It’s an age-old question: are you planning to fail or failing to plan? In the midst of the Covid storm it’s a question business leaders need to ask themselves and their organizations.
Because while the business world is properly consumed at the moment with the pandemic and the resulting issues of employee safety, supply chain shortages and even customer relations in countless weird ways (yes you need to wear a mask!), we must stay aware of an important reality. Tomorrow is going to come. The storm is going to pass and when it does there are going to be an entire list of new challenges for business to face.
And the time for planning, hard as it is, is now.
Last week I wrote about the military’s tendency to overly focus on past successes, which in turn leaves open terrible shocks from the future. Happily a number of MNB readers responded to that column by sharing articles on everything from a potential shift in consumer behavior away from consumption to deeper dives into planning and the military.
One reader sent me a recent white paper by McKinsey focusing exactly on how the military plans for decisive action in the midst of chaos. It’s worth reading here.
The article offers some fabulous insights into how military leaders divide up their intellectual assets to best cope with chaotic times, kind of like what we are facing right now. Rather than have everyone working together in a single “war room” structure, the military (based on history) creates a group of teams focusing on insights, actions, operations, planning ahead and communications.
As the article makes clear, planning is never a perfect science something that was once wonderfully summed up by boxer Mike Tyson, who said basically that all his opponents had a plan until they got punched in the mouth. Plans are great, but they need the flexibility to adapt to changing conditions whether in the form of an adversary or a novel virus.
For instance, even companies that managed (and few did) to sail through the first weeks of Covid-19 lockdowns now need to focus on how to reopen businesses staying mindful of how stressed staffers and shoppers are and what kinds of interactions might result. On top of that we all need to confront the reality that the nation’s (and the world’s) economic condition has deteriorated mightily during the battle against the virus.
So even the best plan from say mid-March, might be woefully out of touch with the shopper realities we face today.
It’s impossible to create a perfect plan in any time, no less a storm like we have today, but the process still matters. As former general and president Dwight Eisenhower said, “plans are worthless, but planning is indispensable .”
Hard as it might be right now to take some key people off of current problems to think of the future, it might be more important than ever to consider the long-term impacts of changes we are already seeing such as young people suddenly finding suburban living attractive, technology companies increasingly allowing staff to work from home permanently, to the collapse of some more indulgent forms of retail as shoppers re-evaluate priorities and habits.
We’re still in a storm, but let’s be honest. It won’t be the last and we better get planning for what’s coming next.
Members of the MNB community are cordially invited to join us tomorrow for "De-Invest to Re-Invest: A Leadership Summit," a lively and dynamic event designed to engage with industry leaders and visionaries who will share strategies and insights necessary to survive in a time of dramatic charge.
This Leadership Summit will go beyond the immediate challenges of the Covid-19 pandemic to look at the broader opportunities that exist as industry moves into the future.
I am thrilled to be part of the event - I'll be doing an interview with Albertsons co-chairman Jim Donald on the subject of "Leading Through Turbulence," as well as moderating two panel discussions. One will be about how the in-store customer experience will change, and the other will be about how suppliers will have to adapt their approach and products to new realities.
Ideoclick, Replenium, and Accenture Interactive have joined forces to bring you straight to the source of information on how leaders from multiple industries are addressing both risk and opportunity during this changing landscape.
Access to this online event is complimentary, and you can find out more about it and register here.
"De-Invest to Re-Invest: A Leadership Summit" will take place tomorrow - Wednesday, May 27, beginning at 2 pm EDT/11 am PDT. Join us for all or just part of it … but you do have to register to gain access. Hope to see you tomorrow.
On Friday I had the opportunity to be part of a Portland State University (PSU) "Boardroom Breakfast," an online event that had as its headliner Tim Bray, who very publicly resigned from Amazon - specifically Amazon Web Services (AWS) - as a way of protesting what he then called "the vein of toxicity" in the organization that led to the firing of whistleblowers who were protesting the treatment of warehouse workers.
(I had the opportunity because of being an adjunct faculty member at PSU - the event was open to teachers and students in the business school.)
Bray's emphasis was on the fact that the culture pays a cost for things like one and two-day delivery promises that put enormous pressure on employees, sometimes putting them in unsafe conditions. "Free delivery is not free," Bray said, and he pointed to Amazon Prime as being a vehicle for many of the inequalities that exist at the company.
I asked Bray if he still is an Amazon Prime members, and he conceded that he is - because he likes the Prime Video offerings.
Another question I asked Bray: I find it hard to wrap my head around two facts. Jeff Bezos is the founder-CEO of a company that fires whistleblowers, and yet he also singlehandedly saved the Washington Post by buying it (for which many of us will be forever thankful), and the Post is an entity that has as its slogan, "Democracy dies in darkness." How does Bray reconcile those two apparently oppositional facts?
Bray said that he admires Bezos in a lot of ways, describing him as some of "excellent taste" who founded "the best managed company I've ever worked at." But he said that time, money and power have conspired to enclose him in a bubble, and that he simply may not be acquainted with the facts that led to the whistleblowers' protests and eventual firing.
Bray suggested that when inequities occur, it is because of power imbalances. One would never see these kinds of problems at AWS, he said, because there is a power balance - the company needs those specific engineers and technologists, and so they are well treated. The warehouses, on the other hand, have a power imbalance, which allows Amazon to take advantage of workers.
All in all, an interesting and Eye-Opening session with an accomplished guy who had a lot to teach attending students about ethics in business.
Schnuck Markets announced last week it will shortly open a new store format in Columbia, Mo. "focused on consumers prioritizing health and wellness, natural foods, and the occasional splurge. EatWell, A Natural Food Store by Schnucks, will open in early summer 2020," the company said.
"In addition to offering natural food items, the neighborhood store will also include a focus on organic and local items, and feature a natural living department in which teammates can assist customers with choosing options that fit a healthy, balanced lifestyle," Schnucks said in a prepared statement.
The store is in a former Lucky’s Market location that Schnucks purchased during a bankruptcy auction earlier this year.
It will be interesting to see how learnings from this store find their way into Schnucks' traditional units. This is a great opportunity to try something new … and test new concepts that may be more appropriate to a post-pandemic world.
Random and illustrative stories about the global pandemic and recovery efforts, with brief, occasional, italicized and sometimes gratuitous commentary…
• In the US this morning, there are 1,706,226 confirmed cases of the Covid-19 coronavirus, with 99,805 deaths and 464,670 reported recoveries.
Globally, there have been 5,601,871 confirmed coronavirus cases, with 348,145 fatalities and 2,381,369 reported recoveries.
• The New York Times on Sunday offered a graphic and sobering front page (and several jump pages) on which it listed the names of 1,000 people from across the country who died from Covid-19. Not just the names - in many cases, the Times offered a snippet of information that provided context about the lives lost, like a person "loved long drives, late nights and huge meals," or that another joined the FBO as a top recruit.
One thousand names. One thousand people. And just one percent of the lives lost - almost certainly, the US will pass the point of having 100,000 pandemic-related fatalities.
• From the Washington Post:
"Vacationers flocked to the Lake of the Ozarks over the holiday weekend, flouting social distancing guidelines as they packed into yacht clubs, outdoor bars and resort pools in the Missouri tourist hot spot.
"Images of the revelry rippled across social media, showing people eating, drinking and swimming in close quarters. In one picture shared by the news station KSDK, dozens of people could be seen crammed on an outdoor patio underneath a sign reading, 'Please practice social distancing.'
"The scenes underscored how some have interpreted the loosening of the coronavirus restrictions ahead of the Memorial Day holiday as an invitation to return to a pre-pandemic version of normal. Amid varied and sometimes conflicting orders from state and local officials, people across the country have been left to decide on their own how strictly to follow the rules."
I hope the folks who ignored the warnings end up being right, and that their actions do not result in more coronavirus cases and more deaths. But it is hard to imagine that they will be.
• From the Wall Street Journal this morning:
"Truck loads are growing again. Air travel and hotel bookings are up slightly. Mortgage applications are rising. And more people are applying to open new businesses.
"These are among some early signs the U.S. economy is, ever so slowly, creeping back to life.
"Plenty of data show the country was still mired in a severe downturn in April and May, with overall business activity falling and layoffs rising—though more slowly than in the early weeks of the coronavirus crisis. Current projections have the economy contracting by 6% to 7% this year and unemployment lingering in double-digit percentages for a while. But, for the first time since the pandemic forced widespread U.S. business closures in March, it appears conditions in some corners of the economy aren’t getting worse, and might even be improving."
I think we'll take good news wherever and whenever we can get it. I just hope that it persists, and that we're not thrown yet another curve by Covid-19.
• From Wired, an important story about unintended consequences:
"The world’s total number of confirmed Covid-19 cases is closing in on 5 million. But an accidental side effect of the pandemic—an indefinite pause in the worldwide campaign to eradicate polio—could dwarf its toll by allowing the almost-vanquished disease to get a fresh start.
"At the end of March, on the advice of a World Health Organization panel of experts, mass vaccination campaigns against polio and measles were put on hold to prevent spreading the virus. As a result, says Dr. Michel, WHO’s director of polio eradication, 'we have several millions of children below the age of 5 who remain susceptible and have not had the chance to be vaccinated'.
"The pause benefits the fight against the coronavirus: Approximately 3,700 WHO employees, consultants, and lab personnel who staff the polio campaign in 55 countries have been loaned to the Covid-19 effort, according to Zaffran. But it is a serious operational hazard for the three-decade campaign."
And here's something else I did not know, from the Wired story:
"The forced pause comes on top of a bad year for the polio campaign. After its inception in 1988, when approximately 350,000 children were paralyzed by the disease each year, the multinational effort had nearly wiped polio out of existence. In 2018, there were only 33 naturally occurring cases in the world, and an additional 25 in which a weakened virus used in some vaccine formulas reverted to virulence and caused paralysis.
"But in 2019, polio began bouncing back, with 176 cases of the naturally occurring type, which spreads from child to child through fecal particles and contaminated water, and an additional 366 cases of what is called vaccine-derived polio. By May 13 this year, there had been 59 cases of wild polio and another 104 cases of vaccine-derived polio—and that’s with the tropical rainy season, traditionally the riskiest part of the year for infection, still to come."
• From the New York Times:
"The Smithfield Foods plant in Tar Heel, N.C., is one of the world’s largest pork processing facilities, employing about 4,500 people and slaughtering roughly 30,000 pigs a day at its peak.
"And like more than 100 other meat plants across the United States, the facility has seen a substantial number of coronavirus cases. But the exact number of workers in Tar Heel who have tested positive is anyone’s guess.
:"Smithfield would not provide any data when asked about the number of illnesses at the plant. Neither would state or local health officials.
"'There has been a stigma associated with the virus,' said Teresa Duncan, the director of the health department in Bladen County, where the plant is located. 'So we’re trying to protect privacy'.
"Along with nursing homes and prisons, meatpacking facilities have proven to be places where the virus spreads rapidly. But as dozens of plants that closed because of outbreaks begin reopening, meat companies’ reluctance to disclose detailed case counts makes it difficult to tell whether the contagion is contained or new cases are emerging even with new safety measures in place. The Centers for Disease Control and Prevention said there were nearly 5,000 meatpacking workers infected with the virus as of the end of last month. But the nonprofit group Food & Environment Reporting Network estimated last week that the number has climbed to more than 17,000. There have been 66 meatpacking deaths, the group said."
I would suggest that the real stigma could come if it ends up that the companies, in league with local officials, are found to have been covering up significantly more cases and deaths than have been estimated, and doing so to protect stock prices, not employees, to protect company interests, not those of local citizens.
I just hope that everyone involved is on the right side of this story. If they're not, they'll find out what a stigma really is.
• The New York Times also reports on how "the meat industry’s troubles may have provided a boost for plant-based meat substitutes, which had a jump of 35 percent in sales during the same period. (The increase just for uncooked products was more dramatic: 53 percent for the vegan products versus 34 percent for meat.)
To meet the demand, Impossible Foods has been hiring more workers, increasing pay and adding more shifts. Beyond Meat reported record sales in the first quarter of this year.
"Those companies’ new generation of plant-based alternatives — developed in laboratories, with long lists of unfamiliar ingredients — had been slowly catching on with consumers. But some say that reports of illness among meat-processing workers have made them even more curious."
• The Washington Post reports that strong alcohol sales that have occurred since the pandemic forced many people to shelter at home have not extended to one segment of the business.
Here's how the Post frames the story:
" According to market research firm Nielsen, sales of alcoholic beverages spiked 55 percent in the week ending March 21, one of the first weeks of lockdown, and online sales of alcohol in the United States rose almost fivefold in April compared to the same period last year.
"Alcohol delivery app Drizly says sales surged 485 percent through mid-April. And data analysis firm inMarket says light beer sales have skyrocketed, with Anheuser-Busch’s Busch Light sales experiencing a 44 increase over the past two months."
But, the story says, "One category has had little uptick in sales and consumption, however. American craft distillers have seen precipitous declines in sales, worrying industry experts that many distilleries will not make it through the pandemic and economic downturn."
The reason: "People largely drink the fancy stuff, the small-production craft spirits, in restaurants and bars, leaving themselves in the expert care of mixologists. At home, people aren’t fiddling with amari and bitters so much, going heavy on handles of less-expensive familiar brands such as Jim Beam or Smirnoff." Plus, "National brands can pay to commandeer premium placement on liquor store websites and shelves, he said, which may partially explain the rise of their sales figures during the pandemic."
• From the New York Times:
"Hertz, which started with a fleet of a dozen Ford Model T’s a century ago and became one of the world’s largest car rental companies, filed for bankruptcy protection on Friday after falling victim to its mountain of debt.
"The coronavirus pandemic has devastated Hertz by grounding business travelers and tourists, making it impossible for the company to continue paying its lenders. A sharp drop in used car prices has also decreased the value of its fleet."
The Times notes that "Hertz said late Friday that it would use more than $1 billion in cash on hand to keep its business running while it proceeds with the bankruptcy process."
The Wall Street Journal adds:
"In many cases, the companies in the most trouble today are those who were also in the most trouble yesterday. The pandemic means muddling through is no longer an option.
"The crisis has battered the whole rental-car industry with a plunge in bookings. Hertz was more vulnerable than competitors, having borrowed about $19 billion directly and through a series of complex financial transactions. In addition to its sedan commitment, the company was held back by its troubled 2012 acquisition of Dollar Thrifty and efforts to move into the leisure-traveler market, a niche dominated by Avis Budget Group Inc. and Enterprise Holdings Inc."
This last point by the Journal is a good one. There will be a lot of companies out there that will claim that they've been victimized by the pandemic, while the reality is that they've been victimized by their own strategic and tactical missteps - the pandemic just accelerated the inevitable.
• KCCI-TV News reports that Hy-Vee announced yesterday that "it will give away free masks to customers at its Iowa grocery and drug stores … Hy-Vee received 75,000 cloth masks from the Iowa Department of Public Health," and will give them away on a first-come, first-serve basis.
Hy-Vee said that "the masks are intended for Iowans who do not already have access to face coverings to protect themselves from COVID-19."
• The Boston Globe reports that in Massachusetts, "nine weeks after Governor Charlie Baker shut down all nonessential businesses in an effort to stop the spread of COVID-19," retailers have started the re-opening process by offering curbside pickup.
The Globe writes: "US consumer habits have shifted significantly, with e-commerce sales jumping 49 percent in April after shutdown restrictions were issued throughout the country, according to Adobe’s Digital Economy Index. Many of the biggest retailers saw the biggest gains: Walmart’s online sales jumped 74 percent, Target’s were up 114 percent, and Wayfair has seen its stock price surge 24 percent as stir-crazy shoppers eagerly update their abodes.
"But the economic realities that affect retail sales are just as stark: Massachusetts’ jobless rate reached 15.1 percent in April, and since mid-March, the state has received 1.23 million claims for unemployment assistance. Major retailers like Neiman Marcus, JCPenney, and J.Crew have filed for bankruptcy protection, and there’s evidence that more will follow.
"Many retailers were disappointed with Baker’s decision to allow only curbside sales to start on Monday, instead of permitting stores to open by appointment or for in-store sales with capacity restrictions in place."
The story goes on: "One Harvard Square store owner who asked for anonymity said she’s worried about having to engage her customers in difficult discussions about wearing masks, since she and her employees all fall into high-risk categories. She’s hoping that curbside operations will offer an on-ramp, of sorts, getting people accustomed to the idea that all commerce, not just that at essential stores, will need social distancing restrictions."
• USA Today reports on how, "as the U.S. reopens and summer approaches, cities from Tampa, Florida, to Las Vegas to Portland, Maine, are opening sidewalks and closing streets to create large al fresco or open air dining rooms. They hope this nod to the bustling cafe culture of Paris and Rome will help Americans feel comfortable eating out again and help restaurants begin to recover from staggering losses."
The story notes that "proposals are being floated all over the country to allow restaurants to spread out to sidewalks, parklets (parking spaces converted into extra outdoor seating), parking lots or even into streets as long as they adhere to safety and sanitation guidelines. Some cities are already expediting permits and waiving fees, helping restaurants whip through what is often a cumbersome and costly process … The advantage of open-air dining for restaurants with prosciutto-thin margins in the time of the coronavirus: By expanding their square footage, they can operate at full rather than at half or a quarter capacity. And dining that sprawls onto sidewalks and streets has the advantage of keeping restaurantgoers and servers from clustering indoors where the coronavirus is transmitted more easily."
• Interesting piece in the Financial Times about how so-called road shows by companies looking for investment capital, which take company executives through a grueling travel and meeting schedule, may be an endangered species.
The reason: "A number of initial public offerings during coronavirus lockdowns have done strikingly well despite executives being unable to do what they normally do, and present to roomfuls of investors at big financial centres around the world … , some are questioning whether the financial and logistical benefits of virtual marketing will forever change the traditional roadshow."
One case of where roadshows may be desirable: "IPOs that revolve around a key founder character," where personal charisma and vision may be a critical part of the pitch.
• The New York Times has a story about how WW International - the company formerly known as Weight Watchers - decided to fire a number of its employees via a series of three-minute Zoom calls that took place simultaneously two weeks ago.
WW won't say how many Zoom calls took place, nor how many people were laid off - but it was enough the company's CFO, Nick Hotchkin, said "it wasn’t practical to have all of the conversations be one on one."
The story suggests that two things affected WW's business model. First, the company moved away from a strict weight loss orientation and toward a broader wellness theme, which didn't sit well with many of its members. Second, when the pandemic made in-person meetings impossible, online get-togethers showed declining numbers.
One of the things that the story points out is that WW's approach has been fuzzy … and "fuzzy" in terms of strategy and tactics is not where anyone wants to be these days. You have to be sharp, specific and scintillating, or you may be sunk.
Beyond all that, the idea of mass layoffs seems so cold, so anti-wellness. It is like they saw "Up In The Air," and thought, wow, that seems like a great way to go.
• From Vogue:
"Fashion shows in their traditional format are not likely to return, according to industry experts.
"Digital solutions are stepping up to preserve shows in some form, while designers are rethinking their approaches to opt for smaller, more intimate showings.
"Ancillary industries like celebrity styling and photoshoots are adopting new norms to stay afloat.
"With a push from coronavirus, a decade’s worth of fashion show evolution is about to take place in a matter of months. That requires a rewiring of an entire industry as executives, creative leaders and event producers break with hallowed traditions to adopt technologies already familiar to the film and television industries."
Rewiring entire industries? Breaking with hallowed traditions? Sounds like a Tuesday. And a Wednesday. And like every other day these days.
• The Wall Street Journal has a story about how Saratoga Springs, New York - the upstate community that "sells itself as 'the summer place to be,' welcoming more than a million people to the thoroughbred track that operates in July and August and thousands more to an outdoor concert venue that brings fans of music from Beethoven to the Grateful Dead" - is facing an uncertain summer.
Concerts and cultural performances have been cancelled, and the Journal notes that any horse racing may have to be done without spectators at the track.
"Gov. Andrew Cuomo said on May 16 that horse racing could occur in the state without spectators. That includes the thoroughbred track at Belmont Park, on Long Island, which will resume live racing on June 3 and on June 20 host the Belmont Stakes—the first leg of the Triple Crown.
"The Democratic governor said last week that it was too early to say if the policy would change to permit fans at Saratoga, where racing is scheduled to begin on July 16. Mr. Cuomo previously mentioned the racetrack as an example of an 'attractive nuisance' that could draw a large crowd from a wide area, and therefore might not operate safely."
The decision could have enormous financial implications: "The racetrack has a $237 million economic impact on the surrounding region, according to a 2014 study commissioned by the Saratoga County Industrial Development Agency," the Journal writes.
• From the Wall Street Journal:
"The University of Michigan won’t have a football season this fall unless all students are able to be back on campus for classes. And, according to President Mark Schlissel, that isn’t a sure thing.
"Dr. Schlissel, an immunologist by training, said he expects to make a call in the coming weeks on what the new school year will look like for the prestigious public university, which has about 46,000 undergraduate and graduate students and a football program that is a perennial powerhouse … Dr. Schlissel’s measured approach strikes a different tone than the rosy predictions made by many of his peers, both within the Big Ten athletic conference and across the country at major research institutions. Auburn University President Jay Gogue, for instance, promised incoming freshmen that the fall semester would hold football, fraternities and extracurricular activities as usual."
According to the story, "Dr. Schlissel said his leadership team is trying to figure out whether they can lower the risk of coronavirus exposure for students, staff and others on campus so that it is “indistinguishable from their risk at home.” While many are sheltering in place now, he acknowledged that students in particular may already be following social-distancing protocols more loosely.
"About half of the University of Michigan’s students hail from outside the state, so they could be coming from hot spots such as New York, New Orleans or Seattle. Dr. Schlissel said the school may consider quarantining some upon their arrival to campus, and is assessing things such as symptom screening, testing, social distancing and the widespread use of personal protective equipment."
You think some people got upset about not being able to go to church? Football in Ann Arbor is a different kind of religion, and no games this fall would be an enormous deal - and would have national implications. I don't envy Dr. Schlissel - he must be under enormous pressure at the moment.
• Okay, here's one for the "yuck" file, from the New York Times:
"Humans are not the only ones who miss dining out.
"As restaurants and other businesses have closed during the coronavirus pandemic, rats may become more aggressive as they hunt for new sources of food, the Centers for Disease Control and Prevention warned.
"Environmental health and rodent control programs may see an increase in service requests related to 'unusual or aggressive' rodent behavior, the agency said on its website on Thursday."
Apparently, rodentologists say that the rats are not expected to get aggressive toward humans. Just each other. Which reminds me of the scene from "Skyfall."
• Eater - Portland reports that "a Portland restaurateur has announced that he will close not one, but all of his five restaurants because of COVID-19. David Machado, a hotel-based restaurateur, will be permanently closing the rooftop bar Altabira City Tavern, Citizen Baker, Italian restaurant Nel Centro, Pullman Wine Bar and Merchant, and Northwestern bistro Tanner Creek Tavern. 'There’s no pathway back to a viable business,' Machado says."
The story says that "there are a few factors that make David Machado Restaurants especially vulnerable to the perils of reopening — perhaps most obvious is that all of them are housed in hotels, and there’s no indication at all when Portland’s tourism scene will return to anything approaching normal. Additionally, each of them relied heavily on a steady stream of concert, sports, and event-goers — Nel Centro was a popular spot for ticket-holders going to a show at the Keller Auditorium, while Altabira and Pullman pulled in Blazers fans heading to the nearby Moda Center and crowds attending the various events at the Convention Center across the street. Tanner Creek Tavern’s position in the Pearl meant that most nights saw diners headed to shows at the Armory, or stopping in for a post-performance drink.
Even the flashy design of the restaurants, once a selling point, is now a hindrance, as large dining rooms with hundreds of seats surrounding a central bar wouldn’t fit the new state guidelines for reopening, Machado says."
I mention this particular restaurant closing because it hits home. Nel Centro, one of the restaurants closing, is right across the street from the apartment I've always rented for my summer adjunctivities in Portland, and it was the place that Tom Gillpatrick and I always took our industry executive guests after class - we'd have a bite to eat, plenty of wine, and often would learn even than we had during class. And even on summer evenings in Portland, if the weather was cool, they'd light up the fire pits, and the place would be magical. (We could see the fire pits from the apartment window, and if Mrs. Content Guy looked down in the evening and noted that they were on, it was code for, 'Let's go have a glass of wine.")
I say all this because it is important to remember that when restaurants close, they take with them pieces of people's lives - the people who own them, the people who work there, and the people for whom many of these places could be a home away from home.
During the most recent quarter, Target's online sales were up 141 percent. Walmart's were up 74 percent. Etsy's April sales were up almost 80 percent.
All of these increases, the New York Times suggests, were at Amazon's expense, as it "struggled to keep up with the demand."
But now, Amazon is saying: "Enough is enough."
Amazon, the Times writes, "is shipping many more items in a day or two and is again running promotions. It has removed limits on the types of products allowed in its warehouses. And while it has delayed its annual Prime Day, Amazon is preparing for an earlier 'Summer Sale' to let brands sell excess inventory, according to an audio recording of an internal meeting discussing the promotion.
"The changes position Amazon to recapture its customers who had fled elsewhere when the outbreak took hold. And the moves signal that Amazon’s leaders feel confident that the business, and in particular its shipping network, is no longer in crisis mode in response to the pandemic."
Amazon may want to get back some of that business, but healthy e-commerce numbers at the competition certainly help make the argument that it should not be broken up by antitrust regulators. Think of it as bad news-good news.
Amazon's great advantage in this competition will be using its customer data to lure people back to its site. Expect the offerings to become more compelling and potentially more targeted and personalized in coming months.
CNBC has a story about what it calls Best Buy's "new reality" - "Selling to customers in stores by appointment only. Offering virtual tech support. And serving frustrated, sometimes hostile, customers."
Best Buy, CNBC says, "has always been a place to touch and see the latest gadgets and electronics with its hands-on displays. But the company had to rethink that model as customers and employees worried about getting sick."
The story goes on:
"CEO Corie Barry explained her decision to close stores to customers and allow them back to stores, but by appointment only. She said the approach is a safer way to serve customers. And, she said, the personalized sales experience is a better fit for the retailer, which sells big-ticket items like gaming consoles, kitchen appliances and home theater systems … When customers come in for their appointment, she said they get tailored one-on-one service — including a phone call before their visit to better understand and cater to their needs. That improves their experience and their impression of the company, she said."
CNBC writes that "Barry said the company will continue to adapt and test new ways to serve customers — even as the pandemic makes it difficult to forecast the future. She said the way Best Buy does business won’t look the same across the country. Instead, she said, it will tailor its service to different regions and offer choices to customers that help put them at ease … With its appointment-only model, customers get one-on-one attention from a mask-wearing employee. The employee escorts the customer around the store, wipes down everything he or she touches and offers advice. Each customer gets a half hour appointment, though they can book more time, Barry said.
"So far, she said demand has been highest with large home appliances. Home theater equipment has also been popular, she said."
Not everyone can do what Best Buy can do. But I think most would agree that it has shown itself to be a surprisingly nimble competitor.
• Amazon today announced that it has committed the equivalent of $4 million (US) " to The Nature Conservancy in an effort to reduce climate change risks and increase species biodiversity in three German cities.
"The initial project is in Berlin’s Charlottenburg-Wilmersdorf district. Learnings will be applied in two other German locations, and then shared across other European cities. With this, Amazon is recognizing the urgency of the climate crisis and its impacts on urban communities. The announcement follows The Climate Pledge, the company’s commitment to be net zero carbon by 2040."
• Bloomberg reports that "Bayer has reached verbal agreements to resolve a substantial portion of an estimated 125,000 U.S. cancer lawsuits over use of its Roundup weedkiller, according to people familiar with the negotiations.
"The deals, which have yet to be signed and cover an estimated 50,000 to 85,000 suits, are part of a $10-billion Bayer plan to end a costly legal battle the company inherited when it acquired Monsanto in 2018, the people said. Although some lawyers are still holding out, payouts for settled cases will range from a few thousand dollars each to a few million, said the people, who asked not to be identified because they weren’t authorized to speak publicly."
Resolving all the various lawsuits against the company has been a high priority for CEO Werner Baumann, the story says.
Bloomberg writes that "the settlements are designed to resolve claims that Roundup, whose active ingredient is the chemical glyphosate, caused non-Hodgkin’s lymphoma in some users. The company denies that Roundup or glyphosate cause cancer, a position backed by the U.S. Environmental Protection Agency. Still, after Bayer’s court losses spurred a surge in new suits, investors such as Elliott Management Corp. urged the company to seek a comprehensive settlement."
• From Variety:
"Amazon has turned one of the buildings in its Seattle headquarters into a permanent homeless shelter.
"Since 2017, the company had plans to create a homeless shelter for Mary’s Place Family Center on its Seattle campus. From 2016 to 2018, the shelter had operated out of a vacant Amazon building, but now the new location in the Regrade neighborhood of Seattle has opened.
"The brand new facility has eight floors and 63,000 square feet of usable space, which increases the organization’s overall capacity by 40% in King County, Wash. The shelter has an industrial kitchen for residents to use, an on-site health clinic, office space and recreational areas where kids can play. Mary’s Place can shelter up to 1,000 people per year and 200 family members each night."
• Bloomberg has a story about Sprouts Farmers Market, which CEO Jack Sinclair says "is well suited for the shift toward healthier lifestyles. Stores are loaded with organic produce. There’s a butcher and a fish market. They also have aisles of vitamins and health supplements."
"I think there's a fundamental trend which has been accelerated by customers—sensitivity to what you eat," he says. "There's a tailwind behind that. More people are going to be interested in that going forward. If you look around our shelves, we sell things which nobody else sells."
Sinclair says that he expects to add 20 stores to the company's 344-store fleet in the coming year.
• Bloomberg reports that "Amazon.com Inc.’s Prime Air fleet will grow to about 200 planes -- up from 42 now -- in the next seven or eight years, creating an air cargo service that could rival United Parcel Service Inc., according to a study … Key to its ability to take on the entrenched players, the report says, is Amazon’s new $1.5 billion facility near Cincinnati that will accommodate up to 100 planes and as many as 200 flights each day. Amazon’s lack of a central hub has kept it from competing in the overnight delivery services offered by UPS and FedEx, which have more planes flying to more destinations."
“At a time when many other airlines are downsizing due to the pandemic, Amazon’s push for faster and cheaper at-home delivery is moving ahead on an ambitious timetable,” said the report issued Friday by DePaul University’s Chaddick Institute of Metropolitan Development. “Amazon Air’s robust expansion makes it one of the biggest stories in the air cargo industry in years.”
Brian Sharoff, president of the Private Label Manufacturers Association (PLMA), passed away on Saturday after a brief illness. He was 77.
I didn't really know Brian - we'd had some interactions over the years - so I asked Michael Sansolo, who did know him well and has done a lot of work for PLMAS over the years, to offer some thoughts:
I wouldn't hesitate to call him a friend and advisor. He really was quite good to me. He was incredibly passionate about the business, he loved (LOVED) movies, Broadway shows and the like. He knew as much trivia as we do.
Also he could be one of the funniest and most intuitive people I've met. He'll really be missed and not just for the assignments!
Last week, MNB took note of a New York Times story about how America - which used to be the gold standard when it came to logistics design and implementation - has list its way in this critical business ecosystem:
"Rationing meat. Scrambling for masks. Running low on crucial drugs. The early shortages for the pandemic - swabs, toilet paper, ventilators - were a foreshadowing, not an aberration. We still don’t have enough good tests. Our national pantry, long bursting, lacks essentials. Come to think of it, it’s also missing some nonessentials. Just try to buy a bicycle.
"Let us acknowledge the obvious: The country is flunking a curriculum that it basically wrote. Which is baffling. American supremacy in logistics has been a calling card for decades, even among people unfamiliar with the L-word."
But no more.
You can read the story here.
This prompted a number of emails.
One MNB reader wrote:
Logistics has nothing to do with Rationing Meat or toilet paper…etc...
It has to do with getting finished goods from Point A to point B........When there is such a high demand and manufactures cannot keep up with orders to put on a truck- That becomes the issue ( not to think some companies are short staffed with covid absence.
The NY Times article is totally out of sync......It is like saying if tomorrow everyone wanted to get the newspaper delivered to their door step....You think they would be able to turn on a dime and have enough paper and print to produce 500 times the amount they usually do with no notice or time to prepare....Cut me a break here....They are unfamiliar with the L word….
Another MNB reader wrote:
Logistics are not dead. Being bent is not broken .. IMHO, the strength of the system is it withstood the massive stressors, brought on in part by Hacks at the NY Times who were active in creating panic buying.
RIP NY Times
Methinks you may have a bigger problem with the Times than just disagreeing with this piece.
Just so you know - the New York Times isn't going anywhere. And thank goodness - because the Times, the Wall Street Journal and the Washington Post are my personal definition of "essential."
One reader agreed with the Times perspective, especially its mention of the Post Office as being expert in logistics:
It actually makes perfect sense. The post office handles logistics but not profitably so it is a different model than the private sector. The logistics of the private sector are like a finely tuned high performance engine. Everything has been engineered and re-engineered to maximize performance. Timing, tolerances, efficiencies, etc. are all constantly pushed towards perfection which when it is running well is amazing and magnificent. However, it is not at all tolerant to any unexpected changes, variances or weaknesses. When those things occur you have a catastrophic failure.
On another subject, from another reader:
I had to respond to your response to the Fox poll re: mask wearing and planning to get a vaccine. No, I don’t think it’s strange at all that fewer people plan to get the vaccine when available than are willing to wear a mask. The way the whole vaccine process is being pushed and pushed and pushed? The fact that is normally takes years to make a vaccine and not months makes me very leery of getting a shot (or pill, or whatever) that can’t possibly have been vetted out for long term side effects.
Responding to my OffBeat piece last week about director Lynn Shelton, one MNB reader wrote:
I likely won't be the only person to mention her incredible work on Hulu's "Little Fires Everywhere" limited series. The acting was consistently excellent (which is a sign of a good director), and each scene was clearly very carefully imagined and staged. Her work was exquisite. Such a loss.
And finally, this amazing email from an MNB reader following up on the conversation about my bicycle accident:
I hope you are recovering, and, I am glad you are heeding the advice of your readers, get a new helmet!
My 19 year old grandson was in a longboarding accident May 5th of 2019. An avid boarder, who at the age of 18, opened his own board shop, Kraken Boardshop. Braden, all about safety, wore all the protective gear and even took his younger brother to follow him if he went down a hill, so he wasn’t alone in the event something happened. I remember the day he purchased the helmet he was wearing when he crashed May 5th. He came to my house and said “gramma, look at this helmet I bought, isn’t it the best?! Someday, this helmet gramma, could save my life!” I think about those words now, and I am ever so thankful that at the ripe old age of 18, Braden had the street smarts and savvy, to wear that helmet!
On May 5th 2019, he crashed going down a hill, his 17 year old brother, Bryce, watched him bounce off the asphalt on his head, more than once. When Braden finally stopped rolling and Bryce saw him unresponsive, 911 was called. Bryce, is a hero….. Braden was taken to a local hospital and when they did the cat scan, immediately life flight was called. The doctor who made that decision at our small local hospital here, made all the right decisions and expedited him. Even to the point where one more look at the scan caused her to say, “he has no time, we cannot get him to Harborview in Seattle, he won’t survive that long. We ended up in Olympia, 30 miles from home…..As soon as life flight landed, Braden was taken right to surgery and after 3 ½ hours the surgeon came out and said the trauma was extensive. Part of the skull had to be taken off to repair damage, remove clotting and pooling, and help with swelling of the brain. “Be prepared he said, make some plans. There is a less than 10% chance he will wake up from this surgery.” We, never left his side, one of us was with him 24 hours a day, we slept in a cot in his icu room and rotated shifts. Our jobs and lives, on hold while we battled with him. We counted the staples in his head to pass time. 57 of them that crossed over like a seam on a baseball.
Braden, a little over 2 weeks later, DID wake up. He spent months going from hospital to hospital for rehabs and has since had multiple brain surgeries. He had to learn to walk, talk, feed himself. He spent the day of his graduation from high school, in Seattle Children’s hospital watching the ceremony from a laptop. They are a great group there, and his speech therapist there, helped him turn on the “talk” button. He had vision problems, but, his memory was amazing! He remembered the past, our camping trips, motorhome trip to Alaska, things from when he was younger. Places and people. What he still does not remember, is the accident. When he wasn’t able to talk, he picked up a pen and paper and was able to convey what he needed, what he was thinking, as if nothing had ever happened. The therapists were amazed at his ability to write, use punctuation, and spell correctly. His journey is far from over, his right leg, arm and hand, still need extensive therapy. His right foot turns inward and drags when he walks. His right hand, the fingers are clenched. BUT, he is alive and productive, he is with us, we can touch him, hug him, talk to him, eat with him, do a virtual relay for life walk with him, because he was wearing a helmet! And, because God listened to us. Two important factors in why he is with us today.
Had his helmet not of had a face shield on it, he would have faced a lot of other issues, and may not have had a face at all. I am now that crazy woman that drives down the street, yelling at people as I drive by, GET A HELMET ON!!!!!!!
I am a crazed gramma, loyal reader of your column, and, an advocate for helmet safety. For you, and, your family Kevin, get a new helmet!
I promise. My heart goes out to you, your family, and especially Braden, who sounds like an amazingly brave and resilient young man.
I'm happy to announce that on Friday, at 5:30 pm EDT / 2:30 pm PDT, we're going to do it again … our fourth MNB Virtual Happy Hour.
The folks at GMDC have once again agreed to sponsor and host it, and I'll have a link and instructions for you later this week.
Hopefully, you can put it on your calendar … choose a libation for Happy Hour … and then prop up your laptop or warm up your computer on Friday, May 29, for a conversation and a drink. (You don't have to let me know you're coming, but it would be nice to know.)