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    Published on: September 20, 2016

    by Michael Sansolo

    All of us know a whole lot about many things, but the reality is that we simply cannot know what we don’t know. Sounds pretty Zen doesn’t it? The reality is that it can create fatal blind spots in business.

    I got a massive dose of this last week while moderating a fascinating conference for the Category Management Association (CMA), where some of those things we don’t know seemed pretty frightening.

    For example, the CMA meeting featured Kevin Hartman, a Google executive discussing analytics, who dropped two bombs of new knowledge on me. The first is that the cost of making calculations has declined from multi-millions to pocket change in just a few years. That means the ability to analyze data has grown beyond belief.

    Plus, Hartman gave us the shock and awe treatment by explaining that all our current technological expertise is merely scratching the surface; maybe one percent of what is actually possible. If that’s the case, I’m both excited and terrified to think what even 20 percent might be like.

    This is another simple reminder that no matter how advanced you believe you or your company are today, you have plenty more to do. Plenty!

    For instance, the main topic of the conference was the unveiling and explanation of Category Management 2.0, a topic that should be central to any company interested in serving today’s consumers. Category management, which hopefully you already know well, created a new level of marketing and product assortment discipline in the retail food industry, by urging companies to consider the role that each and every product plays.

    Category Management 2.0 takes that to a new level, urging the industry to build even greater skills by using analytics to both better understand and serve consumer need states. In short, it’s a focus on how to best to serve the shoppers you have, based on who they are and why they are shopping at that moment.

    Sure it sounds hard, but today’s tools make it possible. Gordon Wade, one of the driving forces behind the original category management and 2.0 movements, explained why it’s time to step up. As he reminded the crowd, the original category management effort pre-dates Facebook, Twitter, iPhones and even Google, among other things.

    So yes, category management was an excellent effort for its time, but the times, the tools and the capabilities have changed.

    It reminds me of a point we make here constantly: what was good enough is simply no longer good enough.

    Interestingly, one of the conference’s guest speakers gave the new effort a powerful rationale by telling a story that had nothing to do with category management.

    Daymond John, best known today as one of the regulars on TV’s Shark Tank, told the story of his personal rise to riches. John explained how FUBU, the small clothing line launched in his boyhood home, got an incredible boost thanks to the ignorance of a major global retailer.

    Back in the 90s, rapper LL Cool J, a neighbor of John’s, was featured in a Gap commercial back wearing a FUBU hat even though the Gap didn’t sell the item. Basically no one on the commercial team understood that the hat was from a non-affiliated independent company. A bunch of people got fired and FUBU (and John) got a massive launch toward success.

    As John explained in another part of his speech, “Poverty of the mind is permanent.”

    In this age of rapid-fire analytics, we can amend that slightly to say it is both permanent and fatal.


    Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com . 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: September 20, 2016

    by Kevin Coupe

    It has gotten a lot of attention in the media, but one almost cannot focus on such acts of kindness too much.

    It was Sunday night in the Chelsea neighborhood of New York, where an apparent terrorist attack resulted in an explosion rocked several blocks and resulted in the wounding of 29 people. As first responders came to the scene, an employee from a nearby Starbucks who identified himself only as Jermaine also showed up, and he passed out bags of pastries and cups of coffee to the police and fire department personnel at the scene.

    "I wish I could give a little more," Jermaine told the officers.

    But Jermaine's act was more than just an act of kindness. It was proof that even in moments that can reflect the worst of what humanity can do, there is the opportunity for people to show the best of themselves.

    Sort of like the Standard High Line, a local hotel, which CNN reports "opened up its rooms to residents living within the attack area. In a Facebook post, the hotel said residents would proof of address could also eat for free."

    It was an Eye-Opener.
    KC's View:

    Published on: September 20, 2016

    Reuters reports that Sears Holdings plans to close 64 Kmart stores before the end of the year, with liquidation sales to begin in specific locations by the end of the week. The timing suggests that Sears believed that the stores were so irredeemable as to be not worth keeping afloat for the holidays, just in case they could be turned around.

    "Thousands" of employees will be laid off, the company said.

    The closings are in addition to the 68 Kmarts and 10 Sears stores that it announced back in April that it would close. As of the beginning or the year, Kmart had 941 stores and so it appears that by the end of the year it will have closed more than 14 percent of its fleet, while losing billions of dollars to other bricks-and-mortar and online retailers.

    According to the story, "Sears said it would provide an updated store count in their next quarterly filing."
    KC's View:
    The way things are going, they're going to be able to count all their stores on the fingers of two hands. But, they're only going to need two of those fingers to show investors how the company feels about them. (Which is roughly how it seems to feel about customers.)

    It was just last week, when confronted by analyses suggesting that Kmart was facing inevitable bankruptcy, a spokesman said, "We are an asset-rich enterprise with multiple resources at our disposal to fund our transformation..."

    My question is, transformation into what? The guess here is that virtually nobody at Sears/Kmart has any idea.

    I'll say it again: Dead company walking.

    Published on: September 20, 2016

    The Associated Press reports that Walmart has completed its $3.3 billion acquisition of Jet, the year-old online retailer that it hopes will be able to jump-start its own e-commerce business and deliver on its ambition of catching up with Amazon.

    According to the story, "The hefty price tag shows how heavily Wal-Mart is willing to invest as it tries to increase online sales that totaled $13.7 billion last year — still just a fraction of the company’s total annual revenue. Wal-Mart has said it will incorporate some of Jet.com’s 'smart technology' that lowers prices in real times by looking for ways to cut costs. Wal-Mart and Jet.com will operate as separate brands, though."

    Marc Lore, who founded Quidsi and diapers.com and sold them to Amazon before launching Jet and selling it to Walmart, will stay with the company, running the e-commerce business and report directly to Walmart CEO Doug McMillon.
    KC's View:
    That's a lot of money to spend on a business that hasn't yet proven itself, and that almost certainly has a culture that will not fit in naturally with Walmart's.

    The question is whether Lore will be given enough running room to really remake Walmart's online business, and if he can do so in a way that will compete with Amazon effectively. I still think that the odds are pretty good that before long they'll move all the online business operations from Silicon Valley to Arkansas ... that they'll integrate Jet into Walmart's online business rather than keeping them separate, and that Lore stays as long as his contract is for, and not a day longer.

    Published on: September 20, 2016

    Bloomberg has a story analyzing how Amazon is trying to position its Echo/Alexa technology as being the "digital brain at the center of our automated homes," and is working to outmaneuver companies such as Google, Microsoft and Apple to be the go-to company in this regard.

    The broader ambition, the story says, "is to connect users to Amazon shopping and to become a home operating system through connections to lights, door locks, refrigerators and any other imaginable thing that can be implanted with a computer chip ... If the smart home ever becomes a reality — and tech history is littered with predictions of digital revolutions that never happened — it’s premature to pick winners and losers. Amazon’s biggest disadvantage is that the smartphone is still the center of the world’s digital life, and that makes smartphone-based home automation approaches like Apple’s and Google’s the better bet."

    The Bloomberg story suggests that while Amazon has a goal of selling 10 million Alexa-based devices next year, that is small potatoes "compared with the 1 billion Apple devices in use worldwide.

    "But when Amazon devotes itself to a mission, it can bulldoze everything it sees. The key to becoming a dominant operating system is persuading as many other companies as possible to tailor their products to your operating system, just as Microsoft did with Windows and Apple with iPhones. That’s what Amazon is doing by slowly convincing makers of air conditioners and thermostats and home-security cameras to devise products that work with Amazon’s home software brain."
    KC's View:
    It is important to contrast Amazon's approach with Walmart's. Amazon has an ecosystem-centered view of the world that puts it potentially at the center of everything. Walmart wants to sell more stuff online.

    I always think that fortune favors the bold, or, in the original Latin, Audentes Fortuna iuvat.

    Of course, if I remember my ancient history correctly, the guy who first said that sailed his boat so close to Mount Vesuvius that he died when it erupted.

    So there's a downside. I'm just saying.

    Published on: September 20, 2016

    The Associated Press reports that there is a proposal on the table in Seattle that would legislate how retail and foodservice businesses deal with hourly employees, "including requiring them to schedule shifts two weeks in advance and compensate workers for some last-minute changes."

    The story says that "the mayor, city officials and labor-backed groups are targeting erratic schedules and fluctuating hours they say make it difficult for people to juggle child care, school or other jobs, to count on stable income or to plan for the future.

    "Seattle's 'secure scheduling' proposal also would require retail and fast-food companies with 500 employees globally to compensate workers with 'predictability pay' when they're scheduled but don't get called into work or are sent home early; provide a minimum 10 hours rest between open and closing shifts; and offer hours to existing employees before hiring new staff."

    The AP goes on to note that "it's the latest push by a city that has led the nation in mandating worker benefits. Seattle was among the first to phase in a $15 hourly minimum wage, mandate sick leave for many companies and offer paid parental leave for city workers."
    KC's View:
    For me, this new proposal is definitely a bridge too far, and if Seattle goes there, it runs the risk of undoing a lot of the economic growth that it has experienced.

    Such rules don't just undermine any ability for a retailer to have any flexibility, but it also actually hurts the employees who want to be more flexible because it gives them a differential advantage. It actually sounds like if someone were to cal in sick, the business would be financially penalized for calling someone else in to replace them. How does this make sense?

    This is just nuts, and is way too intrusive.

    Published on: September 20, 2016

    The Boston Business Journal reports that Beantown area Whole Foods stores are partnering with a local startup, Baroo, to offer pet concierge services out of a mobile truck.

    According to the story, "The truck offers on-site services ranging from baths, coat brushings, nail trims and other grooming services," but this is no small venture. "The startup, which says it offers high quality pet services ranging from in-home pet sitting to feedings, walks, playdates and nail trimmings, has raised $1.12 million out of a planned $2.7 million, according to a recent regulatory filing with the Securities and Exchange Commission. The groomers and pet caregivers that Baroo works with are required to complete an FBI background check and are also bonded and insured."

    Baroo also does business in Washington, DC, and Chicago, but does not have a Whole Foods connection in those markets. Yet.
    KC's View:
    Needing to find people who have passed an FBI background check to arrange play dates for one's pet is what I call a first world problem...

    But hey ... if it gets more people to shop at Whole Foods, that's not a bad thing. And to be honest, if I could drop off my dogs at a mobile truck for a quick bath and nail trimming while I did my food shopping, that might influence which store I choose to patronize.

    Published on: September 20, 2016

    Ahold USA said yesterday that its retailer divisions - Stop & Shop, Giant Food of Landover, Giant Food Stores of Carlisle, Martin’s and online grocer Peapod - have together achieved their goal of eliminating one billion grocery bags from the environment, a goal that the company set in 2011.

    According to the announcement, "Over the past five years, Ahold USA’s retail divisions have encouraged customers to remember to bring reusable bags with them each and every time they shop. In addition, better bagging efforts were introduced to division cashiers and baggers to reduce the number of plastic and paper bags used by ensuring they are properly filled and avoiding extra bags unnecessarily."

    Marissa Nelson, senior vice president of responsible retailing and healthy living, Ahold USA, said that this was a milestone that was part of a broader goal - to "achieve zero waste by 2020 through diverting 90% or more of their total waste from landfills."
    KC's View:

    Published on: September 20, 2016

    • Albertsons said yesterday that it will ramp up what it described as "click-and-collect and delivery options for customers across Chicago, New England, Philadelphia and West Texas markets," via banners that include Jewel-Osco, Shaw’s, United, ACME Market and Star Market.

    Shane Sampson, the retailer's chief marketing and merchandising officer, said that the goal is to "bring our eCommerce offering to market quickly, while still providing a best-in-class user experience."

    Albertsons said that its new e-commerce offerings will be powered by the MyWebGrocer platform.

    Full disclosure: MyWebGrocer is a longtime and valued MNB sponsor.
    KC's View:

    Published on: September 20, 2016

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

    Reuters reports that while British grocery sales rose 0.3 percent in the most recent quarter, every one of the country's major supermarket chains saw sales declines - Tesco was down 0.2 percent, Sainsbury was down 1.4 percent, Morrisons was down 2.3 percent, and Walmart's Asda was down 5.4 percent.

    Compare that to discounters Aldi and Lidl, which, the story says, recorded "sales growth of 11.6 percent and 9.5 percent respectively, and winning market share."

    The only bright side for a company like Tesco, Reuters suggests, is that its sales decline was the smallest since early 2014 ... which may foreshadow a comeback for the company. Maybe.

    The story also notes that the entire supermarket sector was helped by alcohol sales that were up 8.5 percent for the last four weeks of the quarter, "as Britons bought sparkling wine to celebrate the country's sporting success at the Olympics and Paralympics."

    They're also probably drinking a lot as a way of coping with the whole Brexit thing...


    Fox News reports that US Agriculture Secretary Tom Vilsack has announced the launch of what is called the US Department of Agriculture Branded Products database, described as "a free online resource that contains nutrition details of more than 80,000 name brand prepared and packaged foods." It is expected that this database eventually will be expanded to include information on as many as 500,000 products.

    Vilsack also announced "an update to the Global Agricultural Concept Scheme (GACS), a thesaurus of over 350,000 terms in 28 languages that establishes common terminology across agriculture and nutrition worldwide. GACS is a collaboration between USDA, the FAO and the Centre for Agriculture and Bioscience International (CABI)."

    The goal of these initiatives is "to share agricultural data in an attempt to eradicate hunger," a goal that has been set by the United Nations as achievable by 2030; the UN estimates that close to 800 million people around the world suffer from hunger or malnutrition.
    KC's View:

    Published on: September 20, 2016

    We continue to get emails about the Albertsons baker who got a lot of attention when she refused to inscribe a pro-Donald Trump statement on a birthday cake; I think such refusals are silly, but got challenged by a reader who asked if I'd ever turned down advertisers for ethical or moral reasons. I said I had, but that it is different.

    One MNB reader agreed with me:

    In my opinion the crux of this cake decorating issue is who is ultimately the responsible party, meaning who owns the joint.   You own MNB and can do as you wish with accepting or rejecting advertising.  You gain or lose by your decisions.  The baker is not ultimately responsible.  Albertsons is ultimately responsible and gains or loses based on what the employees do or say.  If the baker owned the store then he can choose whether or not to decorate a cake because he is ultimately the responsible party.  Having strong convictions is fine but when you are employed by someone their opinions on operations should trump the employee’s.  If the employee doesn’t agree with that then he can and should find a new employer or go into business for himself.

    From another reader:

    Okay, so put yourself in the shoes of this poor Albertsons bakery employee.  I could envision the quandary. They were potentially damned if they do and damned if they don’t.  If they HAD done the Trump cake deed, they likely would have dragged their employer thru a variation on a press mess but would have more closely aligned Albertsons to a given political sentiment and then lost their job over the decision to proceed.  I think they took the safest road there was in a nasty no win jungle.  Both roads had alligators.

    I disagree. If the baker had inscribed the cake with a pro-Trump statement, nobody would've noticed, and the national media wouldn't have been all over the story.

    I continue to maintain that the baker should've just done the inscription, and then voted for Hillary.




    On another subject, I got the following email from MNB reader Edward Zimmerman:

    Just returned from Portland, OR – Lake Oswego to be precise and visited the new 365 store.

    I found the design utilitarian and cold. More important, I went specifically to have dinner and check it out. Arriving at 6:15, I found the hot bar picked over and looking dry and leftover. I literally walked around for 15 minutes trying to decide what to eat. I settled on a packaged Chicken Caesar, dry, tasteless. A few chicken wings, unimaginative, and some kind of pulled chicken meat – a cross between BBQ and Indian – not memorable. Finally, I selected some Hummus – very good and pre-cut carrot and celery sticks which tasted old and somewhat reminiscent of bleach.
     
    Whole Foods has a lot of work to do to make me return – C+ at best.





    Chiming in on the continuing debate about bricks-and-mortar retail vs. online, one MNB user wrote:

    I might suggest a counter argument to your perspective.  Brick and mortar HAS a differential value that they can exploit as they discover WHY e-commerce isn’t as strong for food and beverage.  I believe it relates to two distinct issues, selection of fresh and complexity of fulfilling total grocery requirements.  That said, I also chuckled a bit about using The Ed Sullivan Show as a reference point for discussing millennials…..thanks for the laugh, even if it was unintended!



    On the subject of Amazon expanding into the college bookstore business, MNB user Joe Lucas wrote:

    Amazon continues to break through the monopoly of the college book sale and good for them. My son at K State regularly “rents” books for minor classes and the experience has been, like most with Amazon, cost effective, timely, easy, and returns of the book are a snap.  Unfortunately, he still has to pay $250.00 for the engineering books…but it’s a start!

    The story we quoted about the Amazon campus store said that "in the campus store where the textbooks used to be, there are now adult coloring books, racks of university-branded polos and windbreakers and three narrow bookshelves displaying assorted novels. The rest of the store is a vibrant collage of spirit wear and school supplies: backpacks and baseball caps; pompom hats and striped scarves; notebooks and correction fluid."

    To which MNB reader Mark Woodgerd responded:

    Correction fluid? What's that?

    This made me laugh out loud ... because of course, there is an entire generation that has no idea what correction fluid is.

    Just to confirm, I asked my 22-year-old daughter yesterday if she had any idea what correction fluid was, and she responded, "Is it sexual?"

    Which made me laugh even louder.




    yesterday, MNB took note of a Business Insider piece about what might be called the creeping robotization of the fast food business, and the likelihood that this will extend to supermarkets and other retail segments. In many ways, the story suggested, much of this is being driven by Amazon, where founder/CEO Jeff Bezos has a famous antipathy toward people in business, often saying that his goal is to automate everything possible and depend on algorithms to drive marketing and merchandising decisions. This can drive cost out of the business, which puts the pressure on other retailers to do the same.

    I commented:

    Inevitably, this story will generate emails from people who will suggest that it proves, once and for all, that Amazon is evil, and that its growth is promoting trends that will bring about the downfall of America.

    To which I can only suggest, somebody has to build and program the robots.

    And while I certainly don't think that it is a good thing that people may be losing their jobs to robots, I think it is important to not just embrace progress, but to think about one has to adjust in order to be relevant within a changed society.


    One MNB user responded:

    Yep, you are correct. Undeniable proof Amazon is the American evil and the greatest killer and future killer of American middle income jobs and the middle class. They are bad now, but the future will be worse…not to mention the de-socialization of America on top of destroying jobs.
     
    I also find it a bit sad/disturbing that some will simply brush this evil off very naively saying something to the effect of “simply make yourself more relevant.” While undeniably important, if we don’t balance the need for technology advancement with the need to preserve jobs, the future looks dim…BTW, do robots pay Social Security taxes?


    I think we simply have different definitions of "evil."

    Another MNB user wrote:

    This sounds great until someone inevitably develops computers and robots that can program and assemble themselves.  I'm all for progress, but one does have to wonder at what point does an automated future begin to do more harm than good?

    And MNB reader Mark Boyer wrote:

    Don’t you think the robots will eventually be able to build and program more robots themselves?

    Well, we know this is going to happen. The system is called Skynet, and when Judgement Day happens, we're all screwed.




    We quoted an Australian news story yesterday that used the word "spruiking," which I said I'd never before heard. It is Australian slang that means "to speak in public," especially in the case of a salesman or showman.

    My education has been continued by MNB reader Gary Harris:

    So how surprised would you be to hear that ‘spruiking’ is a word we’ve used at Wegmans for almost 30 years?
     
    From my fuzzy memory archive, here’s where I think it started with us. It seems that back in late 80’s or early 90’s, a grocery store (Big Fresh, maybe?) in Oceania (don’t remember if it was an Australian or a New Zealand chain) had a TV ad campaign that featured a senior employee spruiking produce. This 1st ad included hawking to customers, clever one liners, and juggling. Much fun in the produce department.

    The 2nd ad featured him having to teach spruiking to a new hire, a young aboriginal man who watches with a detached, skeptical expression as the older employee does his best to impress. The 3rd and final ad has the senior employee tossing an orange (or maybe a mango) to the young man and encouraging him to try it. The surprise ending is the young man launching into a cleverly written and well-executed break-dance while spruiking the product, to the senior employee’s delight.
     
    So Spruiking has been in our cultural vocabulary for several decades. We fell in love with the ‘theater’ aspect of engaging customers by entertaining and having fun with them, and of course the story of the ad campaign is something that’s apparently timeless, because it still resonates when we think of the generational and cultural differences between these employees and how they were able to go right past tolerance to appreciation. Sure wish I could find that video!


    You brought back memories. I think it was Big Fresh in NewZealand ... and I shot a video profile of that store maybe 30 years ago. And that's exactly what they were doing, though I don't remember the word.

    I'll have to see if I have that old video in the basement...

    By the way, I got another note about this story ... specifically about the sentence in which I wrote that it was a word that "I'd never heard before."

    An MNB writer asked:

    Do you always dangle your prepositions?

    Not always. But sometimes.

    There actually is a school of thought that suggests that prepositions indeed can be dangled, and that this particular grammatical rule is nonsensical.

    No less a writer than Winston Churchill felt this way, once writing, "This is the kind of nonsense up with which I will not put."

    I'm with him.

    The question did remind me of a joke that my dad used to tell, about the guy who enrolled at Harvard and on his first day stopped a fellow student and asked, "Where's the dining hall at?"

    The student looked down at the questioner and said, "At Harvard, we do not end sentences with prepositions."

    To which the new student replied, "I understand. Let me ask it again. Where's the dining hall at, ass----?"

    Just thinking of my dad telling that joke makes my morning.
    KC's View:

    Published on: September 20, 2016

    In Monday Night Football action, the Philadelphia Eagles defeated the Chicago Bears 29-14.
    KC's View: