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    Published on: March 20, 2018

    by Michael Sansolo

    “We thought we were prepared.”

    Think about that phrase for a second and whether you have used it or heard it in your company lately as you’ve dealt with the onslaught of new competition and new demands on your business.

    Here’s hoping your answer is “no.”

    Last week I heard that phrase from an unexpected source during the annual Food Shippers of America conference. It came from an executive at a major food bank discussing the series of natural calamities that hit the US in 2017, putting unexpected pressure on those important supply networks that aid people in need.

    Try to recall: there were three major hurricanes devastating major population centers from Florida to Texas to Puerto Rico. Then there were the wildfires in California followed by mudslides. The combined impact of those disasters was an unparalleled need for and pressure on food banks to help people suddenly left homeless and certainly short of food supplies.

    Food banks routinely do a magnificent job in partnership with the food industry and in the process help untold numbers of families. And certainly those same food banks are no strangers to natural disasters because they happen every year. But the combination of events in 2017 (not to mention the series of snow emergencies in the Northeast in early 2018) was almost too much to handle. Hence the comment: “We thought we were prepared.”

    As we frequently talk about here on MNB, no one can ever be fully prepared. The impossible seems to happen with increasing frequency. Virtually every week the news has some stunning revelation.

    It’s not just about competition or shoppers. It can be food safety, technology preparedness, security or any one of a thousand different challenges. Think of all the articles that appear here regularly on MNB about emerging and unforeseen challenges.

    The truth is, no one can be prepared for everything and no one should ever think they are. That’s the real mistake.

    After all, it would be impossible, incredibly expensive and completely exhausting to be fully prepared for everything. Unexpected things and certainly unintended consequences have happened as long as civilization has existed. The difference today is the speed with which those changes happen, which in turn means we all need to accelerate the pace at which we evolve and adapt.

    But that’s no excuse for inaction or complacency. We simply need accept that we’ll never be prepared for everything. New storms are always coming and we must always be as ready as we can be.

    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: March 20, 2018

    by Kevin Coupe

    Panel discussions - of the sort that take place at conferences all the time, and that Michael Sansolo and I often find ourselves moderating - are funny things.

    As moderators, we hope to both educate and entertain, to facilitate conversations that will shine some light on the subject at hand. It is important for panelists to feel comfortable and spontaneous, and yet that can be difficult; often they are sitting on stage in front of peers, or competitors, or employers, or future potential employers, and it can be hard not to think of all those things when talking.

    It is wonderful thing, then, to get a moment of sheer naked honesty.

    That’s what happened yesterday, at Western Michigan University’s annual Food Marketing Conference.

    Michael Sansolo was moderating an Executive Forum, discussing the challenges facing retailers and suppliers in a time of constant disruption and breakneck change. The session was a good one, with the various panelists talking about the importance of customizing the bricks-and-mortar experience in order to compete with e-commerce, of allowing consumers to shop on their own terms, of nurturing communities and identifying the differentiating shopping habits of Generation Z, who soon will supplant millennials as the age group of the moment.

    Michael then shifted the conversation to lessons that the panel could offer to the students in the audience that would help them to be both happier and more effective in their careers. And that’s when it happened.

    Carmela Cugini, vice president of US e-commerce for Walmart/Jet, talked about the fact that a change that she has seen take place in corporate cultures. At Jet, for example, it was important to offer paternal benefits to employees, which was not on Walmart’s list of benefits that it planned to offer. But the argument was made, and now all fathers at Walmart have the ability to take time off after the birth of a child. That’s progress.

    But progress can take different forms. Cugini, who spent her career at PepsiCo before she joined Jet, said, “I’m gay,” acknowledging that it was the first time she’d ever made such a statement in a panel discussion. But that before she went to Jet, Cugini said, she never felt able to talk about a long-term relationship she was in. It was only when she made a change in her career, she said, that she felt she could be transparent about who she is. “I could bring my authentic self to work,” she said.

    That was her lesson to the students - that being their authentic selves could not only be a key to personal happiness, but also could provide to their companies the kind of intellectual and emotional diversity that actually make them better.

    It seemed so simple, so direct, so obvious. And yet, such an Eye-Opener.
    KC's View:

    Published on: March 20, 2018

    National Public Radio (NPR) has a story about how Walmart has been testing a partnership with Handy, a home services app, in Atlanta “and now plans to expand it to more than 2,000 locations.” The goal is “to give shoppers a deal on professional help assembling furniture or installing a TV … Walmart shoppers will be offered TV installation for $79 and furniture assembly for $59 through the Handy app or website.”

    Convenience and being a resource for shoppers have become major differentiating points for retailers, the story notes, pointing out that “Amazon is expanding its own home-services offerings, such as dog walkers and plumbers. Ikea, the giant furniture retailer, recently purchased TaskRabbit, another marketplace for freelance professionals, including people who can help you assemble furniture.”
    KC's View:
    Not that Walmart cares what we think here at MNB, but this is part of a broader approach to business that I’ve talked about for some time - that retailers can differentiate themselves from the competition by being more than a source of products, and becoming a resource for shoppers. Good idea.

    Published on: March 20, 2018

    Bloomberg reports that Amazon “has looked at the possibility of expanding its retail footprint by acquiring some locations from bankrupt Toys R Us,” though not with the intention of maintaining the toy store’s brand. Rather, Amazon is said to be interested in “using the soon-to-be-vacant spaces for its own purposes.”
    KC's View:
    The Bloomberg story seems to assume that Amazon would operate the stores as bricks-and-mortar retail locations, but that doesn’t strike me as necessarily true. After all, Walmart is converting 10 closed Sam’s Club locations as e-commerce distribution centers, and it may well be that a surgical purchase of certain Toys R Us locations might give Amazon a presence that will help it expand on its ability to use Whole Foods as distribution centers.

    After all, it was just yesterday that we had a story about how Amazon seems to be thinking about some sort of pickup service that would allow shoppers to pick up their Whole Foods groceries, Amazon orders, and, potentially, purchases from other merchants in one location. probably not a coincidence that this stuff is all happening at the same time.

    Published on: March 20, 2018

    In Minnesota, the Star-Tribune reports that Target plans to begin testing a new loyalty marketing program that will build upon rather than replace the Redcard discount program that has proven so popular that “nearly a quarter of purchases from the retailer are now made with one.” Redcard purchases give users a five percent discount.

    Instead, the new Target Red program will allow members to “use 1 percent of their purchase totals toward their next Target runs. Members can also waive the $5 fee for Target Restock, the next-day delivery service for household essentials and dry groceries. Members also will receive half off the first year of a $99 membership to Shipt to access Target’s new same-day delivery service.

    “Target Red members also will get to vote on which organizations Target should focus its charitable giving, a new twist on a now-defunct program previously connected to Redcard where shoppers could direct funds to the school of their choice.”

    No specific payment card is attached to the program, which will begin being tested next month in Dallas.
    KC's View:
    I have to admit that I’m less than impressed by some of the Target stores that I’ve been to lately - especially the further they are away from the company’s Minnesota headquarters - and so I suppose they have to do everything they can to generate consumer loyalty. I agree with such moves, especially when they demonstrate the degree to which the business are loyal to their shoppers.

    Since programs like AmazonPrime essentially are giant and incredibly successful loyalty programs, retailers like Target have to come up with compelling responses. I just wish some of the stores were better.

    Published on: March 20, 2018

    Reuters reports that Google “is teaming up with retailers including Target Corp, Walmart Inc, Home Depot Inc, Costco Wholesale Corp and Ulta Beauty” on a new program that allows these retailers to “list their products on Google Search, as well as on the Google Express shopping service, and Google Assistant on mobile phones and voice devices … In exchange for Google listings and linking to retailer loyalty programs, the retailers pay Google a piece of each purchase, which is different from payments that retailers make to place ads on Google platforms.”

    According to the story, the goal is to influence shopper behavior in a way that makes these retailers more competitive with Amazon - which, it ends up, often is the default result and/or choice for consumers who search for products on Google.

    The new program, called Shopping Actions, “will be available in the United States to retailers of all sizes and could help retail chains keep those customers,” the story says.
    KC's View:

    Published on: March 20, 2018

    The Network of Executive Women (NEW) is out with a new study suggesting that “the turnover rate among women, especially women executives, in retail and consumer goods is much higher than among men.”

    The study goes on: “Turnover rates for women in the industry overall are significantly higher for women than men (31 percent vs. 24 percent) … hampering efforts to achieve gender equality. The turnover rate increases at higher job levels. Women first- and mid-level managers leave at nearly double the rate of their male peers, 24 percent vs. 13 percent at the companies surveyed. The turnover rate for senior executive and C-suite level women is nearly four times that of men -- 27 percent vs. 7 percent.”

    The findings, NEW says, are based on a survey of more than 3,600 NEW members and U.S. retail and consumer goods industry employees, plus hiring, promotion and turnover data from eight leading companies representing more than 400,000 employees. The study was done in partnership with Mercer and Accenture.

    The report, entitled "The Female Leadership Crisis,” identifies “four main reasons for the disparity in turnover between senior-level men and women: Women feel isolated; favoritism and bias is embedded in corporate cultures; women do not feel supported in new roles; and work/life issues are taking a toll.”

    NEW president/CEO Sarah Alter says that “to turn the tide on female leadership, organizations must boldly commit to gender equality, transform their corporate cultures and institute effective new programs and policies.

    And Beth Marrion, managing director, retail for Accenture as well as a NEW board member, says that "unless companies act now to tear down barriers to gender diversity and inclusion, the percentage of women executives at the participating companies is projected to drop precipitously, from 35 percent today to an alarming 15 percent by 2027.”
    KC's View:

    Published on: March 20, 2018

    Re/code reports that “new data from Pew Research Center found that 26 percent of American adults admit to being online ‘almost constantly,’ and 43 percent go online ‘several times a day.’ In 2015, roughly 21 percent of American adult admitted to being online ‘almost constantly’.”

    The story notes that “young people are more likely to be internet-obsessed than the general population. About 39 percent of 18- to 29-year-olds reported going online ‘almost constantly,’ compared to 36 percent back in 2015.”

    Re/code makes the point that much of this increase almost certainly has to do with internet-connected mobile devices that are on all the time.
    KC's View:
    I have to admit that I’m in that 26 percent. Increasingly, of course, people are online all the time not just because their lives seem to demand it, but because their jobs require it.

    Published on: March 20, 2018

    • The Seattle Times reports that a number of merchants who sell on Amazon “are creating a trade association in hopes that a unified voice will force Amazon to take them more seriously … Organizers began pitching fellow merchants on the Online Merchants Guild last week at the Prosper Show, an annual Las Vegas conference that drew 1,900 Amazon sellers. The group is just getting started but has big ambitions, which include negotiating better terms with Amazon, pushing the company to respond more effectively to sellers’ complaints, and lobbying government officials to make sure merchants’ viewpoints are being heard.”

    However, “even with an organized group, merchants could find it difficult to negotiate with Amazon, which typically resists collective bargaining. The e-commerce giant has had long-running disputes with the Author’s Guild and the Association of American Publishers over online book sales. And the company has managed to keep unions out of its U.S. warehouses.”
    KC's View:

    Published on: March 20, 2018

    • WinCo Foods announced that next week it will open its 120th store - an 82,077-square-foot unit in the Dallas Metroplex that also is its 10th in that marketplace.

    WinCo, which makes its employee ownership a key part of its value proposition, operates stores in Arizona, California, Idaho, Nevada, Oklahoma, Oregon, Texas, Utah, and Washington, with plans to open in Montana sometime next year.

    • In Maine, the Press-Herald reports that Hannaford Supermarkets has settled a labor dispute at its South Portland distribution center, as employees represented by the United Food and Commercial Workers (UFCW) accepted a three-year contract offer.

    The deal came three weeks after a one-day strike. Delhaize America, parent company to Hannaford, says that the accepted offer was in fact the original offer, which it called “fair and competitive.”

    Terms of the agreement were not disclosed.

    Reuters reports that girls accessories retailer Claire’s Stores has filed for Chapter 11 bankruptcy protection, conceding that “lower mall traffic” has had an impact on many of its locations, creating a level of unsustainable debt.

    Bloomberg reports that McDonald’s “is vowing to cut its greenhouse-gas emissions” by “adding LED lights and more efficient kitchen equipment, such as grills and fryers.” The goal is “to reduce emissions at its restaurants and offices by 36 percent by the year 2030 from 2015 levels.”

    The story goes on: “Changes to beef production, meanwhile, will lower greenhouse gases from the company’s supply chain by 31 percent, McDonald’s said. Suppliers are experimenting with new paddock-style grazing practices, in which herds are rotated across sections of pasture. That allows the land to recover and reduces gases from cattle.

    “The company says the combined effect will be the equivalent of taking 32 million cars off the road for a year.”

    • The Associated Press reports that the National Labor Relations Board (NLRB) has reached a settlement - the specific of which have not yet been disclosed, and which have not been approved by a judge - in a case that will determine the degree to which the company could be considered a co-employer with franchisees.

    MNB took note yesterday of a New York Times story about how Peter B. Robb, the new NLRB general counsel, was trying to negotiate a settlement between McDonald’s and employees in the case, which had already gone to trial that had been temporarily halted for settlement talks. The NLRB’s goal was to achieve a settlement that would avoid a court decision that could have broader, long-term implications.
    KC's View:

    Published on: March 20, 2018

    We had a story yesterday about a study saying that Amazon is stronger in New York and California, while Walmart is stronger in Texas and Florida. This prompted MNB reader Robert Dyer to write:

    One has to note on the market share spread between Amazon in California and New York is that unions and politicians have worked hard to create roadblocks to Walmart stores in these areas, most specifically in New York City, Los Angeles, and San Francisco.  The false narrative on Walmart is pervasive and continues to shape the attitudes of consumers in those market areas.  So, Walmart has to work harder to overcome those challenges, while Amazon has not such roadblocks to overcome.

    I’ve always had a problem with the roadblocks that politicians in New York and California have thrown up against Walmart, but while those may be a factor, I also think there are cultural reasons that New Yorkers and Californians are more in tune with Amazon than with Walmart. And I say that, to be perfectly honest, as someone who has lived in both places.

    We also had a story yesterday about how Kroger has decided to remove all publications about assault rifles from its stores. There apparently aren’t very many of them, but from now on readers will have to find them elsewhere. The decision comes just weeks after Kroger said that it would no longer sell any gun or ammunition to people under 21 years of age in its Fred Meyer stores in the Pacific Northwest. That decision followed similar moves by both Dick’s Sporting Goods and Walmart.

    I commented:

    These moves are not going to have an enormous impact on the availability or maybe even the use of guns in the US, but there are, I think, an attempt to position the company as being on what management sees as being the right side of history - not anti-gun, but perhaps with a little more attention to detail and oversight into who has them and who doesn’t.

    In the end, this is all happening because of a growing force of young people who are politically engaged and intend to use every tool at their disposal - especially in social media, which is their weapon of choice - to bring about change.

    One MNB reader disagreed:

    Kevin, Kroger is yet another example of a company trying to gain publicity with a statement that has no impact on their stores. In fact, I'm not even aware of any magazine that is devoted solely to assault rifles since they don't exist. Perhaps Kroger should just say any gun that looks intimidating will not be allowed in magazines in our stores.

    Secondly, I'm unclear on your statement "the right side of history", I'm not aware of any changes to the constitution. Did I miss something?

    No. I wasn’t talking about the Second Amendment to the Constitution, which, even if we don’t agree on its guarantees, I think we could agree that there are ongoing arguments about those guarantees. I was talking about how history is shaped by the passion and dedication of people who feel strongly about an issue. We’re going to see a lot of that, in the form of marches and protests, this weekend, I think.

    MNB reader Woody Weddington wrote:

    It is not the responsibility of retail to make federal law.  I can promise you that Dick's and Walmart is off my list of places to shop.  When the federal government move to create the 21 age to purchase all firearms and ammunition then retail will be obligated to follow the laws of the nation.

    Another MNB reader wrote:

    I think this is a great idea. I just returned from a trip to FL where the local Publix had these publications on display, front and lowest shelf — in plain view of all children. It was disturbing to see, even as a parent of grown children.

    On the subject of frequent return visits by customers to Amazon Go in Seattle, MNB reader Herb Sorensen wrote:

    This is outstanding confirmation of the fact that stores are "communal pantries."  Checkout is a needless impediment to grab and go, what you do when you go into your personal pantry.

    So Amazon is building REAL pantries for all of us to share, the true communal pantry!

    It gives me enormous pleasure that I got a lot of email yesterday in response to my “MNB Sports Desk” piece.

    The story said that “the National Association of Professional Baseball Leagues (NAPBL) announced last week that it is imposing a number of changes in how minor league games are run, including the decision that whenever a game goes into extra innings, each of those extra innings will start with a runner on second base. That runner will be the last person in the order during the previous inning, with authorities saying that the rule change is necessary in order to make games go faster.”

    There also will be a timer put on pitchers, requiring them to make their pitches more expeditiously, as well as a limit on visits to the mound. All the changes are aimed making games move faster.

    I commented:

    At the risk of being that old guy who just tells kids to get off his lawn and sits in his rocking chair reminiscing about the good old days, I’d just like to say that I find some of these changes to be outrageous.

    I have no real problem with limiting visits to the mound, or in putting a time clock on pitchers. To a certain extent, I think it puts baseball in the position where it is imitating football and basketball, which I don’t think is a good thing. Baseball is designed to be a more leisurely sport. It doesn’t have the sheer physicality of basketball or the violence of football, but that’s one of the reasons I love it. You can sit back, drink a beer on a warm day, nibble on a hot dog and enjoy the fact that it plays out at a slower, more deliberate pace. There’s no time clock … games take the time they take.

    I’m a lot more concerned about this extra inning, man-on-second-base nonsense, because it seems to be a test balloon for a change that could be brought to the major leagues. You’re not supposed to be on base unless you’ve earned it; you’re not supposed to be just be there, in scoring position.

    Sure, some people want to go home earlier. But a lot of them already do, leaving in the seventh inning to beat the traffic. Sure, longer games put more stress on pitchers’ arms … but that’s reason to make pitchers’ arm stronger and more durable, not change the rules of the game.

    We live in a world where people like to take shortcuts, don’t like to play by cultural and societal norms, where the fabric of society begins to unravel because people simply aren’t decent to each other.

    There’s a reason, in the words James Earl Jones spoke so eloquently as Terrence Mann in Field of Dreams, that “the one constant through all the years … has been baseball. America has rolled by like an army of steamrollers. It's been erased like a blackboard, rebuilt, and erased again. But baseball has marked the time. This field, this game -- it's a part of our past … It reminds us of all that once was good, and it could be again.”

    We can’t let the bureaucrats steamroll over our game with rules changes that will make baseball something else, something less than it is.

    Not everybody agreed with me.

    One MNB reader wrote:

    I'll bet you were upset when the NBA introduced the 3-point shot, too.  Maybe you should shift your ire to the NFL's decision to almost eliminate kickoff-returns, once just about the most-exciting part of their game.

    I actually like the three point shot. As for eliminating kickoff returns, I’m not a fan. But basketball and football aren’t baseball.

    MNB reader Jim Huey wrote:

    Kevin, I wholeheartedly share your views on baseball and the proposed changes. However, it seems to me that MLB is doing what you argue retailers need to do, innovate. I love going to baseball games, but my millennial children find it boring and long and don’t want to go. Now maybe these proposed changes will only succeed in driving away purists like you and I and be unsuccessful at attracting a new audience with a shorter attention span and different desires, but they are doing something to try and combat their clientele becoming older and older.

    Now, an argument could be made that what teams and MLB need to do is not change the product on the field, but change things to make the overall experience more desirable for millennials and others. Continue to give them other things to do while they are there (that incidentally they pay more for) and leave the game alone for purists like ourselves who only leave when our bladders are too full of beer.

    It isn’t for everyone. But one of the great pleasures of my life is going to a ballgame with my son Brian. We get there early, we stay until the end, and life is good.

    From another reader:

    So let me get this oh guru of the “change or die” mentality is suggesting MLB NOT CHANGE to keep viewers/fans who are switching to other sports more engaged and satisfied with the product that is MLB….say what what…what did I miss.  Gosh I really loved the good ol days before UPC labels on products…..wink.

    Much the same from MNB reader Richard Raudabaugh:

    ”Too many companies are not innovating for tomorrow. Instead, they are defending yesterday.”

    Worked for football, baseball needs changes.  It’s bad enough that games start so late on the east coast and if they go long, there over when you wake up for breakfast.

    First of all, I’ve never described myself as a “guru” of anything. I’m just a writer and a pundit and a wisenheimer.

    Second, I’m totally with you about when games start, especially postseason games. They used to argue that they needed to start them at a certain time so folks on the west coast could get home to their television sets. But these days, people can watch games on all sorts of different pieces of technology in all sorts of different places, so that argument does not seem relevant. I think no postseason game should start after 7:30 pm … best to do it so kids can actually watch the games end.

    I have no problem with making games more accessible, or even faster. But when you change an essential rule in how runs are scored, that strikes me as akin to Whole Foods opening McDonald’s counters inside their stores so they could drive more traffic.

    One MNB reader wrote:

    Kevin, I could not agree with you more! I grew up with a grandfather who listened to every Pittsburgh Pirate game on the radio and scored the games. My brother and I could not wait to pour over those sheets at breakfast every morning. I played baseball and then softball until well into my 40’s and still love it more than any other sport. I agree games can be sped up but to mess around with extra innings( my brother still has the score sheets from Harvey Haddix PERFECT 12 innings in the late 50’s or early 60’s) is sacrilegious! Tell the batters to step in the box and stay there and have the pitcher stay on the mound instead of marching around checking out the crowd after every pitch and you will have faster baseball. You never hear MLB complain about the money they receive from all the commercials between innings do you? Cut the commercials (the sponsors will pay more for them) by 40% and you will have faster baseball.

    Funny you mention the commercials. What makes me crazy are all the quick ads inserted in the coverage - every pitch and every twitch seems to be sponsored by someone, which gets in the way of the natural poetry of the play-by-play.

    MNB reader Christina Zook chimed in:

    I’m with you on putting a man on second in extra innings, sounds like something that you would do in little league.  I’ve divided on the pitch clock because that could mess some good pitchers up who take longer than 15 seconds between pitches but they are some guys taking a long time between pitches even without runners on base.  As a Chicago White Sox fan we always loved when Mark Buehrle pitched because when he was on we were out of there in an 1hour and 50 minutes.  I do think the mound visits by the catcher needs to be limited, I’ve seen Joe Mauer of the Twins walk out there too many times to count during an inning.
    There is a rule that the batter is supposed to stay in the batter’s box between pitches and I don’t see that one being enforced.  I’m surprised that the owners would really want the game to speed up since that would be less money in their pocket from the concession stands for extra innings.  Time will tell what makes it into the Majors.

    Another MNB reader wrote:

    If MLB co-opts this rule of putting a runner on second to start extras, then I will have to re-think my relationship with the game. Baseball has been a constant in my life since I was a small boy, and – at its heart – retains a purity, grace and beauty that no other game can match. None. I couldn’t even begin to explain how the game has influenced my life, but I can tell you that the one thing I love most about it is that, no matter what, in any given baseball game you will see or experience something that has never happened before.

    Giving a single free base – let alone two – to a runner at the top of an extra inning is hardball blasphemy.

    “Baseball is dull only to dull minds.” – Red Barber.

    I miss the Ol’ Redhead, sitting inn the catbird seat.

    I’m a little young to have heard him broadcast Brooklyn Dodger games, but I vividly remember hot summer nights, lying in bed with the window open and the transistor radio on, captivated by Barber and Mel Allen and Phil Rizzuto and Jerry Coleman broadcasting Yankee games.

    Here’s the deal. I know other sports make big changes. I know that we have to embrace change. But as Robert B. Parker once said, “Baseball is the most important thing that doesn’t matter.” These changes would begin a slide that could make it matter less, and I find that unacceptable.
    KC's View: