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    Published on: December 9, 2014

    by Michael Sansolo

    Looking for insights on how to deal with generation issues around job skills or how about omni-channel marketing? It may be time to contemplate what’s happening with everyone’s favorite seasonal cookie sales force - the Girl Scouts.

    Truth be told, I’m not a huge fan of Girl Scout Cookies. Sure, I have downed far too many thin mints (at times in a single sitting) and yes, I have bought my share of many of the Girl Scouts’ varieties. But my reason for buying the cookies is simple:

    For most of my adult life I’ve had a neighbor child who was a Girl Scout and I bought cookies to support their efforts.

    Now that the Scouts are going to high tech sales I think we have to really pay attention to this because the implications for business lessons are important - both for management and marketing.

    Let’s start with a point Kevin has made twice on this story: that the girls themselves probably know a whole lot more about building on-line sales than their troop leaders. There should be no arguing with that and every business manager could and should relate.

    The simple reality is that for the foreseeable future we will all be hiring young people who are better at technology than their managers. That’s the perk of being digital natives in a time of constantly evolving technology.

    There’s another side to this that matters to businesspeople. While younger people have unquestioned technology skills, they are clearly suffering some lack of interpersonal skills. One of the great challenges facing business is how to train future generations in basic people skills.

    So the balance the Girl Scouts are facing is one that all business can mirror: how do we blend technological and traditional skills by both teaching and learning at the same time. The challenge the Girl Scouts face is one every business needs to also consider.

    Yet we need also recognize that the balance of selling on line and door-to-door means the Girl Scouts are mirroring the challenge of omni-channel business balance that is clearly the way of the future. Only in this case, the Scouts may be way ahead of the trend.

    There’s a song taught to all Girl Scouts that may best explain omni-channel thinking:

    Make new friends and keep the old,
    One is silver and the other gold.

    That might be the anthem of omni-channel thinking right there.

    What all businesses seek to do is exactly what the song suggests: find new customers and keep the old because they literally are silver and gold. The challenge is finding a way to attract the new without disenfranchising the old.

    One of the biggest challenges of omni-channel operations is finding a way to create a seamless experience so the customer is delighted no matter how they transact business with you—on line, in store, by phone or even with a drone.

    The Girl Scouts may not be blazing the trail here, but their experience may well be worth watching.

    Pass the cookies…and the lessons!

    Michael Sansolo can be reached via email at . His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available on Amazon by clicking here. And, his book "Business Rules!" is available from Amazon by clicking here.
    KC's View:

    Published on: December 9, 2014

    by Kevin Coupe

    Continuing protests around the nation by people seeking a higher minimum wage, or at least income adequacy, are drawing attention to the plight of low-wage earners in this country, especially in the fast food industry. I think it is fair to say that the argument against wage increases is that such raises would be unsustainable, that they would make it harder for business owners to make money, and would result in fewer jobs, ultimately hurting the economy. The pro-argument is that higher wages help the economy, giving people money to spend, not to mention creating a climate in which people can afford housing, food, and clothing for their families.

    Of course, adding a bit of spice to this discussion is the fact that - for unrelated reasons - McDonald's continues to seek new ways to find relevance for a younger generation of consumers that would rather buy their fast food at Chipotle and Five Guys, abandoning Mickey D's in droves.

    Now, let's add this story for a bit of interest…

    On National Public Radio's The Salt, there is a story about Moo Cluck Moo, described as a "small but growing fast-casual burger and chicken chain" in suburban Detroit that has managed to find profitability despite starting pay for employees of $12 per hour.

    "The idea, according to co-founder Brian Parker, was to train everyone to multitask," The Salt writes on its website. "No one is just flipping burgers. All of the workers are expected to be jacks-of-all-trades: They bake buns from scratch daily, they house-make aioli and prepare made-to-order grass-fed burgers and free-range chicken sandwiches.

    "And, now, says Parker, the investment is paying off. Revenue is up at the chain's two locations. And workers are sticking around. And their pay now? It's up to $15 an hour. By comparison, a typical fast-food worker in the U.S. makes about $8 or $9 an hour."

    To be sure, the burgers there are six bucks apiece on average, more expensive than at many fast food joints. But the owners say they are building a brand, with an equal emphasis on sustainable sourcing of product and a sustainable supply of motivated, committed employees.

    Now, not everybody would agree that this is a template for how all fast food joints should pay their employees.

    Michael Strain, an economist at the American Enterprise Institute, argues that there is a chasm between Moo Cluck Moo and McDonald's, and that the two restaurant formats appeal to very different consumers and have very different financial models.

    Which is true.

    Of course, the question is whether McDonald's might be seen as more relevant if it spent less money on training because it had less turnover, and had more employees who felt and behaved as if they are an asset to the business, not just a cost. (It is a pretty good bet that the vast majority of fast food employees don't feel this way. Hell, it is a pretty good bet that a high percentage of all employees don't feel this way.)

    My point is that this is not as simple a calculation as some would like us to believe. There is at least some evidence out there that higher pay at lower levels of organizations does not necessarily lead to fewer jobs, does not necessarily lead to a weaker economy.

    Which is just a long way of saying that this is a discussion worth having. As the economy continues to improve, and the need for employees grows, I suspect that wage rates will go up simply because companies will have to pay more in order to attract good people. Suddenly, the argument about how higher wages hurt the economy will become moot.

    This not about making low income people rich, and not about rewarding people who don't deserve it. But it is about income adequacy, and a what income inadequacy means not just to the economy, but also to the culture.

    Again, this is a Eye-Opening discussion worth having.

    One other thing, if I may.

    Yesterday, I took note of a Reuters report that "US fast-food workers and supporters marched for higher pay in Chicago, Milwaukee and Boston" last week, "as demonstrations advocating for a $15 minimum wage and other labor rights in about 190 cities began around the United States." Organizers said that the protests "under a banner organization called Fight for 15 and aimed to include home care and airline industries, are the most expansive to date, increasing to about 190 cities from 150 in a similar protest in September. No arrests have so far been reported."

    Which prompted one MNB reader to write:

    It just struck me as a more or less revealing nature of reporting today that when a group of rich and influential people get together, trying to put forth a point of view, they have meetings, symposiums and special access to lawmakers, we cover the speeches and the ideas discussed. But when a group of ordinary citizens use one of their very few possible methods of gaining attention, a public protest that demonstrates support by gathering people together in large enough numbers to be significant, we assume there might be violence and it is considered normal reporting to comment “no arrests have so far been reported” – a statement which besides being utterly gratuitous, contains within it an assumption of future arrests being well- nigh inevitable.

    Shame on you for reiterating this useless and slanted addendum.

    I think this is absolutely legitimate criticism and an important point. I wish my radar had picked up on this, and that I'd been thinking more critically.

    The next time some fat cat lobbyist appears before a group of legislators to argue for or against some bill that would help an industry and line somebody's pocket with even more cash than they already have, maybe the "no arrests have so far been reported" line ought to be used … because it is a pretty good bet that there are higher incidences of corruption at that level of society than there is on the streets of major American cities where people are seeking some level of income adequacy.

    That would be an Eye-Opener.
    KC's View:

    Published on: December 9, 2014

    The Boston Globe reports that MillerCoors struck a deal with Drizly, described as a "Boston-based online alcohol delivery company", that will result in a cross-promotion. "As part of the partnership, Drizly delivered cases of Miller Lite for free over the past weekend in four of its nine service cities."

    This is not seen as a one-off. In fact, Drizly is using the MillerCoors arrangement as a model for an approach that "will allow other brands to access Drizly’s network of liquor stores delivering beer, wine, and liquor through its mobile app … While Drizly already is able to draw revenue through the delivery fee for its services, opening up another channel through corporate partnerships is even more impressive."

    According to the story, Drizly has been able "to differentiate itself in a completely untapped business sector that relied on older infrastructure, and one that has a quite frightening regulatory apparatus to overcome. The company’s proprietary mobile ID verification tool, which it allows its liquor store delivery partners to have access to, has not only made it possible to bring alcohol delivery to new markets very quickly, avoiding regulatory and bureaucratic muck and mire, but do so without very little competition.
    KC's View:
    There's a phrase in this story that everybody ought to pay attention to, about how Drizly was able to differentiate itself in a completely untapped business sector that relied on older infrastructure.

    Man, that just strikes me as a chorus that could be sung at the funeral of a lot of businesses.

    Published on: December 9, 2014

    Reuters reports that Amazon is getting into the "name your own price" business, adding a feature "that allows customers to bid for lower prices on more than 150,000 items, including fine art and rare coins, sold by third-party vendors.

    "The new feature represents a renewed attempt by Amazon to move beyond the fixed-price model on its site. In 1999, Amazon launched an online auction site, but the effort failed to compete with eBay Inc. Amazon went on to create a lucrative marketplace for third-party sellers which now accounts for about 40 percent of its quarterly unit sales."

    Amazon said that a survey of its shoppers revealed that "the ability to negotiate prices" would be an important driver in getting them to do more business on the site.

    The story says that "Amazon plans to expand the 'make-an-offer' option to 'hundreds of thousands' of items in 2015. Items that can be negotiated now include an 1863 document signed by U.S. President Abraham Lincoln sold for $150,000 and a mint-condition baseball signed by Babe Ruth and Lou Gehrig with a nearly $10,000 price tag."
    KC's View:
    It is hard for me to imagine that this would be a huge driver for Amazon. On the other hand, it is not hard to imagine that the folks at Amazon known more than I do.

    Published on: December 9, 2014

    The Financial Times reports that Tesco "has issued its fourth profit warning in the space of a year, slashing £1bn from a trading profit forecast it made less than four months ago as it approaches the end of what has been an annus horribilis."

    According to the story, "An adviser to Tesco said that the 'resetting of supplier relationships' in the UK was one of the main reasons behind the warning. Tesco’s trading statement outlined a 'new commercial approach' that would 'underpin stronger long-term relationships with our suppliers . . . ensuring that revenue recognition is transparent and appropriate'."

    Tesco currently is under investigation by the British government because of profit projections it made early this year that were too high because of both an understatement of costs and an overstatement of fees it would be receiving from manufacturers, with some suggesting that tits supplier relationships had turned toxic because of a high level of arrogance at Tesco headquarters.

    FT also writes that "the trading statement comes a day after the UK’s accountancy watchdog warned that retailers must provide much more clarity about the extent and nature of payments they receive from their suppliers in their audited accounts."
    KC's View:
    What a mess. It almost defies understanding, though I think that the whole arrogance and toxicity thing probably is key … and it goes back years.

    Published on: December 9, 2014

    The Washington Post reports that a US Government-approved drone test site has opened for business.

    "Textron Systems, a government contractor whose unmanned systems division is based in Hunt Valley, Md., said it received FAA authorization Monday to begin flying its Aerosonde unmanned vehicle over Virginia skies," the Post writes. "Located in Blackstone, Va., the site was one of six selected by the Federal Aviation Administration last year as part of a long-range effort to safely integrate drones into national airspace."

    The story notes that the drones are being tested for largely agricultural and environmental work, not the commercial deliveries for which companies like Amazon, UPS and FedEx would like to use unmanned drones.
    KC's View:
    I'd bet that commercial delivery drones will be tested there and elsewhere before long. After all, Amazon has already gone on the record as saying that if the US does not allow it to test drones, it'll have to do so outside the US … and I'm not sure anyone wants to see one of the great models of US capitalistic innovation looking offshore for places where it can be more innovative.

    Published on: December 9, 2014

    BrandIndex is out with a new look at Whole Foods' first national advertising campaign, concluding that it "has seen its Ad Awareness and Purchase Consideration scores tick up modestly, although Value perception has remained in negative territory."

    The report goes on: "While Whole Foods’ ad awareness rose about 3 points during the first few weeks of its campaign, value perception remained mostly negative and climbed no higher than where it had been as recently as September, and still below its peak 2014 levels in February. Another challenge: competitor Trader Joe’s Ad Awareness spiked shortly after the Whole Foods campaign, possibly blunting some of the intended message.

    "On the other hand, Whole Foods’ purchase consideration score has also increased modestly: 16% of consumers currently say that they would consider the brand the next time they are in the market for groceries. That compares to 14% prior to the campaign. Comparatively, Trader Joe’s current purchase consideration is 21%."
    KC's View:
    I think Whole Foods is the kind of company that understands that changes in perception cannot happen overnight, and that it takes more than a few weeks of a television ad campaign to change long-held opinions about the chain.

    This is a long-term play. It has to happen in advertising and marketing, it has to happen in the stores, and it has to happen in the sometimes slow-dawning consciousness of consumers. But as I say, I think Whole Foods is the kind of company that understands that.

    Published on: December 9, 2014

    Fortune has an interview with PepsiCo CEO Indra Nooyi in which she takes issue with those who suggest that her company ought to split itself into two, breaking apart its food and beverage businesses.

    According to the story, "Nooyi argues that the company’s broad portfolio of products and size make it even more important with retailers desperate to bring shoppers into their stores."

    “Our portfolio works, we have scale," she says. "We go to large retailers and talk about how to drive our collective business. We generate a lot of cash for retailers because we are in high velocity categories, and so retail CEOs want to sit down and talk with us … “Last week, I was at a meeting with Wal-Mart. I don’t think the Wal-Mart CEO is going to spend time with me if PepsiCo is not so big and so important.”

    • The Associated Press reports that Walgreen "is testing a new telemedicine service that lets patients see a doctor without leaving home or visiting any of the drugstore chain's clinics … patients in California or Michigan can now contact a physician around the clock through Walgreen's mobile application for smartphones or tablet computers.

    "The virtual visits cost $49, and doctors can diagnose and treat problems that aren't emergencies and don't require a physical exam, such as pink eye or bronchitis. The physicians, who are licensed to practice in the patient's state, also can write prescriptions."
    KC's View:

    Published on: December 9, 2014

    • Fairway Markets said yesterday that Howard Glickberg - grandson of the company's founder, longtime CEO and most recently Fairway's Vice Chairman of Real Estate Development - is retiring from the company, though he will remain on the board of directors.

    Fairway, which now has 15 stores in the New York metropolitan area, was sold in 2013 by the Glickberg family to Sterling Investment Partners, a private equity group.
    KC's View:
    Forgive me, but I actually was sort of surprised that anyone from the Glickberg family was still involved with Fairway, which seems to have hit a series of New York-sized competitive potholes since the sale to Sterling. In fact, I was reading a piece in the other day suggesting that the speculation in the financial community is that Fairway's best bet is a takeover by another retail chain. And let's face it … private equity groups generally are in the business of buying and selling, not keeping and growing.

    The Institutional Investor piece also pointed out that Fairway is suffering from strong competition, financial demands that are out of whack because of too-high executive compensation, and higher costs related to rent and high product costs. All of which points toward a business model increasingly untenable.

    Maybe Glickberg - who was running real estate development at a time when Fairway had put its expansion plans on hold - is getting out while the getting is good.

    Published on: December 9, 2014

    Yesterday, MNB took note of two McDonald's-related stories.

    One has to do with Kraft planning a major campaign to back the national rollout of McCafe bagged coffee, which is being introduced in partnership with McDonald's.

    The other had to do with McDonald's latest attempt to be relevant - the rolling out of a customized sandwich program to some 2,000 stores around the country.

    One MNB user wrote:

    I wonder if the Executives at Kraft read your observation about McDonalds? I found it kind of ironic, I first read about McDonald’s responding to  declining store sales, falling stock prices and shrinking base of younger customers and then I read about Kraft creating a major partnership with a company that has declining sales and shrinking base of younger customers?

    Good point. I'm not sure that McDonald's is the basket where I'd be putting any of my eggs.

    I also think that retailers ought to be thinking twice about stocking coffee branded with the name of one of their major competitors. I know this is an argument that I've advanced before, and that not everyone agrees with me … but I think that this stuff is hardball, and retailers ought to be willing to say "no" sometimes. Better they should promote their own retail brand, and not that of the competition.
    KC's View:

    Published on: December 9, 2014

    In Monday Night Football, the Green Bay Packers defeated the Atlanta Falcons 43-37.
    KC's View: