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    Published on: June 12, 2018

    by Michael Sansolo

    One complaint I hear occasionally about MNB is why we write about a wide variety of topics from politics to movies to cheeseburgers, as opposed to staying within the traditional lanes of business reporting and commentary. My response is simple - we believe there are both straightforward and unexpected business lessons to be found almost anywhere and that’s why our scope is so wide.

    Well, get ready for it to get wider.

    This past weekend, I briefly attended the Washington, DC, Capital Pride parade and saw how many businesses are finding new and creative ways to reach out with a positive voice to the LGBTQ community. The business lessons were clear, useful and educational.

    Let’s remember that all business rests on people. We need people to connect with us as shoppers and, almost as importantly, we need them to want to work for our companies. As the representative of one bank at the festival told me, a company can’t afford to overlook any group when it comes to finding quality staffers. Diversity can be both a strength and a pipeline for new and needed talent, especially today with unemployment at near record lows.

    Most of the businesses (from banks to travel destinations) exhibiting at the festival were clearly focused on one goal: turning the LGBTQ population into customers. The community, after all, is made up of potential shoppers who largely have decent incomes and generally lower-than-usual expenses related to child rearing.

    Among those businesses were many local food retailers with some interesting messages. Giant Food (the Ahold division) had substantial traffic at its booth thanks to a wide array of giveaways and prizes. Food Lion (now a cousin of Giant’s thanks to the Ahold Delhaize relationship) made a clear statement about feeding economically distressed populations.

    But two stood out. Wegmans was the only business of any kind that I encountered that was talking about people as both shoppers and prospective employees. The Wegmans’ team at the festival was clearly well chosen and eagerly talked about the company’s inclusiveness.

    The other was Amazon, which found a way to make itself seem simply cooler than anyone else. The e-commerce giant billed itself as “Glamazon” and handed out assorted paraphernalia pushing that name. I’m sure my wife wasn’t the only one to ask if packages could be delivered to that very booth. And somehow, Amazon missed that opportunity.

    It was ironic, by the way, that this festival was being held - and embraced by local businesses - at the end of a week when a Colorado bakery owner went to the US Supreme Court and won the right not to do business with the LGBTQ community.

    But let’s come back to why I write about this.

    At MNB we believe we can cast a wide net to find all kinds of ideas useful and increasingly relevant to businesses facing an ever-increasing range of challenges. Sometimes that means going places I wouldn’t otherwise venture - like the Capital Pride Festival. And frankly, I would go back again to be part of the energy and warmth of the entire crowd.

    Just like us, you need to cast your net wider than ever, as it might be a new way to find important people such as prospective shoppers and staffers. To paraphrase some old political wisdom, “It’s the people, stupid.”

    That means all the people.

    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: June 12, 2018

    by Kevin Coupe

    The Los Angeles Times reports that after two months being closed, Disneyland’s Pirates of the Caribbean ride has reopened - with changes.

    “The scene that for decades showed women tied by ropes and put up for auction has been replaced by a scene that depicts pirates auctioning off the pilfered treasures of the townsfolk,” the Times writes. “A tall, redheaded woman who was shown as the top bride prospect in the previous auction scene is now shown as a pirate.”

    The Times notes that “Disney has a history of overhauling rides either to reflect more sensitive contemporary tastes or to inject characters or scenes from new movies that the Burbank-based entertainment giant is trying to promote,” and that “park founder Walt Disney himself always intended for the rides to be updated and refreshed to draw return visits.”

    Similar changes have been made at Pirates of the Caribbean ride in Walt Disney World in Florida.

    The story notes that the changes have been met with mixed reviews, with some decrying how political correctness has affected even amusement park rides.

    I’d have one response to such people: Tough.

    Sometimes political correctness isn’t a bad thing. Sometimes, it is just correct. And, it corrects, or at least addresses, the sins of the past.

    I’m sure that the guys - and they almost certainly were all guys - who created that ride thought the whole auctioning-off-women-as-property thing was funny. There are guys out there who almost certainly still think that it is funny.

    But it isn’t. In 2018, it is indefensible … especially to our sons and daughters, who ought not be taught that such things are humorous or acceptable or appropriate or not worth paying attention to.

    I’m glad that Disney made the change. I hope this Eye-Opening story will make other people and companies think about the changes that maybe they ought to be making in their businesses and cultures and even personal behavior.
    KC's View:

    Published on: June 12, 2018

    Employee Benefit News reports that Hy-Vee is fighting against high turnover rates among part-time employees by introducing a “sophisticated enrollment platform” that allows it to offer 11 optional benefits from which workers can choose if they are seen as applicable and desirable.

    According to the story, “ Hy-Vee created six demographic profiles to help part-timers start their customized online benefit shopping experience and zero in on the most appropriate options … As part-timers shop for benefits on the platform, the system gives them a running total of the per-paycheck deductions they will incur to pay for selected benefits … Part-timers at least 19 years old can purchase health (both ACA-compliant and a “mini-med” plan), dental, disability (short and long-term), vision, life (group and individual), accident, critical illness hospital indemnity, disability, vision, homeowners, renters, and pet insurance.”

    Other services, like banking and investments via Midwest Heritage - a financial services company owned by Hy-Vee - are also marketed via the platform.

    The story notes that “some 2,000 eligible part-timers browsed the platform during the open enrollment period, although not all of them ultimately purchased any of the coverage options.” While some 65,000 of Hy-Vee’s 85,000 employees are part-timers, the company says it expects the benefits program “to pick up steam”
    KC's View:
    At a time of low unemployment, it is critical for companies to do whatever they can to become employers of choice. At a time when bricks-and-mortar stores ought to be making their people a centerpiece of whatever differential advantage they seek to offer, they need to come up with ways to be employers of choice.

    Published on: June 12, 2018

    The Seattle Times reports that the Seattle City Council seems likely to repeal the “head tax” that it enacted less than a month ago, which would head-off (no pun intended) a citizen-backed call for a November referendum on the issue.

    “The council voted 9-0 last month to pass the tax of $275 per Seattle employee, per year on the city’s largest employers – those grossing at least $20 million per year in the city,” the Times writes. “The tax is scheduled to take effect in 2019 and projected to raise about $47 million per year over five years,” which was slated to be used to address Seattle’s homelessness issue and provide affordable housing.

    At one point, the City Council was considering a $500 per employee tax, but backed off that number because of political resistance and criticisms from many of the city’s businesses, including Amazon and Starbucks.
    KC's View:
    Seattle has issues. We all know it. Amazon certainly is aware of it, because it is making avoidance of those issues a focal point in its search for a second headquarters city. But targeting the companies driving the area’s growth and prosperity may not be the best tactic.

    Published on: June 12, 2018

    Reuters reports that French retailer Carrefour “is teaming up with Google to boost its online shopping business on its home turf, where rivals are also launching e-commerce offensives.”

    Starting next year, Carrefour says, “its groceries would be available on the U.S. search engine’s new dedicated shopping site in France, or through Google-operated systems such as connected speakers and voice-assisted devices.” Reuters writes that “the tie-up comes amid a broader shake-up in France’s competitive food retail market as retailers invest in online platforms and home delivery services to win over clients and ward off in-roads by U.S. e-commerce giant Amazon.”

    In addition, the story says, the companies announced that “they would open an innovation lab in Paris this summer, in partnership with Google Cloud, for research into artificial intelligence that can be used in consumer services.”
    KC's View:
    I think we’re going to see a lot more of this kind of deal, as Google gets more aggressive in creating retail alliances that will drive growth in this sector. Which is just what traditional retail business need … another behemoth with large footprints.

    Published on: June 12, 2018

    Last week, we reported on how IHOP was stoking speculation via social media by teasing that it would change its name from “IHOP” to “IHOB,” without saying what the “B” would stand for.
    Yesterday, the company provided the answer, saying that the “B” stood for “burgers,” and that the change was a temporary one that “celebrates the debut of the brand's new Ultimate Steakburgers, a line-up of seven mouth-watering, all-natural burgers.”

    "Burgers are a quintessential, American menu item so it makes perfect sense that IHOP, one of the most iconic, all-American comfort-food brands in the world, would go over the top to create a delicious line-up of quality burgers that hit the spot any time of day," Chef Nevielle Panthaky, the company’s head of culinary, said in a prepared statement.

    And Brad Haley, it chief marketing officer for IHOb restaurants, said, “We’ve pancaked pancakes for 60 years now so it's the perfect time to start burgerin' burgers, and we're kicking it off by flipping the 'p' in IHOP to a 'b' for burgers. And, when you try them, I think you'll agree with me that IHOb's new line of Ultimate Steakburgers are so good that I'd put them up against anyone's … just like our pancakes.”
    KC's View:
    First of all, I’d like to point out to Haley that “burger” and “pancake” are not verbs. Using them as such actually hurts my eyes and ears.

    Tom Stoppard, in “The Real Thing,” writes that if you are careful about your choice of words “you can build bridges across incomprehension and chaos. But when they get their corners knocked off, they're no good any more... They deserve respect. If you get the right ones in the right order, you can nudge the world a little or make a poem which children will speak for you when you're dead.”

    Though when I think about it, it occurs to me that based on my limited experience at IHOP, I’m not even sure that its pancakes are food … so why should they get words right?

    I wouldn’t go to IHOP for pancakes. I sure as hell wouldn’t go there for burgers.

    To me, this whole effort strikes me as a tease without a sufficient payoff. The bet here is that while the marketing folks probably thought this was brilliant, it’ll end up being a nothingburger with customers. (IHOP’s Twitter feed is pretty funny, especially if you enjoy people mocking a company for much ado about very little.)

    Published on: June 12, 2018

    The New York Times reports that there is “a growing body of research” suggesting that “the spectacular growth of online shopping” is a major factor in “tamping down inflation.”

    The reason is simple: E-commerce allows consumers to shop around for best prices, which discourages business from raising prices, even if their costs are going up. But this can be a problem, economists says, because two percent inflation is considered a target and “sweet spot” that keeps “the economy humming without overheating.”

    This confluence of factors, the Times suggests, could be the reason that, while “unemployment is sinking and businesses are churning out more goods and services … prices and wages are climbing a lot more slowly than anyone has expected.”
    KC's View:
    I’m not an economist, so my two cents worth on this one may not even be worth that. But it does occur to me that this does illustrate one fact o our lives - that as realities change, we may have to re-evaluate not just what measurements matter, but how things are measured. That’s not necessarily a bad thing … but it probably is a real thing.

    Published on: June 12, 2018

    The New York Times writes this morning:

    "America’s dairies have been gut-punched by declining milk prices — some dropping about 40 percent in recent years — and demand, as consumers embrace soy, nut and other milks, and the Greek yogurt craze cools. In some places, despair has set in: Three members of the Agri-Mark Dairy cooperative, which represents about 1,000 dairy farmers in the Northeast, have killed themselves in recent years, the latest in January.

    “To save their livelihoods, many dairy farms have started breweries, bolstering bottom lines with a different kind of liquid capital.

    “It’s another chapter in the dairy and brewing industries’ interlinked history. Brewers often supply farmers with spent grains for feed, and many American craft breweries have started by using secondhand dairy infrastructure.”
    KC's View:
    The Times story offers a number of examples of dairy farms that are taking this approach. For which I think the editors, because it provides a kind of map for what sounds like a fun road trip.

    Published on: June 12, 2018

    The New York Times has a worth-reading profile of Sarah Masoni, director of the product development and process program at the Food Innovation Center of Oregon State University.

    Her title, however, belies what she does for a living - she is “a professional food designer - skilled in building flavors and textures, versed in arcana like the aftertastes of alternative sweeteners and the umami of dried yeasts. She has a foot in the worlds of food safety, processing and packaging, and supermarket shelf stability. A student of food trends and innovations, she is also a sought-after judge, with a specialty in dairy products.”

    One of her clients describes her as having a “million-dollar palate,” though the Times notes that it comes without a “million-dollar attitude”: “Masoni has a down-to-earth, slightly nerdy charm, like the shy kid in class who surprises you with her witty insights.”

    You can read the story here.
    KC's View:

    Published on: June 12, 2018

    • Amazon-owned Whole Foods announced this morning that it has “launched free two-hour delivery of natural and organic products from Whole Foods Market through Prime Now in Baltimore, Boston, Philadelphia and Richmond … The service launched earlier this year with plans for continued expansion across the U.S. throughout 2018. Customers can start shopping from Whole Foods Market selection at or by using the Prime Now app available on Android and iOS devices.”
    KC's View:

    Published on: June 12, 2018

    • Add IKEA, SeaWorld and Royal Caribbean to the list of entities banning the use of plastic straws and bags.

    The Washington Post writes that “the companies are now linked to a host of businesses, governments and others across the world that have joined an effort to dramatically reduce the 8 million metric tons of plastic that pollute oceans each year - ‘one garbage truck into the ocean every minute,’ according to a 2016 report released by the Ellen MacArthur Foundation. The corporate activism is evidence that a fledgling movement to ban plastic straws, which sprang from outrage over plastic’s impact on the environment and animals, continues to stir.” These three companies made their decision “less than two weeks after a pilot whale died off Thailand with 80 plastic bags in its stomach.”

    The story goes on: “On July 1, Seattle will become the largest U.S. city to cut out all plastic straws and eating utensils in restaurants, while the California General Assembly is weighing legislation to ban straws and plastic bags statewide. Across the Atlantic, British Prime Minister Theresa May has announced her government will introduce a ban on the sale of plastic straws, stirrers and plastic-stemmed cotton swabs throughout the United Kingdom. The European Commission also has proposed rules banning 10 single-use plastic products throughout the European Union.”
    KC's View:

    Published on: June 12, 2018

    Responding to yesterday’s story about an Oliver Wyman study suggesting that Lidl is gaining some traction, and my comment that such formats could be formidable when, inevitably, the nation goes into recession, one MNB reader wrote:

    You are way too optimistic about companies like Lidl. Not sure why Lidl’s 55 stores warrant the space. Dollar General probably opened that many stores in the last month ! Lidl has been commissioning these kind of “independent” reports…….Very narrow survey base, must be tough to find a whole 164 Lidl shoppers in Virginia!

    More relevant news on Lidl is they continue to scramble … a new USA CEO appointed May 18 and they have run ads featuring primarily national brands.

    A year ago most press pundits breathlessly wrote about Hard discount taking over the USA, watch what happened to Europe etc. The Lidl truth is what was supposed to be a road to 500 stores is stalled at 55. As you’ve stated many times, a retailer must have a compelling offer and a sense of retail entertainment to survive. If having low prices on private label was a winner, then any mainstream USA retailer could simply drop prices on the thousand of private label skus they already stock offering their consumers both private label plus national brands (sounds like Winn Dixie or A & P).

    Fair points, though I’m shocked, shocked to hear you suggest that a company like Oliver Wyman would slant the findings of a study to satisfy a client. (For the record, I don’t know that Lidl commissioned the study.)

    I would just be a little careful about underestimating their potential (as opposed to their current reality, which has been underwhelming).

    Yesterday, MNB took note of an Associated Press report on a US Labor Department study saying that “more than 15 million Americans were working as independent contractors, on-call workers, temporary workers and for contract companies as of May 2017. That’s equal to about 10.1 percent of the American workforce, down slightly from 10.8 percent when the government last conducted the survey, in 2005.”

    These figures, the story noted, are at odds with conventional wisdom that more people than ever are working as independent contractors, including a 2016 study saying “that the number of people in alternative work had risen by more than 50 percent in 2015 from a decade earlier, to 23.6 million.”

    MNB reader Yvonne Manganaro wrote:

    I think one of the most important reasons that IC’s were likely undercounted was the methodology of the survey. They did not count individuals who had a primary position elsewhere, and did not count those who had not worked that week. Most Lyft and Uber drivers I have met have primary sources of income other than the ride sharing services, and I imagine for many “gig” workers, it’s the same situation.

    Good point.

    Our Monday Eye-Opener was about a number from the National Center for Health Statistics, an arm of the Centers for Disease Control and Prevention (CDC): “More than half of U.S. households — 53.9% — rely entirely on cellphones.” In other words, they don’t have landlines.

    The other interesting conclusion:

    “The health statistics center’s survey also found that members of cellphone-only households were more likely to engage in risky behaviors such as smoking, binge drinking, lacking health insurance and driving without seat belts, although the survey did not delve into why that might be.”

    One MNB reader opined:

    Data showing that cellphone only persons engage in more risky behavior is easily explained by looking at the age differences.  We old people are more apt to keep our land line even if we have finally succumbed to the lure of an iPhone. And I suspect old people engage in less risky behavior.

    Finally, yesterday we reported on a new NPR/Marist poll saying that “close to two-thirds of Americans now say they've bought something on Amazon … That is 92 percent of America's online shoppers — which is to say, almost all of them.”

    I commented, in part:

    It all comes back to the ecosystem that Amazon is creating, which makes it an incredibly and almost unprecedentedly powerful competitor. Here’s how NPR sums it up: “It’s much more than an online store. It makes movies and TV shows, has a massive cloud data-storage business where it keeps information from the government and numerous other companies, runs the Whole Foods grocery chain, offers people Internet-connected door locks, and makes the popular Alexa smart speaker.”

    Amazon is a habit. Here’s a little test: Try to remember the last day when you did not have some sort of interaction with Amazon.

    I can’t remember one. And the only other company I can say that about is Apple.

    But one MNB reader challenged me on this:

    I can’t remember the last day I had any sort of interaction with Amazon unless you count the day I went to Whole Foods to see what all the commotion over that Amazon acquisition was about, and then only spurred by a Chase Hyatt VISA Card promotion that gave me a $20 credit on a $50 purchase, most of which was spent on beer.  I have not been back since.  But that might be explained by my being in the 65+ category.


    But I’m 63, so I’m not sure the divide is as generational as you think.

    In fact, I think we’re talking about multiplication, not division.
    KC's View: