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    Published on: July 16, 2020

    KC talks about how doing the hard thing now can make it more likely that a business - or industry - won't have to do the harder thing in the future.  If they're lucky.

    Published on: July 16, 2020

    by Kevin Coupe

    I got an email yesterday from an MNB reader, who wrote:

    Hey KC -  an Instacart strategy I think worth noting (that my Mom in Law shared with me - I don’t use Instacart) are offers popping up when she used the app like “Buy $45 of Tide and get free delivery”. Not sure exactly how these offers work on the backend, but it would appear that Instacart might be bypassing the retailer and to make deals directly with manufacturers to offset their delivery fee. Couple that with Instacart's visibility to customer data, Instacart could be tailoring certain offers to specific customers to make them even more relevant/effective. Thought this was interesting, and again example of them cutting out the retailer and driving loyalty to Instacart.

    I did a little checking yesterday … and this is true.  (I have this on excellent, unimpeachable authority.)

    Instacart is, in fact, going to manufacturers for promotion money in exchange for making direct offers to shoppers that it only has because it has customer information gleaned from retailers with which it has client relationships.

    Which is sort of amazing, when you think about it, considering how jealously over the years retailers have guarded promotion dollars.  They'll stand for a lot of things, but go anywhere near their supplier promotion money, and they get downright infuriated.

    But in this case, it seems, Instacart may be in certain cases weaponizing retailers' own data against them yet again, and creating a scenario in which Instacart is seen by the customer as the retailer-of-choice and service provider.  And almost certainly doing so with surgical precision - because Instacart is very good at this stuff.

    Remember … this is not a slam on Instacart, which is building a successful business model that persuades retailers that they should outsource an increasingly critical part of the customer experience to a third party, and then is delivering on the agreements it makes by providing an important service to the ultimate shopper.

    As any business should, Instacart is highly focused on building its own brand.  And is doing so, based on how many consumers say that they do their online shopping with Instacart.

    My question is to the retailers making the Hobson's choice with which Instacart presents them.

    What is wrong with this picture?

    Published on: July 16, 2020

    •  From Fox Business this morning:

    "The number of Americans applying for unemployment benefits remained historically high last week, indicating that employers are continuing to slash jobs as the coronavirus outbreak intensifies.

    "The latest jobless claims figures from the Labor Department, which covers the week ended July 11, show that 1.3 million workers sought jobless aid last week, pushing the total number since the shutdown began to more than 51 million … It's the 17th week in a row that jobless claims came in above 1 million; before the pandemic, the record high was 695,000 set in 1982."

    And from the Wall Street Journal:

    "U.S. retail sales increased 7.5% in June as stores and restaurants reopened and consumers bought big-ticket items and resumed clothing purchases, but a recent rise in virus cases could again dampen spending.

    "The Commerce Department on Thursday said the June increase in retail sales - a measure of purchases at stores, at restaurants and online - totaled $524.3 billion, up from $487.7 billion in May and nearly back to pre-pandemic levels. The total was driven by a pickup in sales at motor vehicle dealers, furniture, clothing and electronic stores.

    "Spending on gasoline increased 15.3% from the prior month as commuters got back on the roads. Sales at bars and restaurants jumped 20% from May, while online spending decreased 2.4% last month and sales at grocery stores dropped 1.6%."

    KC's View:

    Me, I wouldn't get over-confident.  June was one thing, but July may be something else, and it remains to be seen what August and September will look like, depending on whether we actually are able to do what is necessary to get the pandemic under control.

    Me, I'm with Bette Davis, from All About Eve:

    Published on: July 16, 2020

    Kroger issued the following statement yesterday:

    "With the increase in COVID-19 cases across the country—as America’s grocer—we are committed to doing our part to help reduce the spread of the virus.

    "Kroger’s most urgent priority throughout the COVID-19 pandemic has been to provide a safe environment for our associates and customers while meeting our societal obligation to provide open stores, ecommerce solutions and an efficiently operating supply chain so that our communities have access to fresh, affordable food and essentials.

    "As an employer, grocery provider and community partner, we have a responsibility to help keep our associates, customers and communities safe. According to the CDC, wearing a facial covering, combined with social distancing and frequent handwashing, has been scientifically proven to reduce the spread of COVID-19. Starting July 22, we will require all customers in all locations to wear a mask when shopping in our stores, joining our associates who continue to wear masks. We are taking this extra step now because we recognize additional precautions are needed to protect our country.

    "We respect and acknowledge that some customers, due to medical reasons, may not be able to wear a mask (small children are exempt). We encourage those customers to consider an alternative option like a face shield or facial covering. If they’re unable to wear a mask or an alternative design, we request that they use our ecommerce services like pickup or delivery. To support all households during the COVID-19 pandemic, our grocery pickup service remains free (generally a $4.95 fee)."

    KC's View:

    I don't want to be negative in any way, because the rush of retailers - Starbucks, Best Buy, Costco, Walmart and now Kroger - is a good thing.  

    But they should've done it three months ago.  They could've made the rule, sold it to customers effectively, and helped to bend the curve and set the tone for the national debate.

    Published on: July 16, 2020

    From the New York Times this morning:

    "It was about 4 in the afternoon Wednesday on the East Coast when chaos struck online. Dozens of the biggest names in America — including Joe Biden, Barack Obama, Kanye West, Bill Gates and Elon Musk — posted similar messages on Twitter: Send Bitcoin and the famous people would send back double your money.

    It was all a scam, of course, the result of one of the most brazen online attacks in memory.

    "A first wave of attacks hit the Twitter accounts of prominent cryptocurrency leaders and companies. But soon after, the list of victims broadened to include a Who’s Who of Americans in politics, entertainment and tech, in a major show of force by the hackers.

    "The Associated Press reported that Amazon CEO Jeff Bezos was also among those whose Twitter accounts were hacked.

    "Twitter quickly removed many of the messages, but in some cases similar tweets were sent again from the same accounts, suggesting Twitter was powerless to take back control of the accounts.

    ":The company eventually disabled broad swaths of its service, including the ability of verified users to tweet, as it scrambled to prevent the scam from spreading further … The hackers did not use their access to take aim at any important institutions or infrastructure — instead just asking for Bitcoin. But the attack was concerning to security experts because it suggested the hackers could have easily caused much more havoc."

    KC'S View:

    This is a developing story, with a lot of speculation about how and why it happened, who did it, and what the long-term implications might be … especially coming less than four months before a national election.  Was it an isolated incident from a kind of lone gunman?  Or something more insidious, a calculated effort to figure out how to drive our democracy into a bridge abutment?

    Hopefully we'll find out in time to make sure it doesn't happen again, or at least mitigate the impact when it does - fighting disinformation with truth.  Hopefully.

    Published on: July 16, 2020

    The New York Post reports that the San Diego woman who complained on social media last month about the Starbucks barista who refused to serve her because she was not wearing a face mask, only to generate an outpouring of support for that barista that resulted in a customer-created GoFundMe page that brought in more than $100,000 in "tips" for the employee, now has a new cause.

    She's considering suing for half the money that customers have to the barista.

    According to the story, Amber Lynn Gilles told a local TV station that she has underlying medical conditions that don't allow her to wear a mask.

    The Post writes that "Gilles brought two documents to the outlet to prove her exemption. One document was a pelvic exam from 2015, reporting a 'probable exophytic fibroid arising from the anterior wall of the uterus measuring 2.9 cm size,' and 'simple 2.5 cm left ovarian cyst.'

    "A second was a handwritten note on letterhead from a local chiropractor, reading, 'Amber has underlying breath conditions that prevent her from wearing a mask or any type of facial covering whatsoever. Please contact me if have any questions.'

    "Gilles asked for the chiropractor to not be named and the practitioner declined to discuss Gilles when the outlet reached out for comment."

    “I get shortness of breath, dizziness and it messes with the heartbeat,” she told the TV station. “And I do have asthma as well, and I do get mask-acne. So there’s several things going on and not only that but it doesn’t even work.”

    KC's View:

    If she's stopped at "mask acne," she would've been better off.  But when she goes on to say that "it doesn't even work," Gilles betrays herself.  In essence, she has unmasked her own intentions and priorities.

    I'm glad she didn't name the chiropractor, because that allows me to ask out loud - without impugning his or her integrity or expertise - whether he or she might've been promised a piece of the action.  Certainly a question worth asking.

    Here's the deal.  There are folks out there for whom wearing a mask creates a medical problem, and while the wearing of masks is critical to bending the curve of the pandemic, it is important to show compassion toward those folks and figure out how to make accommodations.  But those folks have to meet retailers halfway … and by the way, on a serious note, retailers need to have processes in place designed to meet (and sometimes defuse) these situations.

    These customers should try not to be rude, and certainly should avoid going on social media and threatening to "call the cops" next time if they're not served while not wearing a mask.

    Maybe they ought to avoid looking brazenly opportunistic and greedy when things like this happen.  And maybe, just maybe, they ought to figure out when to be quiet and go away.

    Published on: July 16, 2020

    Random and illustrative stories about the global pandemic and how businesses and various business sectors are trying to recover from it, with brief, occasional, italicized and sometimes gratuitous commentary…

    •  In the United States, we now have had 3,618,739 confirmed cases of the Covid-19 coronavirus, with 140,185 deaths and 1,646,683 reported recoveries.

    Globally, there have been 13,718,081 confirmed coronavirus cases, 587,330 fatalities, and 8,172,464 reported recoveries.

    •  The Wall Street Journal reports that "Oklahoma Gov. Kevin Stitt became the latest politician to test positive for the new coronavirus, as rising numbers of cases in more U.S. states suggested the pandemic was continuing to spread.

    "Mr. Stitt, a Republican, joins a list of U.S. and world leaders who have contracted Covid-19, the disease caused by the coronavirus, including Atlanta Mayor Keisha Lance Bottoms, Brazilian President Jair Bolsonaro, British Prime Minister Boris Johnson and Bolivia’s interim president, Jeanine Áñez."

    The Journal goes on to report that "new coronavirus cases have risen 26% over the past week in Mr. Stitt’s state, and the share of positive tests in Oklahoma has ticked up to 8% from 3% a month ago. The state so far has recorded 22,813 cases and 432 deaths.

    "Oklahoma is one of 46 states that had a seven-day average of new cases higher than their average during the past two weeks, according to a Wall Street Journal analysis of data from Johns Hopkins University. That held true in 44 states at the start of the month and 21 states at the beginning of June, suggesting recent increases in new cases."

    Tulsa World writes that "Stitt said he was 'not thinking about a mask mandate at all …  I am just hesitant to mandate something that is problematic to enforce."

    Stitt also said "his wife and six children have tested negative for the virus," that he will be "quarantining at home and conducting more meetings by videoconference," and "does not second-guess his personal choices not to wear a mask despite testing positive."

    There have been efforts to directly tie Stitt's illness to his presence at the Trump campaign rally in Tulsa three weeks ago, but doctors say that this is unlikely and that he "could have caught it anywhere."  Which, I think, is exactly the point - and why a mask mandate is important.

    •  Other notes from the Wall Street Journal:

    - "Florida, Texas and California, the country’s most populous states, have been seeing an uptick in cases for weeks now, and continued Wednesday to see large new daily case counts. The Sunshine State and the Lone Star State recorded over 10,000 news cases each, and the Golden State reported more than 11,000 new cases."

    - "A number of other states, including West Virginia, Tennessee and Alabama, have seen new coronavirus cases jump 20% or more from a week ago."

    - "In Alabama, where cases have risen more than 25% over the past week, GOP Gov. Kay Ivey announced that she would be implementing a statewide mask order, effective Thursday … After months of having little to no guidance on face coverings, Montana Democratic Gov. Steve Bullock on Wednesday issued a statewide mask order in counties that have more than four confirmed Covid-19 cases."

    - "Houston Independent School District, the largest school district in Texas, said Wednesday it plans to begin the school year with virtual learning. Texas education officials said last week they plan for schools to open, with opportunities for some virtual instruction and the expectation that closures could become necessary."

    "The pandemic’s spread in California prompted the cancellation of the 2021 Rose Parade. Organizers said planning for the annual Rose Bowl football game was continuing."

    •  The New York Times reports that "Gov. Brian Kemp of Georgia, a Republican, specifically forbade local officials to require people to wear face coverings in public, but he also extended by two weeks an executive order limiting the size of public gatherings to 50."

    The Washington Post adds that "Kemp’s order voids existing mask mandates in more than a dozen cities or counties while also extending other coronavirus social distancing restrictions statewide.

    "The governor had previously tried to ban cities and counties from passing any coronavirus restrictions that went further than Georgia’s guidelines. But many cities, including Atlanta, defied him by passing mask mandates anyway, arguing it was essential to flatten the curve."

    I am gobsmacked by Kemp's decision not to allow local officials to impose mask regulations.  If you want to be ignorant, I suppose that's your decision … but to create a rule saying that everybody else has to act ignorant, too … I don't even know which words to use.  (Actually, I do.  I just can't use them here.)

    The Times writes that "in Kansas, Gov. Laura Kelly, a Democrat, announced that she would delay the opening of schools until after Labor Day, saying that schools needed time to get masks, thermometers, hand sanitizer and other supplies."

    •  Axios writes that "62% of respondents in the most recent Axios-Ipsos Coronavirus Index said they’re wearing a mask 'all the time' outside the home, up from 53% two weeks ago."

    •  From the New York Times:

    "Across the United States, many public schools have plans to reopen classrooms just a few days a week or not at all, while neighboring private schools have prepared to open full time.

    "Public schools, which serve roughly 90 percent of American children, have less money, larger class sizes and less flexibility to make changes to things like the curriculum, facilities or work force.

    "The biggest challenge for returning to classrooms is how to maintain physical distance, as required by guidelines from state governments and the Centers for Disease Control and Prevention. Most countries in which schools have opened — after reducing infection levels and imposing distancing measures — have not had new outbreaks.

    "Public school buildings in the United States are often old, with small classrooms, cramped halls and outdated ventilation systems. Independent schools (private schools not run by a for-profit company or religious organization) are more likely to have smaller class sizes to begin with, and money to hire additional teachers."

    •  The Washington Post reports that "France will required people to wear masks while inside most public spaces beginning next week, pushing up the start of nation’s mask mandate by nearly two weeks.

    "French Prime Minister Jean Castex announced the change in plans Thursday, the Associated Press reported. Earlier this week, President Emmanuel Macron had set the new policy to start on Aug. 1, but the timeline was accelerated after outbreaks in the nation’s northwest Mayenne region."

    •  CNBC reports on how the new wave of coronavirus infections around the country threatens to swamp many businesses, with the National Restaurant Association (NRA) saying that "100,000 restaurants have been closed down over the past two weeks under state and local government mandates."

    According to the story, "The trade group sent a letter to leaders in the House and Senate Wednesday, calling for specific aid for the nation’s restaurants, which are projected to lose $240 billion in revenue this year due to the pandemic. Some 8 million workers have been laid off or furloughed from March through May, the group says."

    •  The Wall Street Journal reports on new demands being placed on food banks around the country, as "demand for the free vegetables, milk and canned goods on offer … has surged since the coronavirus pandemic torpedoed the U.S. economy, closing businesses and thrusting millions out of work."

    At one emergency food pantry in Brooklyn’s Flatbush neighborhood, the social services provider has "served more than 18,000 people last month, nearly five times as many as in February, before the virus took hold in the US … The scene is being repeated across the country as the growing need hits food banks and pantries, leading to long lines of people seeking food and straining providers coping with shortages of high-demand products like canned goods even as they handle a crush of produce from sidelined food-service operations. Food-relief organizations are retooling their operations for the Covid-19 era, testing out new distribution tactics, bringing on temporary labor and scrambling to secure storage space to meet a level of need that some say could stretch into next year and beyond."

    •  Reuters reports that Amazon "has extended a work-from-home policy until Jan. 8 and is continuing to ask employees to defer all non-essential travel, a spokeswoman said on Wednesday."

    •  The pandemic continues, and more traditions recede.

    The Boston Globe reports that "for the first time in 145 years, there will be no Swan Boats ferrying passengers around the lagoon at the Boston Public Garden.

    "The Paget family, which operates the iconic vessels, has announced the business will hold off opening until 2021 out of public health concerns related to the coronavirus. Under the state’s reopening guidelines, the company would be allowed to operate under Phase 3, which began in Boston on Monday."

    The family said that even though it could have opened the Swan Boats for business, it did not make sense to do so.

    In other words, learning the "Jurassic Park" lesson - just because you can do something does not mean you should do something.  

    Published on: July 16, 2020

    Bloomberg reports that new research from KPMG International suggests that the combination of people working from home on an extended basis as well as doing more of their shopping online "will reduce driving in the U.S. by up to 270 billion miles a year" - even if a vaccine for the coronavirus is developed.

    The study also concludes that this reduction in driving "will remove 14 million cars from U.S. roads."

    The story goes on:  "During the height of the pandemic in April, Americans sheltering at home drove 64% fewer miles, an unprecedented decline in travel. Those new habits will die hard, with KPMG predicting as much as a 10% permanent reduction of the almost 3 trillion miles typically traveled every year and vehicle ownership declining to slightly less than two cars per household."

    And:  "The change in habits could result in roughly 1 million less sales of new cars and trucks annually … Americans have purchased more than 17 million cars, sport-utility vehicles and light trucks annually for the last five years. The National Automobile Dealers Association expects U.S. auto sales to plunge as low as 13 million this year. As the industry works its way out of the hole created by the shutdown, the potential loss of 1 million sales a year will loom large."

    KC's View:
      There's more bad news.

    Think about this will impact garages that do car repairs, or retailers that sell after-market equipment.  Think about the impact on gas stations.  Hell, think about the impact on insurance companies that sell auto insurance.  (We can think about them, but people probably aren't going to feel too bad for the insurance companies.   But, keep in mind … if insurance companies make less profit on auto insurance, they may raise other rates.  So we can feel bad for ourselves.)

    However … the good news is that maybe we'll have less pollution, and fewer deaths because of car accidents.  Think of this as a silver lining.

    But - and yes, this becomes a rabbit hole from which it is hard to emerge - if there are fewer deaths because of car accidents, there also will be fewer organs available for transplant, so people will die in other ways.

    Big lesson:  nothing happens in a vacuum, and everything has consequences.

    Published on: July 16, 2020

    My friend Bob Wheatley, the CEO of Emergent, has a fascinating blog posting that is worth checking out, writing that "on the horizon" is "a new company and food-making technology that promises to create the most sustainable meat alternative on earth. Meat that requires no agriculture, no animals and yet delivers a nutritionally superior, complete higher protein product than anything created from a chicken, pig, cow or plant."

    The company, Air Protein, is helmed by MIT physicist Dr. Lisa Dyson, and Wheatley describes it as "a fascinating recipe of uniquely combining carbon dioxide, oxygen and nitrogen with renewable energy, water and nutrients, then adding common microbes in a fermentation process similar to making wine or cheese. The high protein flour outcome of this brewery-like approach is turned into authentic meat analogs by using pressure, temperature and natural flavors. Her sustainable 'Air Protein Farm' operates more like a yogurt making facility than meat processor."

    Fascinating stuff, and you can read it here.

    Published on: July 16, 2020

    With brief, occasional, italicized and sometimes gratuitous commentary…

    •  Business Insider reports that White Castle "plans to test a cooking robot named Flippy in the kitchen of at least one White Castle this fall.

    "Flippy is built by Miso Robotics, and can fry food, flip burgers, and more. It's already used in stadiums, venues, and restaurants like the Dodger Stadium.

    "The White Castle and Miso collaboration has been in the works for a year, but the pandemic sped up the fast-food chain's push for automation due to delivery demand and a move toward contactless cooking."

    I can understand why this is an attractive option, since the pandemic makes low-touch alternatives something with a lot of an appeal.  But it also occurs to me that this is happening at a time of increased unemployment, and if this becomes a broader trend, it isn't going to help put people back to work.

    Published on: July 16, 2020

    Yesterday, MNB took note of a USA Today story about fart-free cows:

    "Burger King's new menu item aims to tackle the environmental impact of beef. 

    The fast-food chain partnered with top scientists to develop and test a diet for cows to produce less methane, a greenhouse gas that traps the sun's heat and warms the planet.

    "The new diet reduces up to 33% per day, on average, of cows' daily methane emissions during the last three to four months of their lives, according to initial study results."

    I commented:

    I know I'm a child about this stuff, but I'm just happy for any excuse to use words like "fart" on MNB.  

    MNB reader Mike Bach responded:

    How would you like to be the scientist that was given that assignment?  I’m sure he was very excited about setting up the sampling process. And, then to go home each night and tell his family “what he did that day”… now that might unleash the child in just about anyone.

    On another subject, one MNB reader observed:

    I’ve been reading that masks were also controversial during the 1918 pandemic.

    There’s something in the American character that doesn’t like being told what to do. And not learning from the past seems to be a universal human trait.

    Some might call this American exceptionalism.  I might characterize it differently. 

    From another MNB reader about companies imposing mask mandates:

    I wholeheartedly agree with you and the decisions these companies are finally making. Wish we could say it's a bold move but four months in, it's actually not.

    One thing that concerns me is seeing employees and vendors not abiding by the rules of the retailer. If the goal is to mitigate the virus, then the rules apply to all. I have a choice of several supermarkets. I shop at the one that best follows their own rules.

    And, from MNB reader Joe Axford, regarding my "Real Talk" virtual session with Jim Donald, cochairman of Albertsons, done for the Organic Produce Summit:

    Watched this last night KC, and came away very impressed with Jim, and glad that he's Co-chairman of Albertsons. Looking forward to more, as I work at Shaw's so this gives me hope!

    And finally, from my friend Beatrice Orlandini over in Italy, about our story yesterday about how studies now say pasta and bread will make you live longer.

    Buone notizie?

    I would say, Ottime notizie!

    Of course I am biased…

    Non scherzo.  Grazie.