell me what you think…MNB readers have never been shy about sharing their opinions!)  MorningNewsBeat always has been a community, and your opinion matters.

    So that's my news.  I hope that on Monday when you see what we've been working on, you'll think it is as much an Eye-Opener as I do.  I also hope you'll let me know what you think, you'll inform me if we have any glitches we need to know about, and that you'll tell your friends and co-workers about the new and improved MorningNewsBeat.

    Published on: February 7, 2020

    Advertising Age reports that Target-owned delivery service Shipt "is rolling out a new logo and brand campaign designed to attract more members … To attract more members, Shipt is swapping out its green spaceship logo for a shopping bag that better speaks to the brand’s predominantly female base."

    According to the story, "The new campaign, 'Over-delivering Delivery,' will include a series of spots featuring how Shipt shoppers go above and beyond in their quest to meet consumer needs. The campaign will be a mix of national and local TV commercials, and include digital, social and out-of-home advertising."

    The story notes that in addition to delivering for Target, Shipt "works with 89 other retail partners including CVS and Petco."

    KC's View:

    Not to pick a nit - though that's sort of what I do for a living - but I'm always a little skeptical when companies tell me that they are going to over-deliver on their promises.

    Maybe it is just me, but I always sort of think that it is up to me to decide if they've over-delivered or not.   Businesses should make promises and do everything possible to live up to them;  they can have over-delivery as an internal goal, but it should not be part of the ad campaign.

    Published on: February 7, 2020

    Yesterday, MNB reported on how Barnes & Noble had to back down from a diversity-oriented project that it hoped would be seen as positive and would improve its tarnished reputation.

    On more time, here's the background…

    The company partnered with Penguin Random House to publish a series of classic novels -  including Lewis Carroll's “Alice's Adventures in Wonderland,” Mary Shelley's “Frankenstein” and L. Frank Baum's “The Wizard of Oz" - for which the covers would portray characters from the books as being dark-skinned.  None of the words would be changed, but the covers were meant to pose a provocative question:  Did you ever consider the ethnicity of the characters in these classic books?

    The thought was that for the most part, ethnicity was never mentioned in the books or factored into characterizations, but the assumption always was made - regardless of the the color of the reader - that they were white.  The new series of covers - marketed as "Diverse Editions" -  were meant to suggest to people of color that these characters could look like them and help them engage with the classic titles.

    To say the least, the effort backfired.

    The criticisms of the series focused on the fact that these novels were not representative of the black experience, and therefore minimized it by trying to suggest that the white experience was universal.  One critic called it “the classics in blackface.”  Others argued that it would have been more powerful and appropriate to republish and promote classic novels by black authors.  And it didn't help that the series was released for Black History Month.

    Barnes & Noble has pulled the books from its shelves and website.

    The company released a statement, saying that the new covers were "not a substitute for black voices or writers of color, whose work and voices deserve to be heard."

    And I commented, in part:

    I have no doubt that their intentions were positive, that they wanted to make classic novels more accessible to children of color.  But it assumed that people cannot relate to characters who don't look like them or live like them.  One of the things that literature - and art in general - can do is give us access to lives and experiences unlike ours.  Our lives and insights are broadened, not narrowed.

    I totally agree that the companies would have been better off making books by black authors more available and accessible, which makes me wonder how many black people were in the room when these decisions were made.  I'm not judging here, because I don't know, but is it possible that this misguided attempt to be more diverse actually reflects a lack of diversity?

    I spent some time yesterday on the phone with Alex Ortolani, the company's director of corporate communications, to get a sense of how the initiative was conceived, and one of the things he told me was that the media - and this includes MNB - misunderstood one core fact about the issue.  The "Diverse Editions" were a) just new book jackets with new art that were being put on existing books, and b) were limited to only Barnes and Noble's Fifth Avenue store in Manhattan, and was initiated by that store's management.

    This fascinated me for several reasons.

    I was surprised that a single store in such a big chain could do something so ambitious (and, it ends up, controversial) on its own, though to be fair, this is exactly what new CEO James Daunt promised when he bought the company last year.  (Daunt promised to make the chain's stores more like independent bookshops, autonomous to a large degree and in touch with their local communities.)

    Ortolani said that the Fifth Avenue store could in fact do this because it is such a big and busy store … and agreed that even though the idea went off the rails, it was in keeping with the company's new mandate.

    One of the things that Ortolani conceded was that one of the company's original statements about the controversy - "the booksellers who championed this initiative did so convinced it would help drive engagement with these classic titles…" - could be seen as blaming the Fifth Avenue store, but said that this was not the intent.  He also said that this misstep will not change the company's new strategic direction, and that individual stores will continue to be urged to be ambitious in their efforts.

    As I think about the Barnes & Noble situation, I have some additional observations:

    Especially after my conversation with Ortolani, I remain utterly convinced that this was a well-intentioned idea that just went wrong.  Barnes & Noble did the right thing by reacting fast, and it will do the right thing if iut does not over-correct based on the controversy.

    It occurred to me that all of the artists commissioned to do the new book covers were, in fact, people of color … and none of them objected to the project on moral or ethical grounds.  They did the artwork and they cashed the checks.  This doesn't let Barnes & Noble or Penguin Random House off the hook, but it does suggest that not everyone of color was offended.

    I also think that this is an easy fix for Barnes & Noble, and an enormous opportunity.  If  were Daunt, I'd announce - no later than Monday - that I am underwriting a major marketing program that will highlight the work or both major and less well-know authors of color, complete with in-store and online displays, readings, book signings.  And, I might even underwrite a) a project that would bring to the public the work of unpublished minority writers, and b) writing programs in schools around the country where they are desperate for this kind of investment.  Barnes & Noble, I would guess, could get a lot of publishers to get involved in such projects, and it could be winner for everyone involved.  All they have to say is, "We made a mistake.  We learned from it.  And here's what we are going to do about it."

    There is one silver lining in all this, and I must admit I am surprised by it - all the attention suggests to me that Barnes & Noble's brand has a lot more power and equity than I might have expected.  People may have been disappointed in Barnes & Noble, but they are only disappointed in brands they care about.  That is a foundation upon which Barnes & Noble can build.

    The good news for Barnes & Noble was that for at least a couple of days this week, it got more headlines than Amazon.  It also was the bad news … but I'd suggest that the company look on the bright side.

    As Robin William's literature teacher says in <i>Dead Poets Society</i>, "Carpe diem.  Seize the day."

    Every business can learn another lesson from the same movie, as expressed by Williams' character:   "I stand upon my desk to remind myself that we must constantly look at things in a different way."


    Published on: February 7, 2020

    The Associated Press reports that "the National Highway Traffic Safety Administration granted temporary approval for Silicon Valley robotics company Nuro to run low-speed autonomous delivery vehicles that were designed without any accommodations for human drivers. That means no side and rear-view mirrors, windshield wipers, steering wheels or brake pedals."  It is, the the story says, the first time that the government "has approved a company’s request to deploy a self-driving vehicle that doesn’t need to meet the same federal safety standards for cars and trucks driven by humans."

    The approval, the AP writes, "is the first sign that NHTSA is moving from abstract statements and voluntary standards governing autonomous vehicles to actual regulation, said Bryant Walker Smith, a University of South Carolina law professor who studies vehicle automation. It’s a signal that the agency, which has stated publicly that it doesn’t want to stand in the way of the new technology, is likely to approve more vehicles, he said."

    Nuro - which has deals with Walmart and Kroger - expects to have fewer than 100 vehicles on the road this year, but has permission from regulators "to eventually run as many as 2,500."

    Published on: February 7, 2020

    The New York Times this morning has a story about improving wearable technology is being designed to help commercial truckers avoid giving into fatigue, which "comes with the job of driving an eighteen-wheeler, even with rules requiring rest stops and limiting driving hours. Now, new technologies are becoming available to alert drowsy drivers, sometimes even before they feel tired … Biometric sensors are getting lighter, cheaper and more accurate, and new software systems can connect driver and vehicle data. The feedback loops these systems create could make the roads safer for everyone."

    Some examples:

    "New wearable technology monitors the drivers but in a more subtle way, and comes in a variety of forms including caps, vests, wristbands and eye wear.

    "Glasses made by Optalert measure the driver’s eye blinking with an LED light monitor.  Eyelids that stay down too long might point to a sleepy driver. The real-time measurements are displayed on a dash-mounted device with alarms and notifications.

    "A headset made by Maven Machines detects if a driver is looking forward through the windshield, up, down or sideways, and measures mirror checks, which can decrease in frequency if a driver is getting tired. The headset detects head bobs and jerks, signs the driver is falling asleep.  This system also notices and can deliver notifications on 'coachable' behaviors that can be improved, like hard braking, and delivers audible routing, weather and other messages as well."

    In addition, "The SmartCap device is a headband that fits into trucker caps, beanies or other head gear. The band measures electronic brain waves and translates them to a measure of alertness or fatigue. It notifies the driver and a central monitoring system if the wearer appears drowsy."

    KC's View:

    As someone who does a lot of long-distance driving, I'd suggest that this technology ought to be available for everyone … and maybe even standard equipment on every motorized vehicle.  (Except the autonomous ones, of course.  Computers don't get sleepy.)

    Published on: February 7, 2020

    From Bloomberg:

    "There are dozens of climate models, and for decades they’ve agreed on what it would take to heat the planet by about 3° Celsius. It’s an outcome that would be disastrous - flooded cities, agricultural failures, deadly heat - but there’s been a grim steadiness in the consensus among these complicated climate simulations.

    "Then last year, unnoticed in plain view, some of the models started running very hot. The scientists who hone these systems used the same assumptions about greenhouse-gas emissions as before and came back with far worse outcomes. Some produced projections in excess of 5°C, a nightmare scenario."

    The problem is, scientists couldn't figure out why the new models showed an acceleration of the problem, or the degree (no pun intended) to which they needed to be taken seriously.

    More from the story:

    "The reason for worry is that these same models have successfully projected global warming for a half century. Their output continues to frame all major scientific, policy and private-sector climate goals and debates, including the sixth encyclopedic assessment by the UN’s Intergovernmental Panel on Climate Change due out next year. If the same amount of climate pollution will bring faster warming than previously thought, humanity would have less time to avoid the worst impacts."

    Like I said.  Worth reading.  Here.

    Published on: February 7, 2020

    •  In Minnesota, the Star Tribune reports that none of Hy-Vee's 240 stores no longer will be open 24 hours a day.

    “We have changed our hours to reallocate several team members to be available to assist customers during busier shopping times each day,” said Hy-Vee spokeswoman Christina Gayman.

    According to the story, "Although Cub and Walmart still have Twin Cities locations open 24 hours a day, overall numbers continue to decline locally and nationally for 24-hour supermarkets, discount stores and pharmacies. Analysts cite a number a reasons, including fewer customers in the early morning, online ordering and delivery, and an increase in shoplifting."

