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    Published on: September 21, 2020

    Last Friday, MNB featured an interview with thriller writer Ted Bell, who talked about the nature of storytelling and his segue from advertising legend to novelist.

    We saved one piece for today, however.  KC asked Bell who was the best leader he'd ever worked with or for in his ad career … and this is what he said.

    Ted Bell's latest Alex Hawke thriller, "Dragonfire," is available on Amazon, from the iconic independent bookstore Powell's, and at your local bookseller.

    Published on: September 21, 2020

    by Kevin Coupe

    A common theme I'm hearing from many retailers these days is how "beat up" many of their employees are feeling after six months of dealing with pandemic-related stresses.  With the holidays coming, there is little relief on the horizon.

    Except, perhaps, at Lunds & Byerlys in Minnesota.

    The retailer told its employees on Friday that in addition to being closed on Thanksgiving, November 26,  this year, it also will be closed that day after - Black Friday, November 27.  Employees will be paid for both days.

    “What all of us have experienced together has certainly been unprecedented and so, too, has been the collective effort of our staff to face it all with a level of care, compassion and commitment to each other and our customers,” said Tres Lund, president and CEO of Lunds & Byerlys. “We know the gift of time is priceless, and we hope our staff is able to use this additional paid holiday to recharge and make even more great memories with their loved ones during the holiday season.”

    The thing is, care, compassion and commitment have to go both ways - and that's exactly what they are demonstrating at Lunds & Byerlys.  I think this is an extraordinary move by the company, the kind of decision that will not just create enduring loyalty in employees, but also, I think, customers who like the idea of doing business with a company that cares about its people.

    Terrific story.  Terrific company.  A wonderful Eye-Opener to start the week.

    Published on: September 21, 2020

    Fox Business reports that "President Trump said he has agreed in concept to a deal under which Chinese-owned video-sharing app TikTok will partner with Oracle Corp. and Walmart Inc. to become a U.S.-based company, capping negotiations that have stirred debate over national security and the future of the internet."

    Together, according to reports, Oracle and Walmart will own 20 percent of TikTok;  Oracle would own 12.5 percent, and Walmart would own 7.5 percent.

    Fox Business writes that "TikTok’s current owner, Beijing-based ByteDance Ltd., would retain roughly 80% ownership of the company, according to people familiar with the situation. But because ByteDance is about 40% owned by U.S. investors, the new company with equity stakes for Oracle and Walmart can be described as having majority American ownership, they said.":

    However, this construct may run into trouble with the Trump administration, which was prepared to ban all new TikTok downloads as of today, and ban the company from doing business in the US, over concerns about data usage and security concerns.  The Trump administration implied that its blessing of the deal was predicated on the fact that "it will have nothing to do with China," which does not seem to be the case.

    At the same time, Business Insider reports that the Trump administration was saying that "the companies involved in the deal had agreed to pay a $5 billion fee to the US Treasury which would be used to set up an education fund."  However, "ByteDance said the $5 billion figure was not a one-off fee but an estimate of the income tax the company could potentially pay over several years.  'TikTok is confident in its future but the actual tax amount will have to be determined in accordance with the actual state of the business and American tax structures'."

    KC's View:

    There will be much posturing and rhetoric about this deal, I suspect, as it moves forward during the crazy election season.  All that seems clear to me is this - Walmart has played this very well, keeping itself in the deal as it keeps its eyes on the prize, which is all those young people who it will have access to through some third-party marketplace.

    Published on: September 21, 2020

    The Seattle Times writes that "at least 10 Amazon employees took bribes to help third-party merchants boost sales on the company’s website, according to a federal indictment filed Friday.

    The indictment charged six U.S.- and India-based consultants, working on behalf of third-party merchants who sold on Amazon’s Marketplace platform, with conspiracy and wire fraud. The consultants allegedly paid nearly $100,000 in bribes to Amazon employees, who in exchange reinstated merchants’ suspended accounts and products on Marketplace, facilitated attacks against competitors, gave away network access privileges, shared proprietary information and circumvented internal regulations to boost merchants’ sales."

    It is no small deal:  "All told, the U.S. attorney estimates the scheme took a monetary toll in excess of $100 million. Part of that sum represents the merchants’ proceeds from Marketplace sales between 2017 and the present, secured by bribes that brought them unfair competitive advantages. The rest comprises lost sales on the part of competitors, and costs to Amazon."

    The story notes that none of the Amazon employees were charged, but could be in the future.

    KC's View:

    I'm confused by this latter piece of information.  Isn't it as much a crime to take a bribe as to give one?

    And I certainly hope that these are former Amazon employees.

    Published on: September 21, 2020

    The Washington Post reports that eBay is shifting some of its business away from the United States Postal Service (USPS), which it long has used as its primary shipping vendor, to the United Parcel Service (UPS).  The reason:  current "reliability issues" at the post office that have resulted in a "decreasing on-time delivery rate."

    The Post provides some context:

    "The company said that by the end of September, eBay sellers will be able to print out discounted UPS shipping labels, at a cost up to 62 percent cheaper than typical UPS rates.

    "For the Postal Service, the loss of eBay revenue could be substantial: A spreadsheet of the Postal Service’s largest customers prepared last spring showed the e-commerce site was agency’s second-largest retail customer, shipping more than 130 million items up to that point in the fiscal year. The USPS generated more than $743 million in revenue from eBay packages in that fiscal year while grappling with a $160.9 billion deficit.

    "EBay is second only to Amazon, which generated more than $2.3 billion in revenue for USPS during the same time frame, and whose business top Postal Service managers were fearful of losing, the Washington Post reported this week."

    KC's View:

    We know that Amazon is trying to build as much delivery infrastructure as possible, and so it seems likely that the Post Office is going to hit with a one-two punch … and, I'd guess, will see some other incoming as well.

    It long has been the argument here that while some said that businesses such as Amazon were taking advantage of the Post Office, the fact was that companies like Amazon were actually keeping the USPS afloat.

    I know it seems obvious to me that the Post Office is suffering from reliability issues.  It used to be that when I sent a quarterly tax check to the IRS, it would get cashed in a matter of days;  now, it is weeks before it gets cashed.

    Which means that when I vote by mail, it won't be by mail - I'm going to fill in my absentee ballot (for which I already have applied) and take it - along with the ballots for my wife and kids - directly to the local Board of Elections.  As far as I'm concerned, neither snow nor rain nor heat nor gloom of night will keep me from my appointed round.

    Published on: September 21, 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 7,004,768 confirmed cases of the Covid-19 coronavirus, resulting in 204,118 deaths and 4,250,140 recoveries.

    Globally,  there have been 31,261,540 confirmed coronavirus cases, with 965,368 fatalities and 22,845,810 reported recoveries.

    •  The Associated Press reports that the centers for Disease Control and Prevention (CDC) has revised a previous piece of guidance and now is saying that "anyone who has been in close contact with an infected person should get tested … The CDC now says anyone who has been within 6 feet of an infected person for at least 15 minutes should get a test. In a statement, the agency called the changes a 'clarification' that was needed 'due to the significance of asymptomatic and pre-symptomatic transmission'."

    •  From the Washington Post:

    "For months, scientists and public health experts have warned of mounting evidence that the novel coronavirus is airborne, transmitted through tiny droplets called aerosols that linger in the air much longer than the larger globs that come from coughing or sneezing.

    "Now, the Centers for Disease Control and Prevention agrees. The CDC recently changed its official guidance to note that aerosols are 'thought to be the main way the virus spreads' and to warn that badly ventilated indoor spaces are particularly dangerous.

    "'There is growing evidence that droplets and airborne particles can remain suspended in the air and be breathed in by others, and travel distances beyond 6 feet (for example, during choir practice, in restaurants, or in fitness classes),' the agency stated. 'In general, indoor environments without good ventilation increase this risk'."

    •  From the Wall Street Journal:

    "Twelve states reported at least 1,000 new confirmed cases on Saturday, led by California with 3,822 and Texas with 3,377.

    "'I think we have at least one more cycle with this virus heading into the fall and winter,' Scott Gottlieb, a former Food and Drug Administration commissioner, said on Face the Nation on Sunday. 'If you look at what’s happening around the country right now, there’s an unmistakable spike in new infections.'  He cited about 30 states where the rate of transfer is above one, which indicates 'an expanding epidemic.'

    •  The Wall Street Journal this morning reports that "plenty of CEOs remain stuck working from home and boards may still be meeting virtually, but companies are shifting their sights from surviving the coronavirus pandemic to charting new courses through it … That attitude is a change from earlier in the year, when most U.S. companies spent the first months of the pandemic hunkering down, slashing costs, hoarding cash and pulling their financial forecasts. As the coronavirus’s spread continues in the U.S. and abroad, businesses have concluded they’ll coexist with it for some time. So they are reviving stalled operational plans, changing leaders and reissuing financial targets."

    Certain facts seem clear.  This new reality is going to last awhile, and at some point you have to stop treading water and have to start moving forward.  There will be opportunities out there - in part because some companies were unable to survive the pandemic, which leaves some niches open.  I've been saying almost from the beginning of this thing that companies needed to figure out how they would be different coming out of the pandemic than they were going in, and the moment may be right for some companies to make their move.

    •  The Los Angeles Times has a piece about a potential tsunami of hotel closures that is likely to happen because of the coronavirus, as "industry experts point to an unusually high loan delinquency rate among hotel borrowers as a sign that more closures are likely to follow."

    The reason is simple:  "The steep decline in tourism and business travel has devastated the hotel industry."

    Among the hotels mentioned in the piece are Luxe Rodeo Drive in Beverly Hills, the Hilton Times Square hotel in New York City, and the  Palmer House Hilton in Chicago.

    The clock is ticking, the Times writes:  "Nationwide, it’s not clear how many hotels are behind on their loan payments. But figures are available on hotel loans that have been bundled and sold to investors as commercial mortgage-backed securities. Payments on 16.77% of those loans are more than 30 days late, according to Fitch Ratings — up dramatically from less than 2% before the industry began feeling the pandemic’s financial effects.

    "Once a hotel is more than 30 days late on making a mortgage payment, the lender can file a notice of default on the loan and increase the interest rate by 5% until the payments are brought current, according to hospitality industry experts. If after 90 days, the lender has not brought the loan current, the lender can file a notice of sale — a sale that can take place 21 days after the 90 days expire, experts say."

    •  From CNN:

    "Pine-Sol's original cleaner has been approved by the US Environmental Protection Agency (EPA) as a product that can kill the coronavirus on frequently used surfaces.

    "The product was added to the agency's list of products expected to kill the virus after meeting the criteria for use against SARS-CoV-2, the coronavirus that causes Covid-19, an EPA spokeswoman told CNN via email on Sunday.

    "Pine-Sol was tested by a third-party laboratory that showed the disinfectant can kill the virus within 10 minutes of being used on hard, nonporous surfaces, The Clorox Company said in a press release."

    •  From The Guardian:

    "Industrial bleach is being sold on Amazon through its product pages which consumers are buying under the mistaken belief that it is a 'miracle cure' for Covid-19, despite health warnings from the US Food and Drug Administration that drinking the fluid can kill.

    "The chlorine dioxide solutions are being sold on the Amazon platform under the brand name CD Kit and NatriChlor. Third-party sellers signal the bleach as a 'water treatment' and include legal disclaimers that the liquid is 'not marketed for internal use.'

    "But comments from Amazon customers under the review section of the pages tell a different story. Users discuss how many drops of bleach they are imbibing and explain they are drinking the chemical which they call MMS to 'disinfect ourselves'."

    Oy.  I checked this morning, by the way. Best I can tell, these product listings are still up on Amazon.  I expect better of it.

    I wonder.  In a Venn diagram, what would be the overlap between people who are willing to take this crap because they think it will keep them from getting the coronavirus, but don't want to wear masks because it impinges on their "personal freedom."  Just curious.

    •  Another Content Guy fave bites the dust:

    Willamette Week reports that in Portland, "Rogue has announced it is shuttering its public house in the Pearl District after 20 years - and this closure appears to be permanent."

    "This was a very difficult decision," Rogue owner Dharma Tamm said in a press release, "but unfortunately challenges from the pandemic and rising costs have made it apparent that our only option is to close the Pearl Public House in order to better focus on our other public houses and wholesale business."

    Published on: September 21, 2020

    There was an extraordinary piece of writing in the Washington Post the other day by personal finance columnist Michelle Singletary, part of a multipart series about misconceptions about race.

    In the piece, Singletary gets personal about her hiring by the Post in the early nineties.  Despite having eight years of experience, she writes, it seemed like she was forever having to deal with questions about her qualifications and the perception that she only had been hired because she was Black.

    The business editor, David Vise, confirmed the perception:  "Yes, I hired you because you are Black," he said.  "I also hired you because you’re a woman.  I hired you because you come from a low-income background and, most importantly, because you are a good reporter. I also hired you because you have enormous potential and I want to mentor you."

    In other words, Vise hired Singletary because she was everything that the Post newsroom wasn't - and he realized how important it was to bring different perspectives to a newsroom that could only benefit from them, since it was serving a highly diverse community.

    The same goes for retail.  How many companies actually reflect in terms of total employee makeup - and especially in terms of leadership - the communities that they serve?  How many would be better for doing so?

    Singletary writes:  "As minorities, we know that some people label us as affirmative-action hires, and that has a profound impact on our self-confidence. We might wonder whether we’re good enough. We hear that White hires got their jobs because of a meritocracy, and we are made to feel as if we took unfair advantage of a system that was weighted in our favor.

    "But the reality is that favoritism for Whites is so familiar that we just take it for granted. Doors are opened to the children of people in the business. And of course, there is the practice of legacy admission to Ivy League colleges, which confers even more advantages, mainly for White families. But there’s a price to pay when you are the so-called 'Black' hire. People question your abilities from Day 1. They wonder whether you are truly competent."

    The column is a fascinating, thought-provoking piece of personal journalism,  and you can - and should - read it here.

    Published on: September 21, 2020

    •  From the Los Angeles Times:

    "The Trump administration’s effort to ban the Chinese messaging app WeChat is on hold after a U.S. District Court judge granted a preliminary injunction Saturday.

    "After days of hearings, U.S. Magistrate Judge Laurel Beeler issued an order temporarily halting the U.S. Department of Commerce from implementing restrictions that would remove WeChat and any updates to it from U.S. app stores and prevent U.S. users from sending or receiving money through the app.

    "In an Aug. 6 executive order targeting WeChat and the video app TikTok, President Trump warned that Chinese software poses a national security threat. The executive order had been set to go into effect Sunday.

    "Last month, a group called the U.S. WeChat Users Alliance sued over Trump’s executive order barring transactions with the app. They argued the administration’s action would upend life among Chinese enclaves across the U.S. Because most other foreign apps are blocked in China, WeChat is a lifeline for families reaching their relatives abroad as well as a crucial tool for regional and cross-border commerce."

    •  From Fox Business:

    "Amazon reiterated Friday that its annual 'Prime Day' sales promotion would take place before the end of the year, but did not respond to multiple reports suggesting the event is slated to occur in October.

    "This year’s edition of 'Prime Day' was delayed due to complications related to the coronavirus pandemic. Various tech sites, including T3 and Tom’s Guide, have speculated about a mid-October launch for the annual event, Amazon has yet to make a formal announcement."

    Published on: September 21, 2020

    With brief, occasional, italicized and sometimes gratuitous commentary…

    •  Yahoo Finance reports that Walmart "is doubling-down its sustainability efforts to combat climate change, laying out a plan to be a zero-emission company across its global operations by 2040 … Walmart plans to power all of its 11,500 locations worldwide with renewable energy sources such as wind and solar by 2035. So far, the company powers around 30% of its operations from renewable energy. The company is targeting 50% by 2025, before hitting its newest target of 100% by 2035."

    Walmart CEO Doug McMillon says that the company wants to "play an important role in transforming the world's supply chains to be regenerative," warning that  “we face a growing crisis of climate change and nature loss and we all need to take action with urgency.”

    Walmart is too big and too smart to engage in climate change denial.  But at the risk of seeming just a bit cynical - and that's really not my intention - it seems to me that there is at least a small connection to its desire to acquire part of TikTok, an app used by young people.  This younger generation, to which Walmart would very much like to have access, and which it would like to turn into customers, has little doubt about the devastating impact of climate change.  This generation will want nothing to do with companies or people that it perceives as being blind to its concerns or ignorant about realities that impact its future.  I feel strongly that companies have to keep that in mind going forward, and suspect that the folks at Walmart are highly aware of this.

    Published on: September 21, 2020

    •  From Yahoo Finance:

    "Kroger is being accused of violating federal law for allegedly firing two employees who refused to wear a rainbow emblem, which they believe contradicts their religious beliefs.

    "The Equal Employment Opportunity Commission accused the supermarket in a lawsuit filed Monday of terminating the women after they asked for a religious accommodation so that they didn't have to display the rainbow," which is a longtime symbol of the LGBT community.

    According to the story, "The lawsuit claims that a Kroger store in Conway, Ark., implemented a new dress code in April 2019 that 'required all employees to wear a new apron with a new logo, a rainbow heart embroidered on the top left portion of the bib' … Both of the defendants in the case, 57-year-old Trudy Rickert and 72-year-old Brenda Lawson, believe 'in the literal interpretation of the Bible' and hold 'a sincerely held religious belief that homosexuality is a sin'."

    •  From the Wall Street Journal:

    "Meat prices are falling at grocery stores as last spring’s shortages fade and livestock clog farms, benefiting consumers but hurting meatpackers and farmers already hit by Covid-19 disruptions.

    Prices for ground beef and pork loins have returned to pre-pandemic levels, after surging as Covid-19 sickened meat-plant workers and forced shutdowns. Some products, including chicken wings and prime rib, are cheaper now than they were before the pandemic began, according to data from Nielsen.

    "Rising production and lower overall demand are pushing down meat prices. Last spring’s plant closures left cattle and hogs lingering—and getting fatter—on U.S. ranches and farms.

    "Meanwhile, fallout from the coronavirus has kept steakhouses idle and reduced meat exports. The result is relief for cash-strapped consumers, and more financial pain in farm country, where producers have struggled for years with low prices for livestock and poultry."

    •  From the Financial Times:

    "Mondelez, the $81 billion maker of Oreo cookies, Cadbury chocolate and Ritz crackers, is on the hunt to acquire healthier snack brands as consumers watch their weight and both investors and governments urge action on obesity. The US-based food group has made a push into healthy snacks a priority as it plans to redeploy billions of dollars worth of investments in coffee companies Peets and Keurig Dr Pepper."

    Published on: September 21, 2020

    Ruth Bader Ginsburg, the Associate Justice of the Supreme Court since 1993 who gained popular celebrity as "the Notorious RBG," passed away on Friday night of complications from pancreatic cancer.  She was 87.

    KC's View:

    The political implications of Ginsburg's life and death are for another time and another place, as is a fuller conversation about her unique place in American history and reflection of the zeitgeist.

    I will just say this.  It seems to me that if you are a woman working in a job that as recently as 30 or 40 years ago you might not have been able to hold simply because of your gender, at some level you have Ruth Bader Ginsburg to thank for it.  And if you are a man, you can thank her, too - because her contributions to the law, pushing for a world in which gender equality reflects a more perfect union, make the world a better place.

    "Tzedek, tzedek, tirdof."

    Published on: September 21, 2020

    We had a story last week about howe Walmart is changing store staffing structures to make them more efficient.

    I commented, in part:

    While it is necessary to adjust a workforce based on changed circumstances, it will be curious to see the degree to which these changes help a workforce that no doubt has been battered  by the pandemic.  One of the things I hear from retailers across the board is that employees are generally feeling beat-up and exhausted … it has been a long six months, and there are few signs that things are going to get a lot better anytime soon.

    The other thing I wonder about is whether fewer leaders means that more front line employees have great responsibility and autonomy to make decisions.

    One MNB reader responded:

    I have been associated with Walmart in some capacity as both a supplier and an associate, for 26 years.  In some ways, it looks like they are taking a step back to the way it was in which there is more ownership at the department level to run the department as they see fit, vs having the responsibilities split up among teams in the stores.  I think this is a positive move in getting the departments running more smoothly.  I do expect Walmart to put more of a squeeze on the supplier world as the increase in wages has got to come from somewhere, and with the investment they have been making in .com,  it will come from the supplier as they will probably not be raising prices to cover this.  As a supplier there are the more stringent guidelines on OTIF, and other requirements for spend.  It has been a goal for about the last 10 years, to “drain the swamp”.  As a supplier, I think the ground is dry enough to build.

    Sometimes what is old is new and sometimes what is old, just goes by a new name. Tis the cycle we live in.

    But another MNB reader wrote:

    Autonomy and decision making for front line workers? Those words no longer fit in the same sentence. It is now all about corporate making the strategy and front line workers executing that strategy flawlessly. All under the shopper getting the same experience at all branded locations. 

    On another subject, from MNB reader Bob Thomas:

    I read the events of the market introduction of the Sony PS 5.  It is a classic example of a poor distribution chain.  With the break in the chain (that may have been  helped by some insiders) the next shoe to fall will be counterfeit units appearing in the market.  Some companies don’t mind counterfeit units on the basis that the consumer is “buying” their brand rather than a competitor’s brand.   A market shortage also increases the risk of theft.  In 2011, according to the US Attorney in Philadelphia, stolen PS 2 units were involved in a money laundering scheme benefitting the terrorist group Hezbollah.  Sony could figure out what happened to their distribution chain but will they?

    And regarding all the TikTok contretemps, one MNB reader wrote:

    TikTok ... is simply a well-executed product that's addictive to hundreds of millions of users ... globally.

    Whereas China protected its industry from overseas competitors, the likes of Google and Amazon, through market entry barriers, the US is now trying to protect its entrenched silicon valley incumbents from overseas competitors like TikTok.

    Sadly, it can be argued, America is no longer on the leading edge of technology and applications in many key strategic markets.  Therefore the US is now demanding joint ventures and local cloud data sovereignty just like the Chinese Communist Party has demanded for years.

    China and America now seem to be mutually engaged in a strategy that some call ... 'Gangster Capitalism'! Not sure how this will turn out ... but think you can rest assured ... the process will be contentious.

    And finally, in a discussion here last week about someone who was critical of a position I took, I said that I didn't mind, that I welcomed criticism, and that "it keeps the conversation lively."

    Prompting one MNB reader to write:

    Almost a Big Chill quote…

    Very good.  Extra credit.

    Published on: September 21, 2020

    In Week Two of the National Football League…

    Giants  13,  Bears  17

    Rams  37,  Eagles  19

    Falcons  39,  Cowboys  40

    Panthers  17,  Buccaneers  31

    49ers  31,  Jets  13

    Broncos  21,  Steelers  26

    Jaguars  30,  Titans  33

    Lions  21,  Packers  42

    Bills  31,  Dolphins  28

    Vikings  11,  Colts  28

    Washington  15,  Cardinals  30

    Ravens  33,  Texans  16

    Chiefs  23,  Chargers  20

    Patriots  30,  Seahawks  35