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From The MNB Archives
Friday, November 04, 2016
by Kevin Coupe
The New York Times reports on how a number of new firms, including some technology companies, have decided to compete in the "death and dying" business, often focusing on price and convenience in a realm that often is not friendly to such discussions.
Because many people "would rather not ponder critical decisions about feeding tubes, funeral homes and other end-of-life issues until the need is thrust upon them," the $18 billion funeral industry has largely been able to avoid the kind of disruption that has affected other business categories; it is considered revolutionary when Costco starts selling caskets, but that hardly gets at the core of the opportunity.
"But with nearly 2.6 million people dying annually in the United States," the Times writes, "entrepreneurs see an opportunity to innovate."
The story notes that many of these startups "are founded by millennials, who have grown up online and expect to shop for — and curate — everything there."
One example: "Parting, founded about a year ago in Los Angeles, an online directory of funeral homes searchable by ZIP code, which allows users to compare prices and services, and view the homes’ locations.
"A team of people posing as shoppers seeks out pricing and services information from funeral homes that are unaware the information is for the site. An increasing number of funeral directors, however, are voluntarily working with Parting to put their information in the database, which now has more than 15,000 funeral homes.
"It is backed by an angel investor and is increasing about 27 percent a month in searches and visitors..."
Another example: "Cake, a start-up in Boston created at M.I.T.’s Hacking Medicine conference’s Grand Hack in 2015, helps users decide end-of-life preferences, like the extent of life support or what to do with their Facebook page. It then stores the choices in the cloud and shares them with those who are designated ... The platform asks users a series of questions to help them determine their preferences. Their answers are used to populate their Cake profile, to which they can add notes and instructions to family members or friends. An environmentalist, for instance, could learn that others sharing his green values donated their bodies to science. Or the person could arrange for a biodegradable burial."
We've had some experience with this lately, dealing with seemingly incompetent lawyers, funeral home directors who appear locked in their own dimension, and a health care system where doctors seem more focused on their golf games than promises made. (To be fair, with a different relative, the experience has been vastly different and far better.)
But in so many ways, the death-and-dying experience is almost designed to be hard to navigate for consumers - I can't shake the feeling that what on the surface looks like compassion often masks a kind of arrogance and condescension. The industry is ripe for disruption ... and I'm glad to see that there are some entrepreneurs out there taking aim at it.
The results should be Eye-Opening.
Kantar Retail is out with its best-in-class retailer and manufacturer PoweRanking survey, concluding after examining strategic and operational metrics that Kroger and Walmart are in a "virtual tie" on the retail side, with PepsiCo and Coca-Cola in first and second place respectively on the supplier side.
According to the report, "While Walmart’s long-standing dominance among U.S. retailers now has a formidable challenger, the supercenter chain continues to outrank all other retailers in the areas of clear strategy and supply-chain management ... A major factor in Kroger’s performance this year has been its ability to innovate and maximize the shopper experience by applying insights derived from both suppliers and its own 84.51 shopper insights firm."
On the supplier side, "PepsiCo showed broad improvement across many of the strategic and operational metrics measured in the study. The company was particularly praised for providing top-class capabilities in the area of data analytics ... Coca-Cola received the top ranking for innovative marketing, receiving plaudits from retail partners for creative campaigns, such as 'Share a Coke'."
The report notes that "the purpose of Kantar Retail’s annual PoweRanking study is to identify the manufacturers and retailers viewed as best in class by their major trading partners and to provide insight into what distinguishes them across key areas of the manufacturer-retailer business relationship."
Companies like these have the resources to be best-in-class, and so one would expect that they should be able to achieve such a ranking; expectations, of course, often are not met, and some companies don;t do what they need to do.
The big lesson is that in order to survive, every company has to be best-in-class in something. There's no room for complacency, for coasting, for being good enough.
Good enough just ain't good enough anymore.
The Cincinnati Business Courier has a story about how Kroger CEO Rodney McMullen told analysts this week that its acquisition of Roundy's presents very different challenges than the company is used to.
"“We’re very good at managing high-quality companies and bringing together the best of both worlds,” he said, adding, "One of the things we don’t know is whether we can do a fixer-upper. It is a lot of work.”
CFO Mike Schlotman chimed in, saying that "we’re clearly shining up a slightly tarnished star. Getting back to a 50 (percent) market share from 30 or 35 is a lot of work.”
Interestingly, Bloomberg has a story at the same time suggesting that whatever the challenges at Roundy's, Kroger's desire for deals may not be sated. Kroger has suggested, the story says, that "it was eager for deals but has struggled to find another can't-miss target like Harris Teeter -- the successful Southeastern grocery chain for which Kroger shelled out $2.5 billion in 2014 and quickly absorbed without much trouble. CEO Rodney McMullen assured investors that, if there's such a potential target out there, Kroger has looked at it."
Possibilities include "publicly traded Ingles Market and Sprouts, now-bankrupt Fairway and privately held Fresh Market, which has drawn Kroger's attention in the past," Bloomberg writes. "These are fresh-focused chains with high-income customers and good business models, which could benefit from better management. Kroger could also make a play for a meal-kit maker or food-delivery company such as Blue Apron or Door Dash, which could give it an edge over competitors."
McMullen told the analysts, the Courier writes, "that the Roundy’s deal served as a way for Kroger to get into a new market. That’s something Kroger was trying to do on its own at the time the Roundy’s opportunity came up. The acquisition cost was about the same as what Kroger would have spent to open a new market."
The story also notes that "One key was Kroger’s realignment of the management team, with one team handling Roundy’s Wisconsin operations and another focused on Mariano’s in Illinois ... Kroger has converted 13 Roundy’s stores to its system, with changes in pricing, products, customer rewards and tech systems. Roundy’s has 117 stores in Wisconsin under the Pick ‘n Save, Copps and Metro Market banners as well as 34 Mariano’s stores in the Chicago area. Kroger is moving quickly to convert the others..."
Tarnished star, indeed. I'd actually go farther than that in describing what is supposed to be the jewel of the Roundy's system.
I've spent some time in a few Mariano's stores lately, and I have to admit that I am less impressed than I used to be. Some of them work, but some seem overbuilt and awkward. And most of all, I've been surprised by the degree to which they seemed empty of customers ... even on weekends, when one would expect them to be far busier.
This was not a scientific survey, so I don't want to make too much of it. But as impressive as some of the Mariano's stores are, there also seems to be something missing there. Kroger may have its work cut out for it as it looks for ways to expand the Mariano's brand ... I think its Main & Vine format in Washington State is a lot more interesting.
The New York Times has a piece suggesting that the presence of " irrepressibly friendly employees" at Trader Joe's may be a little bit of an illusion, and that the "patina of good cheer has masked growing strife and demoralization in some stores on the East Coast, far from the company’s base in California. A number of workers, known at Trader Joe’s as 'crew members,' complain of harsh and arbitrary treatment at the hands of managers, of chronic safety lapses and of an atmosphere of surveillance."
According to the story, "The morale issues appear concentrated at some of the company’s largest and busiest stores, including one where a union is trying to organize. Tensions have been heightened, according to several employees, by the pressure to remain upbeat and create a 'Wow customer experience,' which is defined in the company handbook as 'the feelings a customer gets about our delight that they are shopping with us'."
Indeed, an unfair labor practices charge was filed on Thursday with the National Labor Relations Board (NLRB) by Thomas Nagle, described as "a longtime employee of the Trader Joe’s store on Manhattan’s Upper West Side," who says he "was repeatedly reprimanded because managers judged his smile and demeanor to be insufficiently 'genuine.' He was fired in September for what the managers described as an overly negative attitude."
Some experts say that a policy that requires people to be unflaggingly positive with managers, fellow employees and customers may in fact "be illegal because federal labor law gives employees the right to discuss working conditions and the merits of joining a union with one another, and to complain about working conditions to the public, including customers."
Trader Joe's disputes the claims by Nagle, saying, "We are committed to maintaining a great and safe environment in which to work,” adding, “As part of that commitment, we promote an open and honest environment that encourages questions, suggestions or concerns to be raised.”
Interesting. Not every Trader Joe's employee agrees with the complaint, but there are a number who tell the Times that it is rooted in truth.
It is not hard for me to imagine that Trader Joe's could be the kind of company where they breathe their own exhaust - that they are so committed to their culture that they see any discordant notes as a cancer that needs to be cut out. This isn't out of malevolence ... just commitment, and maybe an inability to listen intently and recognize that the people who dissent often give companies the greatest opportunity to improve and adapt.
The New York Times reports on a decision by the University of California, San Francisco, to remove sugar-sweetened beverages from the campus - from every "store, food truck and vending machine" at the college, including from fast food restaurants with outlets there.
UCSF is not operating in a vacuum, and here's how the Times frames the issue:
"The university’s experiment comes at a time of growing battles over policies aimed at curbing soda consumption. On Tuesday, three cities in Northern California and one in Colorado will be voting on whether to tax soft drinks. The cities of Berkeley and Philadelphia have already approved taxes on sugary beverages. One recent study found that the Berkeley tax was working: In low-income areas, sugary drink consumption fell and water consumption rose after the tax went into effect. Last month, the World Health Organization urged countries around the world to impose a tax on sugary drinks, presenting research that showed just a 20 percent increase in soda prices would result in a proportionate reduction in their consumption.
"The beverage industry has been fighting back, spending millions on ad campaigns against the proposed taxes in California and Colorado, which it calls a regressive “grocery tax” that hurts the poor. In September, the industry filed a lawsuit against Philadelphia, calling its soda tax illegal.
"As the fights over soda taxes play out, many hospitals and health organizations have taken matters into their own hands, banning sugary drinks from their own workplaces. Nationwide, at least 30 medical centers have restricted the sale of soda and full-calorie sports drinks, including the Cleveland Clinic in Ohio and the University of Michigan Health System.
"U.C.S.F.’s policy may be the most far-reaching. It applies not only to its medical center, but the entire university, including the aforementioned 24,000 employees and its 8,500 visitors and patients each year. Visitors to the campus now will find only bottled water, diet drinks, unsweetened teas, and in some cases 100 percent fruit juice with no added sugar."
It is early days, and it'll be interesting to see how the study plays out. The short term evidence seems to be that people actually are even changing the items they bring from home, and overall consumption seems to be going down.
There seems to be little question, though, that this is an actual trend ... one with which retailers and suppliers who have long done very well with such products will have to contend and adapt.
The Wall Street Journal has a piece comparing the Amazon Echo/Alexa system to the new Google Home offering.
"Google is releasing Home on Friday in the hope of riding the coattails of Echo, the Amazon gadget that is powered by the virtual assistant called Alexa," the Times writes. "Echo became available last year to much fanfare. By posing questions and making requests to Alexa, people have since put Echo to work as a shopping assistant, kitchen companion and home automation tool. Amazon has a bona fide hardware hit."
And what's interesting about the review is that it concludes that Google’s Home is "a preternaturally smarter speaker" than the Echo ... that while Echo is currently more capable than Home, partly because a larger number of third-party companies have worked with Amazon to add capabilities to its speaker, Google’s product is poised to surpass Echo in the coming years."
You can and should read the review here, if only because I think these kinds of system are shaping up to have an enormous impact on how people acquire product.
Tech Crunch reports that a new study from data analytics firm 1010data concludes that "Amazon’s investment in its own private label products has been paying off ... The retailer now competes with vendors via its own products in over a dozen categories, including computer accessories, home goods, pet supplies, grocery items, and more." In some categories, the study says, "Amazon has even established itself as the online category leader."
While the study only focuses "on a handful of categories," the story says, "it’s a good glimpse into the power than Amazon.com has when it comes to marketing and selling its own products at scale. And the retailer has much larger plans for its private label items going forward ... Outside of consumer products, Amazon has also invested in fashion, having quietly launched over a half dozen private label clothing brands earlier this year, including Franklin & Freeman, Franklin Tailored, James & Erin, Lark & Ro, North Eleven, Scout + Ro, and Society New York."
It hasn't been a process without potholes for Amazon; let's not forget that its initial foray into private label diapers was a disaster. (They leaked. Not what one wants from a diaper.) But these guys are committed and persistent and willing to make mistakes on their way to getting it right.
• Bloomberg reports that when Starbucks released its quarterly numbers yesterday, one of the interesting things it said was that "mobile payments accounted for 25 percent of domestic transactions, up from 20 percent a year ago."
Revenue climbed 16 percent to $5.71 billion in Starbucks’s fiscal fourth quarter, while same-store sales in the Americas region was up five percent and global same-store sales were up four percent for the quarter. Q4 profit was up 23 percent to $801 million.
• The Associated Press reports that CVS Health is letting go about 600 employees, mostly from corporate offices in three states, as it "streamlines operations."
The company currently employs about a quarter of a million people across the country.
From MorningNewsBeat, September 15, 2016:
A US Department of Labor report recently revealed that there were 5.2 million jobs available in the United States ... which was said to be the highest level of job availability since these specific numbers started being tracked back in 2000. This despite the fact that there remains considerable debate, much of it cacophonous, about national unemployment and under-employment.. The problem, one expert said, is that what we have in this country is "one of the biggest mismatches between skills and lack of qualified help available in the nation's history."
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Remember ... for most of us in the US, this weekend marks the end of Daylight Savings Time and a return to Standard Time. On Sunday, November 6, at 2 am, it will be time to turn your clocks back an hour. (Assuming, of course, you have clocks that require manual changing.)
Enjoy the extra sleep.
In Thursday Night Football action, the Atlanta Falcons defeated the Tampa Bay Buccaneers 43-28.
City of Gold is a wonderful documentary, now available on iTunes and probably elsewhere, about Jonathan Gold, a longtime restaurant reviewer in Los Angeles. Gold is like of like a culinary Raymond Chandler, moving down LA's mean streets, though he's not in search of criminals; rather, he is seeking tiny restaurants in strip malls, food trucks and carts, or the odd ethnic restaurant that he sees as challenging convention and raising the gastronomic bar.
Gold is seen wandering the surface streets and freeways of Los Angeles in his beaten up Dodge truck, looking for inspiration in the form of things such as fried grasshoppers or tacos with charred octopus. Los Angeles is a place, he says, where you "don't have to travel far to taste food that makes you think you've traveled far."
And this may be the real magic of Gold's writing and this documentary. He is deeply, passionately in love not just with the food of Los Angeles but with the city itself, seeing it as a place where there are an extraordinary number of cultures bumping up against each other and overlapping. The "fault lines where the cultures meet," Gold says, often is where the real beauty is.
City of Gold is a terrific piece of work about a man who is not just a food critic, but an invaluable chronicler of the culture. And best of all, it is anything but stuffy; Gold maintains a sense of humor about himself and his role.
In one of the best lines of the documentary, Gold says that he does not take notes while eating in restaurants. "You also could take notes during sex," he says, "but you'd probably end up missing something."
Great piece of filmmaking. I highly recommend it.
Marvel is out with yet another in a sometimes seemingly unending series of superhero films - this one, Doctor Strange, is about an esteemed, egotistical and supremely talented surgeon who loses the use of his hands in a car accident that plays out like a public service ad against testing-while-driving. Desperate and depressed after he is unable to find any medical way to cure his disability, Stephen Strange turns to the mystical arts - where he finds himself embroiled in a far greater fight than the one to regain his surgical skills.
Like most Marvel movies, Doctor Strange is pretty silly and dense with backstory and myth. It also has some great actors - Benedict Cumberbatch in the title role and Chiwetel Ejiofor, Rachel McAdams, Benedict Wong, Mads Mikkelsen, and Tilda Swinton in supporting parts. And, as usual, it is fabulous production values - Doctor Strange is psychedelic in its view of a world that can be folded in upon itself (and I'm really glad to have seen it in Imax 3D, where the effects are mind-blowing).
Doctor Strange isn't really my kind of movie, but I had a good time.
This week, I had the chance to spend some time in Minneapolis and St. Paul, so I made tracks to the Surly Brewing Company, where I washed down some supremely tasty chilaquiles with a Damien black ale that was amazingly tasty. Unfortunately, you may not be able to share the experience, since the bartender told me that they were on the last keg of the limited edition beer. To get it again, you'll have to wait until next year.
It'll be worth the wait.
If you have not been watching "Westworld" on HBO, I would suggest that you find a way to catch up - I'm finding it to be a spellbinding experience, complex and thought-provoking. Based on the old Michael Crichton movie, "Westworld" portrays an elaborate theme park in which humans are able to satisfy every need by interacting with "host" robots. The TV series, unlike the movie, very much focuses on the robots, who are beginning to develop some sort of independent consciousness; there are a lot of questions to be answered about who is human and not, what being human really means, and even about the timelines that are playing out.
The cast is wonderful, but so far the standout is Evan Rachel Wood, who plays a robot host named Dolores. She's had a ton of great moments, but perhaps the best one so far was last Sunday when she did something unexpected and turned to someone and said, "You said people come here to change the story of their lives. I imagined a story where I didn't have to be the damsel."
Great stuff. I'm totally hooked.
That's it for this week. Have a great weekend, and I'll see you Monday.
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