business news in context, analysis with attitude

MNB Archive Search

Please Note: Some MNB articles contain special formatting characters, and may cause your search to produce fewer results than expected.

    Published on: March 20, 2015

    by Kevin Coupe

    Call it one for the books.

    There's a story in the Daily Journal about how libraries are working to keep themselves relevant in a digital world where books can be downloaded, almost anything can be researched online, and the public library is competing with both Google and Starbucks, especially for the attention of young people.

    The consensus seems to be that libraries have to reinvent themselves as community centers, offering "programs for all ages, technology like 3D printers and Skype, guest speakers and meeting spaces" and evening providing a "coffee house feel" its patrons enjoy. At a recent conference, "librarians also talked about improving communication and forming partnerships with government officials and residents to help improve programs and rally support at budget time."

    But in what I think was one of the better turns of phrase, one expert says that librarians have to turn themselves into "information retrieval specialists" ... essentially becoming a valued source of curation and context.

    Which, when you think about it, is exactly what smart retailers have to do.

    It is a big ocean of information and product out there. Think of great librarians and retailers as offering swimming lessons.

    (Okay, between "one for the books" and "swimming lessons," I know I'm mixing my metaphors. But you get my point...)
    KC's View:

    Published on: March 20, 2015

    The Washington Post has a piece this morning that purports to explain the social and business logic behind Starbucks' new "Race Together" campaign, which encouraged baristas to write those words on coffee cups and engage with customers in conversations about the nation's racial tensions.

    The campaign, the story notes, was described by Starbucks' official communications as being the singular brainchild of CEO Howard Schultz, but "the company's marketing of Schultz as America's thought leader on race — especially attached to a campaign that was quickly being called self-serving and oversimplified — struck many as strangely reverent, if not tone-deaf.

    "Kate Taylor, a writer for Entrepreneur, wrote the 'one voice' line painted Schultz 'as a visionary progressive for daring to discuss race — something others, especially people of color, haven't exactly been silent on in recent months or the last couple centuries'."

    The Post continues: "Schultz has built a reputation by inserting himself at the center of some of the country's most intractable debates. He has asked customers not to bring guns into the company's omnipresent cafes. In 2013, when an investor complained about the coffee king's support of a same-sex marriage bill, Schultz told him he was free to sell his shares and invest somewhere else.

    "Schultz's heart-on-his-sleeve progressivism has helped to elevate him as a warm paragon of corporate responsibility: One of his stated mantras is 'Don't be a bystander.' But it has also proven to be a shrewd business tactic, serving to humanize Starbucks' world-spanning cafe empire, which through its ubiquity has become an icon of American corporate imperialism."

    Schultz put it this way in an interview with "60 Minutes": "We're not in the business of filling bellies. We're in the business of filling souls."

    The Post writes that "Schultz' reputation for conscious capitalism resembles that of another billionaire who helms a beloved West Coast mega-firm: Apple chief executive Tim Cook, who has loudly supported workplace equality and fought against gay and lesbian discrimination. Both men have helped rewrite the traditional corporate playbook, which long advised dodging touchy topics in an attempt to protect the bottom line.

    "When Starbucks has been portrayed in unflattering light - as it was last year, when a New York Times story highlighted the chaotic life and volatile schedule of a young barista - Schultz has stepped into the position of the monolithic firm's corporate conscience. The story, he told the Seattle Times, had led the firm to a bit of soul-searching, adding, 'We are better than that, and we care more'."

    The "Race Together" campaign, the story notes, "marks perhaps Schultz's thorniest campaign to date. Many have panned the effort as a cursory and awkward awareness campaign little prepared to heal one of the country's deepest wounds." And "critics were also quick to point out that, though 40 percent of the company’s baristas are minorities, the leadership team Schultz is at the head of is overwhelmingly white."
    KC's View:
    This remains one of the most fascinating stories of the week. Last night, a little before 9, I got a call from my 88-year-old father, who wanted to know what I thought about the Starbucks campaign. (He's not very good on the computer, so he does not often read MNB.) We chatted about it, and I was surprised when my dad - who would never be described as politically progressive - said that he admired what Starbucks and Schultz were doing.

    I also got an email yesterday from one of my favorite people, Robin Russell, who wanted to challenge my thinking about this issue:

    It seems like a lot of the comments you’ve received about the Race Together campaign are critical or negative.  I think most people agree in principle that tolerance is a good thing, and would privately say that racism is still a problem.  Talking about it openly exposes it to the light of day - and what better place than the neighborhood coffee shop?  Especially when race issues are at the forefront of national news?

    Baristas are encouraged to talk about the issue - and even with corporate permission some will be afraid to be honest - but it’s not a requirement.  So why isn’t that a good thing?  Look at how the gay rights issue transformed from undercover to wide acceptance in a few years!  Howard Schultz may have a Messiah complex, but as a Starbucks shareholder and a U.S. citizen, I’d give him an A for effort AND results.

    Fair enough.

    Between talking to my dad and listening to Robin, I have to say that I'm re-evaluating my position on the Starbucks campaign. I still worry about baristas ill-equipped to have this conversation getting into all sorts of trouble by engaging with the wrong person about the wrong specific.

    But while I'm concerned that maybe Schultz has gone a bridge too far with this specific campaign, that's not to suggest that the bridge is not worth taking. Robin's right - the neighborhood coffee shop is a good place for this conversation take place. And while I may have concerns about messiah complexes and whether this initiative has been thought-through to the extent that it should have, maybe the world needs more CEOs who tilt at windmills.

    There are so many headlines and stories about racial issues these days that it sometimes is hard to believe we're living in 2015. But as Cervantes wrote in "Don Quixote," "Neither good nor evil can last for ever; and so it follows that as evil has lasted a long time, good must now be close at hand.”

    We can hope.

    Published on: March 20, 2015

    The New York Times reports that the Federal Aviation Administration (FAA) has "given Amazon a green light to begin testing drones, but it will most likely take years before the online retailer can start delivering packages from the air to peoples’ homes."

    The specific permission is "to conduct test flights of its drones outdoors, as long as the company obeys a host of rules like flying below 400 feet and only during daylight hours.

    "In a sign of how far Amazon has to go before its vision for its drone-delivery service is realized, the company’s drones for now will have to be operated by a pilot with a certificate to fly a private manned aircraft. Amazon has envisioned its drone-delivery service, which it calls Amazon Prime Air, to be autonomous, consisting of buzzing fleets of miniature helicopters soaring far beyond the view of Amazon warehouses."
    KC's View:
    Totally predictable. I've been saying all along that while there seemed to be considerable resistance among authorities to Amazon's proposed drone program, eventually Amazon would get its way ... though I have to admit that this happened faster than I expected.

    And now, I'll predict that while Amazon has far to go before its drone visions are realized, it remains a pretty good bet that it'll happen sooner rather than later. Because that's how change takes place these days.

    Published on: March 20, 2015

    Love this story, from Irish Central, passed along by MNB reader Mike Slattery.

    For the second year in a row, Kevin Westley of East Meadow, Long Island, decided to make a point of the fact that the local Walmart was selling St. Patrick's Day t-shirts that he believed denigrated Irish culture by suggesting that drunkenness was a primary Irish character trait and that St. Patrick's Day is all about drinking.

    "Last year," the story says, "after complaining about the offensive t-shirts to the managers at the Walmart stores in his area and to the company’s corporate office (and being told by each that the decision to carry the items was in the purview of the other), Westley decided to take matters into his own hands.

    "After carefully and thoroughly reading Walmart’s return policy, Westley went to three Walmarts on Long Island and purchased over $800 worth of the t-shirts. He left the tags on, kept the t-shirts clean (and out of public view) in storage boxes, and returned them after St. Patrick’s Day."

    Last year, the plan went off without a hitch. This year, not so much.

    "In February, Westley bought $400 worth of the questionable t-shirts from two Walmart stores. The third store he had visited the previous year wasn’t stocking them this time around, he was delighted to find, though he was uncertain if that was a result of his campaign." But this time the local Walmart was ready for him, and initially said that he could return shirts to one Walmart that had been bought at another Walmart. It took over an hour to process the returns, but eventually Westley was successful ... and he tells Irish Central that he plans to do it again next year ... unless, of course, Walmart decides to stop selling the merchandise.

    "Stereotypes can be vicious,” he said. “They can keep you from getting a job, or finding a place to live – not just the Irish of course, but everyone.”
    KC's View:
    Let's see if Walmart - and other stores - start changing their returns policies for seasonal merchandise ... which I suspect will be the natural response to a story like this.

    The thing is, Westley is right. That merchandise is insulting ... but somehow, because it's the Irish, it is not seen as such. But if you were to print up t-shirts with similar stereotypical observations about other cultures or races, it is a pretty good bet that the response would be outrage. And maybe a Starbucks coffee cup campaign.

    Don't mean to be humorless here. My response to this kind of stuff is to simply not be the stereotype. But I think Westley has a point, and it ought to be taken seriously.

    Published on: March 20, 2015

    Kantar Retail is out with a new pricing study, finding that "Target’s overall basket is 3.5% more expensive than Walmart’s and Walmart leads in each of the sub-baskets, with the strongest lead in general merchandise."

    Topline results of the one-stop basket assessment, include: "Target’s overall basket was 3.5% more expensive than Walmart’s.  Walmart led each of the sub-baskets, with the strongest sub-basket lead in general merchandise ... The price index between basket items was narrow, with 76% of the basket items priced within 3% of each other ... Both retailers’ baskets posted few promotional prices, with Walmart’s basket recording two Rollbacks and Target’s recording four temporary price cuts (TPCs) ... Target’s REDcard holders would have paid 1.6% less for the basket than Walmart shoppers would have paid."

    Robin Sherk, Director at Kantar Retail and contributor to the study, says that “Walmart’s basket asserted its low price positioning. This was achieved through an emphasis on everyday pricing, consistent with the retailer’s stated strategy. It’s important to note that Target’s prices were still very close to Walmart’s, reinforcing its continued commitment to price competitiveness.  We anticipate that over time, Target will place less focus on price points for single SKUs as it drives a solutions-based and basket-building approach."
    KC's View:
    Price competition is only going to get tougher, which is going to be good for shoppers if a little tough on suppliers, who are going to see retailers demanding better terms and more differentiated product.

    Published on: March 20, 2015

    The store brand identity design for Brothers Marketplace in Medfield, Mass., a new concept from the Massachusetts-based Roche Bros. supermarket chain, has won the 2014 International Visual Identity Award (IVIA) in the retail category.

    The concept was designed to consciously recall small European food markets, with "an emphasis on unique offerings in prepared foods, baked goods, seasonal and exotic produce, meats, cheeses and packaged foods from local producers," the award citation says. "Brothers Marketplace provides busy customers the ability to purchase grab-and-go items quickly while also offering an experiential culinary setting for lingering and savoring an array of seasonal foods."
    KC's View:

    Published on: March 20, 2015 reports that grocery-delivery service Instacart has announced a new exploratory partnership with A&P: "Instacart already delivered some items from A&P's SuperFresh stores, and with this trial partnership Instacart will  deliver the full assortment of SuperFresh items, including natural products, international cuisines, prepared foods and private-label items."
    KC's View:
    Wow. A&P is taking orders online? I'd heard they'd just taken their first delivery on a shipment of fax machines....

    Published on: March 20, 2015

    • The Boston Globe reports that "more than six years after a Walmart worker was trampled to death by a stampede of Black Friday shoppers, Walmart Stores Inc. stopped contesting a $7,000 fine by the US Occupational Safety and Health Administration, which found that the retailer failed to control shoppers.

    "Walmart has spent millions fighting the fine and a 2011 ruling by an independent administrative judge to uphold the penalty, following the death of Jdimytai Damour, a Walmart employee at the Long Island store."

    Walmart spokesman Kory Lundberg explained why: “We decided to put it behind us."
    KC's View:
    Millions of dollars to fight a seven grand fine? Imagine what they'll spend if the various probes into alleged bribes of Mexican officials indicate any wrongdoing...

    Published on: March 20, 2015

    • The Wall Street Journal reports that "egg-laying hens raised cage-free exhibit a wider range of natural behaviors than more-confined birds, but cage-free facilities have higher hen-mortality rates and lower air quality, according to food-industry-backed research published on Wednesday.

    "Cage-free hens can perch, nest and forage more than chickens reared in the two other major U.S. commercial hen-housing systems, both of which use cages ... The study found little difference in egg quality among the three systems, and no indication that hens in any of them experienced acute or chronic stress."

    • The Herald Tribune reports that "Publix Super Markets went on a buying spree over the past year, bagging six shopping centers in Southwest Florida for $86 million ... But the state's largest grocery-store chain is hardly finished — it has earmarked $1.3 billion this year to buy more centers, build new stores and remodel others.

    "The cash-rich company has become a major player in shopping center acquisitions, betting on the revival of the commercial real estate market here and across Florida."
    KC's View:

    Published on: March 20, 2015

    ...will return.
    KC's View:

    Published on: March 20, 2015

    Got a chance to watch Chris Rock's Top Five this week, and I think the best thing I can say about the movie - and this is high praise, in my view - is that Top Five is to Chris Rock is what Manhattan was to Woody Allen.

    Rock, who is one of our funniest and most trenchant stand up comics, wrote and directed the movie, and stars as Andre Allen, a former comic who has moved on to a film career that has become less and less relevant and successful. (Think Eddie Murphy, who cannot be happy about this movie.) Allen has become almost a parody of himself, desperately hoping that his latest movie (a drama that nobody wanted him to make and fewer people seem to want to see) will find an audience while planning a wedding to a reality show star and trying to stay sober. The movie for the most part takes place during a single day and is framed through an interview that he gives to a New York Times reporter played, luminously, by Rosario Dawson.

    To be clear, this film has moments that are extremely raw, at least by my standards - the language can be off-putting and there are a few scenes that seemed needlessly graphic. But I thought that Rock seemed intent on getting to some sort of essential truth about the creative mindset, and he largely succeeds ... while at the same time getting some very nice performances from a large supporting cast. (I particularly loved J. B. Smoove as his friend, aide and, in some ways, guardian angel ... he's just great, and plays a ton of comic and serious notes in very little onscreen time.)

    Top Five is a very good movie. Tough, relentless, observant, and funny. Not for everybody, to be sure, but worth your time.

    Excellent news this week from Amazon - "Bosch," the original 13-episode series that it produced, based on Michael Connelly's Harry Bosch novels, has been renewed for a second season.

    The announcement said that "'Bosch' has achieved the biggest debut weekend among all Amazon Original Series and is the most-watched title on Prime Instant Video, across movies and TV series in its first four weeks. Bosch currently has an IMDb rating of 8.5/10 and Amazon customer rating of 4.6/5 stars."

    A triumph for Amazon, for Michael Connelly, and, in the end, for the whole concept of differentiated advantages and content.

    I know I have no right to complain, because I've missed more than a month of winter this year with my various trips and speaking gigs. But I'm home in Connecticut now, in time for the first day of spring ... and the freakin' weather report is for snow.

    I. Am. Done.

    I'd like to go where the pace of life's slow ... I gotta go where it's warm...

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

    KC's View: