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    Published on: December 5, 2019

    This commentary is available as both text and video; enjoy both or either ... they are similar, but not exactly the same. To see past FaceTime commentaries, go to the MNB Channel on YouTube.

    Hi, Kevin Coupe here and this is FaceTime with the Content Guy.

    So over the holidays, we were sitting around the kitchen finishing dinner, and I must've said something particularly clueless - I cannot even remember what - and one of my kids looked at me and said, "Okay, boomer."

    And the other kids laughed. Not unkindly, I should point out. Just knowingly. Affectionately. If you have kids, you know the laugh. It comes with a shake of the head. If you're lucky, they manage to suppress the eye-roll.

    I then proved - for the umpteenth time - exactly how clueless about certain things I am when I indicated that I hadn't heard that particular turn of phrase before. (The only good news for me in this conversation was that Mrs. Content Guy hadn't heard it either. This is not to say that she made me luck any better, just that I wasn't alone on this particular island of generational cluelessness, which lies just southwest of the Island of Misfit Toys.)

    Being a savvy guy, I went to the Google machine to do a little research, and discovered that, according to Wikipedia, "Okay, boomer" actually was a retaliatory strike on the part of some Millennials and members of Gen-Z who were being put down by a Baby Boomer for having unrealistic expectations about life, work and everything else in their existence. To which those younger folks responded, "Okay, Boomer" …

    I wasn't there, so I don't know if those two words were dripping with contempt, or laced with affection. Either way, as someone who is right in the middle of the Baby Boom generation, I'm perfectly willing to admit that the world we are handing the younger generation is not in great shape. In fact, it is in pretty crappy shape. The climate is going to hell, the infrastructure is rotting, international tensions are, well, tense, and don't even get me started about the state of our politics.

    But … we also gave them the internet … cell phones … and both Amazon and Netflix. I'm not sure that's a wash, but it isn't a total deficit.

    I spend a fair amount of time with young people, and I'd agree that many of them have different expectations from the world than I did at their age. Many have a different work ethic.

    But some of them actually are doing a lot to create a world that can live up to their expectations, and some of them work incredibly hard … and a lot harder than a lot of people my age ever did.

    Which is really just one way of saying that catch phrases and lump an entire generation of people together as one thing are actually a pretty lazy way of appraising individuals. No matter how old we are, we can be lazy about such things, and I think we'd all be better off - at home and in the workplace - if we appreciated both our similarities and differences, and looked to create common ground where there only seem to be long distances.

    In the workplace, that means listening as well as talking … learning as well as teaching … and being willing to accept that the way we think things are may not actually be the way things are, nor how they should be. That goes for all of us.

    That's what is on my mind this morning. As always, I want to hear what is on your mind.

    KC's View:

    Published on: December 5, 2019

    by Kevin Coupe

    Bloomberg has a story about how some retailers, looking for a way to compete with the checkout-free technology pioneered by Amazon in its Go stores, are turning to an age-old approach.

    The honor system.

    According to the story, "From Russia to Japan to the U.S., retailers are betting on the good side of human nature. In exchange for being able to grab an item and walk out, shoppers are relied on to be honest and pay - much like an unmanned roadside produce stand. So far, theft rates are low, which means these companies have hit on a way to offer a cashier-less experience similar to Inc.’s Go technology, but without the big expense of cameras, sensors and software."

    An example: "In downtown New York, beverage-maker Iris Nova sells $10 bottles of brands like Dirty Lemon in a small store in the bottom of a building that doesn’t have employees or a cash register. Customers are trusted to use their phones to pay for drinks via text message. The space has visible security cameras, as well as mirrors that may subconsciously push visitors to pay because they don’t want to see themselves stealing—although the company says the mirrors are purely for aesthetics … The Iris Nova location has a theft rate below 5%, according to founder and CEO Zak Normandin. Many retailers have rates of stealing, or what the industry calls shrink, of about 2%, but they also pay for deterrents like security systems and employees."

    Another example: "In Japan, Ezaki Glico Co. has also made a business out of selling on the honor system. The company places snacks such as Pocky and Pretz biscuit sticks in drawers, shelves, and sometimes the office fridge. Those who want to indulge simply drop a coin in a container … That may not come as a huge surprise in Japan, where social harmony is prized and crime rates are low, but the same phenomenon is playing out elsewhere.

    "In Moscow, Vkusvill’s micro markets are similar, but customers pay using a credit-card machine after selecting snacks, ready-to-eat meals and from fridges and shelves on the office floor."

    It is an interesting and Eye-Opening approach, albeit one that I suspect won't get that much traction; I just don't think there is that much faith out there in the goodness of human nature. (I'm also not sure that much more faith would be justified these days.)

    I also think that there are different factors to consider. In Russia, for example, violating the honor system probably results in a long trip to the gulag.
    KC's View:

    Published on: December 5, 2019

    The Wall Street Journal has a story about how FedEx, United Parcel Service (UPS) and the US Postal Service (USPS) "confront a problem they haven’t faced in years: how to deliver millions more orders in six fewer days" because of a shortened post-Thanksgiving shopping season, at the same time as "online shopping is expected to be bigger than ever."

    The story notes that "the last time the industry dealt with such a narrow window between the holidays was 2013, when U.S. e-commerce spending was roughly half as big as it is today, according to Commerce Department data."

    While history does not suggest that all of these delivery companies will be able to meet all the challenges facing them, the Journal says that all of them point to infrastructural improvements that should help them deal with the heightened load.
    KC's View:
    A critical component in this analysis is the fact that it is not just the delivery companies on the hook - while the delivery companies obviously will play an important role in whether or not stuff ordered by e-customers get to them online, those shoppers likely are not going to blame FedEx, UPS or the Post Office for presents not delivered.

    They're gonna blame the retailers. Amazon. Walmart. Target. And any other retailer that, for whatever reason, is not able to deliver on promises made.

    Which means that these retailers are going to have to be vigilant.

    It also means, I think, that retailers far more dependent on the effectiveness of the in-store experience need to be equally vigilant about making sure that their stores are compelling, experiential, differentiated, relevant and resonant. If there is a likelihood that there are going to be breakdowns in the e-commerce system, then competitors need to be positioning themselves as not just a viable alternative, but as a superior one.

    Grab your moments when you can. They may not come often.

    Published on: December 5, 2019

    Bloomberg reports that Starbucks has disclosed for the first time how much less women in the company make compared to male employees.

    Zero. Almost.

    That's right. Starbucks says that there is virtual gender pay parity in its organization, as opposed to "the nation’s workforce overall, in which women make on average 19% less than men."

    Furthermore, Starbucks says, it has no racial pay gap.

    The company says that this demonstrates that this "parity shows not only that women get 'equal pay for equal work' but also that they have achieved as many high-paying roles as men."

    The story says that "Starbucks joins Citigroup Inc. in reporting figures for median pay, a rarity among U.S. companies, which are not required to release diversity data publicly. The U.K. has required organizations to report such data for workers since 2018. There, women at Starbucks make 5% less than men. Globally, its female employees make 98.3% of what men do."

    The Citibank revelations are nor quite so heartening, as it "reported that women at the bank earn 29% less than men, its peers chose not to follow. In the U.S., the bank also pays people of color 7% less than their white co-workers."
    KC's View:
    I'd be perfectly comfortable with a regulation in the US saying that public companies would be required to report on gender and racial pay parity. I think it is a perfectly legitimate piece of information that would help investors decide where to put their money. But I'd also be comfortable with a regulation requiring public companies to report on the disparity of pay between people at the top of the executive ladder and those at the bottom of the food chain. Again, a legitimate piece of investment information, I think.

    But companies don't like such rules. Can't imagine why.

    Published on: December 5, 2019

    Quartz reports on a talk given by  Uber CEO Dara Khosrowshahi to the Economic Club of New York, in which he talked about Uber having something unique going for it: "Where we are fundamentally different from almost any other company is that we operate at the intersection of the digital and physical,” he said.

    Except maybe not.

    Quartz writes: "Long before Uber, which was founded in 2009, there were companies like Amazon, and a host of other, less durable e-commerce retailers. When Jeff Bezos started his online bookseller in 1994, the idea of advertising products and taking orders over the internet was still new. But the delivery of those products was very much a physical undertaking.

    "To anyone interested in the future of Uber, Amazon offers another important precedent, one that Khosrowshahi recognized as a model for his company: In the same way that Amazon is no longer just about books, Uber is no longer just about booking a car ride.
    Khosrowshahi wants Uber to be a marketplace, offering virtually any form of transportation—whether that’s an Uber, taxi, subway, scooter, or flying vehicles—but also helping you decide the best way to get to your destination. He sees the variety of transit options (with the goal to make them all shared, and all affordable to middle- and upper-middle-class customers) as part of a solution to worsening traffic congestion in large metros.

    "He also sees Uber as a growing marketplace for delivery … Eventually, he expects the food-delivery experience will be more focused on the food and the restaurants it came from, and less on the service that delivered it. He compares it to the evolution of television—how we first focused on the tv but now we’re more fixated on the show rather than the box (or flat screen) we watch it on."
    KC's View:
    It is nice that Uber has ambitions. It also has problems - like a consistent lack of profit, a high burn rate, problematic relationships with its drivers, questions about safety from many of its customers, and even some markets (London!) where it is being banned.

    It may need to deal with the latter before the former become possible.

    Published on: December 5, 2019

    • Ocado, the British online grocer that has partnered with Kroger to open a series of robotic warehouses in the US that it believes will improve Kroger's efficiency and effectiveness, not to mention responsiveness to shopper needs, said that it has struck a similar arrangement with Japanese retailer Aeon.

    According to Reuters, Ocado's "initial CFCs will serve Japan’s Kanto region, with the first planned to go live in 2023, followed by others over the next two years.

    "Aeon will also use Ocado’s product-picking software within parts of its existing store network, and offer click-and-collect services from selected sites.

    "The Japanese firm did not say how much it was paying Ocado, but said the agreement included upfront fees, in addition to later payments which will depend on sales performance and capacity installation."
    KC's View:

    Published on: December 5, 2019

    Reuters reports that Unilever "appointed Conny Braams to the new post of chief digital and marketing officer, expanding the scope of a role previously held by advertising industry veteran Keith Weed," who recently retired.

    The story says that "Braams, currently executive vice president of middle Europe, joined Unilever in 1990, and has held a variety of marketing and general management roles across key European and Asian markets, Unilever said."
    KC's View:

    Published on: December 5, 2019

    …with brief, occasional, italicized and sometimes gratuitous commentary…

    • The New York Times this morning that "the Trump administration, brushing aside tens of thousands of protest letters, gave final approval on Wednesday to a rule that will remove nearly 700,000 people from the federal food-stamp program by strictly enforcing federal work requirements.

    "The rule, which was proposed by the Agriculture Department in February, would press states to carry out work requirements for able-bodied adults without children that governors have routinely been allowed to waive, especially for areas in economic distress. The economy has improved under the Trump administration, the department argued, and assistance to unemployed, able-bodied adults was no longer necessary in a strong job market."

    points out that "Americans who live in cold-weather states like Vermont, New York and South Dakota could be the next to feel the impact of the Trump administration’s efforts to tighten food-stamp eligibility.

    "That’s because the Department of Agriculture wants to change how heating and other utility bills are calculated into a family’s expenses. When people apply for food stamps, they subtract their state’s typical utility costs from their income, which provides the program with an idea of how much they have left for other expenses. That, in turn, helps determine their food-stamp benefits."

    The story says that "the proposed overhaul may hurt poor residents of many cold-weather states by reducing the amount they can deduct for utility costs, according to a new analysis from the Urban Institute. About 29 states would see a decline in funding from the Supplemental Nutrition Assistance Program, as the food-stamp program is formally known, although the hardest-hit would be those with costly winter heating bills, it found. The USDA has not specified when the overhaul could happen."

    The Times says that "the change is expected to shave nearly $5.5 billion from food stamp spending over five years."

    Spending that has taken place in a lot of US supermarkets, which are about to share a $5.5 billion haircut.
    KC's View:

    Published on: December 5, 2019

    If I may … my friend and "Innovation Conversation" partner Tom Furphy is the subject of a GeekWire story this week that looks at where a couple of his companies fit into the "whole cottage industry of startups eager to help retailers crack the e-commerce code."

    And you can check it out here.
    KC's View:

    Published on: December 5, 2019

    Yesterday, we wrote about a new Chick-fil-A television commercial that focuses on a family that has trouble finding time for the important things, and how a young girl, bu visiting a magical "Time Shop," is able to get them refocus their priorities - an approach that followed a survey saying that "73-percent of respondents said they want more time together with people they care about. Ninety-three percent said quality time together is the single most important ingredient to creating favorite holiday memories, surpassing the food, decorating and music, parties and gifts."

    I commented:

    I think it is a charming commercial with a laudable theme … but I'm not sure how it helps Chick-fil-A grow its brand. In fact, the Chick-fil-A connection is virtually negligible; if you're not paying attention, I'm not sure you'd remember who even sponsored the thing.

    In that way, I'm not sure the commercial achieves what should be its goals.

    This was a lonely place to be.

    One MNB reader wrote:

    What I’ve heard about Chick-fil-A indicates they are about more than just selling sandwiches.  Perhaps for this commercial they have a different goal.  In your comment you mention brand building.  Perhaps this commercial, similar to REI’s Opt Out Black Friday store closings or Patagonia’s first TV ad back in 2017 which only addressed public lands enhances the Chick-fil-A brand by focusing on their values, but with their name less prominently displayed.  Humble and less focused on sales this holiday season could be a winner with their base.

    MNB reader James Coffman wrote:

    I enjoy MNB everyday, and have for well over a decade.

    I found your response to the Chick-fil-A ad interesting.  You said, " I'm not sure the commercial achieves what should be its goals. "  This was in reference to a negligible presence from Chick-fil-A in the ad.

    Personally I believe that was part of the point.  Chick-fil-A has been a values based and purposeful business for its entire existence.  I don't think they were trying to get people to associate themselves with family time, I think they truly wanted to remind people to spend the time with their loved ones, while they still can.  Any press they get from the campaign would be secondary, as they are one of the few large companies out there that truly believe in, and act on, putting people first.

    MNB reader Tim Braciak wrote:

    The commercial had an opposite effect on me. It caught my attention as a cute “inspired-by” a favorite movie of ours, Coraline (2009) by Henry Selick & Neil Gaiman. So much so that I was waiting for the appearance of ‘the Other Mother” as it ended, then when saw that it was sponsored by Chick-Fil-A…and somehow that is sticking with me. I can’t tell you how many other commercials I see where I can remember the story line, but not the product they were trying to sell me.

    MNB reader Andrew Klapmust chimed in:

    I’ve been following your daily emails for several years, but this is my first time commenting.  I enjoy the insights into the retail industry, other topics, comments, and I often pick up industry news from you that impacts our business since I oversee the membership of around 1000 companies.

    Thanks for sharing the recent Chick-fil-A commercial; the first I saw of it.  I think the branding is purposely subtle.  In your face branding while trying to convey a virtuous message is ripe for cynical criticism.  Chick-fil-A’s success is in part due to business practices that come at a cost to the bottom line – they seem to always have plenty of staff, have sponsorship programs for schools, teams, youth groups and the biggest factor – still being closed on Sunday.  I think the commercial falls perfectly in line with this quote from founder, Truett Cathy.  “I’d like to be remembered as one who kept my priorities in the right order. We live in a changing world, but we need to be reminded that the important things have not changed, and the important things will not change if we keep our priorities in proper order.”  Hoping this commercial resonates with many to pause often, turn off the electronics, and make filling someone’s emotional bank account with quality time a priority.

    MNB reader Jackie Lembke wrote:

    I get what you are saying, it is hard to tell what company the commercial is touting but it isn't the only holiday ad that promotes something other than the company sponsoring the ad. It isn't the only commercial I have seen no matter the time of year where it is hard to tell what is being sold. The Chick Fil A commercial is sweet and timely, a lovely combination this time of year when the airwaves are full of car ads, medicare ads and political endorsements. I am not sure if the approach is supposed to send you out for a chicken sandwich but it does leave a warm fuzzy feeling about the company.

    And from MNB reader Elliott Olson:

    Some of the old rules of advertising don’t necessarily apply in the digital age. This is foremost a complete story not an ad. It was designed to and will go viral. Put a price tag on that.

    Okay, maybe my response was a little "bah! humbug!"

    Yesterday MNB took note of a Marketing Daily story about a new study from UBS Evidence Lab into why people are willing to try plant-based products. Go figure - most folks are focused on price and taste. Y'know, just like real meat.

    Interest in health benefits, animal welfare, and "the quality of being resource-friendly" come next.

    MNB reader Scott Habben wrote:

    Yes, taste drives food consumption. It is interesting that “among survey respondents who planned to increase their consumption over the next six months, health perceptions was the #1 reason."

    I challenge those to read the ingredient statements and nutritional panels and point out exactly what those health benefits are.

    And, from MNB reader Mike Spindler, who for the purposes of keeping this email needs to be identified as CEO of

    Taste is indeed the overall QUALIFIER for repeat.  Lots of the "big-food" guys found that out when they came out with 'better for you" versions of their current brands. certainly views taste as the front door to the other benefits of making seafood a regular, twice per week, staple.   We recognized that seafood taste was a hurdle in this consumption and found that fresh seafood, delivered direct to your door is both convenient and VERY tasty.   The other benefits primarily health, but also planet health and source sustainability are unlocked by that freshness-tasty door. 

    The claim about health benefits for the alt-based "meat" products (met with a grass fed beef guy last week and he labeled them "conjured") have been broadly debunked, even by guys like John Mackey , who sell them.

    If I have to choose between seafood and plant-based "meat," I must confess I'm going with the fish.
    KC's View:

    Published on: December 5, 2019

    Past Retail Tomorrow podcasts have focused on how technology can have an impact on business models and people's lives. In this edition, however, we drill down to talk about how technology affected one life … and, in fact, makes living a best life possible.

    Our guest: Heidi Dohse, senior program manager in Google's Cloud - Health and Life Sciences division. Dohse's personal and professional story makes for a compelling narrative that is at once provocative and inspiring.

    Hosted by Kevin Coupe, MorningNewsBeat’s “Content Guy."

    You can listen to the podcast here, or on iTunes and GooglePlay.

    This edition of the Retail Tomorrow podcast is brought to you by GMDC, the Global Market Development Center.

    KC's View: