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    Published on: April 9, 2018

    by Kevin Coupe

    I was shocked over the weekend to learn that Don Imus, host of the “Imus in the Morning” radio program for almost 50 years, had shut the program down and retired in late March.

    Not so much shocked that he retired; Imus was 77, but had seemed older than that for years. Mostly, I was shocked that the tree had fallen in the forest, and few people seemed to have heard it.

    Imus, who helped to invent the “shock jock” genre, first in Cleveland and then in New York, reinvented himself in the late eighties when he moved his show to WFAN in New York, the nation’s first all-sports station. The show began being syndicated all over the country. Then, in 1996, he began simulcasting his show on MSNBC, and for a decade was a high-profile place for politicians from both sides of the aisle as well as prominent journalists and athletes, to appear to talk about issues in a more relaxed context. His interviews often created headlines, because he asked questions that few others would think to ask. Imus used his celebrity to raise millions for a variety of charities, with a special focus on children with cancer, wounded veterans, and autism research. And, he even launched, with his wife, a line of environmentally “green” cleansers.

    It all came crashing down in April 2007 when he referred to the Rutgers University women’s basketball team, which was competing in the NCAA championships, first as “rough girls” and then as “nappy-headed hoes.” The comment generated outrage about what was then portrayed as a pattern of racism and sexism, but Imus was slow to apologize and realize that he’d put his career and business at risk. Most of the prominent people who appeared regularly on the show were no longer willing to do so - he was toxic.

    MSNBC dropped his show. (It was replaced by “Morning Joe.”) So did WFAN. And after a period of exile, Imus returned … with a lower profile, less prominent guest list and smaller syndication value. Later controversies garnered less attention, I think, because fewer people cared.

    The Eye-Opening business lesson, it seems to me, is that no matter how secure your competitive position may be, one has to assume that it all is temporary and maybe even illusory. In fact, it seems to me that the right way to approach the conduct of business is to assume that it can all end tomorrow. It keep you sharp. It keeps you connected.

    There was a time, not that long ago, when an Imus retirement probably would’ve gotten a ton of attention, marking the end of an era. (Think about what will happen when Howard Stern retires.) There was a time when watching or listening to “Imus in the Morning: was a regular part of my day, usually on in the background while I wrote MNB.

    In 2007, though, I decided that there were better ways to go. Thus, in 2018, when the tree fell in the forest, I didn’t hear it, and I didn’t much care.
    KC's View:

    Published on: April 9, 2018

    The Seattle Times reports that Kroger-owned QFC, which started life as Quality Food Centers more than 60 years ago, is considering re-branding itself as just “Q.”

    Suzy Monford, president of the division, says that “our customers, our fans, our community, they call us the Q … We call ourselves the Q. Amongst many of the innovations we’re working on, we are going to be looking at our brand and sort of modernizing it, if you will.”

    According to the story, “Monford said the company has already used the single-letter moniker in some marketing materials and checkout areas. She said the company is also considering changes to the look and feel of the logo.” The story makes the point that QFC is looking to make changes in order to better compete with existing and new market forces, as well as seem more relevant to a changing demographic.

    The Times writes, “Monford said that QFC – or perhaps just the Q – is well positioned and perfectly sized to innovate in the fast-changing and competitive grocery industry. The company recently rolled out technology that allows shoppers to scan items as they pick them from the shelves, skipping the checkout line. It offers online shopping for in-store pickup, and, as of late last year, home delivery via Instacart. And it just started selling meal kits – packages of pre-portioned ingredients and recipes for people to make at home.”
    KC's View:
    I think every brand can use a refresh from time to time, and this strikes me as a natural one. I can even imagine the promotions, saying that “we know each other so well, we thought it was time to be on a first-name basis.”

    It has to be more than a name, though … because Seattle has some of the best food shopping in the country and an educated, increasingly foodie-oriented population.

    Published on: April 9, 2018

    Florida Today reports that Winn-Dixie, “facing bankruptcy woes and store closings, is jumping on the home delivery bandwagon.

    “The company announced today it will partner with the grocery service Shipt, and will offer same-day delivery … Beginning today (April 3), shoppers will be able to get items from Winn-Dixie stores delivered right to their doorstep.” To access the service, the story notes, customers have to pay $99 a year for a Shipt membership.

    As Florida Today writes, “The announcement comes amid a shakeup at Winn-Dixie's parent company, Southeastern Grocers. The company filed for bankruptcy in March and will close stores across the southeast, including 35 in Florida … Southeastern Grocers also owns Harveys Supermarket, Bi-Lo and Fresco y Mas.  However, those stores are not included in the Shipt partnership.”
    KC's View:
    The first thing I thought when I saw this story was, better late than never. The second thing I thought was, maybe not … especially since Winn-Dixie is using a delivery service owned by Target - which, last I checked, is a competitor.

    I may be wrong about this, because I’m not in Florida and am visiting Winn-Dixie stores with any regularity. But this somehow feels like a box that needs to be checked off, as opposed to part of broader strategy designed to create a strategy - for both stores and online - that will make the company’s retailing offering compelling, relevant and differentiated.

    Winn-Dixie can emerge from bankruptcy, but it will take a lot more than moves like this, as well as the closing of some stores and elimination of some debt, to help it emerge from irrelevance.

    Published on: April 9, 2018

    The Wall Street Journal this morning has a story about how “small to mid-size dealer groups are selling their businesses to auto-retail giants or investment firms at a robust clip even as auto sales remain strong. The trend - highlighted by Warren Buffett’s entry into the dealership business in 2014 - has gathered momentum as electric, shared and autonomous vehicles threaten to reshape the car business.”

    Essentially, the deal is this. The profit margins on car sales have been narrowing as consumers gain control of the process - they are able to use the internet to gather enormous amounts of information and pit retailers from all over the country against each other. At the same time, Tesla has engineered a sales process that eschews traditional dealerships and instead sells direct to consumers. And, making things even worse, the existence of services like Uber and Lyft means that not as many people need to own cars. All of which add up to a lot of pain for small and mid-sized dealership groups, which now are willing to sell their businesses to entities that have the capital needed to survive and compete.
    KC's View:
    A great object lesson in how technology, consumer preferences, and disruptive competitors can up-end an industry. Every business has to pay attention, lest they be caught napping.

    Published on: April 9, 2018

    The New York Times has a story about how “credit card networks are finally ready to concede what has been obvious to shoppers and merchants for years: Signatures are not a useful way to prove someone’s identity. Later this month, four of the largest networks — American Express, Discover, Mastercard and Visa — will stop requiring them to complete card transactions.”

    From now on, it will be up to retailers to decide whether they want signatures. Walmart and Target are two that have decided to no longer require them.

    It is, the Times writes, part of a broader societal shift: “The signature, a centuries-old way of verifying identity, is rapidly going extinct. Personal checks are anachronisms. Pen-and-ink letters are scarce. When credit card signatures disappear, handwritten authentications will be relegated to a few special circumstances: sealing a giant transaction like a house purchase, or getting a celebrity to autograph a piece of memorabilia — and even that is being supplanted by the cellphone selfie.”
    KC's View:
    One of the more interesting observations in the story is how some restaurants are concerned that eliminating the need for a signature will affect waiters’ tips - it is sort of like muscle memory, as patrons get the card receipt, calculate the tip, and then sign it.

    There is one other reason for the move away from signatures, not reported by the Times: many young people don’t learn how to write in cursive, so they have no idea how to sign their names.

    That’s a shame.

    Published on: April 9, 2018

    GeekWire reports that the Amazon Key program - which uses a mobile app to allow people to access their homes via smart locks as well as keep an eye on their homes via security cameras - is going nationwide.

    However, the part of the program that allows for in-home package delivery remains “restricted to select markets,” the story says.

    It is all part of a broader strategy by Amazon, which last month “added the ability to turn on the camera via voice command with Alexa, get motion detection alerts through Echo devices and enable two-way audio to talk through the camera using an Echo Show or Echo Spot. Amazon also created a website where users can follow their live feeds from their desktops at work.”


    • The Wall Street Journal reports that Amazon “is considering whether to use its Alexa virtual assistant to start a person-to-person payments feature, a move that would push the retailing giant into new competition with PayPal Holdings, Venmo and big banks’ payments efforts … Among the options being evaluated are ways in which consumers could tell Alexa to send money to a friend. The idea is still in the early stages, and the voice-activated device would likely need more information about customers’ bank accounts than it has now to execute such money transfers.”
    KC's View:

    Published on: April 9, 2018

    • The Minneapolis/St. Paul Business Journal reports that Supervalu is working with an adviser to consider options for the company, including a possible sale. The company has not commented on the report, and sources tell the Journal that “no final decision has been made and Supervalu may choose not to pursue a sale.”


    • The Albany Business Review reports that Neil Golub, executive board chairman of The Golub Corp., which owns Price Chopper/Market 32, says that he doesn’t know whether his company “will pursue buying any of the stores owned by Tops Markets, a supermarket chain going through reorganization in bankruptcy court.”

    "They have to go through their bankruptcy first," he says. "They've got a lot of debris in their way. It remains to be seen.”

    Burt Flickinger, managing director of Strategic Resource Group and an MNB fave, tells the paper that he “doubted Tops Markets would sell a handful of individual stores to Golub Corp. unless the chain is forced to liquidate. ‘Tops is worth much more to everybody involved in the creditor, lender and operator community as a bundled business than a business to be broken up … If it's broken up and sold as individual stores, even the secured creditors would be unlikely to even get a dime on the dollar’.”
    KC's View:

    Published on: April 9, 2018

    • Big Y Foods announced that John W. Schnepp III, the company’s director of advertising, has been promoted to the role of vice president of marketing. Schnepp is a 43-year veteran of the company, having started as a part-time service clerk in 1975.
    KC's View:

    Published on: April 9, 2018

    Regarding the ongoing Facebook controversy, MNB reader David Spawn wrote:

    Makes me wonder when some enterprising college kid or twenty-something comes up with a competitive idea to FB.  Maybe it’s a bit too naïve or simplistic, but finding sponsors to pay more for content and offer the user something for sharing their “lives” on social media, kind of like interactive TV?  Maybe you get tokens to redeem if you get enough likes or shares?  Probably wouldn’t fly but it seems when someone stumbles badly, it’s an indication that there’s an opening for someone to take advantage of.
     
    Also, regarding the comments in the Eye-Opener, “Zuckerberg admits that companies had their way with its data, yet Russia and Trump are getting the coverage. Clearly, the media doesn't care that people are tired of hearing Trump is connected to everything bad….” I’m a little terrified that someone seems to think that a foreign power using data from an American company to attempt to meddle in a U.S. election seems to not to be news worthy of reporting.
     
    Despite our occasional differences of opinion, I find your blog refreshing and well-written and am very glad that you can keep a cool (& informed) head about this.




    Got an email about another subject from MNB reader Anna Osborn:

    The read about Generation Z not feeling the love for Amazon was a great share.  You bring up some good points about not quite realizing the value of money just yet.  I noticed the article said gen z refers to people born after 2000.  If that's the case, it shouldn't be surprising they aren't enthralled by Amazon.  Most likely don't have an income nor are they likely to have their own account...at most they're just 18 and still being financially supported.  I believe we really won't know more about this generation's shopping tendencies until more of them get a bit older.

    From another reader, on the same subject:

    I had a couple of thoughts on the Gen Z and Millennial purchase differences on Amazon.

    Gen Z is primarily, although not exclusively, living at home making replenishment shopping that Amazon excels at less prevalent.

    Gen Z shopping in stores and enjoying the experience is a HUGE opportunity if retailers talk to them NOW to cement those attitudes for when they do start making more comparisons.

    I would argue that many Millennials are just starting the type of shopping that they will do in the Grocery space as they start their families as they have started later than the X and especially Boomers.

    These shoppers will be very aware of data handling concerns and while retailers are touting their data today, all of that can be erased with one bad step. In the digital / e-com realm, it’s all data.

    Both Amazon and traditional retailers need to beware and think through whether or not they are ready for this as they race online and can they make it a differential advantage?

    If the online strategy adds costs for the consumer, what will they do when there are rough spots in the economy? This doesn’t have to be the whole economy. It can be very local as all things retail are.




    Regarding changes that Target is making in terms of employee screening, one MNB reader wrote:

    Kevin, the situation Target faces in terms of ensuring those they hire do not have criminal backgrounds is not without precedent.  The question about potential bias would be addressed more proactively if this topic weren’t driven by an individual retailer but rather by an industry forum / Board. 

    Its been a couple of years since I was involved in this but a good model to look at is the one in place in South Africa, run by CGCSA (Consumer Goods Council South Africa).  It established an online registry for all store workers (across all retailers) which did three things.  First, it ensured that everyone employed in any retail store is a SA citizen.  Second, the work history was documented.  Thirdly and most relevant to the Target issue, if someone in the database commits an infraction (theft primarily) then it would most likely lead to them not being employable for a period of time within the retail industry.  In a highly franchised market like South Africa, this technology leveled the field in terms of knowing someone’s past work history.
     
    What’s different is that the introduction of this system was intended to be a deterrent to potential theft / crimes being committed.  Once any crime was proven, the individuals record was updated for potential hirers to see.   I’m not close to how well it worked but your story makes me want to reach out to those leading the project to get a perspective. In a country with a diverse workforce, this system (at that time) made a lot of sense.  As a franchise business owner, this brought a more consistent, cost-effective way to do background screening.
     
    My main point here is that one benefit of industry affair type organizations is this type of service.




    Finally, an email about one component of my review of Eileen McNamara’s “Eunice: The Kennedy Who Changed The World”:

    Thanks for a great review and endorsement. I haven’t read the book yet, but will. I studied the Kennedys and consumed info about them from an early age. My comment relates to your judgment regarding her Catholicism. Faith is not political. I think your comments reflect a different generation who grew up questioning everything including their religions. It came off as anti-Catholic and many could easily take offense. It’s tough enough for those of us growing up both Irish as well as Catholic!

    For the record, here is the relevant [passage from my review:

    Eunice Kennedy Shriver was a contradiction in terms, although maybe just when viewed through a modern prism. She was committed to the less fortunate, and yet she certainly enjoyed the privileges that her family’s wealth and connections afforded her, and sometimes seemed oblivious to how unique they made her. Her dedication to the Catholic Church, an institution that we now know had some serious flaws, seems strangely anachronistic and maybe a little naive. There also was a willingness to ignore the personal flaws - and there were many - of her brothers that seems out of step with her intelligence, but, to be fair, in synch with the kind of blind family loyalty inculcated in her brothers and sisters since birth.

    I certainly wasn’t trying to be anti-Catholic.

    I would argue that the faith is one thing, and the institution is another. I am anti-institution. Then again, I’m skeptical about most institutions.
    KC's View:

    Published on: April 9, 2018

    Patrick Reed won the Masters golf tournament over the weekend, finishing at 15 under par to win his first major career title.
    KC's View: