business news in context, analysis with attitude

Published on: August 24, 2021

by Michael Sansolo

A few decades back, a successful college football coach offered a simple explanation for why he stuck with specific plays and tactics game after game. “You dance with the one what brung you,” he said, meaning he stuck with what worked previously.

Such a philosophy might remain successful today in sports and business, as there’s plenty to argue in favor of sticking to strengths in good times and bad.

However, more than ever it may be more important to know when to stop dancing with the “one what brung you,” no matter how successfully you waltzed in the past. In other words, the key quote these days may well be “adapt or die.”

There was an extraordinary example of this in MNB last week in a small, yet relevant story about Gillette, the Procter & Gamble brand that’s long been the king of shaving.  The MNB story, drawn from the Boston Globe, highlighted how Gillette’s world is changing on the fly.

As the article pointed out, facial shaving has taken a huge hit in the past 18 months thanks to all the remote working related to COVID.  A lot of us can look around friends and family and notice many more beards these days and that caused new thinking at Gillette and new grooming products to go with it.

As the company’s CEO said, “we’re no longer a wet shave business. We’re a grooming business.”

Sounds like someone just dropped a long-time dance partner.

But Gillette should be highlighted for adaptability and a willingness to walk away from a legacy of success into a new world of uncertainty where the company may or may not enjoy the same level of success it knew in the past. 

Yes, Gillette is taking an enormous risk, but then again it has a history of moving forward away from success. As any Boomer male like me knows, Gillette constantly evolved our shaving experience by adding additional blades and features and abandoning successful products such as Atra, Trac 2 or countless other shaving systems through the years. In recent times, it seemed the company’s biggest challenge was going to be from upstarts like Harry’s or Dollar Shave Club.

But Gillette is clearly seeing a bigger picture and understanding that their consumers aren’t always looking for a better shave. So now it is becoming a “grooming” company, and no doubt that term will evolve constantly.

The lesson for all of us is pretty simple. It’s wonderful to be great at something, to have a brand image and point of differentiation that clearly sets us apart from the competition. But it’s even more important to know when the world has shifted and it’s time to move on to an entirely different future.  It’s a lesson that countless other dominant companies likely wish they had years ago. (Looking at you, Kodak.)

Change to that extent must be beyond scary, but it’s far scarier to keep dancing “with the one what brung you” after the music has changed radically. Or worse yet, when the music has stopped entirely.

Make sure you are listening!

Michael Sansolo can be reached via email at msansolo@mnb.grocerywebsite.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: August 24, 2021

KC responds to some MNB reader email about yesterday's Amazon Fresh commentary, and diagnoses what may really be the problem - and it isn't poor quality and out-of-stocks.  In fact, it may be something far more pernicious.

Published on: August 24, 2021

Walmart this morning announced Walmart GoLocal, a new delivery service that will service other retailers around the country using traditional vehicles as well as autonomous cars and drones.  The company describes it as "poised to be a top white-label delivery service provider and furthers the retailer’s strategy to build alternative revenue streams and profit pools."

The company says that "Walmart GoLocal is built on the retailer’s proven ability to execute delivery capabilities at scale with efficiency. In just three years, Walmart launched and scaled delivery and Express delivery for its customers on 160,000+ items from more than 3,000 stores, reaching nearly 70% of the U.S. population and growing using its existing delivery network, including drones, autonomous vehicles and market fulfillment centers … Walmart GoLocal has already established a number of contractual agreements with national and enterprise retail clients and is currently accepting select new merchant partners."

In its story, CNBC writes that Walmart "will offer competitively priced shipping within two hours as well as a two-day delivery option. The deliveries will be handled by a combination of associates, gig workers and at times other delivery companies.  Walmart is currently partnered with FedEx for online package delivery. The company would not say if FedEx would be used for GoLocal."

The Associated Press writes that "the strategy announced Tuesday will pit Walmart against the likes of Uber, DoorDash and other delivery services. It comes as Walmart moves to expand its sources of profits and revenues beyond its core retail businesses. It's a strategy similar to Amazon's cloud computing unit called Amazon Web Services, which the online behemoth built for itself and now sells to other businesses."

And the Wall Street Journal writes:  "The acceleration of e-commerce delivery has pushed more retailers to look at even speedier delivery options. Amazon.com Inc., for instance, offers same-day delivery on around 3 million items in select areas. Target’s Shipt does same-day deliveries from its stores and others. Other companies like DoorDash Inc., Instacart Inc. and Uber Technologies Inc. use gig workers to fulfill orders for all sorts of merchants."'

Published on: August 24, 2021

The Dallas Morning News reports that "Instacart will start filling curbside orders Tuesday from 20 Albertsons and Tom Thumb stores in Dallas-Fort Worth as part of a multi-state test … The grocery delivery service is trying to expand its curbside options because its customers want the choice. While overall online grocery delivery activity remains well above 2019 levels, it’s been dropping since last year’s pandemic peak use and since more people have returned to in-store shopping."

Instacart also is working with Albertsons on similar curbside pilots in Austin, Houston, Las Vegas and Phoenix.

The story notes that "Instacart has partnered with other grocers nationwide in recent months to offer its customers curbside service.

"In Dallas-Fort Worth, Instacart started offering pickup service earlier this year from Aldi, Eataly, Fiesta Mart and Sprouts Farmers Market and discovered that the pickup model works well in North Texas."

Published on: August 24, 2021

From the Wall Street Journal this morning:

"Drought is blistering key U.S. cash crops, further elevating prices for staples including corn and wheat … Farm incomes have been hit hard over the past two years, first when Covid-19 shutdowns hammered prices and afterward when hot, dry weather reduced output, limiting farmers’ capacity to cash in on rising demand and higher prices."

The Journal story goes on:

"Extreme heat is baking most of the U.S. North Dakota, South Dakota, Minnesota, Iowa and Nebraska all contain areas of extreme drought, according to data from the U.S. Drought Monitor. North Dakota and Minnesota, in particular, are experiencing near-record lows in soil moisture, according to data from the National Oceanic and Atmospheric Administration.

"As a result, many crops planted this spring are wilting. Some 63% of the U.S. spring wheat crop is in poor or very poor condition, versus 6% at this time last year, according to Agriculture Department data."

Published on: August 24, 2021

The Boston Globe has a piece by one of its reporters, Sheryl Julian, written as am appreciative letter to Tony Russo, the owner of the iconic Massachusetts retailer A. Russo & Sons, who is retiring next month and closing the store.

"Here’s a partial list of things you carry that delight me," she writes.  "A large display of tinned fish (though you practically have to get on your knees to see it all); figs in season by the case; dates from a variety of growers; crisp Persian cukes year round; probably the best green beans in the Boston area; very fresh nuts that don’t have a trace of rancid taste (other vendors, listen up, you can do this, too); mountains of pita and olives; local handmade ricotta; dozens of artisan foods made in the region; a small but well-curated selection of meats; milk from Jersey cows in the Berkshires; eggs from Bedford hens; your beautiful garden center, from which I buy herbs and annuals every spring; in December rows of Christmas trees on either side of the walkway from the parking lot, which puts all customers in a holiday mood."

And that's only the beginning of her love letter to Russo's, which you can read in full here.

Published on: August 24, 2021

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 US, there now have been a total of 38,814,596 Covid-19 coronavirus cases, resulting in 646,667 deaths and 30,570,229 reported recoveries.

Globally, there have been 213,491,131 coronavirus cases, with 4,457,33 resultant fatalities and 191,059,540 reported recoveries.   (Source.)

•  The Centers for Disease Control and prevention (CDC) says that 71.1 percent of the US population age 12 and older has received at least one dose of vaccine, with 60.3 percent being fully vaccinated.

•  As expected yesterday, the US Food and Drug Administration  (FDA) gave full approval for Pfizer-BioNTech’s coronavirus vaccine for people 16 and older.  The vaccine until this point only had an "emergency use authorization," which gave some people pause about taking it and some institutions pause about mandating it for employees.

A similar approval of the Moderna vaccine is expected in coming weeks.

The New York Times reports that once the full FDA approval was issued, "the Pentagon, CVS, the State University of New York system and the New York City school system, among others, announced that they would enforce mandates they had prepared to carry out but had made contingent on the FDA's action."

Good.  This is what public institutions and private companies have to do - mandate that employees at all levels be vaccinated.  People who ask for legitimate exemptions will then have to comply with a mask mandate and frequent testing.  It's the only way to stop this thing and get the culture and the economy back on track.

The only bad news is that with final approval, Pfizer now will be able to market the vaccine, which it reportedly will do under the name Comirnaty.  Expect tons of commercials to flood the airwaves … though, now that I think about it, this could be a great way to raise vaccination rates.  Pfizer could say that it is going to keep annoying us all with those commercials until everyone is vaccinated, which could result in long lines at vaccination clinics.

Published on: August 24, 2021

•  The San Diego Union Tribune reports that Amazon plans to open a new Amazon Fresh store in Poway, about 20 miles north of San Diego, before the end of the year.

The story makes the point that "the site is not zoned for warehouse use, and that the new tenant will operate a 'retail grocery store that will be open to the public'."

Which doesn't mean it cannot defect operate as a kind of dark store that allows customers in … a point made by an MNB reader that I quote in this morning's FaceTime video.

Also, as a matter of interest, the new store is said to be more than 44,000 square feet in size, which makes it about 30 percent bigger than the so-called "department store" format that Amazon is reported to be considering.

•  From Pymnts:

"Target will be debuting sortation centers to help boost the speed of business, according to a company blog post.

"A sortation center is a site where teams can focus on sorting packages to be shipped to customers from the stores, the post stated. A pilot opened in Minneapolis last year.

There will be four new sortation centers debuting this fall in Houston, Dallas, the Philadelphia area and Lawrenceville, Georgia, the retail giant said in the post.

"When an order is placed on Target’s website, teams at the store work on picking and packing everything up, according to the post. Sortation centers were introduced to retrieve packages as soon as teams are finished doing the sorting, at which time they’re routed for delivery.

"The removal of the sorting process from Target’s backrooms saves time and allows for more orders to go through, the post stated."

Published on: August 24, 2021

•  From CNBC:

"Target said Monday that it will roughly triple the number of Disney shops within its stores, helping to drive foot traffic as the holiday season approaches.

"The national retailer, which has about 1,900 stores in the U.S., began opening Disney shops in select locations in 2019. With the expansion, more than 160 Target stores will sell Disney-themed merchandise, from toys to costumes, by the end of year."

The story suggests that "Target’s partnerships are turning its stores into mini-malls where shoppers can conveniently browse a variety of products under one roof.

"Shoppers can get a vaccine or fill a prescription at a scaled-down CVS Health. They can order a Frappuccino at a Starbucks cafe. They can find dedicated displays of Apple gadgets and Levi Strauss denim. And they can try a lipstick sample or get beauty advice at mini Ulta Beauty shops, which began opening in select stores earlier this month."

The move also comes as Disney closes 60 of its stores around the country.

•  The BBC reports that McDonald's stores in England, Scotland and Wales have run out of milkshakes, owing to supply chain issues.

According to the story, "The fast-food chain said it some supply chain issues had affected availability of a small number of menu items.

"These products also include some bottled drinks … The problems emerged because of low stock distribution caused by the continuing shortage of HGV drivers."

The BBC notes that "earlier this month, a survey by the Road Haulage Association (RHA) estimated there was a shortage of more than 100,000 drivers in the UK, out of a pre-pandemic total of about 600,000."

Published on: August 24, 2021

•  Retailer/wholesaler SpartanNash announced that Tyler King, the company's senior director of finance, has been promoted to the role of Vice President, Finance and Finance Business Partner for the company’s retail business segment.

Published on: August 24, 2021

Got this email from MNB reader Steven Ritchey:

The story you ran day before yesterday about the new concept Taco Bell drive through made me think.  Yes, the design was cool looking, it looked a bit futuristic.  But, I've seen lot's of supermarket designs and layouts that looked cool, maybe a bit futuristic, but ultimately failed.  They may have been very, very efficient, but in the end weren't effective.  Too many people look at a concept that looks very cool,  and they see that it's different and they declare it the next big thing.  Within a fairly short time it's forgotten about because it was not effective.  You used to say a few years ago that effectiveness was more important than efficiency.

Finally, another word on Covid.  I'm like you, I see lots of mandates in our future, particularly when it comes to vaccination.  Me being vaccinated means I have no problems with that.  If a store demands vaccination or a very recent negative covid test for entry, I'm good with that.  It means I'm safer in there than I would be otherwise, I means I run less of a risk of infection, meaning I run less risk of passing it on to a friend who for medical reasons cannot be vaccinated.

My own company hasn't announced a vaccine mandate as of yet, but, but I'm sure they are considering it.  They have to,  as we have too many people in retail establishments on a daily basis.

You see the thing is, the rugged individualism we seem so fond of in the US is useless in this instance.  We each have to do our part to protect the whole population, to protect each other.

Two comments, if I may.

One is that I still believe in rugged individualism and American exceptionalism.  The problem is that some people have decided that individualism is more important than responsibility, which strikes me as the antithesis of American exceptionalism.  We're only exceptional if we prove it every day.  These days, there are some of us who seem dedicated to proving that we are anything but exceptional.

As for Taco Bell … I continue to believe that effectiveness is more important than efficiency.  I'm just willing to give Taco Bell the opportunity to prove that this new format can work.

Responding to my comment that affluent people like shopping in dollar stores, MNB reader Marek Littrell wrote:

Agree with your response about affluent shoppers – I know several that can afford the larger stores, but choose to shop at dollar stores simply because they can save a few bucks and spend somewhere else.

The other thing that (the article about dollar stores) misses out on is that the dollar stores are also in smaller towns where the Walmart’s and other stores can’t go in.  My mother lives in a small town of 1500 and there is a Dollar General store.  The nearest Walmart is 30 miles away. 

MNB reader Julia Ann Mataras chimed in:

Would like to add another point about Dollar Tree.

Sometimes, they are just plain old CHEAPER than other stores for things where I don’t care where the item comes from (like non-food items).  For example:  balloons ($1 at DT versus more at Party City); craft items (ribbon is $1 versus $5+ at Joann’s or Michael’s); greeting cards  ($1 versus $5+ at Hallmark store); wrapping paper.  I would not buy any food item from DT.  Also, I purchased a window cleaner from DT during the height of the pandemic last spring (I was desperate!), never again (it was very streaky- plain water would have been better). 

I don’t go to those other stores to buy those things above- but I don’t consider myself affluent.  It does make (dollars and) sense to get them much cheaper at Dollar Tree.   Maybe the question is “What is affluent”?

And from MNB reader John Geocaris:

Over time the Dollar stores are a horrible replacement for traditional stores.  They achieve their low prices primarily with material and ingredient reductions with the resulting cost per oz. increasing significantly as packaging and production costs cannot be proportionally reduced.

Regarding the ongoing supply chain issues that are creating out-of-stocks, one MNB reader wrote:

Perhaps if the Supermarket Chains would not rely on a auto- replenishment system and actually communicate with the vendors, and vendors would actually work at an office and collaborate with the customers the out of stock situation may be minimal.

Whatever happened to the Vendor Representative that followed his customers’ orders from start to finish? Oh, they must have been accepted (forced) the buyout and were replaced by a data analyst?

I suggested yesterday…

It seems to me that this presents two opportunities for retailers.

One is to use the moment to communicate effectively with shoppers.  Rather than let them come into the store (or go onlineZ) and find out-of-stocks, retailers actually could get ahead of the wave and explain the problems to customers.  Tell them what is hard-to-find, and why.  Offer alternatives.  Be pro-active, rather than reactive.  Be an advocate for the consumer, not just a sales agent for the supplier.  (Gee, didn't Glen Terbeek say that like 20 years ago?)

The other opportunity is to start culling out non-relevant, less-than-core products that don't differentiate the retail experience.  Carry few flavors and sizes, as the Journal suggests some retailers already are doing.  Figure out what is essential - to the customer, and to your differentiated value proposition - and focus on those things.  (If you have 40,000 SKUs, are they all essential?  Are 4,000 of them essential?  Are 400?)

MNB reader Roy St.Clair responded:

‘Be pro-active, rather than reactive’….yes definitely.

‘Carry fewer sizes & flavors…decide what is “essential” and get rid of the rest’…maybe not such a great idea right now (or ever).

Eliminating sku’s leaves more holes on the shelf, when it’s already difficult to keep some items in stock.

The ability to buy a smaller/larger size (or in a different flavor profile) than usual might be preferable to not getting the item at all.

And essential to you is not necessarily the same for me.

There’s good reason for stocking a variety of products. I want to keep that customer who buys a smaller size but returns every week to do his/her shopping.

I want that customer who uses the unusual flavor in a special recipe he/she makes for her family…maybe she can only get that in our store.

In my opinion, you missed the mark on part of this subject.

And from another reader;

One of the best parts of the US shopping experience is the breath of variety.  That needs to stay.  The SKU rationalization direction has been going on for years and now has turned into a cash driver.  The rational part that says we want the best for our customers has taken a backseat.  It also is interesting the retailer slant you continue to take when commenting on the issues at hand.  Yes, manufacturers are having component supply issues, but by simply repeating that the suppliers give little direction on how much or when the truck arrives, I find a little tilted.  I have spoken with numerous supplier reps for other companies and brokers reps, all of whom have expressed their frustration in spending an inordinate amount of time communicating supply issues ranging from item availability to late trucks.  Multiple adjusted PO’s.  Multiple delivery times due to confined receiving windows.  Drivers not showing for many reasons.  All of which add to the issues at hand.

In my discussions, I see the communication being at least attempted.  I have not heard of any retailers and distributors willingly carry extra inventory.  If they did, it cost the manufacturer.  You made suggestions on how retailers could help.  Instead of discontinuing items out of need or punishment, which not only reduces options for the consumer it also puts added pressure on remaining items, and in the long run, reduces growth opportunities for the manufacturer.   How about retailers add increased flexibility into receiving hours?  How about expanding their driver routes so that more opportunity for FOB is available?  How about taking a stand with hoarders and continuing max purchase amounts for fast moving items?  How about stop taking the “charge the manufacturer” stance when trucks that carry our product and along with others is late?  Those could help. From a supplier standpoint, we are not the only dog in this fight.  Instead of pointing paws at each other how about we get together and work through this.  We are all in the same yard.

When I talk about reducing SKUs, I'm thinking about the degree to which Stew Leonard's - which carries fewer than 2,000 SKUs in its stores - continues to kill it, just as it did during the pandemic.  A smaller and highly curated SKU count actually sends a terrific message to customers about what is essential and what is not, what is quality and what is not, what is differentiated and what is not.

I'm not saying that everyone should be Stew Leonard's.  Not everyone should, and few can.

But I am saying that a me-too approach to marketing and merchandising puts way too many retailers at risk from a highly focused and well-funded competitive attack - because they don't stand for anything unique.

Variety, in my view, is overrated … especially for retailers competing with "the everything store."  I'd be looking elsewhere for a differentiated advantage.

And finally, from MNB reader Jim Antrup:

I couldn’t agree more with your response about National Trade shows and ending up being reported on in the Nightly news.  Also agree whole heartedly, I am an avid NBC News Lester Holt  fan and try to watch every evening, I also follow other sources (besides MNB) a few of the cable news shows, I think it is good to be informed and get a view from several perspectives.

Keep up the good work, Kevin,  loved your piece this morning on the Amazon Fresh!

Thanks.