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    Published on: December 6, 2019

    by Kevin Coupe

    On Wednesday, I got a request from a friend of mine. A local independent bookstore in my town, Barrett Books, was hosting a Thursday night event to celebrate its 80th birthday - a Battle of the Books.

    The premise was this. James Mustich, author of "1000 Books To Read Before You Die," would be hosting a contest of sorts in which five local residents would each have five minutes to talk about a book that he or she loved before an audience of about 100 people. The only caveat was that it had to be a book not on Mustich's list. One of the people who had promised to participate had come down with a health issue and could not make it; would I be interested in pinch hitting?

    I'm always happy to help a local and independent retailer, so I agreed … but I only had about 10 minutes to choose a book (and I was not allowed to know what books had been chosen by the other four participants). I had to think fast, and so I chose a book that I love, but also - since I believe in always taking advantage of teaching moments - that I thought would relevant to the evening's events: "Crowning The Customer," by Feargal Quinn.

    I thought this morning I would share with you what I said:

    "Crowning The Customer," by Feargal Quinn, may seem like an odd choice for an event like this - it is a combination business book and memoir, by someone I'm guessing nobody here ever has heard of. But it struck me when I was asked to do this that this not only is a book that had a profound effect on me, but it was by an author who did as well … and it also is a book that seems highly relevant in terms of what we are doing here tonight.

    Feargal Quinn was a remarkable man and being Irish, boy did he know how to tell stories. That comes across in "Crowning The Customer." He was the iconic Irish food retailer, someone who only had two dozen stores at his peak. But those two dozen stores were remarkable, and anyone in food retailing who wanted to be better during the three decades of the 60s, 70s and 80s would travel to Dublin to see what made those stores so compelling, so relevant, and so resonant. (These are different things - relevance appeals to the head, resonance appeals to the heart.)

    Feargal would tell people the same thing that he writes in this book - that the key to creating great retail is to put the customer's needs and wants - sometimes even before the customer knows them - at the core of every decision, every strategy, every tactic. In doing so, Feargal created stores that were utterly differentiated for the time, each one reflecting his outsized and joyous personality. You could find him on any given day in any of the store's departments, or packing groceries at the checkouts, or helping shoppers to their cars, all the while charming the adults and entertaining the children.

    And when you think about it, this approach to retailing is even more important now when the alternative is a faceless algorithm on the other side of a screen. That's why we are here in this bookshop tonight - not only celebrating an 80th birthday, but also participating in an event designed to differentiate the business and do something that the online competition cannot and will not do.

    This relentless and obsessive focus on the customer persisted, by the way, in Feargal's post-retail life, when se served a number of terms in the Irish Senate, and he made his constituents - who are, in fact, customers - at the core of his decisions there. Wouldn't it be nice if that were every politician's approach?

    Let me tell you one quick story from the book. Feargal always said that he learned the essence of customer-centricity from his father, who ran a holiday camp in Ireland where families would come for a week or two. People would pay for their visit at the beginning, and there was nothing over the period of their visit that they could pay for - there was no way to upsell them, to get any more money from them. The only way to gauge success was when, as the families left, a parent would say, "Mr. Quinn, we had a grand time, a lovely time, and we'll be coming back next year." Feargal called it "The Boomerang Theory," and said it was the core of his success - working to make sure that every customer leaving the store would at some point return.

    Feargal died last April, and I can tell you that it was one of the great pleasures of my life and work that over the years we became friends … and I learned how important his precepts were even in my own business as a writer and speaker about retailing - because it is critical for me to be differentiated, relevant and resonant in a way that brings readers and audiences back again and again. I miss him a lot, but his work and spirit live on in this wonderful book.

    My book is "Crowning The Customer," by Feargal Quinn, and I cannot recommend it enough.

    The event was great fun, and I'm happy to say that we sold a bunch of books last night. (We also sold a few copies of "The Big Picture: Essential Business Lessons from the Movies," and "Retail Rules!" Yippee!)

    It occurred to me during the Battle of the Books that this could be a model for food retailers, who could sponsor and feature recipe contests with customers, even cook-offs that could bring in a crowd. I'm sure there are some retailers out there doing this, but there ought to be a lot more.

    I would be remiss if I did not tell you the other books that were discussed, a fascinating mix of fiction and non-fiction, all of which I now want to read:

    • "The Shallows: What The Internet Is Doing To Our Brains," by Nicholas Carr.
    • "A Prayer For Owen Meany," by John Irving.
    • "The Unwinding: An Inner History of the New America," by George Packer.
    • "A Little Life," by Hanya Yanagihara.

    I hope that I was able to channel a little Feargal Quinn last night, open a few eyes, and do my thing for an independent retailer. And I hope he'd be proud of me.
    KC's View:

    Published on: December 6, 2019

    Kroger said yesterday that its Q3 net income was $263 million, down from $317 million during the same period a year ago. Quarterly sales were up a bit, to $27.97 billion compared to $27.83 billion a year ago. million.

    Digital sales were up 21 percent for the quarter; same-store sales were up 2.5 percent.

    During its quarterly report, Kroger said it would be divesting its stake in Lucky's Market, a specialty/organic/locally sourced food store.

    Reuters writes that "Three years ago, Kroger invested in Lucky’s Market paying attention to the growing demand for organic products but said on Thursday the decision to divest its stake in the Colorado-based company came as a part of its focus on improving return on investments.

    "'The amount of investment that it would take for Lucky’s to be a meaningful contributor to Kroger overall and the efforts that it would take, we just didn’t think it created a good return for the investments,' Chief Executive Officer Rodney McMullen said on a post-earnings call. 'So it was really driven by narrowing our focus'."

    In its analysis, Bloomberg writes:

    "It is concerning that Kroger apparently has found it so difficult to do retailing battle on multiple fronts. After all, that is simply the reality of being a major brick-and-mortar chain these days, and key rivals seem to be managing it just fine.

    "Target Corp. has renovated about 700 stores since 2017 and has also managed to roll out same-day delivery via Shipt and expand curbside pickup. In the latest quarter, 80% of its digital growth came from those and other same-day fulfillment options. Walmart Inc. has had similar success, developing an online grocery operation that is competitive with Inc.’s while also making physical stores cleaner and better-stocked.

    "It’s not just that Kroger needs to be able to multitask. It also needs a better plan to win at online grocery."

    Bloomberg goes on: "Kroger’s biggest e-commerce bet is its partnership with Ocado Group Plc to build automated warehouses for grocery delivery. But those efficiencies will only matter if it can build a substantial base of online customers. And the cost of building these one-of-a-kind facilities, executives have said recently, is coming in higher than expected."
    KC's View:
    One of the things I gather from conversations with sources and experts is that there is a growing sense of concern that Kroger is going to find it very difficult to dig itself out of the hole it finds itself in … it is a shallow hole at the moment, but people tell me that there is a perception that Kroger is all over the place in terms of strategies and tactics, and not being consistent in terms of message and implementation.

    Obviously, the Kroger folks disagree with that assessment. But they may find themselves getting more of an argument in the industry.

    Published on: December 6, 2019

    The New York Times reports that Walmart "on Wednesday revealed the breadth of customer information it collects as it came out in favor of consumers having 'reasonable controls' with regard to collection, use and sharing of personal data.

    "The world's largest retailer said shoppers should have an opportunity to 'reasonably access, correct or delete their data while limiting the sale of their data to third parties and its use in digital advertising,' as it testified at a hearing by the U.S. Senate Committee on Commerce, Science and Transportation … Walmart said in its testimony it supports a comprehensive federal privacy law and is ready to comply with strict new privacy rules California plans to instate on Jan. 1."

    According to the story, "Walmart said it collects myriad different forms of customer data including personal information provided directly by consumers, personal information provided by third parties, purchase history, healthcare data, browsing information, device information and location data. The company said it sells or rents individually identifiable customer data to third parties for business activities including fulfilling customer orders and processing payments. Also, some of Walmart's recent acquisitions share customer information with other companies, it said."
    KC's View:
    I am - and have long been - a big believer that retailers need to be transparent about the information they collect, share, and/or sell … and that they ought to allow consumers to control as much of that information as possible. Same goes for internet companies, by the way.

    I believe consumers increasingly will demand it. I believe that governments increasingly will require it. And I think it is the right thing to do … and worth whatever investment it requires, because it will engender trust, which is an invaluable and tangible factor in any business-consumer relationship.

    Published on: December 6, 2019

    NBC News has a story about the irony of the fact that "thousands of retail stores are on track to close by the end of the year as consumers embrace online shopping," while at the same time Dollar General will "open 975 stores this year, and 1,000 by the end of 2020 — or 20 stores each week. That's in addition to the more than 16,000 locations it already has, which is more than McDonald’s in the U.S. and more than Walmart globally."

    Some context from the NBC News story:

    "The stores are strictly "no-frills," stocked with only the most popular consumer brands. The company has also rolled out a line of private label products, which allows it to control manufacturing and price. It is able to offer such cheap prices in part because items are sold in smaller packaging, which means that shoppers may be paying more per ounce compared to full-size products.

    "Dollar General's competitive edge goes beyond what it stocks on a shelf. The company is also expanding its fleet of carrier trucks from 80 to 200, and plans to bring FedEx drop-off and collections to more than half of its stores by the end of 2020. There is also a Dollar General app, which enables customers to scan their items and check out on their phone, reducing in-store wait time and minimizing the number of workers required. In some stores, customers can also use the app to calculate the cost of their cart before they check out at the register.

    "These developments have Wall Street analysts and shareholders optimistic about how the company will grow, even — or perhaps especially — in a recession."
    KC's View:
    A recession is gonna come … and when it does, retailers like Dollar General and WinCo and other value-driven formats are going to be well-positioned.

    Published on: December 6, 2019

    Good story from Fast Company about how there seems to be evidence that the "supposed generational conflict between millennials and baby boomers" may be subsiding.

    The story says that Morning Consult’s new list of the “fastest-growing brands of 2019" shows that "younger consumers are increasingly warming up to some legacy brands popularized by their older counterparts, who, in turn, are developing a taste for more and more brands that were once the exclusive domain of the young.

    "That’s right: Millennials and baby boomers are discovering each other’s favorite lifestyle choices—because sometimes we become the thing we hate."

    You can read the story here.

    BTW … The 10 fastest growing brands are, in order: DoorDash, White Claw, Postmates, Impossible (the fake meat company), Venmo, Kind, Ring, Cash App, Purple, and Amazon Prime.

    You can see the full Morning Consult report here.
    KC's View:
    I find it sobering that I only use two of the top 10 brands - Amazon Prime and Ring.

    Not sure if this makes me personally autonomous and individual in my tastes and preferences. Or just out of touch.

    Published on: December 6, 2019

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

    Seeking Alpha reports that "Amazon's quarterly subscription revenue has reached close to $5 billion.

    "The annualized subscription revenue rate should hit $30 billion level by the end of 2020.
    Amazon is increasing the value proposition of its Prime membership by giving free AmazonFresh grocery delivery which earlier cost $14.99 per month … As Prime membership base has grown over the past few quarters, several analysts have forecasted a saturation within the subscription segment. However, recent earnings show that this segment is still expanding at a quick pace. The subscription services grew by 35% on a YoY basis with quarterly revenue of $4.95 billion."
    KC's View:
    Almost everything Amazon does is designed to build the value of its subscription and replenishment services, giving customers more and more reasons to make Amazon the first and often best choice for almost everything. This is not a standard retail battle taking place, and competitors that don't acknowledge that are deluding themselves. If you are a competing retailer, you're not just doing battle on price and availability; you're battling with the mega-ecosystem that is Prime, the efficient and effective replenishment system that is Subscribe & Save, and everything else that Amazon represents.

    Published on: December 6, 2019

    Content Guy’s Note: Stories in this section are, in my estimation, important and relevant to business. However, they are relegated to this slot because some MNB readers have made clear that they prefer a politics-free MNB; I can't do that because sometimes the news calls out for coverage and commentary, but at least I can make it easy for folks to skip it if they so desire.

    • The Associated Press reports that the details of Amazon's lawsuit against the Trump administration were made public yesterday, as the company argues that "President Donald Trump’s bias against the company harmed its chances of winning a $10 billion Pentagon contract."

    President Trump has targeted Amazon largely because its CEO, Jeff Bezos, owns the Washington Post - which has been aggressive in its coverage of the administration - in a private investment.

    According to the AP story, "Amazon’s legal complaint against the Pentagon is sealed. A federal judge summarized its arguments in comments released Thursday.

    "The Pentagon awarded the cloud computing contract to Microsoft in October. Federal Claims Court Judge Patricia Campbell-Smith said at a Nov. 26 hearing that Amazon is arguing that the bidding process was compromised by Trump’s bias. Audio from the hearing was released publicly Thursday.

    The judge said Amazon has determined that the procurement process was not only 'arbitrary and capricious decision-making' but was also 'compromised and negatively affected by the bias expressed publicly by' Trump. She said Amazon is seeking a permanent injunction prohibiting the Pentagon from going forward with awarding the contract to Microsoft.

    "The company is calling for a court order directing the Defense Department to either re-evaluate the proposal or re-open discussion and make a new determination, the judge said."

    The AP says that "in one of the video clips that Amazon plans to submit as evidence, Trump says at a Texas campaign rally in February 2016 that he has 'respect for Jeff Bezos,' but that Bezos bought the Washington Post for 'political influence so that Amazon will benefit from it.'

    “'If I become president, oh, do they have problems,' Trump said at the rally. 'They’re going to have such problems'."
    KC's View:

    Published on: December 6, 2019

    Yesterday's FaceTime video dissected the sometimes dismissive phrase, "Okay Boomer," and suggested that maybe various generations ought to focus on what they can learn from each other and not what divides them. It prompted a n umber of emails…

    One MNB reader wrote:

    I had to laugh when I read your opening article.  My 17 year-old daughter said, "Ok, Boomer" to me the other day, and I had read an article about it!  I was able to correct her, because I am actually Gen X.  Then I realized, yet again, we are still unimportant and forgotten…sigh.

    MNB reader Chris Breen wrote:

    The Age Discrimination in Employment Act of 1967 (ADEA) prohibits discrimination against people 40 and over.  The term "OK Boomer" can be considered discrimination. HR Departments are sending out emails to associates to understand that the term is unacceptable in the work place.

    How do HR departments feel about the phrase "young punk?"

    Another MNB reader chimed in:

    Our millennial son had already shown me video examples of the “Okay, boomer….” phrase and the context of how it is being used in social media.   We had a great conversation about the reasons for the generational disconnect and the hazards of making generalized statements about any group of people under any circumstances.   It also served as yet another opportunity for me to claim that I was born close enough to the Baby Boomer/Gen X cutoff that I relate better to Gen X and that I am NOT a Baby Boomer……as time goes on, I find myself wanting to distance myself more and more from the Baby Boomer generation.

    MNB reader Philip Herr wrote:

    When I was part of corporate America, helping clients market their brands, a phrase I heard with alarming frequency was “we need to reach Millennials”. As if this largest cohort were all exactly the same — you know, technological natives, lazy and coddled. I endeavored to suggest that the process of market segmentation needed to be much more nuanced than this. Not always successfully.

    So, I can sympathize with the term ”OK Boomer”, used perhaps as revenge for being classified and compartmentalized and written off as nothing more than another consuming cohort.

    Finally, one MNB reader had a request:

    To hell with industry news updates and witty insight. When are we going to get some more puppy pictures?

    You ask. I deliver.

    KC's View:

    Published on: December 6, 2019

    In Thursday Night Football, the Chicago Bears defeated the Dallas Cowboys 31-24.
    KC's View:

    Published on: December 6, 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:

    Published on: December 6, 2019

    It is wonderful news that the end-of-year holiday movie season has begun, because it means that we're going to start getting access to movies for grown-ups. There are two of them I want to recommend toi you this week.

    The Irishman, Martin Scorsese's new epic gangster movie, is an extraordinary piece of work. It is completely worth the 3.5 hour run time … I urge you to pour yourself a tall drink, get some take-out, and settle down with Netflix for what easily is one of the best movies of the year.

    Robert De Niro, Scorsese's muse since Mean Streets in 1973, plays Frank Sheeran, the real-life Irishman of the title, who finds himself drawn into the mob life in the fifties and sixties, valued by the bosses because he is willing to sublimate whatever ethics he has to their needs and desires. Al Pacino plays Jimmy Hoffa, for whom Sheeran finds himself working, even as the union boss's behavior grows more provocative and erratic; it is only a matter of time before Hoffa has to face his inevitable reality. And Joe Pesci is simply amazing as Russell Buffalino, a Philadelphia mobster who becomes Frank's rabbi; Pesci is known for big, expressive performances, but here he is all understatement and quiet threat.

    The Irishman has gotten a lot of attention for the de-aging digital technology that allows De Niro, Pacino and Pesci to play their roles over a period of decades. It is largely successful and not very intrusive. One can't help but be aware from their movements that these actors all are in their mid-to-late seventies, but since the whole thing is presented as a kind of memory play - Frank reminiscing about his life in the mob - it works.

    But what really is impressive about The Irishman is the elegiac nature of the movie. Nothing about the mobster life is glamorized here; rather, we have a sense of how much of these men's souls have been eroded by their decisions and predilections.

    And yet, The Irishman moves in and out of their lives with confidence and unerring film style. This is Martin Scorsese, one of the best filmmakers of his generation, working in the same genre as his Goodfellas and Casino, exposing people souls and hearts as he makes yet another movie masterpiece.

    FYI … The New Yorker had a review suggesting that The Irishman doesn't lose any potency when seen on TV via Netflix instead of on the big screen. I have no idea, because I only watched it at home … but I can tell you that it was compelling for the whole 3.5 hours.

    See it.

    Knives Out is a hoot, and wonderful. Director Rian Johnson has crafted a Murder On The Orient Express-style mystery that has a big house, a murder victim (Christopher Plummer, delightful as always), a family gathered and loaded with motive-rich suspects (Jamie Lee Curtis, Chris Evans, Michael Shannon, Don Johnson, Toni Collette, Ana de Armas), and an idiosyncratic detective named Benoit Blanc (Daniel Craig) charged with figuring out whodunnit.

    It is all great fun - cleverly scripted, sharply directed, and acted with verve by a bunch of actors who look like they are having the time of their lives. It is the perfect antidote to our grim times, and I hope that we see a lot of Benoit Blanc down the road. He could be our Southern fried version of Hercule Poirot.

    See it.

    My daughter Allison decided she wanted to find a new craft cocktail for Thanksgiving, and so when my son David and I came home on Thanksgiving afternoon after seeing Knives Out (a movie on Thanksgiving afternoon is one of our traditions), she presented us with a drink made with 2 oz. of apple cider, 2 oz. of ginger beer, 1.5-2 oz. of Tito’s, and a little bit of caramel syrup mixed in.

    When she described this concoction to me, to be honest, I was a little dubious … but it was delicious - absolutely perfect for sipping while sitting by the fire. And so, I pass it along to you.

    That's it for this week … have a great weekend, and I'll see you Monday.

    KC's View: