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    Published on: February 13, 2020

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

    Go figure.  Amazon seems to have a Nazi problem.  

    Here's the deal, as described in a New York Times story…

    Amazon has decided to stop selling certain kinds of books.  Like some by David Duke, a former leader of the Ku Klux Klan, and by George Lincoln Rockwell, founder of the American Nazi party.  Titles like “The Ruling Elite: The Zionist Seizure of World Power” and “A History of Central Banking and the Enslavement of Mankind" are decidedly not prime material.

    Nobody is defending the opinions of white nationalists or racists or Nazis or people who are anti semitic.  But there are questions being raised about the criteria that Amazon is using the identify offending books and its broader transparency about which books it has delisted.  It doesn't really provide specifics about either.  This can get a little problematic when it comes to the Amazon Marketplace, where third-party sellers also are prohibited from selling such material, and yet apparently have trouble sometimes figuring out what is acceptable and what is not.

    I find this to be mildly amusing - it shouldn't be that hard to figure out what kinds of materials reflect the views of white nationalists or racists or Nazis or anti semites.  

    I have no problem with Amazon not selling such materials, with making specific decisions about places in which it does not need to be the "everything store."  After all, Amazon doesn't sell porn.Most retailers curate their product selections to some degree, making a decision about which colors and sizes and styles to carry, whether they sell shoes or cars or refrigerators.  Amazon actually is unusual because it essentially was anti-curation, but the degree to which hate mongering has become prevalent online means that it has had to change its approach to some degree.  Frankly, I wish some of the social media sites would do the same thing.

    And this isn't about politics.  It is about what is - or at least should - be offensive to any decent, tolerant, compassionate and intelligent person.

    There is one thing that Amazon does with which I disagree.  The Times writes that "when Amazon drops a book from its store, it is as if it never existed. A recent Google search for David Duke’s 'My Awakening: A Path to Racial Understanding' on Amazon yielded a link to a picture of an Amazon employee’s dog. Amazon sellers call these dead ends 'dog pages'."

    First of all, I think I'd resent it if my puppy's picture showed up when someone was looking for a book by a former Ku Klux Klan Grand Wizard.  (I'd be okay, however, if they wanted to post a picture of what my puppy leaves in the yard for us a couple of times a day.)

    But I actually think that Amazon ought to be transparent about the books it will not sell, and even have essays devoted to why.

    These essays may not change anybody's mind.  But it is better to light a candle than curse the darkness.

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

    Published on: February 13, 2020

    by Kevin Coupe

    Grub Street has a story about how Marc Forgione, the chef at Peasant - a restaurant described as being an institution in New York's Nolita neighborhood (north of Little Italy) - has come up with something innovative.  It is a familiar dish with an unusual presentation.

    Spaghetti carbonara served in a quart mason jar.

    Actually, not just served in the mason jar…

    Here's how the story describes it:  "Our spaghetti carbonara materialized not in a bowl but inside a quart-size Mason jar, which the server proceeded to shake like a Hemingway daiquiri before spilling its contents onto a plate."  Forgione says that "it’s one of the best ways to emulsify egg yolk into the sauce and allows you to do it tableside.” 

    Grub Street adds, "A few more tweaks — supplementing the traditional guanciale with braised pig’s ears, infusing egg yolks with smoked olive oil — further distinguish the dish from what you get in Rome."

    Wow.

    First of all, I'm hungry.

    Second of all, I'm sort of intrigued.  I make a really good linguini carbonara, but I'm wondering if I should try the whole jar thing.

    Third … this is such a great example of how a little bit of innovative thinking can make something traditional into something almost brand new … and certainly something that can capture the customers' imaginations.

    Carbonara made in a jar?   Now that's my idea of an Eye-Opener.

    Published on: February 13, 2020

    Fast Company has a story about how the Body Shop, the cosmetics and skin care retailer, has adopted a new approach to hiring people for its stores:

    The first person in the front door gets the job.

    That's not hyperbole.  According to the story, this is an approach called "open hiring."  So when a store has an opening, "nearly anyone who applies and meets the most basic requirements will be able to get a job, on a first-come, first-served basis."

    No background checks.  No drug screenings.

    There are just three questions asked of applicants:  "Are you authorized to work in the U.S.? Can you stand for up to eight hours? And can you lift over 50 pounds?"

    The approach was piloted at the Body's Shop's warehouse last year, and this is what it found:  "Monthly turnover in the distribution center dropped by 60%. In 2018, the Body Shop’s distribution center saw turnover rates of 38% in November and 43% in December. In 2019, after they began using open hiring, that decreased to 14% in November and 16% in December. The company only had to work with one temp agency instead of three."

    Now, Fast Company writes, "The Body Shop plans to expand the practice to all of its retail stores this summer, where it employs around 800 people, and as many as 1,000 during the holidays. It’s not a pilot, but a permanent shift in how it handles hiring."

    The story notes that this approach to hiring "was pioneered by the New York social enterprise Greyston Bakery … which sells baked goods to customers such as Whole Foods and Ben & Jerry’s."  According to the story, "When there’s an opening, the job is filled from a list of people looking for work. New hires start as apprentices and get training in both how to do the job and basic life skills; those who decide to stay after the apprenticeship get an entry-level job and the opportunity to advance. The system works well enough that the company sold 8 million pounds of brownies in 2019, making $22 million. This year, Greyston launched a nonprofit, the Center for Open Hiring, in 2018 to help other businesses implement the same process."

    KC's View:

    It sounds like, at least in these cases, the inherent risks of such an approach are paying off.  So good for them.

    But we are in a seller's market when it comes to labor.  I have to wonder if the policy will stay in place when things turn, unemployment rises, and suddenly it becomes a buyer's market.  

    When you can be picky, shouldn't you be picky?

    Published on: February 13, 2020

    Interesting column in the New York Times by Austan Goolsbee, a professor of economics at the University of Chicago’s Booth School of Business as well as  chairman of the Council of Economic Advisers during the Obama administration, in which he talks about it is misguided to chalk up mall retailers' problems to e-commerce.

    He cites four reason why:

    First, "while e-commerce is growing sharply, it may not be nearly as big as you think. The Census Bureau keeps official track. Online sales have grown tremendously in the last 20 years, rising from $5 billion per quarter to almost $155 billion per quarter. But Internet shopping still represents only 11 percent of the entire retail sales total."

    Furthermore, he writes, "more than 70 percent of retail spending in the United States is in categories that have had slow encroachment from the Internet, either because of the nature of the product or because of laws or regulations that govern distribution."

    Second, Goolsbee argues that while e-commerce has been a competitive challenge for many bricks-and-mortar stores, big box stores have been and continue to be a bigger threat.  "The rise of warehouse clubs and supercenters was bigger than the rise of online commerce," he says.

    Third, income inequality:  "Rising income inequality has left less of the nation’s money in the hands of the middle class, and the traditional retail stores that cater to them have suffered," he writes.

    And finally, there is the inescapable fact that "with every passing decade, Americans have spent proportionately less of income on things and more on services."  The problem is, "Stores, malls, and even the mightiest online merchants remain the great sellers of things."

    Goolsbee concludes that "the broad forces hitting retail are more a lesson in economics than in the power of disruptive technology. It’s a lesson all retailers will have to learn someday — even the mighty Amazon."

    KC's View:

    I think the one thing that Goolsbee doesn't take into account, perhaps because it is outside his expertise, is that a lot of these retailers did not do what they needed to do in order to compete.  ("Compete is a verb."  Remember?)

    But it also may be that economic forces and realities are too overwhelming, and that it doesn't matter what you do.  Though I tend to think it always can matter.

    Published on: February 13, 2020

    Fast Company has a story about a new LinkedIn report saying that "the American Dream is still out of reach for many. The U.S. ranks 8th (out of 22 countries) in respondents’ confidence in their ability to access the economic opportunities they want, behind India (No. 1), Indonesia (No. 2), China (No. 3), and Mexico (No. 6)."

    The story says that while Americans believe that they live in a land of opportunity, many are less sanguine about their ability to take advantage of those opportunities.

    According to the story, "More than one in four (26%) U.S. respondents said that financial status was a leading barrier to opportunity. Financial constraints like student loans - cited as a barrier by 30% of respondents - make it difficult to take a chance on a new job that may offer more upward mobility or move to a new area in search of opportunity. Forty percent of Gen Z workers say their financial status is an almost insurmountable barrier to opportunity. Slightly more baby boomers - 42% - possibly facing down the prospect of retirement on limited savings say the same."

    KC's View:

    For the purposes of this discussion, it is important to remember that these people who feel the American dream is out of touch also are customers … and the financial constraints that influence their thinking also may limit the degree to which they can engage in aspirational food shopping.

    This won't mean they will suffer from a lack of aspiration.  They may just be looking for less expensive ways to indulge it … and there will be smart retailers out there who will figure out how to meet that desire.

    Published on: February 13, 2020

    The New York Times reports that the UK plans to adopt policies that would allow the government to regulate internet content to a greater degree, "as part of an effort to force Facebook, YouTube and other internet giants to do more to police their platforms."

    Under the plan, details of which are expected to emerge in coming months, "the country’s media regulator, known as Ofcom, would take on new responsibilities monitoring internet content, and would have the power to issue penalties against companies that did not do enough to combat 'harmful and illegal terrorist and child abuse content'."

    The Times writes that "the push for tougher regulation shows a divergence from the American-led vision of the internet that is largely market driven and free of government oversight. In Europe, where free speech is more regulated than in the United States, there has been a growing willingness to impose new rules on the web, particularly related to hate speech, terrorism and material targeting children … Free-speech and human-rights advocates warned the policies would lead to censorship and be used as a template by more repressive governments."

    KC's View:

    I am conflicted on this.  I do think that so-called 'internet giants' need to be incentivized to exercise more oversight of what appears on their sites;  these have become media companies, not just platforms, and with the great power that they have comes great responsibility.  More transparency about who or what is posting stuff ought to be a bare minimum.

    But, I also worry about what would happen if autocratic regimes are able to control the internet.  Joseph Stalin once said that "Ideas are more powerful than guns. We would not let our enemies have guns. Why should we let them have ideas?"  And an internet where there is a free exchange of ideas is a nightmare to autocrats.

    Like I said, I am conflicted.

    Published on: February 13, 2020

    The New York Times this morning reports that the Massachusetts Attorney General, Maura Healey, has brought a lawsuit against vaping company Juul Labs, accusing it - with evidence - that despite its protestations to the contrary, it was targeting young nonsmokers in 2015 and 2016 and "purchased ad space in its early days on numerous youth-focused websites, including those of Nickelodeon, the Cartoon Network, Seventeen magazine and educational sites for middle school and high school students."

    The Times writes that the lawsuit charges that Juul actually rejected "an initial marketing proposal by a marketing firm it had hired, Cult Collective, that would have branded it as a technology company with a target audience of adult smokers."  Instead, Juul fired that agency "and hired an in-house interim art director to produce 'Vaporized,' a  youth-oriented campaign, featuring beautiful models in provocative poses … The 66-page complaint includes images of young models that it claims were displayed in digital ads on websites, mobile apps and social media. It includes an extensive list of sites where Juul products were promoted that the lawsuit says were clearly aimed at teenagers and even younger children."

    In its response, Juul says that it remains "focused on resetting the vapor category in the U.S. and earning the trust of society by working cooperatively with attorneys general, regulators, public health officials and other stakeholders to combat underage use and transition adult smokers from combustible cigarettes."

    KC's View:

    If one thing seems clear, it is that Juul cannot be believed.  They targeted kids with their ads, they took an investment from a tobacco company, and it seems completely implausible that they did not believe that they needed to hook young people early and often on their product if they were going to build out their business.

    As a culture we can deal with this now.  Or we can wait a few years, for the inevitable moment when all the vaping company CEOs to appear before Congress, raise their hands and admit that they lied about their marketing and lied about the health impact of their products, at which point they'll have to create a pool of money for educational purposes.  But at that point, how many more people will be addicted?

    Published on: February 13, 2020

    From CNBC:

    "Consumer packaged goods giant Unilever said Wednesday that it’s updating its principles for marketing food and beverages to children, including that it will no longer target ads to children under 12, amid widespread concerns about childhood obesity.

    "The company, whose portfolio includes Ben & Jerry’s and Klondike, said the change will apply to all food and beverage products, and defines marketing communications as TV and radio ads, digital activity, social media and digital ads, apps, PR materials, online games and other communication like product placements."

    The story goes on:

    "Unilever also said it will not direct any social media at kids under 13. It will also restrict its influencer policy, not using influencers under the age of 12, nor influencers who primarily appeal to children under 12. (Major social networks like Facebook and Instagram don’t allow users under the age of 13.)

    "Unilever said the changes in targeting take into consideration both the content of the advertising and its placement. The company said for television and other measurable media, it will not run ads where children age under 12 represent over 25% of the audience. For the content, it said creative execution marketing communications should not be designed to target kids under 12."

    KC's View:

    It is ironic that we have this story this morning even as there also is a story about how a vaping company was targeting children.

    Published on: February 13, 2020

    •  Kohl’s senior vice president of communications, Jen Johnson, said in an emailed statement.

    As part of the job cuts, Kohl’s is getting rid of a layer of regional store leadership roles and restructuring teams in its merchant organization.

    No closing of stores or offices are planned, the company said.

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    Bloomberg reports that "Ocado Group Plc forecast retail revenue growth of as much as 15% this year as it starts to sell products from Marks & Spencer Group Plc and sets up the first of its robot-run delivery systems for supermarkets abroad.  The U.K. online grocer says it’s on track to launch its joint venture with M&S in September and open the first warehouses for online Casino Guichard-Perrachon SA in Paris and Sobeys Inc. in Toronto in the first half … Ocado remains bullish on prospects for its international solutions arm, which licenses automated warehouse technology to supermarket around the world. After a slow start, the company has struck a flurry of deals with the likes of Kroger Co. in the U.S. and Japan’s Aeon Co. It forecast that invoiced fees from such partners will grow 40% or more in 2020."

    Published on: February 13, 2020

    We had a story the other day about how Dunkin' plans to spend close to $60 million for 'state-of-the-art, high-volume' brewing equipment for domestic locations, with matching investments from franchisees.

    Prompting MNB reader Mat Medeiros to write:

    Dunks should invest in good coffee instead of equipment to mass produce more bad coffee. They are the McDonalds of the coffee world, everywhere and consistent ... consistently awful.

    Regarding the decision by Ahold Delhaize to close down the Midwestern segment of its Peapod e-commerce business, one MNB reader wrote:

    Is anyone making any money (profit) from their delivery businesses?  I see all these businesses undercharging the consumer for these services and my question has been, once the true cost of delivery is passed to the consumer, will the consumer think the convenience is worth it?  This goes for all the retailer delivery concepts and the third party restaurant deliveries.

    The other two things that I question: if employment continues to do well, where are retailers going to find the employees to deliver these goods? And if employment goes the other way because the economy goes south, will consumers want to pay extra (assuming that the cost of delivering eventually reflects the added cost to deliver) for what they can do for themselves?  I still think retailers have to invest in delivery but unless I am seeing it wrong, I think everyone is losing money on it and that can’t happen forever.

    I would agree that the economics are challenging, but I do think that most consumers believe that the convenience is worth it.  And I think if you believe that delivery is going to go away, you are kidding yourself.

    Responding to the piece about CVS offering a number of "voices" in its stores, representing both brands and the store, one MNB reader wrote:

    We recently discontinued a product at CVS.  The result?  We are now making more profit than before.  I was a real eye opener.  I’m waiting for the second half of the message that says CVS will require “additional participation” from it’s suppliers to fund the new Harmonization initiative.  I’ve grown so cynical in my old age.

    We had a piece yesterday about how a Girl Scout troop decided to sell its cookies outside an Illinois marijuana dispensary, selling 230 boxes during a four-hour shift.

    One MNB reader responded:

    When I was a young boy I sold cans of butter toffee peanuts (Brooks and Adams) to earn my way to YMCA camp each summer.  My dad was a bank manager and on paydays I would camp out in front of the bank and hawk my peanuts.  He would buy a couple cans and set them on the counter by the tellers for sampling and many people would pick them up on the way out.   Now that people seldom use banks to cash their paycheck it seems completely reasonable for scout troops to seek out new places to sell their goodies.

    And from MNB reader Dan Beard:

    Great business 101 lesson for the Girl Scouts “fish where the fish are."  Shielding these ladies from society would be a disservice.  I think this exposure with the attendance of an adult could be a valuable teaching moment if handled properly.

    I also got this email from MNB reader Jim Hornecker:

    Can you help me understand your view on marijuana? I see your undying animosity towards tobacco and it contrasts sharply with your relentless positivity towards cannabis. Smoking marijuana is at least as unhealthy as smoking tobacco. And yet you deem tobacco executives as having a special level of hell reserved for them, but you effectively encourage retailers to get on board with all things cannabis. Why?

    I think I've generally said I am conflicted on the subject of marijuana.  I get the creams, cosmetics and edibles … but I am completely against the notion of vaping or smoking it.

    So I am decidedly not in favor of "all things cannabis."

    Published on: February 13, 2020

    Digital strategies aren't just about creating alternatives to the bricks-and-mortar shopping experience.  Done effectively, they can actually bring people back to the store, while also eliminating customer anonymity, creating rich and actionable data, and deepen relationships between the store and consumer in a way that transcends the simple transaction.

    Our newest Retail Tomorrow podcast, which brings together a terrific panel of experts from a wide range of disciplines, was recorded at Google’s New York City offices during the recent National Retail Federation (NRF) Show.  Our guests:

    •  Matt Alexander, co-founder of Neighborhood Goods, an unusual and fascinating take on physical retailing with stores in Dallas and New York.

    •  Patrick Flanagan, senior vice president of digital marketing and strategy for Simon,  which has more than 200 properties in 37 states and Puerto Rico.

    •  Tom Furphy, CEO and Managing Director of Consumer Equity Partners, a member of the Retail Tomorrow podcast family and a regular contributor to "The Innovation Conversation" on MNB.

    •  And Jalna Silverstein, a leader in Ernst & Young’s Transaction Advisory Practice and its Real Estate, Consumer Experience and Retail Strategy.

    You can listen to the podcast here.

    This Retail Tomorrow podcast is sponsored by the Global Market Development Center (GMDC).

    Pictured below are our panel members, from left:  The Content Guy, Matt Alexander, Tom Furphy, Patrick Flanagan, Jalna Silverstein.