    •  From Fast Company:

    "As more and more companies look to curb food waste, fruit scraps and ugly pieces of produce that once went into the compost bin or trash can are finding second lives. Juice pulp has been turned into popsicles, wonky veggies into soups, and now Dutch company Fooditive is turning leftovers from apples and pears, along with the pieces of fruit that are unfit for supermarkets, into a chemical-free sweetener."

    Fooditive, the story says, "aims to be a natural alternative to those other sweetener options in a way that’s healthy for the planet and our own bodies. Fooditive takes third-grade apples and pears - those ones with brown spots or off colors, which wouldn’t be sold in a supermarket - from local Dutch farmers, along with some fruit scraps, and extracts the natural fructose through a fermentation process. The final result is a calorie-free sweetener without many of the concerns of both sugar and other sugar substitutes."

    Those concerns are largely environmental:  "Artificial sweeteners such as sucralose and aspartame, found in Splenda and Equal, aren’t absorbed by our bodies nor are completely removed by wastewater treatment plants, meaning these sweeteners end up in rivers and oceans, potentially harming aquatic plant and animal life."

    •  From Bloomberg:

    "Visa Inc. is planning the biggest changes in a decade to the rates U.S. merchants pay to accept its cards, hoping to persuade more people to abandon checks and adjusting its fees for new businesses such as ride-hailing services.

    "The company’s interchange rates - fees charged every time a consumer uses a card - will go up or down depending on the merchant and the way a consumer pays for their purchases, according to a document Visa sent to banks that outlines the changes. Higher rates are looming for transactions on e-commerce sites, while retailers in certain services categories, such as real estate and education, will see fees decline."  The company said it is "adjusting its default U.S. interchange rate structure to optimize acceptance and usage and reflect the current value of Visa products."

    Bloomberg notes that "while the changes amount to just a few cents on every transaction, those pennies add up. Swipe fees are already a flashpoint between merchants, banks and payment networks such as Visa and Mastercard Inc. Retailers have long complained about the more than $100 billion they spend each year to accept electronic payments, a figure that’s grown in recent years as fees increase and consumers flock to premium cards, which carry higher interchange rates."

    •  The National Retail Federation (NRF) is predicting that Valentine’s Day spending is expected to grow 32 percent compared to last year to a record $27.4 billion, with consumers saying they will spend an average of $196 apiece, compared to $162 last year.

    Published on: February 7, 2020

    •  United Natural Foods Inc. (UNFI) announced yesterday that chairman/CEO Steven Spinner will remain in that role, having extended is employment agreement through the end of July next year.

    At the same time, interim CFO John Howard has been named the company's CFO … Eric Dorne, the company’s chief information officer and chief administrative officer (CAO), has been named COO … and Paul Green, chief supply chain officer, will take on a new role as president, fresh.

    Published on: February 7, 2020

    The other day we took note of a <i>Financial Times</i> report that the Best Buy board of directors has completed its investigation into misconduct allegations against its CEO, Corie Barry, and said that it "supports the continued leadership of the Company by Ms Barry. To preserve the confidentiality and integrity of the process, the Board will have no further comment."

    I commented:

    I was considering just slotting this into the "FastNewsBeat" section, but thought that it would be fairer to give the story clearing Barry the same kind of position that I gave the story about the original allegations. 

    That's especially because we got a number of emails that sort of piled on Barry before we knew any details about the charges. I think sexual harassment in the workplace is a serious issue, and I would never minimize it, but not every relationship is harassment and not every allegation is true.

    I suspect that Best Buy's board took this very seriously because of the company's history, and so if it cleared her, it must be because she was in the clear.

    One MNB reader responded:

    Thank you for your comments regarding Best Buy and CEO, Corie Barry.  They were spot on. In this day and age we seem to rush to judgment when perhaps we should take care of our own “house” before judging others.  I too believe the Best Buy board would have done their due diligence.

    We keep getting email about the fake ice being used in places too warm for real ice.  MNB reader Grant Ainsworth wrote:

    On the fake ice note – my brother used to use for training on but never actually playing. The best part about it is it can be used like a treadmill with an incline. I do not think this is something you can do near as easy with real ice.

    I referenced a Jeff Goldblum line from <i>The Big Chill</i> the other day, and a reader wrote in to say that a number of co-workers had never heard of the movie.  Prompting MNB reader John Rand to write:

    Which leads to a core question for those of us who have been around a long time: Is it still plagiarism if no one else remembers the source?

    Good question.

    Regarding the Barnes & Noble contretemps, from an MNB reader:

    It’s as though your commentary was reading my mind re: Barnes & Noble publishing white classics in blackface as an effort to “embrace diversity.”  As I was reading the summary, I thought to myself, “I wonder how many POC were involved in this decision.”  Alas, you had the same query.  I was in a conference earlier this week of about 200 regional commercial real estate experts.  Zero diversity.  Zero, and I’m not exaggerating.  Our city’s population is at least half non-white.  I see the articles about Goldman Sachs and the board diversity requirement for future investments.  I like the progress, but boy, it sometimes seems like we have a LONG way to go.

    MNB reader Dan Beard had a thought about yesterday's FaceTime about LL Bean continuing to look for innovative ways to reach new customers:

    On “never letting down your guard,” it’s not just he competition to have an eye on.  The business environment changes hold as many if not more permanent hazards. The demise of Kodak when digital photography changed the landscape is an example.  As always you spark thought invoking conversation, really enjoy your FaceTime.

    MNB reader Ken Robb, however, wanted to quibble with at least one of my observations:

    No question...LL Bean is an American success story.  I used to love their clothing and ordered items from them several times per year.  However, more recently it seems that the quality has declined...at least that is my perception.  Instead, now I order from Filson, albeit more expensive, but consistently high quality, with the durability I used to expect from LL Bean.

    I've not found that … but I suspect that having registered that observation here, you may hear from them.

    Regarding Instacart's unionization issues, MNB reader Jeff Weidauer wrote:

    Retailer support and acceptance of InstaCart has never made sense, a point you’ve made several times. This latest effort to unionize brings that point home: InstaCart, its workers, and the retailer each have different and divergent goals. The retailers who welcome this interloper into their domain have invited a Trojan Horse, and they should be prepared for the consequences.

    You're playing my song.

    From another reader, on another subject:

    Regarding Macy’s cost-cutting to invest back into their business, for the last 20-years of my working career I was involved in several cost cutting initiatives with plans to reinvest in the business.  Did it work? Yes, when we reinvested in the business AND did not do more of the same that got us into the cost cutting mode.  No, when we invested it to do more of the same or chose to drop the savings to the bottom line instead of investing back into the business.

    In my piece about Macy's issues, I asked who its target shopper is, which prompted MNB reader Michael D. Benghiat to write:

    In my opinion it's not "who is the target shopper" but rather "where is the target shopper."

    Your piece that follows,  Mall Owners Take Novel Approach To Retailer Bankruptcy, hits on this. Malls are looking like "ghost towns." With the exception of a handful of malls that are still driving traffic (like Somerset Mall here in Troy, MI), malls are just not where shoppers are going. Not to mention online having an impact.

    Second, I agree about the experience -- it's lacking. It is quite "vanilla" as you put it. But also, I feel the shopper wants something more personalized. My wife really has stopped shopping at the big box retailers such as Macy's and prefers smaller, more "boutique" type shops. Now this may be age-related but when you step into a Macy's or any like retailer and get the assistance you need that does indeed play into the experience.

    I met with Peter Sachse once, a former Macy's C-suite executive who held various marketing/sales/digital/revenue roles; he is a smart guy but no matter the strategy and shifts in business plans it didn't seem to change the outcome. It's happened to so many as you know and the don't need mentioning.

    It will continue to be a struggle for these once iconic retail brand names to remain relevant. Maybe the smaller brand extensions or "off-shoots" will prevail to keep those brands from permanently dying off.

    From another reader:

    Cutting for prosperity would be known for what it is - a corporate death spiral. We’ve stopped shopping at Macy’s because of their greatest flaw and one that will be worsened by the cuts. Store staff, especially in Kansas City, has been cut to the bone. If you want to buy something, finding someone to actually take your money is almost impossible.  The KC store offered a form of ‘self checkout’ which I thought was a way around the lack of staff. Except the last step of the procedure when you had to find someone to verify your purchase. They would be better off finding ways to make it easier to buy rather than more difficult.  Off to Nordstrom’s, I guess, which is just 100 yards down from Macy’s.

    Except Nordstrom is moving. Dead mall walking?

    And from yet another reader:

    Macy’s has devolved into a shoddy discount store with no real message. I used to enjoy shopping there, but their ‘Backstage’ is a trash heap. If they want to be a discounter, then go all in and do it. Make it something innovative, tell me - the customer - what to expect. I’m not in the least surprised they’re closing stores.

    And there you have it.

    A note from MNB reader Bob Samples:

    Kevin, a few of your stories today had a common theme.

    Your blog today talked about how Macy’s announced a plan to go from 800 stores (at its peek) to 400.  Looking past that we see that:

    9,300 retails stores closed in 2019

    50 Earth Fare stores are closing 2020

    39 Lucky’s are closing in 2020

    120 Shopko’s are closing in 2020

    All while Amazon stock eclipses $2,050/share (it was $374 five yrs ago).

    See a pattern?

    Finally, yesterday I mentioned that "there are generations of people who have no idea who Jim Croce was and who never have listened to his music. Which is a shame.

    You don't tug on Superman's cape
    You don't spit into the wind
    You don't pull the mask off that old Lone Ranger
    And you don't mess around with Jim…

    MNB reader Kevin Watkins wrote:

    My 21-year-old son somehow stumbled across Jim Croce’s music and loves it.

    And, from MNB reader Brad Morris:

    For Christmas 1975 my grandparents gave me my first record player. I had just turned eleven, and they thought I would like more music than I could listen to on my little AM transistor radio. Now I needed some records to play on it. I only had $10 in saved allowance; enough to buy two albums. I bought Jim Croce’s Greatest Hits (he had passed two years earlier) and Elton John’s Captain Fantastic and the Brown Dirt Cowboy. While that record player and all the subsequent records are long-gone, I still listen to both of those albums today via Apple Music.

    There never seems to be enough time

    To do the things you want to do

    Once you find them

    I've looked around enough to know

    That you're the one I want to go

    Through time with…

    Great stuff.

    Published on: February 7, 2020

    Digital strategies aren't just about creating alternatives to the bricks-and-mortar shopping experience.  Done effectively, they can actually bring people back to the store, while also eliminating customer anonymity, creating rich and actionable data, and deepen relationships between the store and consumer in a way that transcends the simple transaction.

    Our newest Retail Tomorrow podcast, which brings together a terrific panel of experts from a wide range of disciplines, was recorded at Google’s New York City offices during the recent National Retail Federation (NRF) Show.  Our guests:

    •  Matt Alexander, co-founder of Neighborhood Goods, an unusual and fascinating take on physical retailing with stores in Dallas and New York.

    •  Patrick Flanagan, senior vice president of digital marketing and strategy for Simon,  which has more than 200 properties in 37 states and Puerto Rico.

    •  Tom Furphy, CEO and Managing Director of Consumer Equity Partners, a member of the Retail Tomorrow podcast family and a regular contributor to "The Innovation Conversation" on MNB.

    •  And Jalna Silverstein, a leader in Ernst & Young’s Transaction Advisory Practice and its Real Estate, Consumer Experience and Retail Strategy.

    You can listen to the podcast here.

    This Retail Tomorrow podcast is sponsored by the Global Market Development Center (GMDC).

    Pictured below are our panel members, from left:  The Content Guy, Matt Alexander, Tom Furphy, Patrick Flanagan, Jalna Silverstein.

    Published on: February 7, 2020

    Last weekend, as was mentioned here on MNB earlier this week, I found myself in a  New Rochelle, New York, movie theater watching a live simulcast of "Porgy and Bess," which was being performed at the same time at New York's Metropolitan Opera.

    To be honest, I wasn't there by choice.  Mrs. Content Guy's twin sister got tickets for a bunch of family members, and so I was persuaded that, if I were a good husband, I'd join them for the almost four hour opera.

    I am not, to be clear, an opera guy.  I recognize that this my failing, not opera's.  It just doesn't resonant with me, or touch my soul or heart in any way.  Probably because I'm an ignoramus.

    (I am the guy who wrote here on MNB back in 2004, after having attended a CIES event in Rome at which Andrea Bocelli sang - I was reliably informed that people would've donated kidneys to hear him sing in person - that he seemed to have a nice enough voice, but lacked the kind of stage presence that allowed him to connect with the audience.  I swear - I had no idea he was blind.  But I got a ton of email the next day, all of which I posted on MNB, informing me that I was a moron.  They weren't wrong.)

    That said, I found "Porgy and Bess" to be an interesting and provocative experience, though it had nothing to do with the music (which includes songs like "Summertime," "I Got Plenty O' Nuttin'," "It Ain't Necessarily So," and "There's A Boat Dat's Leavin' Soon For New York).

    Credit: Metropolitan Opera

    Written in 1935 by George and Ira Gershwin and DeBose Heyward, the English language opera features an almost entirely black cast, and takes place in an impoverished black community on coast of South Carolina.  I found myself troubled by what I was seeing almost from the beginning;  I was aware that "Porgy and Bess" was written by three white men, and yet its dialog is what I think of as being stereotypical and sort of insulting black dialect.  It just bothered me, and it was almost worse that the lyrics were projected on the screen as subtitles - hearing people speak that way was one thing, but seeing the words written that way was simply awful.

    And yet … the opera was being performed by black actors and singers who clearly were not insulted by it.  It was introduced onscreen by actress Audra McDonald, who not only was not insulted by it, but won a Tony for playing Bess in a Broadway production several years ago.  If they weren't bothered by it, why should I be?  

    I actually sound the most interesting part of the simulcast to be a series of interviews that took place onscreen during the intermission, in which Audra McDonald spoke to some of the artists and creators, and discussed the fact that "Porgy and Bess" has been a controversial theatrical work.  (At least I wasn't the only one who was bothered.)

    The most interesting interview was with Camille A. Brown, who choreographed the piece, and she spoke about the fact that while seen from a 2020 perspective it might seem anachronistic and maybe even offensive to some, the fact is that it does represent one part of the black experience in America, specific to the south and the early part of the 20th century.  Black people, she said, have "blood memory" about such things - they connect to it precisely because it represents part of their past.  Not their whole past, to be sure, and certainly not their present.  And she suggested that while it is important to see it through 2020 eyes, it is equally important to understand the context in which it was written and produced.

    After all, when the show was originally staged in the mid-thirties, the Gershwins insisted on an all-black cast, which was highly unusual for the time.

    I was intrigued by this, and it allowed me to see the second half with a different sort of mindset.  It still sort of bothered me, but the words "blood memory" stayed with me for the duration, and still do.  They helped to illuminate the importance of seeing things through other people's eyes, and why it is critical to go beyond the top layers of any situation and try to get a deeper sense of understanding.

    I still don't like opera.  I told Mrs. Content Guy that if the offer gets made again, I respectfully decline.  And again, I know it is about me, not opera.

    "Star Trek: Picard" is now three episodes into its 10-part first season, and I continue to be thoroughly engaged by the fresh look at Patrick Stewart's Jean-Luc Picard, who was captain of the starship Enterprise in "Star Trek: The Next Generation."  This is Picard in the late autumn of his life, finding new meaning as he confronts a United Federation of Planets and Starfleet Command that have become fearful and intolerant, xenophobic and flirting with amorality, attitudes contrary to how he has lived his personal and professional life in the service of both.

    Watching Stewart's Picard awaken from the apparent lethargy in which he's been spending his later years, ensconced on his family's vineyard in France, is pure pleasure - the character may be almost 90 (Stewart is almost 80), but there is a sense of resolute decency, intelligence and compassion in every fiber of his being.  Watching him come to life, finding new well of energy to propel him - far more than warp engines - into this new and possibly last adventure, is enormously entertaining.  Not to mention thoughtful.  Provocative.  Even timely.

    If you haven't watched "Star Trek: Picard," on the CBS All Access streaming service, you should.  It is wonderful.

    My wine of the week - the 2016 Terre di Chieti Pecorino, which is a lovely Italian white wine, full bodied and tasty, and perfect with seafood.

    That's it for this week … have a great weekend, and I'll see you Monday.

    Slàinte!

    Published on: February 10, 2020

    from Kevin Coupe, MNB's "Content Guy"

    If you didn't happen to read Friday's Eye-Opener, or didn't see the email I sent to all of our subscribers yesterday, then you're looking at MNB this morning and saying, Something looks different.

    Yup.

    A quick recap…. (You can skip to the Monday Eye-Opener if you've already read this.)

    I'm pleased to announce that MorningNewsBeat has taken on a partner with a significant investment from Accelerate, which describes itself as offering retailers and brands turnkey solutions ranging from Direct Store Delivery (DSD) to Direct to Consumer (DTC) fulfillment, and everything in between.

    The folks at Accelerate have recognized that, to use a phrase that we often use on MNB, it is critical to be not just a source of product, but also act as a resource.  And I am thrilled that as they build out their platform, they want to use MNB as a foundation.

    The Accelerate team tells me that this is because they see real, tangible value in the way MNB has approached the marketplace for the past 18 years - my goal always has been to illuminate, provoke, and entertain with highly readable prose, disruptive opinion, and an irreverent sense of humor.  They don't want to mess with that.  Not at all.

    So what does this mean for you as the reader, and me as the writer of most things on MNB?

    I can tell you with enormous confidence that in terms of content and attitude, it means very little.  But in terms of delivery, I think it will mean a lot - for one thing, the MNB website now is going to be dynamic for mobile, which readers have told me is a high priority for them.  And, Accelerate is going to be able to provide the kinds of resources that I think will only expand our ability to cover the business climate and communicate in a multitude  of ways, including more video and podcasts, and who knows what else as technology evolves.  (Me, I'm counting on coming to you via hologram before I'm done.)

    I hope that you like the new format and functionality as much as I do, that you'll let me know what you think, and that you'll inform me if we have any glitches we need to know about (I'm sure we will have them, and I appreciate your patience as we fix them), and that you'll tell your friends and co-workers about the new and improved MorningNewsBeat.

    Slàinte!

    Published on: February 10, 2020

    by Kevin Coupe

    Amazon may generate more than 90 percent of ebook and audiobook sales, and as much as 45 percent of print sales, but that doesn't mean that nobody wants to compete with it.

    No doubt they are thinking of the Bill Bradley line:  “Becoming number one is easier than remaining number one.”  

    "Into this fray," Wired writes, "jumps a new online retailer, Bookshop, which is betting that people will see the value in choosing to buy somewhere else - at a business meant to give independent booksellers a chance to grab back some of the market share."

    The story goes on:  "Here’s how it works: For someone buying a book, Bookshop won’t be much different from Amazon. (As the platform is still in beta and was built in six months, it won’t be quite as seamless, though.) They click, they spend, they get what they picked out. The real difference is in how the profits are split up and how people discover the books they buy in the first place. Ten percent of all the profits will be divided among independent bookstores every six months; in exchange, these shops will lend support to the mission by promoting Bookshop to their customers."

    There's more:  "These sellers can also sign up for the company’s affiliate program, which offers a 25 percent commission to stores. If, say, a bookseller doesn’t want to deal with ecommerce, they can sign up for this program and essentially outsource their online sales to Bookshop, which uses the major book wholesaler Ingram to fulfill orders.

    "The affiliate program is also available to media large and small, from major magazines to micro-famous book bloggers, with a 10 percent commission. When it’s time to publish seasonal roundups, gift guides, reviews, or other books coverage, these media companies will be able to hyperlink to Bookshop and get paid if readers buy something they click on."

    The piece concedes that there won't be universal acceptance of Bookshop from the independent bookstore community, which, in fact, has been growing over the last couple of years, almost against all odds.  These folks are likely to be a little bit suspicious, with some justification, that Bookshop is just a wolf in sheep's clothing, looking to help until it has enough customers who think of it as their source of books, not the independent bookseller.  In other words, the Instacart model.  And I get that.

    What these retailers have to decide, it seems to me, is whether Bookshop can be what the article refers to as an anti-disruptive force.  Or is it another attempt to put them out of business.  The answer will be an Ey-Opener.

    I have no idea.  I know that a lot of these folks need to find an answer to Amazon's power, but I also know that - if they are doing their jobs right - their direct and even intimate connection to their shoppers is what differentiates them and defines their market advantages.

    Published on: February 10, 2020

    Interesting piece in the Chicago Tribune about the success that newly opened marijuana dispensaries are having in Illinois, with consumers "buying almost $40 million of marijuana in the first month of sales. Tax revenues from those sales, which haven’t been announced, will help the state and municipalities."

    The good news:  "Marijuana’s legalization has created beneficiaries, as people travel to neighborhoods with dispensaries and spend money at nearby businesses. Although there are no numbers to demonstrate the broader economic impact of recreational weed sales, experts say pot shops have the potential to revitalize overlooked pockets in communities."

    But … "not every neighborhood wants a pot shop, as evidenced by recent community meetings. There are 'NIMBYs,' or people who say they support marijuana in general, but 'not in my backyard.'  And some residents have broader safety concerns and worry about the rowdiness pot shops could attract … As cannabis companies rush to open additional stores — each of the 55 medical dispensaries that were operating before recreational sales started can apply to open a second location — they face zoning restrictions and competition for prime real estate."

    However … "A 2019 study in the journal Regional Science and Urban Economics found that local criminal activity fell when a dispensary came into the neighborhood. The research analyzed monthly neighborhood crime of all types and patterns in retail dispensaries in Denver from 2013 through 2016.  'The results imply that an additional dispensary in a neighborhood leads to a reduction of 17 crimes per month per 10,000 residents, which corresponds to roughly a 19% decline relative to the average crime rate over the sample period,' the paper states."

    Part of the reason may be that, for example, "Illinois requires dispensaries to have security inside and outside the store, including security surveillance monitoring equipment, security guards in stores and sufficient lighting around the premises."

    KC's View:
      I'm generally not a NIMBY kind of guy, but I must admit to some level of sympathy to the attitude that wants to keep marijuana shops out of certain neighborhoods.  This probably is because I remain somewhat conflicted about the issue … which is ironic because in Portland, Oregon, where I spend my summers, it seems like the question is moot - there already are pot shops in most neighborhoods.

    Published on: February 10, 2020

    CNBC reports that Clorox "has not seen an increase in demand amid the coronavirus outbreak, but the company has plans in place to keep shelves stocked with its cleaning products should sales pick up."

    The story points out that "the coronavirus, which originated in late 2019 in the Chinese city of Wuhan, has shaken up global markets as the flu-like disease spreads worldwide. As of Wednesday afternoon, more than 27,000 cases and 560 deaths have been recorded worldwide, though a large percent of those affected are in China."

    There have been about a dozen cases of the coronavirus found in the US, and "because a remedy for the disease has yet to be developed, consumers are expected to load up on disinfecting wipes, sprays and bleach in efforts to kill germs."

    Clorox CEO Benno Dorer tells CNBC that "we’re leaning into inventory to be ready, just in case,” but that “what we will never do is try to benefit from fears or concerns that consumers have."

    KC's View:
      One thing that no company can afford to do is be seen as taking advantage of a tragedy.

    I'm already hearing on the news about some price gouging, and the selling of so-called protective gear that is useless at best.  Some retailers and manufacturers are going to get a black eye because of it, and they'll have nobody but themselves to blame.

    Published on: February 10, 2020

    Think of it as independents vs. the big guys, except with better looking walls.

    The New York Times over the weekend had a story about how some independent artists there have decided to open their own galleries as a way of not being indebted to the major galleries and keeping control over their own work.

    According to the story, "a surprising number of artists in Los Angeles have been opening commercial spaces … giving the city’s gallery scene a scrappy energy all its own and providing a strong counter-narrative to the idea that visual culture here is defined by the recent influx of New York and international galleries.

    "These spaces run the gamut from funky weekend-only apartment venues to larger spaces with regular hours, but they tend as a whole to have a more adventurous spirit."

    One canny observer of the local art scene calls it a way of defying "the Home Depot-fication of galleries."

    Some of the independent gallery owners, themselves artists, make a point of not displaying their own work in their galleries (which apparently sometimes can be owned under pseudonyms);  others will show their own work, but are careful not to give themselves preferential treatment, so as to maintain some level of commercial and critical credibility.

    KC's View:
      The thing that I love most about this story - I know only marginally more about art than I do opera, and I established here on Friday how little I know about opera - is the notion of "scrappy energy," and how these artists are looking for ways to bring a kind of guerrilla spirit to their commercial endeavors.  They believe - and I tend to agree - that it is not by being the same as the bigger guys, nor by simply acceding to their dominance, that they can have a greater impact with shoppers (with breathe more rarefied air than I do) and protect their own work.

    In so many ways, they're fighting the same fight as a lot of independents.

    By the way … if you are wondering about the headline to this story, it means you are not old enough to remember Tennessee Ernie Ford, who once had a big hit called "16 Tons."  Great song!

    Published on: February 10, 2020

    The Wall Street Journal reported over the weekend that some technology companies with a presence in the New York City metropolitan area, always on the hunt for new hires in what a seller's market, are "sending their own workers into college classrooms to make sure students have the skills they need after graduation."

    According to the piece, "Tech employees from companies including Google, LinkedIn and Spotify are teaching 22 computer-science courses at the City University of New York this semester. The instructors are recruited through a city program called Tech-in-Residence Corps to help the university meet a soaring demand for technology classes including data analytics, data science and cybersecurity."

    It seems to be working:

    "More than 1,500 students have taken 73 classes across nine CUNY campuses through the Tech-in-Residence Corps, which started in spring 2018 and is run by the Department of Small Business Services, said Commissioner Gregg Bishop. Instructors are paid a $3,500 stipend per course, with the funding coming from the city.

    "The program’s instructors, who work at four dozen different companies, have expertise in fields ranging from software engineering and blockchain to cybersecurity and data visualization. The hope is that New York City students will learn necessary tech skills and that tech companies will broaden their recruitment efforts to give more consideration to public-university graduates."

    KC's View:
      This is really smart, and ought to be adopted by more colleges and business communities across the country.  The notion of putting business people in direct contact with students - teaching classes, mentoring, advising, and helping them make the transition from academia, is incredibly important, if only because the companies putting their folks into the schools are going to have an advantage in recruiting some of these folks.

    To be honest, I have a dog in this hunt - I am on the adjunct faculty of Portland State University in Oregon, and this coming summer will be my ninth in a row, team-teaching a class with the great Tom Gillpatrick and working with Jennifer Nolfi at the Center for Retail Leadership.  One of the things we do every summer is bring executives from a wide range of disciplines into the classroom and engage in a series of colloquiums with the students.  (If you'd like to join us for a night during the summer 2020 semester, let me know … I can promise you an interesting few hours on campus, plus a meal and some great Oregon beer or wine afterwards.)  This so much better than me just standing up and pontificating - and I think the students really appreciate the opportunity to engage.

    Published on: February 10, 2020

    You'll see below in MNB's modest but annual Oscar coverage - what do you expect from a guy who co-wrote a book entitled "THE BIG PICTURE: Essential Business Lessons from the Movies" - that the Best Animated Short award went to a six-minute film called Hair Love.

    This is a wonderful little film, about a young African American girl trying to deal with her unruly hair, and the single father who finds their shared situation to be a challenge.

    In the matter of six minutes, Hair Love manages to be funny, charming, sad and redemptive … which is no small thing.

    The reason MNB is drawing attention to it - beyond the quality and uplift of the work - is that Dove helped to underwrite the largely Kickstarter-funded production … but has done so with relative little fanfare, just getting its name on the film in the "thanks" at the end.

    But, as Fast Company notes, it has gone beyond that.

    "The soft-sell here is Dove just having its name involved with the film and then able to raise some awareness of that involvement and support through events and other initiatives. For example, when Texas teen DeAndre Arnold was suspended from school for having dreadlocks, the film’s producers reached out to have him walk the Oscars red carpet with them … Dove has also been working…to help spread the Hair Love message by reaching out to tastemakers and media, as well as putting on community screenings of the film in New York and Los Angeles."

    Great film … terrific effort by all involved … and you can watch it here.


    Published on: February 10, 2020

    •  In North Carolina, WTVD reports that "two Earth Fare employees are taking legal action against the closing grocery store on behalf of their more than 3,000 coworkers … the class-action lawsuit, filed by two women in Tennessee and Florida, claims the grocery store chain violated the Worker Adjustment Retraining Notification Act, a federal law intended to protect workers when large-scale employers close up shop.

    Earth Fare said last week it would close all its stores.  The WTVD story says that "the WARN Act requires employers with at least 100 workers to give written notice 60 days before any layoffs happen."

    •  The Associated Press reports that "Uber is still losing money as it expands its food delivery business and develops technology for driverless cars.

    "But revenue for its rides business nearly tripled in the final three months of last year as the company picked up more passengers around the world. That prompted it to say it will turn a profit earlier than it expected."

    Uber, the story says, "lost $1.1 billion in the fourth quarter of 2019, about 24% more than the same time last year … Uber brought in $4.1 billion in revenue, up 37% from a year ago. Its revenue grew around the world, although the biggest gain was in the U.S. and Canada, where it pulled in 41% more than last year.

    "Because of the company’s progress in 2019 and its plans this year, Uber expects to turn a profit in the fourth quarter of 2020."

    •  Advertising Age reports that Heinz Ketchup decided to take advantage of this year's Oscar buzz to post an IMDB page in which it listed all the times that it has shown up in films, including Heat, Groundhog Day, and Benny and Joon, plus When Harry Met Sally, when it showed up in the famous diner scene.

    "But after about a week," the story says, "the platform ended up killing the listing, so Heinz and agency Rethink Toronto turned the idea into a contest. Now they're asking fans to share the ketchup’s famous appearances on social media for a chance to win the red stuff for free."

    •  The Financial Times has a column by Madison Darbyshire essentially saying that "bread is back."

    She argues that while "clean eating" has been all the rage - often seen more as a matter of subtraction than addition - "recently, I have sensed a profound shift. Clean eating is out of fashion, and, in a comeback more surprising than Martha Stewart’s, bread is cool again.

    "Real bread. Crusty, leavened rye, sourdough, wheat and country white have left the domain of hipsterdom and re-entered the mainstream. It is a popular middle-class pursuit to keep your own vile sourdough starter and bake hard-earned loaves on Saturday mornings. After nine years of rapid proliferation, the number of gluten-free products launched in 2018 fell by almost 40 per cent from 2017."

    She goes on:  "Trends are by definition cyclical, as evidenced by the surprising resurrection of mom jeans and crocheted bikinis. But I have another theory about the triumphant return of real food.

    "If the world is warming, continents are ablaze with unstoppable wildfires and liberal democracy is going up in smoke, who has the energy to care about carbs? You might as well have a cookie. Probably two."

    If bread indeed is back, count me as a huge fan.  There are few things as great a crusty artisan bread.  I made a brisket last night for dinner, and I'm really looking forward to the sandwich I'm going to have in a few hours, and the bread is going to be a huge part of the pleasure.

    Published on: February 10, 2020

    …with brief, occasional, italicized and sometimes gratuitous commentary…

    •  Bob Parriott, president/CEO of California's Twain Harte Market, passed away in an airplane accident last week  near the Columbia, Calif. airport.

    In his note to members of the California Grocers Association (CGA), the organization's president/CEO, Ron Fong, wrote:  "Bob was instrumental in the merger of the California Independent Grocers Association with CGA in 2014 and served on the CGA Board of Directors Executive Committee – culminating with his year as Chair in 2018.

    "Bob was a true champion for the independent grocer which was reflected in his life and his work. He was a tremendous supporter of the Association and will be remembered for his leadership during the merger and his time on the Board."

    •  Robert Conrad, best known for playing Secret Service agent James West with tongue firmly in cheek in "The Wild, Wild West" TV series, but who actually starred in at least one series in the 1950s, ’60s, ’70s, ’80s and ’90s, has passed away at age 84.

    Other series in which he starred:  "Hawaiian Eye," "Assignment Vienna," "Baa Baa Black Sheep," and "Centennial."

    •  Roger Kahn, who worked as much of his life as a sportswriter but who changed the form in many ways with his "The Boys of Summer," about the Brooklyn Dodgers of the early fifties, has passed away at age 92.

    Kahn wrote some 20 books, but for me, it will never get better than these lines from the beginning of "The Boys of Summer"…

    "You may glory in a team triumphant, but you fall in love with a team in defeat.  Losing after great striving is the story of man, who was born to sorrow, whose sweetest song tell of saddest thought, and who, if he is a hero, does nothing in life, as becomingly as leaving it."

    As long as I live, I'm unlikely to ever write two sentences as fine as those.  I'm just lucky enough to have read them.

    Published on: February 10, 2020

    The single best email I got on Friday after announcing the launch of a rebooted MNB and my new investors was this one from an reader who referred specially to my comment that the investment folks don't want to "mess" with my approach and attitude:

    Not yet! How many buyouts and mergers have you covered?

    It was a good run, Congratulations.

    Such cynicism … but I have to admit that it made me laugh out loud.  The new site hadn't even been launched yet!

    We’ll see.  The good news is that I still own the joint … I’m not being merged or acquired.  And not only do I trust the folks with whom I am working, but I trust the MNB community to hold me - and them - accountable.

    Okay?

    Regarding another story, MNB reader John A. Conroy wrote:

    It is interesting that “Shipt is swapping out its green spaceship logo for a shopping bag that better speaks to the brand’s predominantly female base” and Walmart’s 1st Super Bowl ad featured space ships.

    On Friday, we took note of a New York Times story about improving wearable technology is being designed to help commercial truckers avoid giving into fatigue, which "comes with the job of driving an eighteen-wheeler, even with rules requiring rest stops and limiting driving hours. Now, new technologies are becoming available to alert drowsy drivers, sometimes even before they feel tired … Biometric sensors are getting lighter, cheaper and more accurate, and new software systems can connect driver and vehicle data. The feedback loops these systems create could make the roads safer for everyone."

    I commented:

    As someone who does a lot of long-distance driving, I'd suggest that this technology ought to be available for everyone … and maybe even standard equipment on every motorized vehicle.  (Except the autonomous ones, of course.  Computers don't get sleepy.)

    One MNB reader wrote:

    They may not get sleepy, but they do crash…

    Fair point.

    From MNB reader Mark Woodgerd:

    I think that technology is already here.  My wife and I were on a road trip and I was driving our 2018 Ford Edge.  Suddenly the message window lit up with a steaming cup of coffee icon and a message, something like “Driver needs a break”.  We still laugh about it.

    And, responding to my OffBeat piece on Friday about "Porgy and Bess," one MNB reader wrote:

    I was fortunate to see the production — here in Fairfield at the Quick Center. Prior to the performance Professor Orin Grossman of Fairfield U did an overview which was really enlightening. To the issue of the language, this was an earnest attempt to capture the “Gullah” dialect of the time and place. So rather than interpreting it as stereotypical, it came across as sincere.

    We enjoyed it. And to add, until a couple years ago, I too did not like opera. Now thanks to the simulcast I look forward to several performances each season.

    Like I said on Friday, my inability to connect to opera is my fault, not opera's.  I get it.  

    Published on: February 10, 2020

    The 92nd Academy Awards took place in Los Angeles last night, and here are the winners in the major categories:

    Best Film:  Parasite

    Best Actress:  Renée Zellweger, Judy

    Best Actor:  Joaquin Phoenix, Joker

    Best Supporting Actor: Brad Pitt, Once Upon A Time A Time … in Hollywood

    Best Supporting Actress:  Laura Dern, Marriage Story

    Best Director:  Bong Joon Ho, Parasite

    Best Original Screenplay:  Parasite

    Best Adapted Screenplay:  Jojo Rabbit

    Best Animated Feature:  Toy Story 4

    Best Animated Short:  Hair Love

    Best International Feature Film:  Parasite (from South Korea)

    KC's View:

    Random thoughts…

    For my money, the funniest  lines of the evening were aimed at Amazon CEO-founder Jeff Bezos, who was in the audience and endure shots from Chris Rock and Steve Martin…

    Chris Rock:  He’s got cash. When he writes a check the bank bounces … Jeff Bezos is so rich, he got divorced and he’s still the richest man in the world! … He saw ‘Marriage Story’ and thought it was a comedy.

    Steve, do you have anything you want to add about Mr. Bezos?

    Steve Martin:  No, I like getting my packages on time.

    Funny stuff.  And Bezos seemed to be enjoying himself.

    Also … Variety notes that Laura Dern's win is "the first time an actor has won an Oscar for a role in a movie distributed by a streaming service — Netflix."  

    Which says something about disruption.

    I think I need to see Parasite.

    Published on: February 10, 2020

    Digital strategies aren't just about creating alternatives to the bricks-and-mortar shopping experience.  Done effectively, they can actually bring people back to the store, while also eliminating customer anonymity, creating rich and actionable data, and deepen relationships between the store and consumer in a way that transcends the simple transaction.

    Our newest Retail Tomorrow podcast, which brings together a terrific panel of experts from a wide range of disciplines, was recorded at Google’s New York City offices during the recent National Retail Federation (NRF) Show.  Our guests:

    •  Matt Alexander, co-founder of Neighborhood Goods, an unusual and fascinating take on physical retailing with stores in Dallas and New York.

    •  Patrick Flanagan, senior vice president of digital marketing and strategy for Simon,  which has more than 200 properties in 37 states and Puerto Rico.

    •  Tom Furphy, CEO and Managing Director of Consumer Equity Partners, a member of the Retail Tomorrow podcast family and a regular contributor to "The Innovation Conversation" on MNB.

    •  And Jalna Silverstein, a leader in Ernst & Young’s Transaction Advisory Practice and its Real Estate, Consumer Experience and Retail Strategy.

    You can listen to the podcast here.

    This Retail Tomorrow podcast is sponsored by the Global Market Development Center (GMDC).

    Pictured below are our panel members, from left:  The Content Guy, Matt Alexander, Tom Furphy, Patrick Flanagan, Jalna Silverstein.


    Published on: February 11, 2020

    by Kevin Coupe

    It is an enduring lesson in the power of customer complaints.

    A retailer once told me that the most valuable thing he could get from his customers was complaints.

    That's right.  Complaints.

    The reason, the retailer said, is that when customers complain, it means they care.  It also gives the retailer a chance to prove that he or she cares, that they paid attention and responded.  This is what creates sustained relationships between the store and the shopper.

    I learned something yesterday.  MNB readers really, really, really care.

    Yesterday's reboot of MNB inadvertently lacked a component from the old site that many of you missed.  In the past, when you would click on a headline in the emailed Wake Up Call, it would take you to that story, but within the context of the entire home page - you could scroll up and down to other stories, or easily go up to the top of the page.

    But yesterday, clicking on an email headline brought you to that story, and only that story.  To get to the home page, you had to go back to the email, and all the process did for many of you is create friction where it did not exist before.

    The good news - if you accept the expressed wisdom of that retailer - is that you let me know about the friction.  Many of you let me know.  In a word, I got hammered via emails who worried that this was my definition of progress.

    Well, it wasn't.  I just didn't realize that this was how it worked, even after weeks of testing, and I didn't realize how much it mattered until you told me.

    I screwed up.

    Now, I think the problem is fixed.  I appreciate your passion, the time you took to let me know about the problem, and the patience you showed in allowing us to fix it.

    There will be other glitches, I'm sure.  And, I'm sure you'll let me know about them.  When you do, I'll know that you care … and I hope you know how much I care, too.

    One thing:  It is taking a bit of time to move the archives over.  If there is a story you are looking for, let me know, and I'll try to dig it out and send it to you.

    Published on: February 11, 2020

    by Michael Sansolo

    Imitation, it is said, is the sincerest form of flattery, but I wonder if it’s also the quickest path to growth.

    After all, as George Bernard Shaw once wrote, "“Imitation is not just the sincerest form of flattery - it's the sincerest form of learning.” 

    Sure, breakthrough innovations are stunning and are rightfully hailed as amazing achievements. What’s far more common, I’d argue, are small improvements on existing ideas that build business advantages.

    Forbes dove into that topic recently fueled by, of all things, Walmart’s very creative Super Bowl ad, which featured all manner of characters from recent movies using the company’s click-and-collect curbside pick up.  Forbes liked the ad, but noted a small problem with the entire concept - basically that Walmart (and so many other retailers who weren’t seen during the Super Bowl) are essentially just catching up to a trend that’s been around for a long time.

    As Forbes pointed out, curbside collection of orders would seem incredibly innovative had not McDonalds, Burger King and other fast feeders been centered around the exact same concept for decades now. In fact, many of those chains have long reported that drive-up sales dwarf what they do in-store and have for quite a while.

    Granted, the parallel isn’t perfect. There is simplicity to McDonalds’ menu that no typical retailer could possibly copy. Even a limited assortment store like Aldi would have trouble making it’s entire in-store inventory available to drive up customers. However, that might miss the point of the article, which is that retailers need stay mindful of trends that delight shoppers everywhere and anywhere. Then we somehow need figure how to provide something similar.

    As the Forbes columnist points out, curbside convenience is far from the end of these types of innovations and he makes a less than subtle point about the attraction of checkout-free stores such as Amazon Go.

    That’s a point we cannot possibly repeat often enough. We must stay hyper-focused on the changes our shoppers see elsewhere in their lives that, fair or not, raise their expectations of what can be done everywhere. It could be the popularity of new food and beverages items in restaurants, or changed experiences in movie theaters, banking, amusement parks and elsewhere.

    If something new turns shoppers on, we at least need to consider if there’s a parallel product or service we too can offer especially when the answer isn’t obvious. It’s one more reason why we also need to harvest the diversity of our teams to find out what appeals to varied groups of people so that we can understand things well beyond our own experiences. 

    Or put another way: is there any application of Fortnite that might actually make the supermarket shopping trip more interesting? How about StitchFix? I have no idea, but I bet someone does and if they do it, watch out!

    Michael Sansolo can be reached via email at <A HREF="mailto: msansolo@mnb.grocerywebsite.com "> msansolo@mnb.grocerywebsite.com </A>.  His book, “THE BIG PICTURE:  Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available here.

    And, his book "Business Rules!" is available from Amazon here.

    Published on: February 11, 2020

    by Kevin Coupe

    There is a Bronx, New York, deli and convenience store called Lucky Candy where one of cashiers, Ahmed Alwan - who is the son of the owner - has begun playing a game with customers.

    CNN reports that "the rules are simple: If you can solve a math equation, you get five seconds to grab anything you want off store shelves and have it for free."  Customers "scramble around the store grabbing anything from chips and ice cream to speakers and hookahs. But no matter how much they grab, or how valuable the items are, their cost is always the same: $0."

    The story says that "Alwan pays for everything out of his own pocket. His main concern isn't money, he said, but helping low-income community members save for higher priority expenses, such as rent and utilities."  His dad says he's proud of him:  "It's great to see him do good and help out the community, and most importantly represent Islam.  It's impacting the business in a positive way, bringing awareness and attention to the store as well as spreading positivity throughout the community."

    Indeed, "Alwan has become an internet sensation, gaining more than 300,000 followers on TikTok and 17,000 on Instagram. In his videos, Alwan can be heard asking customers simple questions such as, 'What's 5 times 5?' or '9 times 9 minus 5?'."

    Now, Alwan says that "he plans to continue making videos, and even getting more creative with his questions. He even started a GoFundMe to support the game and enable him to help more people."

    (I wish my dad were around.  He was a math teacher down to the deepest reaches of his soul, and he would've appreciated this young fellow.)

    Community engagement by a retailer always is an Eye-Opener.  But this adds up to something really special … because in the broadest cultural sense, it is about multiplication, not division.

    Published on: February 11, 2020

    The Verge reports that a new eMarketer study says that 70 percent of smart speaker users in the US this year will be having conversations with one of Amazon's Alexa-powered systems.

    That's a small decrease from 2019's 72.9 percent, but it is still an enormous advantage over Google's system, which will be used by 31.7 people.  Apple's Siri is so insignificant that it gets lumped into "other," which is unlikely to even break 18 percent.

    According to the story, "Growth of smart speaker use in the US will slow in the coming years, eMarketer’s report finds, but the number of users will continue to increase as Alexa, Siri, and other voice assistants expand beyond just the home, and into cars and smart home appliances. The report estimates about 83.1 million people will use a smart speaker this year, a 13.7 percent uptick from last year."

    The Verge goes on to explain the appeal this way:  "Amazon has consistently released features that make its Echo and other Alexa-enabled devices more intuitive, eMarketer says. Opening Alexa devices to outside developers and making them compatible with third-party smart home devices also helped boost Amazon’s smart speaker position. Those things aren’t unique to Amazon, however, as smart speakers from both Google and Apple are also compatible with many smart home gadgets."

    KC's View:

    This is yet another example of how Amazon's ability to marry technology and commerce is so valuable  - it is able to develop the gadget, then use its site to market it, and then use the gadget to access the site, which then makes both the site and gadget more valuable, all of it made even more valuable by all of the other components built into a strong consumer experience.

    Hard to compete with, especially because even as other companies innovate, Amazon keeps the accelerator pressed down on everything it is doing.

    Published on: February 11, 2020

    The New York Timeshas a story about the Dart Corporation, which makes, "by the millions, white foam cups, clamshells, coffee cup lids, and disposable forks and knives — the single-use containers that enable Americans to eat and drink on the go. It employs about 15,000 people across 14 states."

    The problem is that Dart's products increasingly is viewed as a threat to the environment, with "cities and states … increasingly banning one of Dart’s signature products, foam food and beverage containers, which can harm fish and other marine life … Maine and Maryland banned polystyrene foam containers last year, and nearly 60 nations have enacted or are in the process of passing similar prohibitions. Some elected officials and environmental groups say polystyrene containers are difficult to recycle in any meaningful way."

    But Dart is said to be fighting back.  The Times writes that "San Diego recently decided to suspend enforcement of its polystyrene ban in the face of a lawsuit by Dart and a restaurant trade group, which argued the city should have conducted a detailed environmental impact study before enacting the law. The city is now performing that analysis."

    Dart CEO Jim Lammers puts it this way:  "We don’t believe there are good, objective reasons to single out certain materials."

    According to the story, "Dart is waging a broader campaign to argue that its products are being used as scapegoats for a society fueled by on-the-go consumerism. Dart says that critics of polystyrene are ignoring the negative environmental impacts of other products, like many paper cups, which are derived from trees and can emit greenhouse gases as they degrade in landfills. By Dart’s reasoning, most materials inflict some negative impact on the environment, so it doesn’t make sense to ban one  and not another."

    KC's View:

    It strikes me as objectively false to suggest that there is no reason to single out certain materials and/or items as being more detrimental to the environment.  I suppose if I were in the business of making materials I might think so, but it doesn't strike me as being fair.

    It would be like saying that there is no reason to suggest that some items are less relevant than others.  If that were true, there would still be a market fore buggy whips.  But there isn't.  And certain kinds of materials - considering raised consciousness about environmental issues and the increasingly fragile nature of the planet - may be the buggy whips of the moment.

    Let's be fair.  Dart is investing in creating more environmentally friendly products that, I assume, will replace the less friendly ones.  Better late than never, I suppose.

    But … one of the arguments I find less than persuasive is the one that says "not everyone is willing to accept the additional costs" of more environmentally friendly products.   I'm not sure that we're are able to bear the costs if we don't make this shift.

    Published on: February 11, 2020

    Edgewell Personal Care, owner of Schick razors, has decided to abandon its efforts to acquire Harry's Inc. for $1.37 billion.  The decision comes in the wake of a Federal Trade Commission (FTC) suit to stop the deal, citing a probability that it would lead to higher consumer prices.

    The move was pleasing to investors, who were concerned about the price of the acquisition, considering that Harry's had more visibility and cachet than profits.  (It has been losing money.)

    The Wall Street Journal writes that "Edgewell’s move hands a notable victory to the FTC, which spent months considering whether the proposed transaction would lead to higher consumer prices. The commission, made up of three Republicans and two Democrats, reached the unanimous conclusion that the tie-up would eliminate one of the most important competitive forces in a shaving industry that has long been controlled by two entrenched companies."

    KC's View:

    I'm not a lawyer or an antitrust expert, but I must admit that on the face of it, this doesn't make a lot of sense.  It would seem to me that since Schick is a distant second to Gillette, acquiring Harry's might've made things more competitive, not less so.  Plus, with Unilever acquiring Dollar Shave Club, this deal could've actually leveled the playing field.

    I said it before and I'll say it again - it sounds to me that the FTC  is fighting the last war instead of allowing companies to fight the next one.

    Published on: February 11, 2020

    •  The Verge reports that "in a letter sent Friday, US senators called on Amazon CEO Jeff Bezos to reform its safety practices and improve its treatment of workers … Amazon has come under fire for dodging workplace safety regulations for years."

    The letter was signed by Bernie Sanders, Kamala Harris, Elizabeth Warren, and Cory Booker - all current or recent candidates for the 2020 Democratic presidential nomination - among others.

    "Any practice that puts profits before worker safety is unacceptable,” the letter reads. “We urge you to take immediate steps to protect your employees from workplace injuries. Your employees’ lives and well-being depend upon your swift action.'  It’s addressed directly to Amazon founder Jeff Bezos and requests a written response, including what actions the company will take, by February 21st."

    Published on: February 11, 2020

    …with brief, occasional, italicized and sometimes gratuitous commentary…

    •  Yahoo Finance reports that when "Popeyes launched its first-ever chicken sandwich Aug. 12, 2019," it "had no idea it was about to change the fast food chicken sandwich game in America … After a Twitter feud between rivals Chick-fil-A and Wendy’s (WEN), the Popeyes Chicken Sandwich went viral and sold out in stores in just two short weeks."

    It was a bottom line success:  "The popular chicken sandwich drove same-store sales of 34% during the fourth quarter at Popeyes … Popeyes' jaw-dropping fourth quarter comes on the heels of a pretty impressive third quarter when the chicken chain reported same-store sales growth of 9.7%."

    •  MarketWatch reports that "Simon Property Group Inc. said Monday it has agreed to acquire mall real-estate investment trust Taubman Centers Inc. in an all-cash deal valued at about $3.6 billion … Under the terms of the deal, Simon will acquire an 80% interest in Taubman Realty Group Limited Partnership, which owns Taubman Centers. The Taubman family will sell about a third of its stake in the company at the transaction price and remain owner of the remaining 20% of shares."

    The story notes that "the move comes at a time when malls are facing steep pressure from e-commerce, which has caused foot traffic to decline sharply and many are looking at new ways to draw in shoppers — and tenants. As retailers shutter stores to save costs, malls are finding themselves without the anchor tenants of the past such as Sears, and are looking to add entertainment outlets, health clubs and grocers and even dentists."

    It would seem that the folks at Simon believe in the future of the mall …. I had the chance to interview Patrick Flanagan, Simon's senior vice president of digital marketing and strategy, for the Retail Tomorrow podcast, and he suggested that a) it can be a bull market for malls, and b) malls are in so many ways going to be different from what they have been in the past.  This is areal challenge for companies like Simon, which cannot just be landlords anymore.  Obviously, Simon believes it is up to the challenge.

    •  QSR reports that "Dunkin’—as part of the push for NextGen remodeling—will shell out roughly $60 million for 'state-of-the-art, high-volume' brewing equipment for domestic locations, with matching investments from franchisees, it said. The brewers will allow the brand to expand the variety of drip coffee blends, increase operational efficiencies, reduce waste, and enhance the quality and consistency across the system. This is on top of the new espresso machines installed in 2018 and the new iced coffee brewers in 2019.

    "The brand ended 2019 with 525 NextGen stores, a redesign including an eight-headed tap system, modern décor, front-counter bakery, efficient coffee line, and enhanced pick-up area. The company expects to end 2020 with 1,400."

    •  The International Housewares Association announced that because of concerns about the coronavirus outbreak, the International Sourcing Expo - which was to be part of its annual Chicago show March 14-17 - will not open this year.

    The decision was made" to protect the health, safety and well-being of the industry from concerns about exposure to the virus," said Derek Miller, IHA president.

    Published on: February 11, 2020

    •  Kroger yesterday announced that Keith G. Dailey, the company's vice president of corporate affairs, has been promoted to group vice president of corporate affairs.

    •  Associated Wholesale Grocers (AWG) announced that Emile Breaux, SVP, Regional Supply Chain Operations, has assumed leadership of AWG’s Real Estate team, in addition to his current responsibilities. Emile will work directly with David Smith, President and Chief Executive Officer, on all real estate matters and continue to report to Dan Funk, Chief Operating Officer, on all other supply chain and division responsibilities.

    Published on: February 11, 2020

    Content Guy’s Note: Stories in this section are, in my estimation, important and relevant to business. However, they are relegated to this slot because some MNB readers have made clear that they prefer a politics-free MNB; I can't do that because sometimes the news calls out for coverage and commentary, but at least I can make it easy for folks to skip it if they so desire.

    •  The Washington Post reports that Amazon Web Services has filed a motion in the US Court of Federal Claims looking to depose President Donald Trump, as well as Secretary of Defense Mark T. Esper, in its challenge of the Pentagon's decision to award a $10 billion cloud computing contract to Microsoft.

    The move by Amazon, the Post writes, "significantly raises the stakes in a bitter procurement dispute over a long-awaited defense contract to create the Joint Enterprise Defense Infrastructure, known as JEDI. The contract would create a powerful, centralized computing system for use by the military and operated by a single commercial technology company."  Amazon is charging that Trump's antipathy toward Amazon CEO-founder Jeff Bezos, who also owns the Post in a personal investment, prompted him to interfere in the bidding process.  (The Post has been aggressive in its coverage of the Trump administration, doing things like keeping a regular tally of what it calls "false and misleading claims" by the president.)

    According to the story, "In its filing, Amazon seeks to question Trump on any communications he’s had with Microsoft, as well as Oracle, another tech giant that sought the JEDI contract and whose chief executive has dined with the president … Amazon is also seeking to ask the president about his communications with Esper over his appointment, and any discussion they had about the JEDI award."

    KC's View:

    I'm just guessing here, but I'd put the odds on Trump being deposed by Amazon's lawyers at roughly the same as Rep. Tulsi Gabbard being the Democratic presidential nominee.

    Published on: February 11, 2020

    The other day we had a story about wearable technology that is going to be available to truckers to help them be safer when on the road, and I suggested that it'd be great to make it accessible to consumers, as well - except for autonomous cares, because "computers don't get sleepy."

    One MNB reader responded that while computers don't get sleepy, "they do crash…"

    I thought that was a fair point, but another MNB reader wrote:

    Actually it's not a fair point...statistically commercial drivers crash far less often than car drivers do and whenever cars and trucks do collide, more often it's the car that is at fault because they don't know how to drive around trucks (speeding, unsafe lane changes, distracted driving, etc.).

    I won't pile on a list of statistics and I'm not saying commercial drivers are perfect but there are many drivers with millions of safe, accident free miles under their belts who take pride in what they do.

    Regarding NIMBY attitudes that sometimes kick in when legalized pot shops want to open in certain neighborhoods, one MNB reader wrote:

    Kevin, is the issue of “pot shops” in neighborhoods a short term issue?  Will this just become akin to having a liquor store in the neighborhood?  I agree with your sympathetic bend to the current concerns.  But at some point this will be normalized, or will it?

    Portland, Denver and Seattle should be the litmus test on time.  I went into a Seattle shop while visiting recently.  The whole process was very systematic and staff were super helpful, even though I did not buy anything.  That said the demographic is a little different than the wine store down the block.  

    Short term, keeping access limited and selective seems prudent.  Long term, if this becomes federal legal, change is inevitable.  I support legalization to cut the black market element and gain control over efficacy and strength.  The tax income won’t hurt, and could help fund enforcement of proper use.  Pandora is out of her box, so embrace it, but let's get this right. Move slow, think deeply, be careful.

    I mentioned Tennessee Ernie Ford's "16 Tons" yesterday, and lamented a bit by the fact that few people under a certain age have heard of him or it.

    One MNB reader responded:

    When I was a high school senior, our vocal music teacher required that all of us seniors had to take a solo piece to our state vocal music contest.   I begged her to let me do “Sixteen Tons” and she steadfastly refused.   Instead, she selected “Asleep In The Deep”, which apparently made the “greatest hits” listing of 1897.  J   I carry around Tennessee Ernie Ford’s version with me on iTunes and listen to it frequently; there is nothing better.  

    And finally … yesterday I told you that on Friday, even before the new MNB had been launched, i got an email from a reader suggesting that my new investment from Accelerate is the beginning of the end for MNB - "it was a good run, congratulations," he said, pointing out that this is inevitable when mergers and acquisitions occur.

    I responded:

    Such cynicism … but I have to admit that it made me laugh out loud.  The new site hadn't even been launched yet!

    We’ll see.  The good news is that I still own the joint … I’m not being merged or acquired.  And not only do I trust the folks with whom I am working, but I trust the MNB community to hold me - and them - accountable.

    The vast majority of MNB readers yesterday - despite the glitches in the new site - were congratulatory. But not this fellow:

    We have been through dozens of mergers/buyouts over the years ... your reader from Friday is not being foolish ... only experienced. You have now gone Corporate, which means no matter what you say...you will lose the intimate relationship you’ve had and morph into something else. We already see it with the new formatting. Matter of fact, I remember these very words from you when this has happened with companies in the industry over the past

    18 years... laughing out loud doesn’t make it not true.

    Well, I don't think I've gone corporate.  I don't think the new format reflects corporate-think … I hope we did it because we wanted to make MNB more accessible, not less.  And if the intimacy of my relationship with the MNB community suffers, that's on me … and I'm going to do my best to maintain what always has been one of the most rewarding parts of MNB.

    Published on: February 11, 2020

    Digital strategies aren't just about creating alternatives to the bricks-and-mortar shopping experience.  Done effectively, they can actually bring people back to the store, while also eliminating customer anonymity, creating rich and actionable data, and deepen relationships between the store and consumer in a way that transcends the simple transaction.

    Our newest Retail Tomorrow podcast, which brings together a terrific panel of experts from a wide range of disciplines, was recorded at Google’s New York City offices during the recent National Retail Federation (NRF) Show.  Our guests:

    •  Matt Alexander, co-founder of Neighborhood Goods, an unusual and fascinating take on physical retailing with stores in Dallas and New York.

    •  Patrick Flanagan, senior vice president of digital marketing and strategy for Simon,  which has more than 200 properties in 37 states and Puerto Rico.

    •  Tom Furphy, CEO and Managing Director of Consumer Equity Partners, a member of the Retail Tomorrow podcast family and a regular contributor to "The Innovation Conversation" on MNB.

    •  And Jalna Silverstein, a leader in Ernst & Young’s Transaction Advisory Practice and its Real Estate, Consumer Experience and Retail Strategy.

    You can listen to the podcast here.

    This Retail Tomorrow podcast is sponsored by the Global Market Development Center (GMDC).

    Pictured below are our panel members, from left:  The Content Guy, Matt Alexander, Tom Furphy, Patrick Flanagan, Jalna Silverstein.


    Published on: February 12, 2020

    In this edition of The Innovation Conversation - with Tom Furphy and Kevin Coupe, talking coast-to-coast via Skype - the focus is on growing and significant consumer concerns about Amazon's impact on retail and the environment, and how competitors can use retail marketing to compete with Amazon's juggernaut.

    The discussion turns on a new survey from Convey, reported by DC Velocity, saying that "one in four Americans (24%) have negative feelings about Amazon's impact on the retail industry, but 21% of those shoppers said they still buy at least 50% of all their goods on Amazon."  At the same time, "27% of respondents said they feel very or somewhat negative about Amazon's impact on the environment, yet more than one in four of those respondents said they still buy at least 50% of all their goods on Amazon."

    Furphy and Coupe talk about how these disconnects offer competitors opportunities to differentiate themselves - in their stores, via their supply chains, and with their people.  It isn't easy … but it likely is critical to survival.

    Content Guy's Note: The goal of "The Innovation Conversation" is to explore some facet of the fast-changing, technology-driven retail landscape and how it affects businesses and consumers. It is, we think, fertile territory ... and one that Tom Furphy - a former Amazon executive, the originator of Amazon Fresh, and currently CEO and Managing Director of Consumer Equity Partners (CEP), a venture capital and venture development firm in Seattle, WA, that works with many top retailers and manufacturers - is uniquely positioned to address.  Me, I just like hanging and talking with people smarter than I am.

    Published on: February 12, 2020

    by Kevin Coupe

    One of the components of the Girl Scout motto is, "To help people at all times."

    This apparently includes when they've got the post-pot munchies.

    Fox News reports that "an industrious group of Girl Scouts sold hundreds of boxes of their signature cookies after setting up shop outside of a Chicago cannabis dispensary over the weekend."  The Girl Scouts sold 230 boxes during a four-hour shift outside the dispensary.

    Recreational marijuana became legal in Illinois on January 1.

    The cookie stand's presence outside outside Dispensary33 in the Andersonville neighborhood reportedly was arranged by the troop's leader, who found that many other locations already had been reserved by competing troops.  "We’re always looking for opportunities, places that have walking traffic," said Melissa Soukoup.  "I was looking for places that weren’t taken, and I thought of this.”

    This week,  Fox News reports, "Dispensary33 revealed that the Girl Scouts already booked them up for sales during the rest of February."

    I'm sure there will be some folks who question whether this is a good idea, and if the Girl Scouts are being taught the right lessons.  I'd prefer to think that they are being taught a valuable, Eye-Opening lesson about entrepreneurship - you don't wait for customers to find you, but rather have to go to them.

    Next year - Girl Scout-branded hash brownies.

    Published on: February 12, 2020

    Ahold Delhaize USA yesterday announced that it plans to close the Midwest division of its Peapod online grocery sales business.  As of next Tuesday, February 18, the company said, "service for Midwest customers placing online grocery delivery orders in Illinois, Wisconsin and Indiana will be discontinued. As a result of this decision, the following facilities will close: a distribution center and food preparation facility in Lake Zurich, Ill., distribution facilities in Chicago, Ill., Milwaukee, Wis., and Indianapolis, Ind., and a pick-up point in Palatine, Ill."

    Ahold Delhaize said that peapod's Midwest business represents $97 million of its total annual $1.1 billion revenue.

    According to the company, "This decision will enable Ahold Delhaize USA to focus on expanding the leadership position of its brands on the East Coast and execute its strategy of enabling each local brand to be the leading omnichannel grocery retailer in each of their markets utilizing the market-leading capabilities of Peapod Digital Labs. There are no changes for customers in other markets."

    “Chicago will remain the headquarters for our Peapod Digital Labs team, and we will continue to draw from the valuable pool of digital and eCommerce talent in the market,” said JJ Fleeman, President, Peapod Digital Labs and Chief eCommerce Officer. “Through Peapod Digital Labs, we will continue to build upon Peapod’s technology legacy. Peapod began here, and we will remain here, in the heart of Chicago. We look forward to honoring and leveraging Peapod’s longstanding legacy of expertise in online grocery and fully focusing our team’s energy and talent on supporting the growth of each of the East Coast brands.”

    “This was a difficult decision given Peapod’s rich history in the Midwest,” said Kevin Holt, CEO, Ahold Delhaize USA.  The company noted that Peapod was the first online grocer in the U.S., and was acquired by Ahold USA in 2000."

    KC's View:

    To be honest, this feels like the first of two shoes.  I'm not sure why Ahold Delhaize would leave Peapod Digital Labs in Chicago when every other one of its operations are on the east coast, hundreds of miles away.  Plus, it could be argued that Boston is more of a tech hub than Chicago is … and Amazon's investments in the Washington, DC, market pretty much assures that there will be a lot of tech talent there as well.  Leaving Peapod all by itself in Chicago wouldn't seem to make any sense.  And so I am guessing that another shoe will drop.  Eventually.

    Peapod's presence in the Midwest did seem to be more of a legacy proposition than anything else - it started in Chicago.  But I always thought that, especially at this time in the e-commerce continuum, it would've made a lot more sense for Peapod to position itself as an e-commerce provider to retailers with which it did not compete all over the country.  It had the history and the infrastructure, and with some tweaking and innovative thinking, Peapod could've positioned itself as a competitor to the likes of Instacart, telling retailers that it understood the importance of their brands, and wanted to build on that equity, not subvert and eventually steal it.

    Published on: February 12, 2020

    The Federal Trade Commission (FTC) yesterday announced that it plans to review acquisitions made by Amazon, Facebook, Apple, Microsoft, and Alphabet/Google over the past decade, with Axios writing that it is seeking "to learn whether large tech companies are buying up small potential competitors in an anticompetitive manner."

    At least some of these acquisitions were not subject to antitrust scrutiny, the story says.  The Wall Street Journal writes that "the new probe likely will involve hundreds of transactions that never drew federal scrutiny because they were under the dollar-value threshold for antitrust review, which is edging up to $94 million this year … The FTC also is looking at deals that don’t involve full-fledged takeovers. That will involve examining potential competitive impacts of minority investments, as well as data acquisitions and licensing arrangements."

    The move appears to be what the Journal calls "a significant expansion of the government’s already extensive examination of possible antitrust concerns in digital markets. Both the FTC and the Justice Department have been conducting antitrust investigations of tech giants including business practices at Google and Facebook."

    The Journal notes that "critics contend acquisitions by big tech firms show a pattern of establishing 'kill zones' around themselves to prevent upstart rivals from posing a competitive threat, and say this can discourage innovation and investment.

    "Defenders of the tech giants say a small startup’s prospect of being taken over by a major company—and the big payoff that can result—is a spur to investment and innovation. Many tech entrepreneurs start companies with the specific goal of being bought by one of the giants."

    KC's View:

    It does not appear that there will be a broad effort to unravel previous acquisitions, though I wouldn't be surprised if the FTC or the Justice Department take a shot at one or two.  It might not even be a matter of politics - this probe is being initiated by the Trump administration, but also is supported by the likes of Sen. Richard Blumenthal (D-Connecticut), a frequent critic of big tech.

    I agree with one of the assessments made in the Journal story, that it is "hard to see an antitrust case against major tech companies snapping up small, unproven businesses so they can hire engineers well-versed in cutting-edge technology."   Not only do such deals often give extended life and resources to these small businesses, but they are usually sought by them … it is one of the reasons they go into business to begin with.

    Published on: February 12, 2020

    Eater reports that Row 7, which was founded two years ago to disrupt the existing seed monopolies "and breed delicious, healthy plants that more people want to eat," has struck a deal with Wegmans to "sell the company's orange badger flame beets - and Row 7’s story - at all of its 101 stores."

    It is seen as the first step in having a broader presence in the nation's grocery stores, a strategy hatched by famed chef Dan Barber.

    According to the story, "Slinging produce at supermarkets may be an unexpected strategy from a Michelin-starred, farm-to-table chef who has long voiced opposition to the corporatization of the food system. But Barber said he sees the partnership - and an overall push into grocery stores - as the best way to get the food and its message to the masses."

    Eater quotes Barber as saying that "the jump from market darling to supermarket sensation was harder than it looked, because of the plug-and-play nature of the wholesale produce market."  Most stores simply were not built to accept and market Row 7 products.  But "Wegmans already had infrastructure in place that would allow the company to test how well the vegetables would grow and sell, and to educate consumers on the new varieties.

    "At its own organic farm and orchard in upstate New York, Wegmans’ farmers tested seven acres of badger flame beets to gauge how the beets would perform if they decided to ask growers in their network of 34 organic farms to plant them. Then they rolled the beets out in select stores to gauge how customers responded to them."

    KC's View:

    One of the things that separates both Wegmans and Row 7 is that they recognized it was not enough to simply have something new - they needed to actually sell it, and Eater says that "Wegmans created signage and in-store displays, and Barber spoke personally to 70 'produce ambassadors' who educate customers in the stores."

    That's huge, but it is a commitment that not enough companies make.  But it seems to me that in order to differentiate a store from its competition, whether physical or online, that is exactly the kind of commitment required.  It takes people, it takes money, it takes energy.  Take it or leave it.

    I'm interested to see how Barber adapts to a less rarefied atmosphere than he is used to;  I've eaten exactly once at his Blue Hill at Stone Barns restaurant, and it was one of the most memorable and expensive meals I've ever had.  I certainly never thought that he'd find his way into supermarkets, even Wegmans (which, as it happens, will be opening a store in Harrison, New York, in just a few months - less than 20 miles from the restaurant).

    He's already reportedly working with the likes of Fresh Direct, Sweetgreen, and the Bon Appétit Management Company, which will put Row 7 products into places like Oberlin College and San Francisco’s Oracle Park.

    Seeds have been planted.  It will be interesting to see what grows.

    Published on: February 12, 2020

    Fast Company reports that online store Brandless, created less than three years ago to sell "simply branded household, personal care, baby, and pet products on the cheap," and in doing so compete effectively with Amazon, is going out of business.

    The story says that Brandless "is no longer taking orders and has laid off 70 people. The last 10 employees still working at the company will process the remaining few customer orders and 'evaluate any acquisition offers'."

    Fast Company points out that that this is "a dramatic end for a company that entered the market with an original idea … bringing the direct-to-consumer business model to the consumer packaged goods industry. They created the infrastructure to develop high-quality organic products but make them cheaper than what you might find at Whole Foods. They were able to do this by controlling their entire supply chain from manufacturing to the actual selling of the product, cutting out the middlemen along the way.

    "Originally, the company had a very limited assortment of products and sold every item for $3 to simplify the overwhelming number of decisions people make when walking through the supermarket or shopping online. Later, Brandless expanded into more expensive products but typically sold them for a multiple of $3."

    However, changes at the top of the company and demands from investors that it show a profit as soon as possible, may have pushed Brandless further and faster than it was prepared to go.

    Published on: February 12, 2020

    CO reports that "coming this year to more than 9,000 retail locations is a makeover of in-store messaging that harmonizes how CVS and its brands communicate with consumers, informed by shopper intent - whether they’re picking up prescriptions or paper towels … CVS’ new store signage, rolling out chainwide this year, will employ different brand voices depending on what shoppers are doing and where they are in the store. At the pharmacy counter, for example, the CVS brand voice will prevail; at other places in the store, a product supplier’s brand voice will dominate … The objective is to help shoppers find items faster and with greater confidence. The strategy is driven in large part by the extensive research CVS conducted to understand shopper behavior."

    Marcy Brewington, director, in-store marketing strategy, CVS Health, says that the bifurcated messaging will work this way:  "When customers go to pharmacy in the back of the store to pick up a script, they expect to hear from CVS, because CVS is a trusted authority. If we blasted supplier messages back there, it wouldn’t work for what they are looking for.

    "On the other hand,” she continued, “a lot of our customers are looking to buy by the brand. When they come into CVS, they expect to see the supplier brand voice coming through. We know our suppliers spend a lot of money [on marketing] to help customers understand what their products are and what the brand stands for, so we’ll allow them a place in the store to talk about that.”

    KC's View:

    If the messages are designed to inform customers about the products they are buying - being a resource of information as well as a source of product - then this is a good thing. 

    But I must admit that when I first saw this story, I thought to myself, when I go into the local CVS, I don't want or need harmonized messages.  Shorter lines would be nice.

    Published on: February 12, 2020

    …with brief, occasional, italicized and sometimes gratuitous commentary…

    •  The New York Times this morning reports that "four years after Chile embraced the world’s most sweeping measures to combat mounting obesity, a partial verdict on their effectiveness is in: Chileans are drinking a lot fewer sugar-laden beverages, according to study published Tuesday in the journal PLOS Medicine.

    "Consumption of sugar-sweetened drinks dropped nearly 25 percent in the 18 months after Chile adopted a raft of regulations that included advertising restrictions on unhealthy foods, bold front-of-package warning labels and a ban on junk food in schools. During the same period, researchers recorded a five percent increase in purchases of bottled water, diet soft drinks and fruit juices without added sugar."

    The Chilean initiatives, adopted four years ago, are described by the Times as "a bold gambit by the government of a country with some of the world’s highest obesity rates. Three-quarters of Chilean adults and more than half of children are overweight or obese, and health officials warned that the medical costs of obesity could consume 4 percent of the nation’s health care spending by 2030, up from 2.4 percent in 2016."

    The Chilean approach appears to have some imitators:  "Peru, Uruguay, Israel have adopted Chilean-style front-of-package labels; Brazil and Mexico are expected to finalize similar labels in the coming months, and a dozen other countries are considering them as well."




    •  Good piece in the Wall Street Journal about the new headquarters that Recreational Equipment Inc. (REI) is building in Bellevue, Washington, just miles from Seattle, where once it opens "workers will be able to walk from one room to the next through outdoor staircases and bridges. They can hold group meetings on rooftop terraces, or around a fire pit in a courtyard full of native plants. Skylights and oversize sliding doors will bring in sunshine and air … The main office building, a 380,000-square-foot structure around two courtyards, is oriented from east to west to maximize the amount of sunlight it gets. Next to it will be an indoor marketplace that will be open to the public and powered in part by rooftop solar panels."

    The story points out that "REI is one of a growing number of companies building unique headquarters meant to attract employees and market their brand. In 2017, Apple opened a massive, donut-shaped office in Cupertino, Calif., whose futuristic design earned it the nickname spaceship. Consumer-goods company Unilever PLC renovated its U.S. headquarters in Englewood Cliffs, N.J., to re-create the feeling of a New York City loft and appeal to younger workers."

    Sounds just like MNB world headquarters.  I have walls.  Windows.  I can see my yard from my desk.  A kitchen with a coffee pot.  I can walk the dogs frequently during the day.  We even have a couple of skylights and one sliding door.  Yup.  REI's and MNB's headquarters have a lot in common.

    Published on: February 12, 2020

    •  The Kellogg Company announced that Scott Salmon, its Chief Customer Officer, is leaving the company after 22 years there to become president of the pet foods division of Simmons Foods.

    Published on: February 12, 2020

    Content Guy’s Note: Stories in this section are, in my estimation, important and relevant to business. However, they are relegated to this slot because some MNB readers have made clear that they prefer a politics-free MNB; I can't do that because sometimes the news calls out for coverage and commentary, but at least I can make it easy for folks to skip it if they so desire.

    The New York Times reports that Sen. Tom Udall (D-New Mexico) and Rep. Alan Lowenthal (D-California,) are introducing in to their respective houses of the US Congress legislation that would make plastics manufacturers " financially responsible" for dealing with the waste their products create.

    It is, the Times writes, "one of the most aggressive, sweeping attempts to hold the plastics industry, beverage makers and other companies financially responsible" for their garbage. 

    "The legislation includes measures that the sponsors argue will increase the nation’s meager recycling rates, such as a national 'bottle bill' that would incentivize people to return their empty soda and water bottles by providing a 10 cent refund for each bottle. It would also require companies that produce and sell food service and plastic packaging to pay for the waste collection, a burden that now falls primarily on taxpayers."

    The Times notes that "the so-called Break Free From Plastic Pollution Act is a long shot, with no Republican co-sponsors and several provisions that seem sure to be nonstarters in an election year. But the legislative effort at the federal level, even if a politically unrealistic one, shows the growing sway of environmental groups that have pushed to stem the flow of plastic waste into the ocean."