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    Published on: September 9, 2020

    The goal of "The Innovation Conversation" is to explore some facet of the fast-changing, technology-driven retail landscape and how it affects businesses and consumers. It is, we think, fertile territory ... and one that Tom Furphy - a former Amazon executive, the originator of Amazon Fresh, and currently CEO and Managing Director of Consumer Equity Partners (CEP), a venture capital and venture development firm in Seattle, WA, that works with many top retailers and manufacturers - is uniquely positioned to address.

    While our title is "What Good Is Spaghetti Carbonara Without Pancetta?," the subject isn't Italian cooking.  Rather, it is the multiple critical moves that retailers must make if they are to compete in a 21st century environment being reshaped by technology, pandemic, and shifting customer needs.   Spaghetti carbonara with pancetta, you see, is just the metaphor.

    The beginning premise is this: The importance for retailers to eliminate redundant supply chain and logistics issues.  That's easier said than done - it isn't all that different from what the industry started doing two decades ago with its Efficient Consumer Response (ECR) initiative.  But it didn't go far enough for fast enough (or else there would be no need for this conversation.  Tom and Kevin are both provocative and prescriptive as they approach the subject, seeing it through the eyes of retailers, solutions providers, and, especially, customers as they offer a recipe for competitive strategies.

    Published on: September 9, 2020

    By Michael Sansolo

    If there is one immutable truth about shoppers that simply cannot be ignored it is this:

    Whether it is the time of Covid or more "normal" times, they don’t spend all their time doing just one thing. 

    Even the most loyal shopper of an individual supermarket for example, is going to go to many other businesses for clothing, hair care, dentistry, cars, and, well, you name it. For that reason we always need to understand that what they see happening elsewhere constantly changes them and raises their expectations.

    Like it or not, that includes you.

    PNC Bank has a relatively new ad that captures this point in a very unsubtle way. The ad shows a dad on his smart phone while the children in his house are creating a ruckus. What becomes instantly clear is those kids are attending a birthday party and he is tracking a highly anticipated and necessary pizza delivery.

    But the voiceover is what should grab us. It questions why, if an app can help you track your pizza, can’t you do the same with your spending and other banking related issues?  It’s a great question.

    Obviously, PNC thinks it has the answer with its virtual wallet offering. So the question moves to you: if a customer can track a pizza delivery or follow everything they are doing in their bank accounts, why is supermarket shopping any different?

    In today’s world, thanks to the almost overnight explosion in online food shopping (thanks, Covid) I wonder if supermarkets are looking at how companies ranging from Domino’s to PNC are providing real time updates. We’ve done lots of curbside collect in our home since March and while I am extremely satisfied, PNC’s ad leaves me questioning how much more could be done.

    For instance, if I ask for delivery, can I track the truck? When my order is being picked, can I virtually accompany my shopper? Obviously I’m not shopping every store in the US these days or ever, but I wonder how many can say yes to those questions. And if not, how can I do something with a pizza or an Uber driver that I cannot do with a supermarket order?

    It will annoy you to read these words, but Amazon does some of this.   Lately, when Amazon is delivering packages via its own system - as opposed to via the Post Office or UPS - it lets recipients know how many stops away its trucks are, and then will send a picture of where the product has been left once delivered.

    Why is it that when I rent a car (remember those days?) the checkout experience is expedited by staffers with handheld devices that move me through the line in minutes? Why is that experience limited to car rentals as opposed to all the other lines I wait on in hotels, airports and supermarkets?

    I’ve long argued that we always need to look around to see what delights customers wherever they go - there are lessons to be learned everywhere that can and should be applied to the supermarket experience.

    It’s also why we have to watch what Amazon, Apple and the other high-tech fast movers do to enhance and reinvent the customer experience. That same shopper will come to you as well and wonder why you too aren’t changing.  Go to an Amazon Go store, and it forever changes how you feel about waiting on line, in the same way that using EZ-Pass makes just the idea of waiting to pay a toll completely unacceptable.

    That’s especially meaningful in Covid-world. If your store doesn’t offer curbside pick up (and there are still many that don’t), or if you don’t have arrows on the floor or plastic barriers in front of cashiers, remember your shoppers are seeing those items everywhere else from Walgreens to McDonalds. They won’t understand the increased costs you face any more than they care about the myriad other challenges you face. They only care about what they face and how you help them cope.

    It is simply what they expect.  Those expectations grow every day.

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

    His book, “THE BIG PICTURE:  Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available here.

    And, his book "Business Rules!" is available from Amazon here.

    Published on: September 9, 2020

    by Kevin Coupe

    The Pew Research Center is out with a new study chronicling how the coronavirus outbreak "has pushed millions of Americans, especially young adults, to move in with family members."

    Here's how Pew lays out this new reality:

    " The share of 18- to 29-year-olds living with their parents has become a majority since U.S. coronavirus cases began spreading early this year, surpassing the previous peak during the Great Depression era.

    "In July, 52% of young adults resided with one or both of their parents, up from 47% in February, according to a new Pew Research Center analysis of monthly Census Bureau data. The number living with parents grew to 26.6 million, an increase of 2.6 million from February. The number and share of young adults living with their parents grew across the board for all major racial and ethnic groups, men and women, and metropolitan and rural residents, as well as in all four main census regions. Growth was sharpest for the youngest adults (ages 18 to 24) and for White young adults."

    The report goes on:

    "The share of young adults living with their parents is higher than in any previous measurement (based on current surveys and decennial censuses). Before 2020, the highest measured value was in the 1940 census at the end of the Great Depression, when 48% of young adults lived with their parents. The peak may have been higher during the worst of the Great Depression in the 1930s, but there is no data for that period."

    Eye-Opening statistics.

    It was Robert Frost who once wrote, in "The Death of the Hired Man"…

    "Home is the place where, when you have to go there,

    They have to take you in."

    Many of us have had the experience of having adult children living with us over the past few months.  In many ways, it has been a gift - time spent together that we might not have had otherwise, and that we may never get again.  (Though, I think it is fair to say, a gift that can have its stresses.)

    But here's what retailers need to think about - the fact that these young people are in many ways being taken out of the consumer class or, at least, being limited in their ability to contribute to the conduct of commerce.

    One wonders how long it will taken for them to regain lost momentum, and what the cost to the country will be.

    Published on: September 9, 2020

    The New York Times has an assessment of how the coronavirus pandemic has changed the food shopping landscape.  Here's how it frames the story:

    "When the coronavirus hit, even the most enthusiastic cooks had to adjust to a new, more complicated relationship with their kitchens.

    "For the first time in a generation, Americans began spending more money at the supermarket than at places where someone else made the food. Grocers saw eight years of projected sales growth packed into one month. Shopping trends that were in their infancy were turbocharged.

    "The six-month shift has been a behavioral scientist’s dream. Shoppers began by building bomb-shelter pantries. Then came a nostalgia phase, with bowls of Lucky Charms and boxes of Little Debbies offering throwback comfort. Soon, days were defined by elaborate culinary stunts, sourdough starter and kombucha clubs.

    "Although kitchen fatigue is setting in for many, a new set of kitchen habits have been set."

    You can read the story here.

    KC's View:

    I wonder about the degree to which retailers - who have been hip-deep in trying to deal with changes in demand created by the pandemic in their stores - think about their own shopping habits have changed, and how that should influence how they think about their stores.

    Beyond, of course, making it easier to stock up on wine and vodka.

    (Did I just say that out loud?)

    For me, it has been learning to make my own pizza.  And learning not just to use, not just depend on, but to love PrimeNow, which has made my local Whole Foods a highly convenient and safe shopping environment.

    Published on: September 9, 2020

    Yahoo Finance reports that Dunkin' "is testing out an Amazon Go-style shop in California in October that lets customers walk in, grab coffee and donuts themselves without ordering or waiting in line to pay … Customers will reportedly be able to shop at the contactless checkout location by downloading the Dunkin' app and using a QR code displayed on phones to enter the test store location and access self-service areas for doughnuts and coffee.

    "Shoppers will get a notification with their digital receipt that can be viewed on the Dunkin' app once they exit the store."

    The story notes that "Dunkin' is the latest in a number of fast-food chains, grocers and tech companies implementing contactless retail and drive-in only business models in the age of the coronavirus pandemic … Burger King last week announced plans for revamped restaurant designs, including a conveyor belt system to deliver food from the kitchen to the drive-thru for touchless pickup. Guests placing online and delivery orders will also get access to coded lockers outside of restaurants where they can pick up food instead of interacting with employees.  And Taco Bell said last month it planned to debut a mobile-only restaurant next year for customers to order food via its app and pick it up curbside."

    KC's View:

    Think of this story in terms of Michael's column today - these retailers are starting to create benchmarks for other retailers and expectations that consumers will bring to other retail experiences.

    Ignore them at your own peril.

    Published on: September 9, 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've now had 6,514,376 confirmed cases of the Covid-19 coronavirus, with 194,037 deaths and 3,797,173 reported recoveries.

    Globally, there have been 27,764,017 confirmed coronavirus cases, 902,356 fatalities, and 19,848,805 reported recoveries.


    •  The Washington Post  reports that while "the coronavirus pandemic appears to be leveling off in most of the United States, with new cases, deaths and hospitalizations all down over the past week," the numbers suggest "continued high levels of infection and a long road ahead, particularly as cold weather and the flu season approach. Without a vaccine or a major advance in treatment, significant reductions in new cases would probably require voluntary or mandated changes in behavior that experts say are unlikely six months into the public health crisis.

    "Although the pandemic has meant the loss of jobs, wages, schooling and more along with lost lives, large numbers of Americans have resumed many elements of their daily routines, and many still decline to wear masks or avoid crowds."

    The Post quotes Michael Osterholm, director of the Center for Infectious Disease Research and Policy at the University of Minnesota, as saying that "he no longer thinks it makes sense to talk about 'waves' of virus spread. Instead, he said, there will be spikes followed by plateaus."

    “This is just one big forest fire of coronavirus, and it will burn hot wherever there is human wood to burn,” he says. “If you don’t put the fire out completely, and then you walk away from it, it’s going to start burning again in days.”


    •  From NBC News:

    "More than 500,000 children in the United States have been diagnosed with COVID-19, the American Academy of Pediatrics reported Tuesday, and the rate of new cases among kids continues to rise.

    "From Aug. 20 to Sept. 3, there were 70,630 cases reported among children - an increase of 16 percent - bringing the national total to 513,415. The largest increases were reported in six states: Indiana, Kentucky, Missouri, Montana, North Dakota and South Dakota.

    "As many as 103 children have died, according to the report.

    "'These numbers are a chilling reminder of why we need to take this virus seriously,' Dr. Sara Goza, president of the academy, said in a statement.

    "The half a million pediatric cases represent 9.8 percent of the more than 6 million cases overall in the country."

    The story notes that "while children may be largely spared the worst outcomes, experts say they can spread the virus to more vulnerable family members" as well as teachers and coaches with whom they may be interacting.


    •  The Wall Street Journal reports that "AstraZeneca PLC said Tuesday it paused clinical trials of an experimental Covid-19 vaccine after a participant in a U.K. study had an unexplained illness.

    "AstraZeneca, which licensed the vaccine from developers at the University of Oxford, said the pause will allow an independent committee to review safety data.

    "The pause affects a study that began last week in the U.S. aiming to enroll 30,000 people, with funding from federal agencies. The study is testing whether the vaccine reduces the rate of Covid-19 cases compared with unvaccinated study subjects. AstraZeneca and Oxford had started a large study of the vaccine in the U.K. in the spring."


    •  From CNBC:

    "Late-summer getaways helped lift air travel during the Labor Day weekend but the coronavirus pandemic has left its mark on what has shaped up to be a dismal season for airlines.

    "The number of people screened by the Transportation Security Administration reached 968,673 on Friday, the highest since March 16, agency data released on Monday showed. During the Friday-through-Monday holiday weekend, close to 3.3 million passengers passed through TSA checkpoints, down nearly 60% from the holiday weekend in 2019. That, however, is an improvement from the depths of the coronavirus crisis in April when passenger volume was off by more than 95%."

    The story notes that "airlines are now scrambling to create more flexible policies to win over travelers, particularly as what is generally the slower fall season followed by the end-of-year holidays approach. Among the changes is a scrapping of domestic ticket change fees by United last month. Delta and American followed with similar policies."


    •  USA Today reports that Marriott "is laying off 673 workers from its headquarters," attributing the decision to "the slump in travel amid the coronavirus pandemic."

    The number is more than 10 percent of the workforce at the Maryland facility, the story notes,. but it is just accelerating an already announced departure from the site scheduled for 2022.  "In March, Marriott International said it was furloughing tens of thousands of employees as the travel industry grappled with a tidal wave of cancellations."


    •  From the New York Times:

    "Across the United States colleges that have reopened for in-person instruction are struggling to contain the rapid-fire spread of coronavirus among tens of thousands of students by imposing tough social-distancing rules and piloting an array of new technologies, like virus tracking apps.

    But perhaps their most complex problem has been what to do with students who test positive for the virus or come into contact with someone who has. To this end, many campuses are subjecting students to one of the oldest infection control measures known to civilization: quarantine.

    "Many public and private colleges have set aside special dormitories, or are renting off-campus apartments or hotel rooms to provide isolation beds for infected students and separate quarantine units for the possibly sick.

    "The general strategy has been supported by public health officials like Dr. Anthony S. Fauci, the nation’s top infectious-disease expert, who say it is better to separate students until they are no longer contagious rather than send them home where they might infect their family and friends.

    "But in practice, many undergraduates and some epidemiologists say the policies have broken down, often in ways that may put students and college staff at risk. And that breakdown reflects the chaotic nature of this extraordinary semester, when schools are struggling to deliver both in-person and remote classes; to identify, isolate and treat coronavirus outbreaks; and to maintain safe behavior among sometimes unruly undergraduates."


    •  The New York Post reports that Jamain Stephens, a 20-year-old defensive lineman at the California University of Pennsylvania and the son of former Pittsburgh Steelers offensive tackle Jamain Stephens, has passed away from complications related to the coronavirus.

    Stephens was not playing football this semester - the Pennsylvania State Athletic Conference had suspended all competition for the fall semester.


    •  The Washington Post reports that the recent Sturgis Motorcycle Rally in South Dakota, which attracted close to a half-million people despite concerns about it being a potential coronavirus super-spreader event, may have been responsible for a significant spike in Covid-19 cases.

    According to the story, "The report from San Diego State University’s Center for Health Economics & Policy Studies used anonymized cellphone location data and virus case counts to analyze the impact of the 460,000-person event that took place last month, believed to be one of the largest events held during the pandemic. Health officials had expressed concerns about the rally, which, the researchers noted, 'represents a situation where many of the ‘worst case scenarios’ for superspreading occurred simultaneously.' Those included the event being prolonged over 10 days, attracting a significant out-of-town population and involving attendees clustered together, with few wearing masks.

    "The consequences were 'substantial,' the researchers concluded. By analyzing the parts of the country that had the highest number of Sturgis attendees and changes in coronavirus trends after its conclusion, they estimated 266,796 cases could be linked to the rally. That’s about 19 percent of the number reported nationally between Aug. 2 and Sept. 2, and significantly higher than the number state health officials have linked through contact tracing. Based on a covid-19 case statistically costing about $46,000, the researchers said, that would mean the rally carried a public health price tag of $12.2 billion."

    Sons of Anarchy, indeed.  Because anarchy is what happens when people who should know better decide to spit in the face of a pandemic.  The pandemic - no surprise -  spits back.


    •  The Associated Press reports that "Britain’s government is banning gatherings of more than six people in England, as officials try to keep a lid on daily new coronavirus infections after a sharp spike across the U.K. that has been largely blamed on party-going young adults disregarding social distancing rules.

    "Downing Street said urgent action was needed after the number of daily laboratory-confirmed positive cases hit nearly 3,000 on Sunday. The figure dipped Tuesday to 2,460.

    "Officials said that starting Monday, the legal limit on all social gatherings in England will be reduced from the current 30 people to six. The new law applies both indoors and outdoors, including private homes, restaurants and parks. Failure to comply could result in a $130 fine."


    •  There have been a lot of stories about people moving out of cities because of the pandemic, driven to find places with more space, back yards, and other amenities that seem desirable during lockdowns.

    The Gothamist has an interesting piece in which it talked to a number of New York City residents - of varying ages, genders and ethnicities - who had decided for whatever reason to stay in the city, which was so hard-hit by the pandemic.

    "While a mass exodus has been greatly exaggerated, there is some truth to be found here — after all, unemployment is way up, and some residents have heartbreakingly left out of necessity," the story says.  "But those aren't the stories making up most of the headlines — instead, we are led to believe that New Yorkers have simply had it with this city, and are fleeing to some sort of perceived comfort in the suburbs … To those who are still here and determined to stick around, we asked: Why are you staying in New York City?"

    One of those answers, from a woman named Andrea Skowronek, touched me:

    "I love New York and I live in New York because, for the most part, this is not just a city where people randomly end up. This is a city where many people have chosen to live. We choose to live amongst each other even though we are all so different. We choose the dirt and the grime and the expense and the inconvenience because we know that New York is the real American Dream. The American Dream isn't a vision of white utopia where everyone has a yard and 'freedom' and barbecues on the weekends. The American Dream is people streaming in from all over the world for hundreds of years onto this one tiny island because they wanted to make a better life for themselves and their kids and their families back home. Covid didn't scare me out of New York because my great grandfather busted his ass to get here at 14 without a dime in his pocket and just a few generations later every single person in the family has a college degree and a good job and health insurance and a home (...and most of them still have their New York accents!). If he could come here as a little kid alone, help build the Holland Tunnel, and build a life and a family, then I can suck it up and wear a mask on the train."

    Good for Andrea Skowronek, and what strikes me as an essential kind of patriotism.

    Published on: September 9, 2020

    The Boston Globe reports on how Michaelann Ferro, a Trader Joe's employee in Brookline, Massachusetts, fed up with sexual harassment by an older co-worker and seeing her complaints dismissed by her manager as a "he said, she said" situation (despite the fact that she had witnesses), decided to take her case to social media.

    Here's how the Globe describes the situation:

    "Ferro and a group of current and former fellow employees took to social media. A petition on coworker.org, signed by more than 7,000 people, calls on people to stand against sexual harassment at the store and asks other Trader Joe’s workers to share their stories. An Instagram post that begins 'Did you know there’s a predator at your local Trader Joe’s?' provides a script urging customers to call corporate headquarters and ask about protocols.

    "The goal, along with getting the alleged harasser fired, is to strengthen the company’s sexual harassment policies."

    According to the story, "The man is now reportedly working at a different Trader Joe’s, although Ferro said management never informed her he had transferred, or how it was decided.  Trader Joe’s would not confirm that the man was working at another store or address any of the points raised by the women."

    In fact, Trader Joe's "declined to address the situation in detail but said the company has a robust process for reporting and investigating allegations."

    KC's View:

    Well, maybe not so much.

    Good for Ferro.  If she were my kid, I'd be proud of here for refusing to accept the status quo as defined by her employer, and what sounds like management malpractice by her boss.  (The creep apparently got transferred.  I'd love to know what happened to the store manager.)

    Maybe Trader Joe's hasn't gotten the memo, but it is no longer remotely acceptable to dismiss such complaints, especially when they've been corroborated by witnesses.  It never was acceptable, but these days, it can't be hidden … employees are empowered, customers will get angry, and companies have to get their act together.

    This crap festers unless attention is paid and action is taken.  No excuses, no delays.

    I've said it before and I'll say it again.  Companies have to send a message to everyone in their organizations, making the point that if they've behaved in ways that would bring shame to them, their families and their companies (or would bring shame if they had that capacity - we all know that there are people out there who are incapable of feeling that emotion), it would be better if they would just leave … because when they are found out, they will be dismissed.

    Published on: September 9, 2020

    With brief, occasional, italicized and sometimes gratuitous commentary…

    •  The BBC reports that Thomas Cook, the travel brand that collapsed last year "under a mountain of debt," now is "close to being relaunched" as an online-only brand "without the aircraft, hotels and shops of the old business."

    The story says that "the brand's owner, China's Fosun, wants to revive Britain's oldest travel firm within weeks to capture the start of the booking season for next summer."

    Which strikes me as notably optimistic about what next summer is going to be like.

    Published on: September 9, 2020

    •  The National Grocers Association (NGA) yesterday " offered support for bipartisan legislation that would allow hemp-derived cannabidiol (CBD) to be regulated as dietary supplements.

    "Introduced Sept. 4, the Hemp and Hemp-Derived CBD Consumer Protection and Market Stabilization Act of 2020 (H.R. 8179) is sponsored by U.S. Reps. Morgan Griffith (R-VA-9) and Kurt Schrader (D-OR-5). The proposal would eliminate regulatory confusion and establish product manufacturing standards to support the growing market for CBD products.

    "Removal of CBD and hemp-derived products from the Controlled Substances Act has led to the quick growth in business and consumer interest, and CBD products have flooded the marketplace in a variety of forms, such as tinctures, pills, lotions and oils."


    •  The Wall Street Journal reports that "Restaurant operator Luby’s Inc., which also owns the Fuddruckers burger chain, intends to sell the business and distribute the proceeds to shareholders after a drop in sales amid the coronavirus pandemic."

    Luby’s said that the sale would include "Luby’s Cafeterias and Fuddruckers outlets as well as its culinary contract business and real estate."

    Published on: September 9, 2020

    Responding to yesterday's piece about 7-Eleven's new deal with Instacart, one MNB reader wrote:

    Do you think the person who wrote that 7-11 is built on offering “continued innovation that ensures we continue offering our customers exceptional products and services when and where they want them” is a regular consumer of the assorted, fried or grilled meat products that 7-11 sells from the heated cases next to their checkouts?  Does a hot-dog shaped hamburger count as exceptional and innovative?  In all seriousness, though, the people who run these companies and write their public communications should understand what their companies are and are not.

    I would agree.

    If only wishing would make things so.

    MNB reader Mike Bach wrote:

    I can only imagine buying lottery tickets (and then only when the pot is high enough) through their Instacart relationship.  Most 7-Eleven franchises can’t manage their own inventory levels so it perplexes me why this relationship has any stickiness whatsoever.

    I can’t imagine this has good economics for Instacart shoppers, either.


    On an other subject, MNB reader Lisa Schnoor wrote:

    Long time reader, first time writing in 🙂 I wanted to reach out and let you know about my experience with Peloton. I ordered a bike in late July and it was delivered just a couple of weeks ago. The delay in shipping was due to COVID-19, but they gave me free access to the Peloton digital app while I waited for my bike to arrive which was a plus.

    Prior to reading MorningNewsBeat this morning, I received an email from Peloton that they were proactively refunding me $350 plus tax on my recent bike purchase since they were going to be reducing the price of the bike effective tomorrow. I had already been pleased with my Peloton experience over the past two weeks of using the bike, but this retroactive price decline really made me feel good about investing in my health with Peloton specifically. This was great customer service and I'm not sure how far back they went into purchase history to honor this new price, but it makes me feel even more committed to them.

    Published on: September 9, 2020

    Longtime MNB readers know that we're total Star Trek geeks around here, willing to cite scenes or drop quotes from pretty much every one of the franchise's incarnations.

    I'm a big fan of "Star Trek: Discovery," the CBS All Access series that begins its third season (delayed by the pandemic) in mid-October.  And so it was a great pleasure yesterday - celebrated by fans as "Star Trek Day" because it was the 54th anniversary since the premiere of the original series on NBC - when the makers dropped a new trailer for "Discovery."

    Which looks great.  Enjoy.  Live long, and prosper.