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    Published on: February 12, 2019

    by Michael Sansolo

    Though we are currently in the midst of the shortest and arguably coldest and bleakest month of the year there are unmistakable signs that spring and summer are coming. This week, at assorted locations in Arizona and Florida, the first major league baseball players will start training for the new season.

    Now trust me, there are parallels in this for business even if you don’t - unlike Kevin and me - see this moment as possibly one of the most important in the year. In countless ways, baseball faces the same challenges and opportunities that confront most businesses these days.

    The 2019 season begins with looming clouds of labor strife and worries that the languid pace of the game - one of its main attractions, for some of us - is increasingly irrelevant for people growing up in a world of fast-paced, action filled options. So baseball is examining how to evolve its rules to adapt to the new era without losing grey heads like your MNB team.

    But what makes the start of the season so special is possibility. In February, March and April we all believe our teams can win that this will be the year. (To be honest, we MNB fans of the New York Mets co-mingle our optimism with time-honored expectations of catastrophe.)

    Since last October’s World Series championship most teams (apologies to Miami fans) have been scouring ways to somehow best the Boston Red Sox, currently the gold standard of the league. The Sox’s eternal rival - AKA, Satan’s spawn - the New York Yankees are spending more money to build a team that will bury the Bostonians.

    Heck, even the Mets tried to improve during the off-season. It’s a reminder that to compete we always must looks for ways to improve and to adapt to the new challenges of the day. Many teams this year are adding players for specific reasons that matter, they believe, most to baseball in 2019.

    In truth, baseball teams have an advantage that other businesses lack. Even teams in the midst of lousy seasons are in no danger or going out of business. Yet the need to constantly update to stay competitive and relevant is something we all need consider. More than ever, baseball teams are driven by data based thinking, which might insult the memory of Babe Ruth. Then again, no player today could get by with the Babe’s famous lack of conditioning. In order for an individual player to stay in the league he needs to be better prepared than ever. (Another lesson for business today. Preparation matters.)

    The other great aspect about baseball is the number of wonderful movies about the game with countless great lessons for life and business. Consider two MNB favorites: Bull Durham and A League of Their Own.

    The former has a wonderful scene reminding us of the chasm that divides good and great performance. In today’s business climate, awareness of that chasm is more important than ever.

    And A League of Their Own reminds us that success and greatness never come easily and that we only succeed when we do that which other find too hard. Both of those lessons are worth considering and sharing again and again.

    Baseball also reminds us that even the best lose regularly. That striking out and errors are part of the game and that we learn from mistakes to become better and win more often.

    Oh and apparently there’s no crying in baseball.

    Then again, Kevin and I are fans of the Mets. Tears, we’re used to.

    Play Ball!

    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: February 12, 2019

    by Kevin Coupe

    Feeling your inner entrepreneur? Think lightning can strike twice?

    If so, you may want to get into the bidding for a home in Bellevue, Washington, that has just gone on the market - 10704 N.E. 28th St. It’s listed for $1,488,888.

    It is described on Zillow as follows:

    Magnificent in West Bellevue! This charming Craftsman was rebuilt in 2001 w/ an enormous great room that's perfect for entertaining! It boasts 13' vltd pine ceiling & river rock fplc. Fabulous granite & maple kitchen entices the cook. Master suite w/divine tiled shower. Hardwoods, crown mldg, lots of skylights & natural light. Meticulous setting, big party deck w/ hot tub, fenced yard, 10x20 strg shed. Very well cared for!

    There’s one other thing worth noting - Jeff Bezos started Amazon in the house’s garage more than a quarter-century ago.

    GeekWire notes that “much of the 3-bedroom, 1.75-bath house has been renovated since Jeff Bezos rented the home in the mid-1990s for a venture then known as Cadabra Inc. However, the property still holds an oversized mailbox, believed to have been used by Bezos and the company’s early employees to accommodate the book catalogs they were receiving for the online bookstore, later renamed Amazon.”

    The GeekWire story says that the house is not priced based on its history, but rather is in line with how other local homes are valued. (On the other hand, prices in the area are pretty high in part because of Amazon’s influence on the area.)

    One other thing. GeekWire points out (with just a touch of snark that I fins appealing) that it is possible that a former tenant might actually find this to be an appealing listing … since Jeff Bezos, at the moment, may be looking for a new place to live.

    If you get our meaning.
    KC's View:

    Published on: February 12, 2019

    Google and Bain & Co. are out with a new research study, entitled “Omnichannel Grocery is Open for Business – and Ready to Grow,” which predicts that “e-commerce penetration is expected to at least triple in the next decade,” though it won’t necessarily be an easy process.

    Online shopping, the study says, “is not yet a consistently more convenient experience than in-store shopping in the consumer's mind – a gap that is limiting the broader adoption of online grocery shopping.  Grocers that can deliver higher levels of convenience through online grocery shopping and shape consumers' digital habits have a rare opportunity to edge out their competition.”

    Consistency - or rather, lack of it - seems to be key. A related survey, the study says, “reveals that penetration hovers at a mere 3 percent.  According to the research, that's because while just 25 percent of consumers surveyed said they used an online grocery service in the last year, only 26 percent of those users, or 6 percent of all consumers, say they have been placing online orders more than once a month.”

    Stephen Caine, a leader in Bain & Company's Retail practice, explains the disconnect this way: “Traditional grocers have decades of experience optimizing their physical stores to align with how shoppers think – training them to navigate store shelves to easily find what they are looking for, making it easy for them to make trade-offs between products, and providing inspiration when they want to try something new.  Online grocery shopping has not yet found a way to digitally replicate these cues simply and intuitively.”
    KC's View:
    That’s not to say it can’t happen … just that it hasn’t happened yet, because traditional retailers have not yet been able to create what Google and Bain call “an intuitive and frictionless shopping experience from start to finish.”

    I do think that it is interesting the degree to which consumers - nine out of 10 surveyed - say that if they’re going to shop for groceries online, they’d tend to be more trusting of a traditional bricks-and-mortar retailer … a level of trust has been established, and those retailers can take advantage of it.

    It also is curious to me how less than half those surveyed said that shopping for groceries online saved them time … which, I have to admit, is counter to my experience. I wonder if there is a perception issue here - we buy a number of packaged goods online (mostly from Amazon, many of them using its Subscribe & Save automatic replenishment program), but I still go to the store to buy fresh foods; those visits may be as frequent, though I think of them as being more targeted. (I also want to be careful not to cast my own experience as being typical. I don’t do “big shops” the way I did when we had little kids, but instead tend to go to the store almost every day to pick up some salmon, or some crab cakes, or fresh spinach for salad.) I still think I have more time to do other stuff … but I think of e-grocery more as improving the quality of my life, not the quantity of my time.

    I do agree with the general conclusion - that retailers that want to be effective online have to figure out ways to be better at it. (The same goes for the in-store experience, by the way.) It may be that one of the things that retailers have to do is change the ways in which they define e-grocery’s advantages, in addition to making the experience more intuitive and frictionless.

    Published on: February 12, 2019

    Business Insider reports on Kroger is “building a system that combines information about what food a customer buys with information about their prescriptions so that pharmacists can better counsel patients on healthier habits and ‘food as medicine’.”

    The goal, the company says, “is to help keep its customers healthy. In that way, it's acting more like a doctor or nurse than ever before.”

    The result, if it works, could be that Kroger will end up filling “fewer prescriptions, according to Kroger Health President Colleen Lindholz, who oversees the company's pharmacies and health clinics. It's a counterintuitive idea, given that retail pharmacies typically make money from selling prescriptions … Healthier eating habits could reduce the need for some medications to treat chronic conditions like diabetes or heart disease, or prevent them from progressing to the point where a person needs additional medications or care.”

    Lindholz puts it bluntly: "We want to decrease the need for healthcare.”
    KC's View:
    It is an interesting and, I suppose, somewhat counterintuitive approach, considering the degree to which Amazon is investing in the healthcare business, Walmart is putting more of a focus on healthcare, and how CVS is expanding its portfolio so that it has a much broader healthcare footprint.

    Now, the argument for why it makes sense to put more of an emphasis on this sector can be found in one number - 18 percent, which is the percentage of the US economy that is healthcare related. And it is growing.

    But I think Kroger is onto something here … not that it should get out of the healthcare business, but that it should try to define it differently, in a way that should play to its strengths. It’s been my experience that doctors would rather people address health issues through diet, exercise and other lifestyle changes, when possible, and only move on to medication when those things can’t or don’t work. If Kroger can effectively tap into that, that’s a strategy that could have legs.

    Published on: February 12, 2019

    Yahoo Finance has an interview with Ron Johnson, the former CEO of JC Penney and the man who helped to develop the Apple Store concept, now the CEO of Enjoy, which sells consumer electronics online and then has its people deliver the items, set them up, and show you how to use them.

    Johnson says that in the e-commerce world, ““Amazon should be having trouble sleeping at night … I mean, seriously. Amazon same-store sales in the U.S. are now single-digit. Target and Walmart, these big retailers have learned how to leverage their stores’ inventory to create a better shopping experience. That’s where customers are going right now.”

    Yahoo Finance puts the observation in context: “Walmart’s U.S.-owned e-commerce growth accelerated 43% year-over-year during the third quarter, while Target posted a record 49% year-over-year surge during the same period in e-commerce growth … Meanwhile, Amazon’s online store sales growth, which factors in product and digital sales, grew at a slower pace during the same period at 12.5% year-over. (The Seattle tech giant also reported a 3% year-over-year decline in physical stores sales - a statistic that included Amazon’s ownership of Whole Foods for the first time.)”

    Johnson says, “Up until now, it was easy to go to Amazon because they had delivery. But now Target can do that and do it better.”
    KC's View:
    As much as I respect Johnson - I often rooted here for what he was trying to do at JC Penney - I resist his characterization of the current situation … largely because it defines the competitive situation as being static. I don’t think there is any question that traditional retailers are going to get better at e-commerce, even as Amazon runs into potholes as it invests more in the bricks-and-mortar business. Nobody should be surprised by this. Jeff Bezos certainly isn’t.

    The question is, who adapts better and faster? Which company has a culture that is more easily able to embrace change, and engineer disruption from within? Who has a better view of what retail looks like tomorrow, not just today?

    I know how I’d answer that question.

    Published on: February 12, 2019

    Reuters reports that Walmart and logistics/delivery company Deliv have ended their alliance on same-day grocery delivery pilots in Miami and San Jose.

    The story says that it was Deliv that ended the relationship, citing Walmart store priorities that always made drivers a lesser priority when they showed up at stores to pick up orders; waits of 40 minutes or longer were frequent, the story says, because “ Walmart gives a priority to customers over delivery drivers during regular hours, which complicated the partnership.”

    According to Reuters, “The store operations at Walmart ‘were a huge problem,’ said one of the people with direct knowledge of the matter, adding the retailer could not ‘process online grocery orders fast enough’.”

    Walmart says that it still “partners with seven delivery firms, including DoorDash and Postmates, four of which it signed up in January.”
    KC's View:
    The challenge to Walmart - which it has been remarkably facile in addressing since its acquisition of Jet and its founder, Marc Lore - always has been legacy systems and policies genetically engineered to reject anything challenging the primacy of existing stores. There will be times, and this appears to be one of them, when old habits will die hard.

    Published on: February 12, 2019

    The Wall Street Journal reports that Amazon-owned Whole Foods, after a period in which it made a big deal about cutting prices as a way of fighting its “whole paycheck” reputation, now is raising prices on “hundreds of items.”

    The Journal writes that Whole Foods “raised prices this month on dozens of items from Dr. Bronner’s soaps to Häagen-Dazs ice cream, according to an email viewed by the Journal. A separate company email in December listed 550 additional price increases on products including crackers, olives and cookies.”

    The reason: suppliers are raising their prices, as contracts providing lower prices have run out and not been renewed. The increases, the Journal writes, “add up to hundreds of thousands of dollars a week in additional revenue.”
    KC's View:
    Have to keep this in context … pretty much everybody is raising prices these days. The trend may hurt Amazon’s efforts to improve Whole Foods’ price profile, but it isn’t taking place in a vacuum.

    Published on: February 12, 2019

    The New York Times reports that Toys R Us, which went bankrupt last September and closed all of its US stores, is hoping to stage a resurrection in time for the 2019 end-of-year holiday shopping season.

    Leading the effort is Richard Barry, a former Toys R Us executive who now is CEO of a new company, Tru Kids Brands, who says that “he and his team were exploring various options for a United States comeback, including free-standing stores as well as shops within other stores. While the details are still being completed, Mr. Barry said e-commerce would play a central role.”

    Barry is part of an investment group that won an auction for Toys T Us’s assets, and now is managing the Toys R Us, Babies R Us and Geoffrey brands. Barry says that any new stores would be 10,000 square feet, about a quarter the size of the chain’s typical stores when it went belly-up.

    The Times writes that “Tru Kids will work with licensing partners to open 70 stores this year in Asia and Europe. Outside the United States, Toys “R” Us continues to operate about 800 stores.”
    KC's View:
    Good luck. They’d better be differentiated - and compelling - in a way that Toys R Us stores hadn’t been for years.

    Published on: February 12, 2019

    • Amazon said yesterday that it is acquiring Eero, described as “a home mesh wi-fi system maker” that connects smart home devices and that has gotten a strong reputation for ease of use and and stability. Terms of the deal were not disclosed.

    Wired writes that “the Eero buy clearly signals how serious the company is about rounding out its smart home hardware offerings - and squeezing as many Amazon-owned access points as it can into a person’s home. In just five years, Amazon has … launched its own array of smart home devices, starting with the first Echo speaker in 2014. The company's roster of smart home devices now includes multiple speakers, TV streaming boxes and sticks, connected television sets, countertop displays, a wall clock, and a DVR, not to mention oddball gadgets like a scanning wand that aids your grocery shopping and a camera that judges your outfits.” And that doesn’t even include its acquisition of smaller companies specializing in IoT-adjacent technology, such as Annapurna Labs, Blink, and Ring.

    TechCrunch reports that “Amazon is taking on QVC with the launch of Amazon Live, which features live-streamed video shows from Amazon talent as well as those from brands that broadcast their own live streams through a new app, Amazon Live Creator. On the live shows, hosts talk about and demonstrate products available for sale on Amazon, much like they do on QVC. Beneath that sits a carousel where shoppers can browse product details and make purchases.
    More than one video streams on Amazon Live at the same time, so shoppers can tune to the one that most interests them.”

    Yahoo Finance reports that “Amazon Prime is expanding its Canadian footprint<‘ and plans to expand “its free, one-day delivery service that comes with an Amazon Prime membership to 13 additional cities and towns across Canada … The 13 cities, 11 of which are in Ontario, include Ancaster, Brantford, Cambridge, Dundas, Grimsby, Hamilton, Kitchener, London, Paris, Waterloo and Woodstock, Ont. as well as Quebec City, Que. and Victoria, B.C. All eligible orders over $25 placed before cut-off times will arrive by 9 p.m. the following day, including on weekends.”
    KC's View:

    Published on: February 12, 2019

    • The Washington Post reports on how McDonald’s has lost its trademark for the Big Mac in the European Union, following a legal battle with Supermac’s, an Irish fast-food chain. Now, Burger King in Sweden has “revamped its menu in a snarky hat tip to the rival fast-food chain,” featuring “menus with names grounded in Big Mac comparisons, including: ‘The Kind of Like a Big Mac, but Juicier and Tastier’ and ‘The Big Mac-ish but Flame-Grilled Of Course.’ Other options were even more derogatory: ‘The Burger Big Mac Wished It Was’ and ‘The Anything But a Big Mac’.”

    McDonald’s says it plans to appeal the trademark decision.
    KC's View:

    Published on: February 12, 2019

    • Walmart announced that NBCUniversal International Group’s and NBCUniversal Telemundo Enterprises’ Chairman Cesar Conde will join the company’s board as an independent director, effective immediately.

    “Cesar brings strong skills as a global executive and expertise in brand management, finance, digital, and media that will complement our Board of Directors’ experience,” said Greg Penner, Walmart’s Chairman of the Board. “We look forward to his strategic insights as we continue to drive the transformation of Walmart to better serve customers and win in an omni-channel world.”
    KC's View:
    I normally don’t spend a great deal of time reporting on members of boards, but this struck me as intriguing in terms of what Conde brings to Walmart in terms of media/digital savvy, which it needs lots of if it is going to continue taking it to Amazon.

    Published on: February 12, 2019

    Got the following email from MNB reader Jim Huey:

    On Jeff Bezos, I can’t figure out why all of the narrative is about the reprehensible behavior of The National Enquirer (which is horrible) and little if any is focused on Bezos reprehensible behavior. You are famous for offering a mea culpa when you make a mistake, I’ve read nothing to suggest that Bezos thinks he did anything wrong and has offered no mea culpa.

    All of us do things that are wrong every day, I certainly wouldn’t want anyone talking to my high school or college buddies about my life then or looking inside my head in weak moments. The difference is whether you come clean about your mistakes and ask for forgiveness. President Trump has not and I judge him harshly for it. I feel the same way about Jeff Bezos now. It makes him very small in my eyes despite his many accomplishments.

    Nobody here is going to defend Bezos’s personal conduct … it is the reason that, other than our original report about the divorce announcement (which had a business angle), it was never referred to here until last week’s story about extortion and blackmail (which also had a business angle).

    I do think that these situations are complicated - we only know what we know. And so while I don’t defend it, I try not to be in the business of judging people’s decisions in their personal lives.

    Sure, I say . Often. And in public, when I write something here that is misconceived, ill-informed, inaccurate, or just plain wrong. I owe you that. But I would suggest that Bezos doesn’t owe you or me any apologies … and we don’t know if he’s expressed contrition of any sort to people to whom he would owe them. Not really our business. (He may end up owing apologies to Amazon stakeholders if this mess hurts the business, but that remains to be seen.)

    In his blog posting last week, Bezos said that his ownership of the Washington Post had been a “complexifier” in his life. (The New York Times pointed out that a) yes, this is a real word … but in French, not English, and b) it means exactly what you think it means.)

    Well, I’m old enough to think that there are a lot of complexifiers in people’s lives.

    From MNB reader Chris Connolly:

    For as much as you reserve your special “circle of hell” for tobacco companies, mine would be for the companies who print the check stand “trash journalism” papers that were referred to in your blog yesterday……and it would be for the same reason.

    My mom was a life-long successful businessperson who just happened to raise a family in her spare time.   While she was working, she read at least two daily newspapers each day and could speak intelligently on a wide variety of subjects.  Despite never having attended college, she was a well-respected manager who delivered consistently positive results and raised five kids who all went to college (four of whom all earned at least masters’ degrees).  When she retired, she elected to surround herself with weekly purchases of such mind-wasting papers to serve as her primary source of news and entertainment.   At first I thought the behavior was funny and a bit ironic, but as time went on I could tell that she was having difficulty separating the facts from fiction.   I remain convinced that this behavior contributed to her social demise as a retiree and caused her to have a poorer quality of life until she passed------and I regret that I ran a retail supermarket that sold these publications over my entire 20-year career.

    The suggestion made yesterday that national retailers should discontinue their relationships with these publishers as a way to improve the retailers’ public image has great validity; however, given the current political environment, I perceive that such a decision by a retailer would immediately be interpreted by some as having an underlying political motive, regardless of whether there was one or not.   As the father of a son who holds a degree in journalism, I support the First Amendment rights of these companies to print their materials but, if I had it to do over again, I would choose not to sell them.

    KC's View: