business news in context, analysis with attitude

Published on: January 16, 2019

'; -->

Published on: January 16, 2019

by Kevin Coupe

In crafting a commercial for its razors, razor blades and personal care products, Procter & Gamble-owned Gillette tried to be cutting edge. In doing so, it has gotten some validation, but also some sharp rebukes.

Here’s the story…

The new ad takes direct aim at masculinity turned toxic, and the kinds of “boys will be boys” rationales that often follow bad behavior. These attitudes often fuel fighting, bullying, sexual harassment and discrimination … and the commercial, which you can see at left, reflects a reality in which old attitudes now have come face to face with new realities, especially because of the #MeToo movement.

Adapting Gillette’s longtime slogan, the commercial asks if this is the best that men can be, and challenges men to do better and be better.

There’s been a lot of coverage of this commercial over the past couple of days, largely because much of the social media reaction seems to be negative. Semi-celebrities such as Piers Morgan and James Woods have threatened to change their brand of razors. (Morgan wrote online that Gillette “now wants every man to take one of their razors & cut off his testicles.”)

Here’s the business context…

Let’s be clear. Whatever the social/cultural context for the Gillette ad, it is releasing it in a competitive environment where it has been successfully attacked and disrupted by brands such as Dollar Shave Club and Harry’s. Other commercials it has produced (like one about the company’s New England factory workers) have somehow seemed a little desperate in their clinging to some level of American authenticity.

This commercial is a way to clear away the clutter from the brand, and use a compelling and resonant social issue to grab some attention and refocus consumers’ minds. And it is in the recent tradition of brands that have done so, to varying degrees of success - sometimes it seems appropriate and supportive (the “Like A Girl” campaign for Always feminine hygiene products), and sometimes it is awful (Ram trucks using a Martin Luther King Jr. speech).

GQ writes: “Many brands have commodified wokeness with great success: Nike’s revenues leapt after unveiling its campaign starring Colin Kaepernick, Patagonia posted massive sales after directly attacking President Trump, and in Gillette’s own shaving space, Harry’s has made reconsidering masculinity a central tenet of its advertising … Gillette’s new commercial isn’t pure marketing, either: the brand also pledged to donate $3 million over the next three years to nonprofits, starting with the Boys and Girls Club of America.”

Here’s what I think…

I love the ad.

The cretinous attitudes and behaviors illustrated in the commercial are not some invention of an advertising person with an over-active imagination. These are real - and they’ve been part of our culture for centuries. Now - not for the first time, but maybe, finally, in some sort of sustainable way - as a culture we’ve started paying more attention, and maybe creating some actual change in what we tolerate and accept.

I think it is a good thing that the ad shows that it is possible to break the cycle of bad behavior, and it illustrates what good behavior looks like.

Gillette isn’t suggesting that all masculinity is toxic … just that certain forms of masculine behavior (as practiced by some politicians and businessmen and actors and artists and journalists and men in every profession and from every demographic) are toxic. And unacceptable. No excuses.

I have no problem with that, and frankly, I have to wonder about the priorities of any man who finds this ad to be offensive. Are they that insecure? What exactly is it about this ad that strikes them as being emasculating and/or inaccurate? (By the way, when you start taking masculinity cues from Piers Morgan and James Woods, it is time to start re-evaluating your life.)

I’m totally cool with the suggestion that men can be better, that men can do better. How we are today is clearly not the best that we can be.

Good for Gillette - taking a position in a way that strikes me as compelling, to an audience and with an approach that strike me as relevant to the brand.

It is an Eye-Opener. As for the naysayers … well, there always will be people who have eyes, but see not; who have ears, but hear not.

Published on: January 16, 2019

In the wake of its deal last week with Kroger that is designed to result in a future store concept, Microsoft yesterday announced a deal with Walgreens Boots Alliance “to design ‘digital health corners’ for its stores as both companies battle an ever-expanding Amazon.”

According to a Bloomberg story, “Walgreens will begin using Microsoft’s Azure cloud-computing software, moving applications and data to the tech giant’s data centers … The deal with Microsoft will start with a pilot of digital health corners in as many as 12 stores this year, which will be designed to promote the sale of health-related devices and help patients manage chronic diseases.”

Bloomberg writes that “for Walgreens, the pharmacy giant must contend with looming competitive threats from Amazon and other upstarts looking to disrupt the drugstore business. Meanwhile, Microsoft is angling to gain ground against Amazon Web Services by offering back-end computing muscle to retail, grocery and health operators that don’t want to give more business to one of their biggest foes.”

While terms of the deal were not disclosed, the two companies “have committed to a multiyear research and development investment to develop other health-care tools that could ultimately lower costs. The companies may establish joint innovation centers in some markets.”

CNBC writes that “Amazon’s recent push into health care looms large. Although the company has kept its intentions closely guarded, it’s making moves like acquiring online pharmacy PillPack and teaming up with J.P. Morgan and Berkshire Hathaway on a long-term plan to improve care and reduce costs for employees.”

Published on: January 16, 2019

A new study released by the National Retail Federation (NRF) says that “consumers increasingly expect free delivery of items they buy online and are also embracing new options like picking up their online purchases at a local store … The report found that 75 percent of consumers surveyed expect delivery to be free even on orders under $50, up from 68 percent a year ago.”

The study goes on:

“Many consumers now consider shipping costs even before getting to the checkout page, with 65 percent saying they look up free-shipping thresholds before adding items to their online shopping carts. Consumers also want their products fast, with 39 percent expecting two-day shipping to be free, and 29 percent have backed out of a purchase because two-day shipping wasn’t free.

“The survey found that 70 percent of consumers who are aware of buying online and picking up in store had tried it, and the top reason for doing so was to avoid paying for shipping. Picking up at the cash register is still the most frequent practice, done by 83 percent of those who have bought online and picked up in-store. But as options grow, 63 percent would like to be able to use curbside pickup (tried so far by only 27 percent), 56 percent want merchandise delivered to the trunk of their cars (tried by 19 percent) and 50 percent want to retrieve purchases from a locker (tried by 16 percent).”

Published on: January 16, 2019

Reuters reports that hedge funder Eddie Lampert, chairman of bankrupt Sears Holdings, has “prevailed in a bankruptcy auction for the U.S. department store chain with an improved takeover bid of roughly $5.2 billion, allowing the 126-year-old retailer to keep its doors open.”

According to the story, “Lampert’s bid, boosted from an earlier $5 billion offer, prevailed after weeks of back-and-forth deliberations that culminated in a days-long bankruptcy auction held behind closed doors. The billionaire’s proposal, made through his hedge fund ESL Investments Inc, will save up to 45,000 jobs and keep 425 stores open across the United States.”

While Sears has accepted the offer, the bankruptcy judge overseeing Sears’ affairs still has to approve it. There remains a coterie of creditors that object to the deal, believing that they have a better chance to get some of the money they are owed if the company is liquidated.

Published on: January 16, 2019

The New York Times reports that the Trump administration is considering the appointment of former PepsiCo CEO Indra Nooyi as president of the World Bank.

The story notes that “the decision-making process for the top post at the World Bank is fluid and in its initial stages and early front-runners and candidates often fall off the radar, or withdraw from consideration, before the president makes his ultimate pick.” However, one person involved in the process who is seen as promoting Nooyi’s candidacy is Ivanka Trump, the president’s eldest daughter.

Nooyi is not seen as a slam-dunk. While she did serve on on Trump’s business advisory council after his election - it was disbanded after a number of executives quit in the wake of the administration’s response to white supremacist violence in Charlottesville, Va. - she did not support any candidate during the 2016 election. And she made some comments after the election about how some PepsiCo employees were “in mourning” that may not be seen as sufficiently loyal to Trump.

Published on: January 16, 2019

CNBC reports that Walmart “has opted to end its involvement in the network of commercial and Medicaid pharmacies run by CVS Health Corp after the two companies failed to agree on pricing, CVS said. The company said Walmart sought reimbursement increases that would lead to higher costs for clients and consumers.”

When the break takes place, it would mean that people who are members of the CVS Caremark benefits system and get their prescriptions filled at Walmart “might not be eligible for coverage by their drug plans … Less than 5 percent of affected CVS Caremark members use only Walmart to fill their prescriptions, CVS said.”

Walmart took issue with CVS’s explanation, saying that it “wants to pass along savings to their customers, not a middle man.”

Published on: January 16, 2019

At The Ohio State University, student newspaper The Lantern reports that there is a new ATM on campus - that dispenses pizza.

Located in a student dining hall, the pizza ATM “holds about 70 pizzas … and students have the options to choose between cheese or pepperoni pizza.” For the moment, the story says, it is only operational when the dining hall is open, but the school hopes to soon have it available 24 hours a day, with more toppings. Students can pay for their pizzas by using their campus meal plan, or with a credit card.

“This is a really a way for us to provide a hot option and other options for students that are over on this side of campus that don’t live on the north area or south area that have other late night operations that really isn’t going to incur a bunch of additional labor costs on top of providing the services,” says Abby Hertzfeld, associate director of operations for Student Life Dining Services.

Published on: January 16, 2019

• Inland Empire reports that this July Walmart will open “a 340,000-square-foot high-tech consolidation center in Colton, CA that will be the first in Walmart’s supply chain to receive, sort, and ship freight. This automated technology will enable three times more volume to flow throughout the center and helps Walmart deliver the right product to the right store, so customers can find the products they need.”

Published on: January 16, 2019

• Netflix announced yesterday that it is raising prices by between 13 and 18 percent, depending on what subscription plan members are using; for its most popular plan, that means an increase from $11 a month to $13.

It is the largest increase taken by Netflix since it started its streaming service a dozen years ago. New members will see the increase immediately, while it will be phased in over the coming year as members’ renewals come up.

Netflix has been in something of a cash crunch - it has more than $12 billion in debt, and has committed to spending more than $18 billion on content in the near future. This includes original movies and series as well as deals for old series like “Friends.”


• QSR reports that Chick-fil-A is testing a variety of spicy items that could be added to its menu - Spicy Chick-n-Strips, Grilled Spicy Deluxe Sandwich, Spicy Chick-n-Strips Biscuit, and the Grilled Spicy Deluxe Bundle.

“While the spicy chicken sandwich has been a staple on the Chick-fil-A menu for almost a decade,” the story says, “the company is looking to expand its spicier offerings.”

Published on: January 16, 2019

• Stater Bros. announced that Keith Thomas, the company’s senior vice president of retail operations, has been promoted to the position of group senior vice president of retail operations.

Published on: January 16, 2019

Yesterday, MNB took note of an Associated Press report that a Washington, DC, judge has ruled that a lawsuit filed by the Organic Trade Association (OTA) against Unilever - charging that its Ben & Jerry’s brand “ misleads consumers about its environmental practices” - can move forward, saying that the suit “alleges facts sufficient to advance a plausible claim.”

I got this wrong - the suit was filed by the e Organic Consumers Association, not the Organic Trade Association.

Thanks to Carl Jorgensen, EVP and Managing Director of the Free From Forum, for pointing this out to me.

Mea culpa, mea culpa, mea maxima culpa.

Published on: January 16, 2019

Got the following email from MNB reader Curtis Arthur:

As they would say in radio when I was a kid, “Long time listener.  First time caller.”

You hit the nail on the head with it is equally important - maybe more so - for retailers to be focused in a granular way on what the data tells them, and using it to communicate effectively with shoppers, demonstrating that they are loyal to them.

In our engagements the big issue isn’t necessarily the data or the insights but the action-oriented mindset of the retailers.  If you aren’t Amazon, who built their business on loyalty information, you have to evolve your thinking from having little information to having too much:  data, insights, communication platforms, etc.  Unfortunately, unless you start from scratch, there is no easy button that tells you what to do.  There has to be some sort of human smarts that guides you over along the path and that has to be within the walls of the retailer who has access to many data sources.



Regarding proposed legislation in New York State, one MNB reader wrote:

Here we go again... the old plastic bag bans that keep failing over and over again. There is more plastic going into land fills than ever! Plus the so-called reusable bags and paper keep failing and end up in land fills along with the plastic.

The facts are now in all over the country....Bag Bans do not work. The consumer ends up paying more at checkout and no less material is going into the land fills. If as much effort went into recycling, not only would there be less litter, but there would be a stronger job market as a result.

Not sure everyone would agree with your “facts.”

From the New York Times:

“Washington’s 5-cent fee on paper and plastic bags went into effect in 2010. City officials have said the law drastically reduced consumption of disposable bags there, and a foundation that monitors trash in Washington’s waterways said it found a 72 percent decrease in the number of plastic bags being removed during cleanup efforts.

Chicago passed a ban on thin, lightweight plastic bags in 2015, then repealed that law in 2016 and replaced it with a 7-cent fee on paper and plastic. A 2018 study from researchers at the University of Chicago and New York University said disposable bag use in the city was down 40 percent.

“Globally, countries including Israel and Ireland also have fees on plastic bags. In Israel, the government said disposable plastic bag use went down 80 percent at supermarket chains in the year after the law took effect. In Ireland, plastic bag use dropped 94 percent just weeks after the country adopted its tax in 2002.”

Doesn’t sound so ineffective to me. Especially since a 2016 report from the World Economic Forum “suggested that by 2050, the world’s oceans would contain more plastic by weight than fish,” and that, “as the plastics break down, they release toxic chemicals, threatening marine life.”