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    Published on: November 17, 2016

    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, go to the MNB Channel on YouTube.

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

    I am, to be honest, a creature of habit, at least when I'm home and not gallivanting around the country. I've been jogging the same 4-6 mile route for the 32 years that I've been living here, I take pride that I have a watch that I've been wearing since 1980, and for most of the years that I've lived here, I've done most of my food shopping in the same stores.

    There have been some variations, to be sure. Amazon had an impact on where I bought non-perishables and non-edible groceries. But when it comes to meat and seafood and produce and bakery and edible grocery ... well, I've rarely deviated from a well-worn path, spending $150-$200 a week in the same stores for all these years.

    Until recently.

    You see, my town got something new. A small, independently owned butcher shop. And, especially because it is within walking distance of both my home and office - actually pretty much midway between them - we decided to try the Darien Butcher Shop.

    And one of the things we found is that while the meat is a little more expensive, we actually waste a lot less. Almost every week we'd throw meat away because it would pass the expiration date before we were able to use it. But no more. Now we buy only what we are going to eat that day and nothing more. So in the end, we're actually spending less.

    More importantly, my 22-year-old daughter loves the place and the people who work there. Since she got out of college and started working, she's actually begun doing more of the cooking at home, and she's turned to these folks for guidance and suggestions, and it ends up she makes one hell of a steak.

    It isn't just the butcher that has changed our habits. Just across the parking lot, there is a really good fishmonger, where they also make amazing sushi. And around the corner, there's a small, independently owned wine shop. We go there, too, because they offer interesting wines and lot of guidance, stuff we can't get at the big box liquor stores.

    Now, these kinds of stores won't necessarily be successful in every community, and they won;t be for every customers. But I do think they represent a different kind of competition that traditional supermarkets need to think about ... because they are doing a very good job of being a resource for information in addition to being a source of product. They are coming at the challenge of attracting consumers from a different angle ... creating relationships with consumers based on knowledge, experience and service.

    I think it is worth noting.

    And one other note. As my habits have changed, whether moving over to Amazon or the local butcher shop, I have not seen one iota of evidence that the retailers with which I used to do business have noticed. No emails. No specials. No promotions aimed at luring me back. Nothing.

    It is as if they don't even know that business is being siphoned off. In many ways, it seems to me that not knowing that new competition is having an impact is even more dangerous than having to face off against new competition.

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

    KC's View:

    Published on: November 17, 2016

    by Kevin Coupe

    The Washington Post this morning has a story about how a group of Chinese construction and furniture companies in China has approached the issue of how to incentivize and motivate employees.

    Make them eat worms if they don't hit their goals and benchmarks.

    That's right.

    According to the story, at a recent meeting "a leader of the sales group called out the names of about a half dozen employees who had not achieved their sales goals at a public event and then made them swallow live worms. Fortunately, alcohol was also provided. Unfortunately, a pregnant woman was part of the group and was unable to comply with the request – but thankfully a kind man stepped in to take her place."

    All of which sounds really bad. But there's a kicker, according to the Post:

    "Amazingly, the employees accepted this punishment because…get ready…they set it themselves. To them, the mealworm threat is encouragement to work harder."

    However, even in China there are lawyers standing up to say that such policies are inappropriate and a violation of Chinese labor laws.

    I'd be a little careful about going to court on this one, though. Because if you lose, who knows what the punishment will be?

    Probably an Eye-Opener.
    KC's View:

    Published on: November 17, 2016

    Coming after a contentious election season (that sometimes seemed to last a decade) in which emotions ran high, we have a little something for you this morning that should make you smile.

    John Lewis, the British department store chain, apparently is known for its Christmas commercials ... and it is getting a lot of attention for this year's edition. (Attention for an ad is a good thing. Other companies are even producing parodies ... which is even better, because everybody knows who made the ad that is being parodied.)

    All I can say is, the original made me laugh out loud. Enjoy.

    KC's View:

    Published on: November 17, 2016

    The Wall Street Journal this morning reports that one of Amazon's go-to-market advantages - creating a marketplace on its site that allows third party sellers to use it as a platform to sell their goods, generating more than 40 percent of unit sales for Amazon - is finding imitators among its competition.

    "Crate & Barrel, taking a page from Inc., is partnering with outside sellers to boost the number of items available to shoppers on its website," the story says. "The home-goods chain this week is adding items to its online assortment, such as kitchen tools and other small appliances, that it won’t handle or ship. Wal-Mart Stores Inc. and Macy’s Inc. are among the other retailers that have opened their e-commerce sites to third parties as a way to expand their reach with consumers."

    According to the story, "More than 250 retailers have added this type of capability in the past couple of years, including Belk Inc., Saks Fifth Avenue and Lord & Taylor, says RevCascade, which developed a platform that connects hundreds of retailers and vendors. Department stores may use it to offer extra sizes, colors and brands of clothes and accessories, while a sporting-goods store may offer specialized equipment that appeals to a limited audience."
    KC's View:
    The Marketplace always has been an enormous advantage for Amazon, and one of the things that it does for any retailer that adopts the approach is provide a customer-centric experience that is much broader in scope than they might be able to provide on their own.

    Published on: November 17, 2016

    Add PepsiCo to the list of companies getting a little bit of blowback in the wake of last week's election and its reaction to the results.

    The Washington Post reports today that PepsiCo CEO Indra Nooyi weighed in on the outcome at a conference late last week. here's how the Post frames the moment, in which Nooyi was being interviewed onstage by Andrew Ross Sorkin of CNBC and the New York Times:

    "Nooyi was first asked by Sorkin how she felt after the election results came out. 'Do you have a box of tissues here?' she said, laughing slightly before turning serious and congratulating Trump on his win. 'The election is over. I think we should mourn, for those of us who supported the other side. But we have to come together and life has to go on.'

    "Nooyi told Sorkin that she had to answer questions from her daughters and employees following Election Night. 'They were all in mourning,' she said. 'Our employees are all crying. And the question that they're asking, especially those who are not white: 'Are we safe?' Women are asking: 'Are we safe?' LGBT people are asking: 'Are we safe?' I never thought I'd have had to answer those questions.'

    "Yet she also spoke of unifying the country and acknowledging the democratic process. 'I think that the first thing that we all have to do is to assure everybody in the United States that they are safe. Nothing has changed because of this election. What we heard was election talk. And we will all come together and unify the country. So the process of democracy happened. We just have to let life go on'."

    Nooyi also, when asked about the coarseness of the election and domestic violence issues in professional sports, said that "there was no place for such language -- 'not in locker rooms, not in football players' homes, not in any place' -- and 'if we don't nip it in the bud, this is going to be a lethal force that's going to take over society'."

    The Post reports that "Trump supporters on social media platforms such as YouTube, Twitter and Facebook pounced on parts of her remarks, calling for a boycott of PepsiCo's products. Some comments referred to the ethnicity of Nooyi, who was born in India." Analysts said that mentions of the boycott reached more than 19,000, and that the hashtags used made clear that the conversations were being driven by supporters of Donald Trump.

    As previously reported here and elsewhere, companies such as New Balance and GrubHub have run into social media buzzsaws because of comments made about the election. A statement by a GrubHub executive that was pro-diversity was perceived as suggesting that any employees who voted for Trump should resign (it wasn't), and a statement by a New Balance executive appearing to support Trump's trade proposals ended up with a white supremacist group lauding the footwear company while some non-white supremacists said they'd burn their New Balance running shoes.

    The Post reports this morning that Nooyi "misspoke" in her initial response to Sorkin: "She was referring to the reaction of a group of employees she spoke to who were apprehensive about the outcome of the election. She never intended to imply that all employees feel the same way. We are incredibly proud of the diverse views and backgrounds across our workforce, and we are united in our desire for a brighter future."
    KC's View:
    I suspect this is going to go on for awhile, if only because the toxicity of the campaign debate laid bare a lot of raw nerves, and because there is a lot of passion on both sides of the argument, with the extreme passion on the fringes helping to keep it going.

    I think business executives are going to have to be very careful about stepping into this minefield. There are just way too many people who can be offended by casual statements that can be misinterpreted.

    I do think that we're going to see some corporate executives go out of their way to make pro-diversity statements, to say that they find racism, misogyny, religious bigotry, homophobia or any other sort of intolerance to be totally unacceptable. I would not necessarily view such statements as being overtly political, nor would I go out of my way to identify such corporate cultures as being defiant of anyone or anything.

    That said, I think the vast majority of Americans are going to be supportive of people and companies that decry racism, misogyny, religious bigotry, homophobia or any other sort of intolerance. For example, I see very little downside to the marginalization of white supremacist groups that may try to take advantage of election results that I think ultimately had little to do with white supremacy.

    The minefield continues to be wide and deep.

    Published on: November 17, 2016

    The New York Times this morning reports that "as the Chinese economy has slowed, strikes and labor protests have broken out across the country, mostly scattered episodes targeting a single factory or business. The government has responded aggressively, detaining activists and increasing censorship to keep unrest from spreading."

    But it's even been worse at Walmart, where activism against its more than 400 stores "has followed a different pattern: workers in several cities agitating against the same company, bypassing official unions controlled by the Communist Party and using social media to coordinate their actions — while the authorities largely stand aside ... They have appealed to local officials with patriotic fervor, invoking the struggles of Mao Zedong against foreign imperialists. They have posted screeds online against unkind bosses and 'union puppets'.

    "In doing so, the Chinese work force of the world’s largest retail chain has put the ruling Communist Party in an uncomfortable position, publicly testing its Marxist commitment to defend the working class and pitting that against its fear of independent labor activism ... Chinese law requires businesses to establish labor unions, but they are almost always controlled by management, and companies generally use the unions to contain worker activism. In the face of labor strife, some businesses have offered back pay, bonuses and other benefits to workers.
    But others, concerned that labor activism could force costly concessions, have resorted to tougher tactics, retaliating against those who help organize protests.

    "At Walmart, some of the most vocal workers have been deprived of raises, reassigned, or in some cases fired, according to interviews with more than a dozen employees."
    KC's View:
    You have to figure that at some level the folks at Walmart figured the one place where they wouldn't face labor issues would be China. Life is full of surprises, many of them unpleasant ... and now it would appear that employees in China are going to apply a little western pressure to the business there. (Though it seems unlikely that in Bentonville anyone will refer to management as "imperialist dogs.")

    Published on: November 17, 2016

    Time reports that this Friday, Amazon will offer a one-day deal - cutting the price of a one-year Prime membership from $99 to $79.

    Prime - which includes two-day shipping, photo storage and streaming access to a vast library of movies, TV shows and music - is seen as a major driver of Amazon's traffic and sales. Prime members are reported to spend an average of $1200 a year on Amazon, while non-members spend about $500.
    KC's View:

    Published on: November 17, 2016

    The Washington Post this morning has a story about how two very different apparel companies are testing a new alliance that they hope will work out for both of them.

    Here's how the Post frames the story:

    "When you consider their business models, it may seem like Rent The Runway and Neiman Marcus should be bitter competitors. Rent the Runway lets customers borrow designer gowns and cocktail attire — potentially negating the need for anyone to plunk down $800 to purchase such dresses at the luxury department store."

    But rather than seeing their differences as negative, the companies are looking for a mutually positive approach:

    "The retailers announced Wednesday that they will be adding Rent the Runway store-within-a-store concepts at some Neiman Marcus locations, starting with a San Francisco outpost that opens Friday. More such locations are slated to open in 2017. Customers will be able to rent garments from the likes of Diane von Furstenberg, Jason Wu and Marni from a roughly 3,000-square-foot space that will also feature shoes, handbags, and undergarments that are available for purchase from Neiman Marcus.

    "The partnership is a gamble by both companies that they can benefit from cross-pollinating their customer bases. And it’s also one big consumer-psychology experiment: If a shopper falls in love with the Derek Lam dress she rents, will it help convince her to buy clothes from that line at Neiman in the future? If an older shopper never rented before because she didn’t like online shopping, will the physical store experience and the Neiman imprimatur make her a convert?"
    KC's View:
    The mutual attraction comes from some basic realities - Neiman Marcus has seen sales declines recently, and Rent The Runway seems to accept the idea that it can help build its brand with a bricks-and-mortar presence.

    In some ways, I see this as being similar to Whole Foods deciding to offer Purple Carrot meal kits in one of its stores. Inspiration and innovation can be found in a lot of places, including in companies that ordinarily are identified as competition.

    Published on: November 17, 2016

    • The Washington Post this morning reports that Target reported Q3 profits of $608 million, up from $549 million a year earlier, on quarterly revenue that was down 6.7 percent to $16.4 billion. (The revenue decrease is ascribed largely to the fact that Target no longer has a pharmacy business, having sold it to CVS.) The story also notes that "Target’s online sales grew 26 percent in the latest quarter, and yet e-commerce still accounts for a tiny sliver of the big-box chain’s overall sales: In the quarter, just 3.5 percent of sales came from the Web."

    USA Today reports that Target CEO Brian Cornell said Wednesday "that he's 'increasingly confident' the company will open 'hundreds' of small-format stores, reshaping the big-box chain's image and real estate footprint ... Target is currently operating nearly 30 small-format locations, including a new 45,000-square-foot store in Manhattan's hip Tribeca neighborhood, where the retailer hopes to glean lessons it can apply to future stores."

    • The Wisconsin State Journal reports that 10 months after Kroger acquired Roundy's for $800 million, five of the seven Madison, Wisconsin-area Copps stores have been converted to the Pick 'n save banner; the overhaul "included new flooring, lighting and display cases; an updated layout, and new labeling for organic, vegan and gluten-free items."

    "Our objective in renaming these Copps stores under the Pick ’n Save banner is to simplify our business,” says Jim Hyland, Roundy’s vice president of communications. “We are unifying these banners under the Pick ’n Save brand to improve efficiency, value and consistency for the benefit of our customers in the Madison market.”

    A market, the story points out, that is highly competitive - Hy-Vee, Woodman’s Markets, Metcalfe’s Markets, Sam’s Club, Costco, Target and Walmart all operate there.

    The State reports that Southeastern Grocers is converting a number of Winn-Dixie and Bi-Lo stores that it owns throughout the Southeast - in Georgia, South Carolina, North Carolina and Florida - to its Harveys discount banner, as well as upgrading a number of existing Harvey's units. In total, 73 stores are being affected, with the company saying that the goal is to provide “great value, stunning quality food and serving with personality.”
    KC's View:

    Published on: November 17, 2016

    ...will return.
    KC's View: