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: December 21, 2016

    Article Text.

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

    I just wanted to take a moment to note that today's edition of MNB is the final one for 2016.

    As is my custom at this time of year, I'm going to take a few days off, hang out with my family, do some reading, catch a few movies, maybe even work out a bit.

    And yes, as always, included in my routine will be my annual viewing of Love Actually, the best Christmas movie ever).

    I hope you're able to find time to do the same, or whatever it is that makes you happy, during the coming holidays.

    The MNB archives will be open, of course, and if anything crazy happens, I'll find my way to my laptop.

    MorningNewsBeat will be back on Tuesday, January 3, 2017 … and I trust that the coming year will be eventful, energetic, prosperous and most of all, fun for all of us.

    I know that Michael Sansolo, Kate McMahon, and Tom Furphy, as well as Mrs. Content Guy and the entire Content Clan, join me in wishing you a happy and safe holiday … however and whatever you celebrate.


    KC's View:

    Published on: December 21, 2016

    by Michael Sansolo

    We all know there are few certainties in life beyond death and taxes. One other would be this: McDonald’s is a self-service restaurant.

    Well, maybe that’s changing.

    Unlike Kevin, I will occasionally, but rarely, visit McDonald’s. A week ago, I went to one and after paying for my food and drink, I followed the time-honored tradition of sliding one step to the left to await my order, while allowing another person to move up to the cash register. That’s when it happened.

    The cashier handed me my drink cup and a number and then suggested I sit down so I could be served at my table. I responded with something witty like, “but this is McDonald’s, you don’t serve tables.” (Keep in mind, I didn’t order anything special or out of the ordinary.) I sat down and within a few minutes my food arrived. Then I watched the same experience play out across the restaurant.

    Unfortunately, there was no one of authority in the restaurant for me to question on whether this program is widespread or long lasting. So I can only speculate that McDonald’s, increasingly up against the far superior Five Guys, Smashburger and BGR in my area, has recognized that it needs to change it up.

    So yes, the food (other than fries) still needs vast improvement, but getting table service at a McDonald’s now apparently is on the menu. Not that long ago, that would've seemed like an impossibility.

    But when the impossible starts happening, that’s an Eye-Opener.
    KC's View:

    Published on: December 21, 2016

    Barron's reports that in Reno, Nevada, this week, 7-Eleven in a single day "launched 77 drone flights to customers who lived within a mile of the store, marking the first commercial delivery service in the US." The c-store chain has been partnering with Flirtey, a drone delivery service, to ramp up the service in the US, which it first tested in July.

    The story notes that "it’s an impressive feat for 7-Eleven, given that and Alphabet are chasing the same goal. Alphabet’s Project Wing delivered Chipotle burritos to Virginia Tech, a closed campus, in September and while Amazon’s trial run debuted in the U.K. countryside last week."
    KC's View:
    It is interesting that even though Amazon and Alphabet (which owns Google) have been getting all the attention for their various drone programs, it is 7-Eleven that seems be getting even more aggressive in terms of its testing.

    There still is a long way to go to make drone deliveries mainstream, not least in terms of regulatory issues; it is unclear at this moment how the incoming Trump administration will approach the issue of commercial air traffic in general and drone deliveries in particular. But we're clearly moving down the path toward the mainstreaming of this technology.

    And, as Jimmy Durante used to say, "Everybody wants to get into the act."

    Published on: December 21, 2016

    The Boston Globe has a story about the Millennial Generation, noting that while it is "the first to grow up with smartphones in their hands," and often is "stereotyped as lazy and entitled," exactly the opposite may be true.

    Workplace experts, the writes, "say workaholics are common among 19-to-35-year-olds, perhaps more so than among older members of Generation X and baby boomers. In one online study, more than 4 in 10 millennials consider themselves 'work martyrs' - dedicated, indispensable, and racked with guilt if they take time off."

    In fact, rather than being a generation accustomed to getting trophies for just showing up, millennials may actually be programmed to work harder and longer.

    "Even though the economy has improved markedly in recent years, young people in the workforce today have record levels of student loan debt," the Globe writes. "They are also less likely than previous generations to earn more than their parents, according to a Stanford University report. The percentage of children who are better off than their parents has dropped dramatically — 50 percent of those born in the 1980s have a higher standard of living than their parents, compared with 90 percent of those born in the 1940s.

    "The way millennials were raised may play into their always-on mindset, too, said Bob Kelleher, a Boston-based employee engagement consultant and author. Many of them were highly scheduled, he said, going to soccer camps, enrolling in SAT prep courses, and competing on the debate team in order to get into a good college. And some have delayed several of the responsibilities of adulthood, he noted, living with their parents and putting off marriage and kids. That frees them up to work even more."
    KC's View:
    I've always thought that millennials get a bad rap. It isn't that all millennials or either workaholics or goof-offs ... just as it isn't true that all Baby Boomers are either workaholics or goof-offs.

    For retailers, I think, it is worth paying attention to these shifting trends ... because it means that millennials are likely to be a center of the marketing target a lot later than earlier generations, which will have a real impact on spending and profitability.

    Published on: December 21, 2016

    The Washington Post has a fascinating story about the Ford Motor Company, understanding that companies are defined by the degree to which they innovate within and even outside their space, has "implemented a number of internal initiatives, from altering its financial incentives for inventors to creating companywide innovation challenges." The goal is to generate as much innovation and disruption from within the company as possible.

    "The efforts appear to be paying off," the Post writes. "As of Tuesday, Ford is poised to have more U.S. utility patents granted this year than any other automaker, according to agency data ... These patents include a flying drone that acts as a lookout for your self-driving car. A filter that purifies air conditioner condensation into drinkable water. And, more recently, an electric wheelchair that loads itself into the car."

    To a great extent, these patents have been generated by a workforce that has been turned into inventors: "Bold innovations traditionally come from companies’ research and development departments, where highly trained engineers bring their education and experience to bare on a problem." Now, Ford "has embraced the notion that good ideas can come from anywhere in the company and has encouraged employees to step forward."

    And they are incentivized: "Employees with promising ideas are gifted a three-month membership to TechShop, a maker space with computers and other equipment that can be used to turn ideas into prototypes. The experience of bringing an idea into existence often helps employees to discover and work through problems they didn’t detect on paper."

    As a result, "More than 5,500 Ford employees put forth ideas so far this year, including about 2,200 first-time inventors, according to the company. More than 4,000 first-time inventors have submitted ideas since January 2015."

    You can read the entire story here.
    KC's View:
    While such a program cannot solve every problem or conquer every mountain, the story does show how companies can use the power of their workforces in a positive, even unexpected fashion. Can you imagine if every company utilized its employees in this way? It is like the ultimate in helping them feel like assets rather than like costs and liabilities.

    Published on: December 21, 2016

    Shake Shack apparently has found that the test of a mobile ordering and payment system has been so successful that it is rolling it out to more markets.

    According to Fortune, "The company first began testing the app in October at just one location in Midtown Manhattan. Now, Shack fans across the nation — including those in multiple New York City boroughs, New Jersey, Washington DC, Chicago, Las Vegas, Miami, Los Angeles, and Minneapolis — can use the app to order and pay for their food with a credit or debit card. They’ll get a text when it’s ready, and can then swoop in to pick it up from a designated pickup point — no waiting in line necessary."

    The story notes that "Shake Shack joins the roster of fast food chains to hop on the digital bandwagon. Chipotle, Starbucks and Taco Bell have all begun mobile ordering services. McDonald’s is also reportedly preparing to roll out mobile ordering services."
    KC's View:

    It so happens that we're getting a new Shake Shack about a half-mile from my house; it is slated to open just after the first of the year. I can only hope that the mobile app is being utilized there, because it would make my life a lot easier.

    I am very excited.

    Published on: December 21, 2016

    Walgreens Boots Alliance and Rite Aid Corporation have announced that they have entered into an agreement to sell 865 Rite Aid stores and certain assets related to store operations to Fred’s, Inc. for $950 million in an all-cash transaction.

    The companies said that "the agreement is being entered into to respond to concerns identified by the FTC in its review of the proposed acquisition of Rite Aid by Walgreens Boots Alliance, which was announced in October 2015. Walgreens Boots Alliance is actively engaged in discussions with the FTC regarding the transaction and is working toward a close of the Rite Aid acquisition in early calendar 2017."

    The deal is subject to federal Trade Commission (FTC) approval.

    The story notes that Fred's and its subsidiaries "currently operate 647 stores and three specialty pharmacy-only stores across 15 states in the southeastern U.S." This new deal will make it the nation's third largest drug store chain.
    KC's View:

    Published on: December 21, 2016

    Fast Company has an interview with Facebook founder/CEO Mark Zuckerberg in which he explains how he has built an AI system to run his home. The system is named Jarvis, after the AI system used by Tony Stark in the Iron Man movies.

    Jarvis, the story says, is "akin to a homemade, highly personal version of something like Amazon’s Alexa service, letting him and his wife Priscilla Chan use a custom iPhone app or a Facebook Messenger bot to turn lights on and off, play music based on personal tastes, open the front gate for friends, make toast, and even wake up their one-year-old daughter Max with Mandarin lessons."

    The system isn;t foolproof (yet), but the story also points out that it is just "the latest of the personal-growth challenges he gives himself each year."

    He actually gave himself two challenges in 2016 - the other being to run a total of 365 miles during the year. In the past, he's taught himself Mandarin, and read a book every two weeks. The AI challenge, the story says, "forced him to refresh his command of the company’s programming tools and processes. That in turn has reconnected him to the daily experience of the thousands of engineers he manages and the engineering culture that’s at the heart of one of the world’s most important technology companies."

    Cool piece, and you can read it here.
    KC's View:

    Published on: December 21, 2016

    • The National Grocers Association (NGA) said yesterday that Corinne Routhier, most recently Director of Sales for Associated Luxury Hotels International, has been named the organization's Vice President of Business Development and Member Services, responsible for member services, recruitment and retention.

    And NGA announced that it has hired Michael Gleeson, director of legislative affairs for the Association of Advanced Life Underwriting, to be its new Director of Government Relations, focusing primarily on tax policy.
    KC's View:

    Published on: December 21, 2016

    We had email yesterday about the Walmart click-and-collect experience, which prompted more.

    MNB reader Karen Techeira wrote:

    My favorite part of the Walmart commercials is "free in-store pick up".

    Really?!  They should be paying us to enter their doors!

    From another reader:

    Walmart’s instore pick-up station, for on-line purchases, is located in the back of the store.  This is convenient for Walmart, but not for customers.

    Which, in a phrase, is precisely Walmart's problem. If it does things that are convenient rather than customer-centric, it will have problems competing with Amazon in this space.

    Yesterday, we took note of a Washington Post report that several major retail chains - including The Disney Store, Aeropostale, and PacSun - are eliminating the use of "on-call scheduling," described as " a practice in which employees must be prepared to come in for a shift, but could find out at the last minute that they don’t have to report to work.

    The reason? Well, it isn't because the companies' human resources departments suddenly had an attack of conscience, realizing that this wasn't fair to employees. No, it was because labor advocates drew enough attention to the practice that a group of state attorneys general started questioning the legality of the policy.

    I commented, in part:

    I think this is a reprehensible and unconscionable way to treat employees. I'm glad that government officials have stepped in to "persuade" companies that they need to go in a different direction. Though I wouldn't be surprised if some legislator somewhere decides to introduce a bill that would legalize such a practice.

    MNB reader Tom Herman responded:

    I have a slightly different take on this.  My daughter worked at a bar/restaurant during college that had on-call scheduling.  I thought it was terrible, but she really didn’t mind it.  They were pretty accurate in their forecast and maybe cancelled 10 to 20% of her shifts.  It was a small business and they probably couldn’t afford 20% more payroll if it wasn’t needed.  She made great tip money and really liked the place.  At no time did anyone force her to take the job and she wasn’t held hostage there. I think the sign of a robust economy is when employers compete for employees.  They do this by providing differentiated benefits and working conditions.  By mandating every benefit and work rule, you take out innovation and differentiation.  I trusted my daughter enough to decide where she worked and the pay and benefits she received.

    From MNB reader Bob Lewis:

    It seems to me, the business model of retailers engaging in on-call scheduling must be very reactive as opposed to being proactive. There are many tools available to accurately predict customer shopping patterns. Those tools allow business to put the right number of employees in place to meet the needs of their customers. In addition to the negative impact on their employees, poor planning practices negatively impact customer experience. If I sold scheduling software, I would view the retailers on this list as prime prospects for new business.

    I think that on-call scheduling is essentially lazy management ... but I continue to believe that it is a reprehensible way to treat people. This doesn't mean that every company abuses it, but a lot of companies put employees on-call without giving them actual hours, and they don't get paid for sitting around. Not only that, they can't take other jobs.

    When so-called innovation and differentiation result in employees being taken advantage of, it have a problem with it.

    On the subject of Starbucks' AI plans, MNB reader Tony Moore wrote:

    My first reaction to the story of AI shortly coming to Starbucks was one of indifference. Who cares that my name is on a screen, or what my order history was, or what others "like me" ordered?  Not really interested in being "up sold" by some algorithm.

    The more I thought about it my indifference was replaced by a low level of irritation.  It seems a bit intrusive and possibly a bit creepy.  On a broader level I hate the thought of a human positively interacting with me being replaced by a cold "black box."

    Got a lot of email yesterday with my automat memories:

    I have fond memories of going to the Automat. I can remember as a little kid being taken to the Automat on the southeast corner of Third Avenue and 42nd Street by aunts and uncles who thought it was the coolest thing ever; it inevitably would be followed by a walk or cab ride over the Radio City Music Hall where we'd see a movie and Rockettes stage show. Good times.

    MNB reader Tom Stenzel wrote:

    Kevin, I think we may have been at the Automat on the same day – December 1963.  And, of course we went to Radio City for the Rockettes Christmas show that afternoon!

    And MNB reader Carl P. Salamone wrote:

    Thanks for the memories. I live in Rochester,N.Y. –my family would take the train to NYC once a year-we stayed at then Dixie hotel and YES I thought the Automat was the neatest thing going.  I still remember the Tuna fish sandwiches we ate from their if we were in NYC on a Friday!!
    KC's View: