business news in context, analysis with attitude

Published on: January 7, 2020

by Michael Sansolo

Talk about a three-word phrase you’d love to hear a shopper say after a trip through your store. If a shopping trip is fun, interesting and leaves someone wanting more, you’d declare that a winning combination anytime and any day.

"That was fun!"

I actually heard my wife say that recently in the midst of a feverish hunt for a last minute holiday gift. The instructive - some would say sad - part of the story is where it happened and why. It is a tale for and about the new world.

I have a nephew living in Europe and we wanted to send him a gift for Hanukah, which is not exactly the holiday that draws the greatest inspiration in December. After reviewing all the bad options of how hard it would be to send something physical to Germany in December, we decided to ship him an Amazon gift card, not really expecting much of an experience.

We were wrong.

Unsurprisingly, Amazon makes it fairly simple to send an electronic gift card because that’s what they do. What made this special was how the e-commerce behemoth decided to jazz up the experience.

Amazon offered up a variety of short animated videos to accompany any such gift card and frankly, all of them were great - even the Hanukah ones, which again is rarely the case. The choices ranged from Santa surfing ocean waves with gifts to dreidels break dancing to rap music. In other words, there was nothing much traditional, but all of it engaging.

In fact, my wife and I spent some of those precious pre-holiday shopping minutes wasting time, watching each and every video, and then discussing which was best and why. Holiday shopping time is usually loaded with deadline pressure and strange little arguments (we’ve been married quite a while). Not this time though. We laughed and intently watched each video multiple times.

In other words, we forgot the looming deadlines, the lists and other issues and simply enjoyed ourselves. The collection of silly videos changed the task and got my wife to burst out that magic three-word phrase about fun.

The lesson? We all need to find ways to make the ordinary a little special and possibly extraordinary by mixing in some whimsy, discovery and fun. That might come from samples, recipes or who knows what else. It won’t be simple (and I’m sure those videos weren’t that easy to create) but it may be table stakes in the new world of retail competition.

Start by asking yourself whether any shopper of your store, your products or your website would say, “wow, that was fun” after a visit. If the answer is no, the reality is that you might have a completely efficient experience that offers nothing unexpected, exceptional or effective. That might allow you to check all the boxes on necessary retail execution without doing anything distinct or special.

After all, if Amazon is doing stuff like this, it is likely to become a customer expectation rather quickly.

Michael Sansolo can be reached via email at msansolo@mnb.grocerywebsite.com . 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.

Published on: January 7, 2020

by Kevin Coupe

Bloomberg has an interesting piece about the shifting fortunes and strategies in the package delivery business, which could have a real impact on retailers that use those various companies.

For one thing, "carriers like UPS and FedEx are upping their prices and imposing new restrictions." For one thing, "both companies have introduced a new $24 fee for packages that exceed 50 pounds," down from a 70-pound threshold.

A major part of the rationale for these increases is Amazon, which is developing its own delivery network, forcing companies that used to rely on it for a certain percentage of business to find new ways to drive profits. FedEx is kind of going cold turkey and has "broken ties with Amazon, realizing that the e-commerce giant is as much a competitor as it is a business reliant on its services."

What this all means, Bloomberg writes, is that "the shipping businesses operating outside of the Amazon ecosystem are being forced to rejigger their offerings to increase profits and find new logistical areas to dominate. As this war rages on, those who rely on these services - especially smaller e-commerce businesses - are consistently being bombarded with changes." And not, to be clear, changes that they will see as beneficial to their businesses.

For example, if shipping fees go up, businesses are likely to be faced with a choice. Do they continue to offer free shipping, even as it becomes more costly? How do they pass off those increased costs onto other entities? And, perhaps most importantly, how do you do all these things while competing with Amazon, which seems to be doing a pretty good job at keeping its prices in line and growing its ability to own and manage the delivery process - all things that seem designed to put its competitors at a disadvantage.

Different companies will have different responses. All of them will be Eye-Openers.

Published on: January 7, 2020

The New York Times reports that Pennsylvania law enforcement authorities are investigating the apparent deliberate release of bedbugs in a Walmart store in Washington Township there.

According to the story, "An employee found a closed pill bottle containing live bugs on Thursday inside the men’s changing room … The bottle was inside a boy’s jacket that was for sale, the police said."

The Times goes on: "The employee reported finding bugs crawling around the men’s fitting room, the police said. The insects were identified as bedbugs.

"On Saturday, a Walmart employee found a second closed pill bottle with several dead bugs on the floor of the men’s department, near the belts, the police said."

No arrests have been made, and police are not treating the incidents as separate pranks. Walmart contacted Ecolab, the hygiene and energy technologies company, to investigate the incidents. There is no evidence of an infestation.

Published on: January 7, 2020

From VentureBeat:

Procter & Gamble, the story says, is at the annual Consumer Electronics Show (CES) in Las Vegas showing off "a connected baby care system … It updates traditional baby monitoring by combining a video monitor with an activity sensor to offer parents a real-time holistic view of their baby’s sleep, feeding, and diapering patterns — all in one place.

"The company said Lumi transforms the data into tangible, personalized insights and actionable tips to support parents as their baby develops and grows. By blending real tracking insights with their own intuition, parents can know, at a glance, how their baby is doing and anticipate their offspring’s needs."

Published on: January 7, 2020

The Wall Street Journal reports on how several plant-based meat manufacturers have decided to turn their attention to fake pork, which if successful could replace the planet's most-consumed meat.

According to the story, "Impossible Foods Inc. said Monday that it will introduce imitation ground pork and sausage, including a patty for a new sandwich at dozens of Burger King restaurants later this month. Rival Beyond Meat Inc. last year began supplying plant-based sausage to Dunkin’ Brands Group Inc., Carl’s Jr. and Tim Hortons restaurants, mainly for breakfast sandwiches."

"Pork being the ubiquitous meat it is felt like the natural way to continue our mission,” says David Lee, Impossible’s CFO.

The Journal notes that "plant-based food makers are also developing chicken and seafood alternatives."

Published on: January 7, 2020

The New York Times had a really good piece about fast-casual salad chain Sweetgreen, which has ambitious plans "to become something bigger - much, much bigger - than a boutique urban chain serving arugula to health nuts and yoga moms."

There's a 3.0 format store that looks to redesign the experience, built on both a better in-store experience and a mobile technology strategy … an expanded menu that is likely to go beyond its core items and even offer (gasp!) sandwiches … delivery-only "ghost kitchens" … and an Outpost strategy that has it "erecting its signature blond-wood shelving units in office and apartment buildings, where the brand can drop dozens of orders at once. For the conscious achiever, this represents a frictionless nirvana, where healthy food simply materializes. There are no delivery fees and no awkward interactions with the assembly line. For Sweetgreen, it means orders that can be prepared in an off-site basement kitchen, cutting down on real estate expense and delivered efficiently by a single courier."

All of this is designed to make Sweetgreen the Warby Parker of salad retailing, with "plans to double in size to 200 stores in the next three years, growing at 35 to 40 percent each year."

Fascinating stuff … and you can read all about it here.

Published on: January 7, 2020

WROC-TV News reports that Wegmans has decided to "remove single-use plastic grocery bags from all its New York state stores starting Monday, January 27." The goal, the company says, is "to shift all customers to reusable bags."

The move comes ahead of a New York State ban on the bags that goes into effect on March 1.

The story says that "at stores where the county or municipality choose not to institute a 5-cent fee for paper bags, Wegmans will charge 5 cent per bag. The amount collected will be donated to the local food bank in each region."

Published on: January 7, 2020

The Los Angeles Times has a story about how "a looming trade tariff of up to 100% … would affect all European Union countries selling wine to the United States, where imported wine is a $20-billion-a-year industry." This tariff, the Times points out, "follows a round of 25% tariffs levied in October against Spain, France, Germany and the United Kingdom … The tariffs come as part of a mounting trade battle between the United States and the EU, currently embroiled over two separate, interlocking issues: subsidies to Airbus, the Netherlands-based, French-founded aeronautics company; and technology taxes, specifically those recently levied by France against American companies including Facebook and Google."

The story says that "if the tariffs are levied, American wine drinkers would be faced with fewer wines coming to America from the EU (especially those made by small, independent producers) and higher prices on the bottles that do make it in.

"A wide swath of wine businesses in the U.S. also would be negatively affected, including importers, distributors, wine shop owners, sommeliers and grocery story wine buyers. Many said they feared having to impose salary and staffing cuts as a result of dramatically reduced profit margins."

It isn't just wine, of course: Also "threatened are goods including olive oil, jam, imported meats, Scotch, Irish whiskey, yogurt and more."

Published on: January 7, 2020

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

• Dairy company Borden, which was founded in 1857, has filed for Chapter 11 bankruptcy protection, attributing its woes to both changing consumer tastes and toughening competition.

The New York Times writes that Borden is "the latest victim of an industry battered by declining prices, rising costs and changing tastes," unable to adjust because of being "hampered by debt." The move comes two month after Dean Foods, the nation's largest dairy company, said it would file for bankruptcy.

The Times writes that "consumption of fluid milk, which accounts for the vast majority of Borden’s revenue, has been declining for decades, with per capita consumption down about 40 percent since 1975, according to Agriculture Department data. Meanwhile, dairy alternatives like milks from soy, oats, almonds and other sources have been on the rise."


• The New York Times writes that "Pier 1 Imports, the specialty furniture chain once hailed as a trendy destination for young professionals, said on Monday that it might close up to 450 of its 936 stores, as well as some distribution centers, and lay off an unspecified number of corporate employees.

"The company is the latest big-name retailer to announce sweeping closings and job cuts as it struggles with declining store visits and changing consumer tastes. Pier 1 made the announcement while reporting a quarterly sales decline of 13 percent and a loss of $59 million."


• ABC News reports that "Hallmark Cards Inc. will cut about 400 jobs worldwide, including 325 at its headquarters of Kansas City, Missouri … Hallmark will offer buyouts before turning to layoffs. The company said affected workers will receive severance pay and assistance as they seek new jobs."

According to CEO Mike Perry, "The way people shop and the competitive dynamics in the marketplace are changing at a pace and at a degree that is having a significant impact on our businesses."

Which, with all due respect, sounds like the understatement of the year.

Published on: January 7, 2020

• The Dayton Business Journal reports that foodservice equipment manufacturer Henny Penny has named Steve Maggard, who has been with the company since 1982 and most recently was senior vice president of global customer experience, to be the company's new president.

Former president Rob Connelly has been named chairman of the board, and will remain as Henny Penny's CEO.

The Journal notes that "the news follows a year of significant growth and investment for Henny Penny, which in October broke ground on the largest expansion project in the company's 62-year history."

Published on: January 7, 2020

…will return.