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    Published on: October 16, 2018

    by Michael Sansolo

    My life as something of a gym rat has taught me the importance of stretching. Sadly with each passing year, I get a constant reminder that my muscles are nowhere near as supple as they once were and need more attention.

    And I’m thinking when it comes to dealing with business change we all need a class in planks and all those other yoga moves - only for our minds. They clearly need stretching as well and now more than ever.

    I got some powerful reminders of this last week while hanging with Kevin at the annually wonderful convention run by the National Association of Convenience Stores (NACS). As Kevin and I discussed in our joint video last week, the show was a bundle of energy and new ideas especially necessary for an industry in the throes of great change.

    After all, the very meaning of the word convenience is changing, so obviously stores dedicated to that concept need get ahead of that change.

    Incredibly, the first two general session speakers used by NACS barely spoke about stores themselves and more about stretching our thinking. Bonin Bough and Scott Stratten were a unique pair of speakers in many ways besides featuring the most interesting beards I’ve seen on stage since ZZ Top went away. And both were worth the time.

    The two speakers focused on the changing world and how we need to think of shoppers, needs, marketing and solutions very differently in this new world. These changes won’t be comfortable or simple, but that’s just the nature of business today. We need to be uncomfortably willing to challenge ourselves to move ahead with the times.

    The two - they spoke separately, but their themes were similar - made clear that most organizations aren’t ready for this. Think about your own company and how you greet new ideas, especially from unexpected places like lower level employees, younger staff or people from different departments. Do you tell people to get back in their own lane or do you recognize that out of the box thinking, by nature, comes from outside the box or certainly outside the lane?

    I recalled, as we often do here at, a movie that’s perfect for this time and of course can be found in “The Big Picture: Essential Business Lessons from the Movies,” the book Kevin and I co-authored. The movie is Babe, the winning story of a pig that becomes a champion sheepdog essentially by never understanding that she is just a pig and by refusing to accept the role nature seemed to assign to him. We all need to be looking for our own Babes these days - and by that I mean, those who think way outside the box.

    (By the way, you may have noticed that I called Babe a she. The movie actually is deliberately vague about the pig’s gender, but every pig used in the movie - there were more than 40, because pigs grow very fast and shooting a movie takes a long time - is a female.)

    NACS featured one other speaker I’d reference and that’s our own Content Guy, Kevin Coupe. Kevin used a quote from ex-General Electric chief Jack Welch;

    ‘If the rate of change on the outside exceeds the rate of change on the inside, the end is near.”

    For too many companies and individuals that is exactly the case right now and largely the people in charge are those who mastered the past to get us where we are today. That’s why we need nurture and find those who think differently and then we have to have the guts to listen and act on what they say. All new ideas won’t be great, but they won’t be terrible as well.

    Start stretching those minds. In the gym we know that a hamstring is a terrible thing to pull. In the office, we need to be just as limber.

    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: October 16, 2018

    by Kevin Coupe

    It’s not bad enough that scientists are predicting global disaster because of global warming.

    Now, there’s a study from the University of California, Irvine, saying that “by the end of this century … heat waves and droughts that damage barley will happen once every three years or so, leading to a roughly 16% drop in beer consumption compared to today.”

    Study coauthor Nathan Mueller tells BuzzFeed, “It kind of adds insult to injury. There’s a heat wave, so you want a beer. But it costs more,” because of barley being so much more expensive.

    The story notes that “beer accounts for about 17% of worldwide barley production (livestock feed is another major use),” and that global warming means that barley supply likely will “drop around 15% by the end of the century.”

    (Let’s be clear. Other crops will be affected by global warming. Crops like rice, wheat, corn, and soybeans. But I think it is important to stay focused on the important stuff.)

    One expert says that it is possible that the projections are wrong, and that barley production won’t drop … but that increasing temperatures will mean that it will be “lousy barley” that will make “crappy beer.”

    (Don’t we have enough crappy beer out there right now?)

    The whole thing is an Eye-Opener, and none of it makes me feel any better.
    KC's View:

    Published on: October 16, 2018

    The Cincinnati Business Courier reports that Kroger “has formed a partnership to deliver wine to customers’ homes, marking the latest in a series of deals it has formed to improve its home delivery capabilities.”

    According to the story, Kroger “is partnering with Los Angeles-based Drinks Holdings to sell wine to be delivered to customers’ homes or offices. The plan is to offer the service initially in 14 states with more areas to be added.” No launch date has been announced.

    Other points from the story:

    • “Kroger will sell the wines at prices ranging from $10.83 to $16.67 per bottle, according to Bloomberg. The wine, which comes from places such as California, Italy, France and Spain, will be available in six- and 12-bottle packs.”

    • “Drinks Holdings is a fast-growing e-commerce business that delivers wine to customers’ doors … The company uses data for marketing similar to how Kroger uses its 84.51 data analytics company to help it market to customers and determine which products to offer.”
    KC's View:
    “Latest in a series of deals,” is right. There is no question that Kroger seems to be picking up momentum these days, making moves around the board with the likes of Ocado and Walgreen, and this is a particularly interesting move.

    Alcohol can be a problematic thing to sell online and deliver because of licensing issues, but maybe in this case it makes sense for Kroger to team up with an outside vendor. (If it works out, y’think maybe Kroger would acquire Drinks Holdings?)

    The interesting thing is that while Amazon sells wine - just check its site - it does virtually no marketing of that fact. Not sure why it even bothers.

    This could be a place where Kroger could really differentiate itself, especially if it can use some of its shopper data to target likely consumers in this category.

    Published on: October 16, 2018

    TheNextWeb has a story about how Amazon has filed for a new patent for its Alexa personal assistant - “it wants Alexa to notice a user’s illness by detecting a change in their voice.”

    In addition, Amazon wants Alexa to be able to “suggest medicines or a recipe for chicken soup.” And, “Amazon aims to use this data and send ads to users. For instance, if the user has a sore throat, it might play a cough syrup ad or suggest a restaurant to order chicken soup from.”

    Or, one supposes, order cough syrup via Amazon Prime Now or chicken soup via Amazon Fresh.

    The story notes that “as is the case with many patents, these features might never become reality.”

    But they also could.
    KC's View:
    It actually is a little scary, all the things that Amazon seems to be developing Alexa to do. Detect illness, evaluate emotional states … and, of course, offer products appropriate to what people are thinking and feeling.

    All this convenience is likely to have a price, of course. Everything has a price.

    Published on: October 16, 2018

    Fascinating story in Wired about Amazon founder-CEO Jeff Bezos’ other passion - space exploration, which is so deep that he sells $1 billion worth of Amazon stock each year to find the operations of his space company, Blue Origin.

    An excerpt from the story says that Bezos believes that “Earth is destined to run out of resources … Humans need a plan B. While he readily concedes that building a space company qualifies as a cool adventure, the ultimate point, he always insists, is getting people to live in space. He often remarks with astonishment and disgust that there have never been more than 13 humans in space at one time. He’s out to change that…”

    You can - and should - read the story here; it is not just a portrait of a man’s passions, but also a unique look at the man himself.

    Like I said, fascinating.
    KC's View:

    Published on: October 16, 2018

    CNBC reports that CVS CEO Larry Merlo, in a presentation to the Economic Club of Washington, D.C., said that his approach to competing with Amazon is to not “leave any white space for Amazon to disrupt.”

    At the same time, the story says, Merlo minimized the impact of Amazon’s acquisition of PillPack:

    “Amazon bought its way into the prescription drug delivery business with a $1 billion acquisition of online pharmacy company PillPack,” which “sorts a person's medicines into clear pouches with labels explaining what's inside and when the person should take them. Merlo said it's a ‘very niche product’ since it's designed for people with chronic conditions who take multiple drugs every day.

    “CVS said it offers a similar multi-dose-packaging product that incorporates a proprietary dosing schedule technology. ‘We have that capability today,’ Merlo said. ‘And listen, with the acquisition of PillPack, there's nothing proprietary about their technology. It's off the shelf’.”
    KC's View:
    The fact of PillPack is less interesting than how Amazon weaves it into its other offerings, and then spins out something even more impactful. I totally agree with the idea of not leaving any white space in which Amazon can operate … but that’s a lot easier said than done.

    Published on: October 16, 2018

    • The Dallas Morning News reports that Walmart has struck a deal with Gerber “to test a fresh baby and toddler food brand beginning this week in 50 stores in Texas, Arkansas, Kansas and Missouri … Walmart has installed refrigerated cases in its baby food aisles for the new Gerber brand called Freshful Start … Gerber developed the line to compete with startups and trends that will only continue with new parents who value convenience.”
    KC's View:

    Published on: October 16, 2018

    Yesterday, MNB reported on the fact that tomorrow Canada will become just the second country in the world to legalize cannabis, after almost a century during which it was illegal.

    Uruguay was first.

    However, an MNB reader wrote in the point out that Canada actually is third, and that often overlooked is the fact that, as reported by the Cypress Mail, last month South Africa’s highest court “allowed the private use of marijuana, upholding a lower court’s ruling that found the criminalisation of cannabis was unconstitutional.”

