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    Published on: December 21, 2022

    by Michael Sansolo

    As any casual MNB reader knows, we love to find metaphors for business lessons in any place you can and might never imagine. But for today’s lesson, I even surprised myself.

    For more reasons than I can name, I have never been a fan of Howard Stern, the well-known, well-compensated and both widely loved and detested shock jock. His style of humor just never worked for me.  But balancing that with my love of Bruce Springsteen’s music, I decided to checkout Stern’s recent interview with The Boss as Springsteen is known. (Kevin wrote about it a couple of weeks ago;  You can find it on HBO Max and no doubt on the Sirius radio stations dedicated to both Stern and Springsteen.)

    The spoiler is this: the interview is fabulous and at no point does Stern behave unprofessionally or rudely, as used to be his wont. Instead he comes across as a knowledgeable Springsteen fan who can’t believe he gets to ask an endless array of insightful questions.  And Springsteen answers everything in his trademark style of humility, self-reflection and authenticity.

    Late in the interview they get on a topic that should resonate or at least challenge any business. Stern recalls that Springsteen once likened his career of music making to a continuous conversation with his fans, listeners and audiences. And as they discussed the topic, Stern admitted that his long career is basically the same thing.

    Honestly, your business or mine is the exact same as well. You have a long-running relationship with your customers whether you are running stores, offering services or producing products. Your hope is that they’ll stay loyal and keep buying from you.

    But you also know that your consumers (like Springsteen’s) change. They age, their tastes shift and your hope is that you move with them, retaining their business in the process even while you try to enlarge your audience. (Quite honestly, all the same might be said about what Kevin and I do here on MNB or what we continually do in our speeches. I promise you this: what we say and write today is miles away from whatever we were saying in 2001, when MNB began.)

    Springsteen’s take on that long-term conversation is especially fascinating because he knows that his concerts (and they are legendary) must include his standards be they "Born to Run," "Rosalita," "Born in the USA" or "Thunder Road."  But he talks about how his music and messages have shifted as he aged from a young rocker into a long-married senior citizen with adult children. In countless ways his lifelong conversation with his audience has evolved with him. Stern said the same applies to him.

    And it applies to all of us. We have to constantly challenge ourselves to find paths to reinvention, so that our offering is always fresh, relevant and current, yet at the same time, stays true to who we are. It’s not hard to think of companies that failed to do one or both parts of that challenging mix and no longer matter or even still exist.

    So whether or not you like Springsteen or Stern or whether you get to see the interview, take with you the concept of a lifelong conversation or relationship with your customers and question of how your conversation has evolved and grown to make it stronger today than ever.

    And remember, it still has to keep changing tomorrow and beyond. 

    Michael Sansolo can be reached via email at

    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: December 21, 2022

    The Information has a second-day piece that offers some context and analysis regarding yesterday's story about Amazon settling two European Union antitrust cases - not paying a fine, but agreeing to change business that regulators said hurt third-party sellers on its Marketplace platform.

    An excerpt:

    "Amazon agreed to let merchants selling under the Prime label use any delivery service rather than limiting them to its own. When Sen. Amy Klobuchar proposed that idea as part of a big tech bill earlier this year, Amazon argued that it had tried to let merchants use other delivery services, only to find they couldn’t make the time frames Prime customers expected. Amazon’s pushback is believable: Why would the company spend money building its own logistics networks if other suppliers could do the job just as well? The problem with the European settlement is that if non-Amazon delivery services get a product to a customer late, the merchant, the customer and the Prime brand will all suffer.

    "What Europe’s antitrust police forget is that the big tech companies are doing a good job of screwing up their own businesses without getting the bureaucrats involved. As we pointed out earlier this month, Amazon is jamming so many ads into its website that its search results are now often useless. Ditto for Google’s search. In fact, Facebook has hurt Facebook Marketplace by allowing scammers to proliferate on the site. (Why wasn’t that in the EC’s complaint?) If regulators just wait a bit, these companies will lose market share of their own accord, if they’re not doing so already. There’s no need for the Europeans to accelerate that process, particularly if it hurts consumers along the way."

    KC's View:

    I think this analysis points to a couple of things that are really important.

    First of all, there is the contention - which I think is true - that by forcing Amazon to adhere to practices that deliver a sub-par customer experience, it damages the company's brand, and shopper, and, where they realize it or not, the third parties that opt to use a logistics network other than Amazon.  Why should I be able to sell my product on Amazon, getting the advantages of access to all its customers, but then take a fulfillment shortcut that subverts the Amazon brand and disappoints the shopper?  That doesn't seem fair, or right.

    Second, I think the analysis correctly observes that companies like Amazon may be making some decisions - some, not all - that prioritize monetization over customer satisfaction.  In the old days, that would have been cause for excommunication from the Amazon community.  But these days, not so much.  Which, I think, opens the door for competitors and alternatives to make their case for why shoppers should patronize them and not Amazon.

    Published on: December 21, 2022

    The Detroit Free Press has a story about how southeast Michigan is home to what appears to be a significant expansion of Amazon Fresh supermarkets, with the suburbs of Plymouth and Dearborn slated to join Grand Blanc, Livonia, Rochester Hills, Roseville, Shelby Township and St. Clair Shores as locations where stores are being built.

    The speculation is that Amazon would like to open all the stores simultaneously, thus assuring itself a public relations splash;  Amazon itself is not commenting on its Michigan store plans.

    KC's View:

    A few things here.

    I have not been a fan of the Amazon Fresh format;  the stores I've seen strike me as being akin to dark stores that just happen to be open to shoppers, with more employees picking for online orders than there are customers.   That said, I've also maintained that the format is just one great retailing executive away from turning a corner.

    I do think that opening a bunch of them in one region at roughly the same time makes a lot of sense.  It could provide both synergies and momentum that could help the stores establish a tangible and viable presence in a way that a one-store-here-and-one-store-there strategy does not.  I'm a little skeptical about Amazon's ability to deliver fast on this promise - there's what appears to be an Amazon Fresh store under construction about 10 miles up the Boston Post Road from me that has been that way for what seems like years.  So, we'll see.

    That said, I don't envy Amazon Fresh going into Plymouth, Michigan, where it will have to face off against Westborn Market, a wonderful independent retailer that I have often describer here and in speeches as the best food retailer in the country that nobody ever has heard of.  Amazon Fresh may have the power of Amazon behind it, but in my view, Westborn is so good that I don't even think it will be a fair fight - I know where I would do my shopping.

    Which, in the end, is the point.  You do battle with companies like Amazon and Walmart and Kroger not by doing what they do, but by having a differentiated and distinct value proposition that you do better than anyone else.  Whining, it seems to me, is a lot less impactful than winning.

    Here's a FaceTime video I did about Westborn a little over five years ago.

    Published on: December 21, 2022

    The Information reports that if/when the IPO market begins to thaw - it has been virtually frozen recently because of inflation and recession concerns - "a path to profitability, have reconciled themselves to lower valuations and—perhaps just as important—are simply sick of waiting."

    Like Instacart.

    The Information writes:

    "Instacart may be first out of the gate among high-profile firms. It had planned to go public for much of this year, even while stock markets were volatile, before it iced those plans in the fourth quarter. Executives have said it intends to list soon. Through the first half of the year, it was on pace for more than $2 billion in 2022 revenue and generated about $30 million in earnings before interest, taxes, depreciation and amortization in the second quarter, a person familiar with the matter said. Instacart has turned a profit on that basis between 2020 and 2022, the person said.

    "Those numbers would make it slightly smaller but more profitable than delivery rival DoorDash was when it went public at the end of 2020 amid a boom for tech stocks."

    KC's View:

    I know that there are lots of folks obsessing about an Instacart IPO, but I'm not one of them - I'm more interested in how the company is evolving in serving customers, supporting retail brands, and continuing to serve as a way for retailers to compete with Amazon, Walmart and Kroger.

    Published on: December 21, 2022

    A new report out from digital insights firm Incisiv and digital solutions company Wynshop makes the following predictions for 2023:

    •  "Overall grocery spending will increase by 3-7% in 2023, as compared with 2022."

    •  "Digital grocery will continue to grow, with a predicted 87% of grocery shoppers ordering through digital channels for at least some of their grocery needs."

    •  "81% of grocery execs say they must upgrade their technology tools and regard "budget, integration, and talent" as their top 3 challenges for 2023."

    •  "In accordance with predicted shopper demand, 67% of shoppers will maintain or increase their spend on 'prepared food' in 2023."

    Published on: December 21, 2022

    •  From Axios:

    "Google and Meta, known together in the ad industry as the "duopoly," are expected to bring in less than half of all U.S. digital advertising this year for the first time since 2014 … The duo's ad dominance has for years made both companies the target of antitrust investigations and lawsuits. While they still tower over digital rivals, their momentum is starting to slow as competition moves in."

    Among the competition:  Amazon, which "is expected to capture 12.7% of all U.S. digital ad dollars, while Meta is expected to capture 17.9%."

    Axios writes that "with the ubiquity of screens in the home, workplace and on the go, virtually any company can target customers with digital ads, expanding the set of competitors for Google and Meta from other publishers and social media firms to streamers, e-commerce companies and beyond.

    "Streaming companies like Hulu, Roku, Paramount's Pluto and Fox's Tubi are collectively gaining digital ad market share as more television dollars flow away from traditional television."

    Published on: December 21, 2022

    •  Walmart yesterday "announced it has surpassed the first threshold required for finalizing the company’s $3.1 billion nationwide opioid settlement framework announced on Nov. 15. The company now has settlement agreements with all 50 states, including four states that previously settled with the company, as well as the District of Columbia, Puerto Rico, and three other U.S. territories, that are intended to resolve substantially all opioids-related lawsuits brought by state and local governments against Walmart. The participation exceeded the 43 states that were required to join the nationwide settlement framework by Dec. 15 for it to move forward. The settlement will take effect if a sufficient number of cities and counties also join.

    "Walmart believes these settlements are in the best interest of all parties and will provide significant aid to communities across the country in the fight against the opioid crisis, with aid reaching state and local governments faster than any other nationwide opioid settlement to date, subject to satisfying all settlement requirements. Walmart strongly disputes the allegations in these matters, and these settlements do not include any admission of liability. Walmart will continue to vigorously defend the company against any lawsuit not resolved through these settlements."

    Published on: December 21, 2022

    With brief, occasional, italicized and sometimes gratuitous commentary…

    •  From the Wall Street Journal this morning:

    "Barnes & Noble plans to grow its fleet by 30 stores next year, the latest sign that big-box retailers are expanding again after years of shrinking their real-estate footprints.

    "The bookseller had been contracting for more than a decade as it struggled to compete with Inc. and other online retailers, and now has about 125 fewer stores than it did at its peak 14 years ago. But this year Barnes & Noble is opening more stores than it is closing, including two Boston-area stores in locations formerly occupied by Amazon Books.

    "Barnes & Noble stores have experienced robust customer demand coming out of the pandemic as all booksellers benefited from people turning to books while stuck at home, according to Chief Executive James Daunt. The company also benefited from improvements it made to stores while they were closed, he added."

    The story also notes that "several other big-box retailers are expanding again after years of shutting stores, a sign of the industry’s resilience emerging from the Covid-19 pandemic."  Among them:  Burlington, T.J. Maxx and Marshalls.

    However, the Journal writes, "Big-box operators are expanding more cautiously than in the past, retail and real-estate executives say, when companies opened too many locations too quickly and sales couldn’t keep up. Retailers today are researching potential locations extensively before signing leases and using sales and location-tracking technology to pinpoint where new stores will be successful and what size footprint is needed."

    In other words, they're being smart and strategic.  Never a bad thing.

    •  The New York Times reports that "New Zealand on Tuesday passed extensive legislation aimed at preventing minors from becoming smokers, including a lifetime prohibition on cigarette sales to everyone born after 2008.

    "Under the new laws, which take effect next year, the country’s smoking age of 18 would be raised year by year until it applied to the whole population. Beginning in 2023, those under 15 would be barred from buying cigarettes for the rest of their lives.

    "The legislation is the result of more than a decade of public health campaigns. In 2011, New Zealand first announced its plans to reduce smoking levels to below 5 percent of the population by 2025, a target extending across all ethnic groups, including Indigenous Maori and Pacific Island citizens. Over the years, the price of cigarettes has been hiked to among the highest in the world, with a pack of cigarettes costing about $20.

    "With these measures, smoking has declined overall. The national smoking rate for adults has halved in the past decade. Only 8 percent of New Zealand’s adult population smoked every day in 2022, according to government statistics."

    I'm not sure what I'm more impressed with - the fact that New Zealand has been so responsible in terms of public health policy, or that New Zealand apparently also has banned lobbying and lobbyists.

    Let's face it.  The world is a much more pleasant, healthier place for the vast majority of people now that smoking has been virtually extinguished from most indoor spaces, as well as ballparks and other outdoor public venues.  And now, New Zealand is taking the lead in going even farther in eliminating a product engineered to addict people and, potentially, kill them.

    •  The Wall Street Journal reports that Delta Air Lines "is expected to begin rolling out free wireless internet for its passengers as soon as early 2023, people familiar with the matter said.

    "The Atlanta-based carrier is initially expected to offer free Wi-Fi on a significant portion of its airplanes before turning on the service on more of its fleet through next year, some of these people said. The move is likely to intensify competition over in-flight offerings as airlines rebound from the pandemic."

    I would assume that we'll see similar developments at United and American - it is a reflection of the degree to which people want to be connected all the time, and expect (especially when paying robust amounts of money for airline tickets) it to be included in the fare.  It wasn't all that long ago when we couldn't get online at all when in the air;  now, if for some reason a plane's internet is not working, it feels like an outrageous inconvenience.  

    •  Marketing Dive reports that "Major League Pickleball (MLP) has named Margaritaville as title sponsor and introduced new branding as 'MLP by Margaritaville' … The hospitality company founded by Jimmy Buffett will develop fan activations and immersive entertainment for the league. Margaritaville positioned itself as a 'driving force' behind interest in the sport, with over 30 pickleball courts across its locations.

    "Margaritaville has served as the title sponsor of the USA Pickleball National Championships since 2018 and is the official lodging partner of the Professional Pickleball Association (PPA). The tie-up follows MLP restructuring amid growing brand activity around the sport."

    Just love this story - I love pickleball, and am a big Buffett fan.  Next question - will pickleballs replace beachballs at Buffett concerts?

    And another question:  Will Buffett write a new lyric to follow this famous one? 

    "I like mine with lettuce and tomato

    Heinz 57 and french fried potatoes

    Big kosher pickle and a cold draft beer

    Well, good God almighty which way do I steer

    For my … Cheeseburger in paradise …"

    Published on: December 21, 2022

    •  Alimentation Couche-Tard announced that Alex Miller, the company's Executive Vice President, Operations North America and Global Commercial Optimization, is being promoted to the newly created position of Chief Operating Officer.

    Published on: December 21, 2022

    We had a piece here yesterday about the growth in the dollar store channel, which led me to comment:

    The growth of the dollar store format, and its perfect positioning at a moment of inflation and recession concerns, means that it may be the biggest threat to many conventional stores - especially those without a definitive and differentiated value proposition and brand image.

    I do find myself wondering, though … would it have made more sense for Kroger to acquire a dollar store chain rather than Albertsons?  Would such a move been more additive in terms of depth, and not just breadth?  

    MNB reader Monte Stowell responded:

    Great question Kevin about Kroger buying a Dollar Store chain. Why has Kroger not adopted that it’s pricing and merchandising to go after the Dollar Store Customer?  All I know is lots of my friends are buying a lot of items at Dollar stores instead of Fred Meyer. All Kroger has to do is take a look at certain category items and create a Dollar store in their existing stores. Fred Meyer for example has plenty of square footage to do so. Sometimes the obvious cannot be seen and  the appropriate action to do something has not been acted upon. The pricing disparities between the Dollar Stores, er’ $1.25 stores and the conventional retailer had created the paradigm shift of where people are shopping. Opportunity awaits for major chains to wake up. Today's consumer is a pretty smart lot.

    Another MNB reader responded:

    Regarding the dollar store growth article, the expansion of these formats from the major chains in the channel has been interesting to watch over my 40 year career in the industry.  The new modern “dollar store” is a welcome sight in most rural markets by the consumer base, however, as with most retailers, many of the legacy stores are not well maintained, nor updated.  For example, in our small Missouri town, the dollar store competes with one regional grocery store.  The grocery store is newer, while the dollar store is very old, dirty, hard to shop and located in an area that is off the beaten path.  This same dollar store is very competitively priced versus the grocery store for consumers looking to stretch their dollars. 

    It reminds me of a chain that built stores based on cheap real estate, and as those stores continue to be profitable (often due to a consumer base with limited options in rural cities), Capex for those locations are often reduced or eliminated.  Horrible parking lots in need of repair, dilapidated store conditions, narrow aisles, no ease of shopping due to stock carts placed on every open aisle space, and out of stocks due to trucks not being worked to the shelf.  We know this is part of the limited staffing business model and “cash-cow” status of these legacy locations, but what could the volume be in these legacy stores if they were properly maintained? 

    And from another reader:

    Seems to me that Kroger is using their delivery program to combat $ stores. I live in an area that I pass 4-6 $ stores to get to grocery store. They often get my money, but increasingly their staffing and conditions have worsened (2 different chains). Seems to me where the store gaps lie, there are gaps in the available qualified work force. My guess is that the $ store needs to do more with each man hour to hit a return?

    On another subject, from another reader:

    The article mentioning Kroger looking at frictionless check out made me chuckle.  I’m a loyal shopper (not that I have a choice) of Kroger in their headquarter town of Cincinnati.  They don’t even have credit card readers where you can “tap” your card.  Their readers are probably 10 years old and work “most” of the time.