    The story goes on to say that “activists who include members of the Rastafarian movement and traditional healers greeted the ruling with loud applause. They have held marches over the years to demand that the law be changed to allow people to smoke ‘weed’, which is called ‘dagga’ in South Africa.”

    Mea culpa, mea culpa, mea maxima culpa.
    KC's View:

    Published on: October 16, 2018

    Paul Allen, who co-founded Microsoft with Bill Gates and went on to a remarkable diverse life and career, passed away yesterday from complications of non-Hodgkin’s lymphoma, He was 65, and earlier this month had revealed that the disease, for which he had been treated a decade ago, had returned and he planned to fight it aggressively .

    Since leaving Microsoft, Allen was a movie producer, musician (with his band, the Underthinkers), professional sports (he owned the Seattle Seahawks and the Portland Trailblazers as well as a minority stake in the Seattle Sounders), space exploration (he funded SpaceShip-One), and science (he invested in the Allen Institute for Brain Science), He founded Seattle’s Museum of Pop Culture, owned the Moda Center in Portland, Oregon, and the Cinerama Theater in Seattle.

    Allen also was one of the first billionaires to sign on to The Giving Pledge, an initiative launched by Gates and Warren Buffett to encourage the world’s wealthiest people to give away the majority of their fortunes to charity.
    KC's View:

    Published on: October 16, 2018

    Lots of reactions to the Sears bankruptcy.

    MNB reader Lori Stillman wrote:

    Eddie Lampert’s mismanagement of Sears and his seemingly intent all along to rob this company of premium real estate (cherry-picked and used to secure his personal loans to the company) and iconic brands is darn-near criminal.  I’ve wondered for years why the SEC has not stepped in to look deeper at the actions that have transpired.  The role that struggling Sears stores play in markets where these locations are anchors to C- and D-class malls will equally be something to watch.  I suspect we’ll see not only many Sears locations shuttered, but the properties they are attached to equally at risk.
    …and the disruption continues.

    MNB reader Eric Mayo wrote:

    The story of Sears should be a case study for new leaders.  The reality is that Sears was the “Amazon” of its time.  I remember as a kid that if Mom and Dad needed something, really just about anything that wasn’t available in a local store, we ordered it out of the Sears catalog.  I’m sure all of us of a certain age remember looking through the catalog when it came in the mail and seeing all the “cool” stuff they had available.  You could order everything from a whole new garage to clothing, tools, televisions, toys, etc., etc.

    Can you imagine what the world of Sears would be today if, at the right moment in time, someone on the team made the decision to see what this newfangled worldwide internet thing was all about, and maybe, just maybe, decided to put their entire catalog online for people to order?  Sears published their last big catalog in 1993 – ONE year before Amazon started (1994).  If the message is not clear to companies of all shapes and sizes right now that you need to spend time, energy, and money on innovation and “what’s next” - - it should be.  The Sears situation kind of makes me sad.  They were an important part of the fabric of America and now they have become irrelevant.  It is, however, a truly interesting and educational story.

    One MNB reader wrote:

    Your article on Sears touched on so many topics from merchandising to Store closures to retiree pensions and benefits.  It was interesting that hear that the courts stood for retirees and mandated an influx of cash into the pension fund.  Yet healthcare and other benefits are most certainly at risk.

    It’s interesting to me due to where our state and federal government agencies are on this same topic.  Bloomberg reported in April of this year that New Jersey has $78 billion in their pension fund to pay for $280 billion in future liabilities, not exactly a heartening number if you’re a retired public servant.  Bloomberg warned that NJ pensions could face insolvency in as little as 5 years.

    I entered the workforce nearly 30 years ago and corporations had already recognized the writing on the wall with pensions and ran away from them quickly in favor of matching 401k retirement plans that all but eliminated pensions for today’s private sector workers.  Why didn’t the state and federal government’s follow such sound financial practices being modeled for them by corporations, I wonder?

    And, from another reader:

    You certainly would have been entitled to caption this story “I Told You So”, but I know that’s not your style. And I’ve enjoyed a lot of your gems over the years but opining that Lampert “seemed to know a lot more about hedge funds than hedge clippers “ tops my list.

    Mine, too, if I’m going to be honest.
    KC's View:

    Published on: October 16, 2018

    In Game Three of the National League Championship Series, the Milwaukee Brewers defeated the Los Angeles Dodgers 4-0, to take a 2-1 game lead in the best-of-seven series.

    In Monday Night Football, the Green Bay Packers defeated the San Francisco 49ers 33-30.
    KC's View: