business news in context, analysis with attitude

Published on: January 12, 2016

by Michael Sansolo

Apparently I am pretty smart.

At least that’s the supposition I can make from a quick look around my world. After all, on a wide range of issues I can easily find people who support my point of view. And I find them everywhere: On television, Internet blogs or even among Facebook friends.

The problem is that view is also wildly misleading. Like so many others, I can easily live in an echo chamber where my opinions and viewpoints are repeatedly validated even when they are wrong.

I was reminded about the importance of seeking out divergent viewpoints while collecting my grand-dog (yes, I have one and he’s wonderful) from the animal hospital this weekend. Doing the exact same thing with his own grand-dog was Charlie Cook, the political pundit.

While we haven’t worked together in years, I follow Charlie because he actually makes sense about the world of politics. He does that in part by understanding the dangers of the echo chamber.

Charlie said his world is more polarized than ever thanks to the rise of media sources that seem to exist only to reinforce the beliefs of their followers. Such thinking, he said, leaves us more convinced of our own brilliance and less willing to consider any other position.

Charlie said he purposely works his speaking schedule to include audiences from all parts of the spectrum to ensure that his messages don’t become stale or simply palatable to one group or another.

That’s a really important point. Hearing opposite views can really irritate us, but it is an invaluable way of ensuring we don’t get stale, arrogant or single-minded. When it comes to business, every one of those words is recipe for disaster.

How do we do it? Start with a lesson Kevin and I love to remember whenever we start feeling too good about what we do here at MNB, in part prompted by what we agree is more positive reinforcement than anyone deserves.

Don’t breathe your own exhaust.

Challenge yourself repeatedly, even when celebrating success. We all love accolades, but in a world of constantly new forms of competition we need to push ourselves for constant improvement. Good enough is never really good enough. Something better is always lurking around the corner.

Secondly, don’t assume there is only one way to do anything and certainly that your way is the only or best way. The competitive environment today is simply too dynamic to let that happen. Think of the improvements to your smart phone, your car or even certain items of clothing. Nothing is standing still and you can’t either.

Thirdly, get out of your own echo chamber. Our population is replete with people of diverse backgrounds and needs so make sure your work circle includes that diversity. What you find perfectly acceptable or consider common knowledge might somehow offend or completely confuse someone else based on gender, age or ethnicity. It’s not about being politically correct; it’s about understanding the wide range of needs your business serves.

None of this is easy, but easy is never the route to take. Branching out and engaging opposite ideas is not a sure way to build growth, but it certainly helps get you ready for whatever may come.


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

Published on: January 12, 2016

The website Vox.com has produced a four-minute video that looks at the Chipotle food safety mess, and it is worth looking at not just because of the way it explains what has happened and why (to the extent that anyone can), but because of the way in which it frames the issue for consumer consumption.

The conclusion is that Chipotle is pretty much conceding that fresh food may not be the same as safe food ... and that it cannot be subtle in either fixing its problems or communicating those fixes.

It is a little raw and a little irreverent ... but a pretty good distillation of the situation. In that sense, it is an Eye-Opener.

Published on: January 12, 2016

The Washington Post reports that Greek yogurt company Chobani is taking a tough tone against Dannon in new online, broadcast and print advertisements, criticizing it for containing artificial sweeteners like sucralose, saying that it "has chlorine in it," and ingredients like potassium sorbate, saying it "is used to kill bugs."

"The message Chobani is sending is clear: our product is natural; theirs is not. And it's doing it loudly," the Post writes. So loudly, in fact, that "shortly after the ads appeared, Dannon sent a cease-and-desist letter to Chobani, asking for an immediate end to the campaign." Chobani has responded by "asking that a New York U.S. District Court declare that its campaign is neither false or misleading."

Peter McGuinness, Chobani's chief marketing and brand officer, says, "We know people are concerned about artificial sweeteners in their food, and this campaign is about giving them truthful and accurate information."

The story notes that "Sucralose is a popular artificial sweetener and potassium sorbate is a widely used preservative. Both are considered safe for use in foods by the FDA ... Dannon contends that Chobani's campaign is misleading, presumably because it scares consumers away from ingredients the government says are fit for consumption."

Published on: January 12, 2016

The Wall Street Journal reports that Amazon plans to shortly introduce "a smaller, portable version of its voice-activated tabletop Echo speaker, building off the device’s surprise success since it was released in November 2014."

The Echo,"must be plugged into an outlet, answers questions, creates shopping lists, plays music and can even turn connected lights on and off upon command." The beer can-sized smaller version, dubbed "Fox," can be charged "on a docking station and responds to voice command only by pushing a button, a necessary compromise to preserve battery life."

The Journal notes that "what started as somewhat of a funky experiment to test voice activation and collect data about consumer behavior has morphed into a potentially lucrative strategy to keep people coming back to the company’s retail site ... Amazon has bulked up the Echo’s features, adding traffic and weather reports, Yelp restaurant recommendations, streaming music services and home automation.

"The company also has begun pushing the Alexa software into others’ devices, in part due to a $100 million fund to encourage hardware makers to continue innovating. Last week, for example, Amazon announced a partnership with Ford Motor Co. to integrate Alexa software into its vehicles so that, say, garage doors could be opened by voice command.

"The initiatives could help make Amazon’s voice-activated software ubiquitous inside and outside the home, helping the company battle Apple Inc., Alphabet Inc. ’s Google and Microsoft Corp. which largely have relied on smartphones and tablets for their voice assistants."

Published on: January 12, 2016

• Internet Retailer reports that Toys R Us had a 3.7 percent increase in same-store sales during December, and a two percent same-store sales increase from November 1-January 2.

According to the story, Toys R Us "did not break out online sales figures in its holiday statement, however it cited e-commerce as a growth driver throughout the holiday shopping season. Online sales gains during the 2015 holiday shopping season may have been helped by the fact that the retail chain lowered its free shipping threshold for online orders in September to a minimum order of $19 from $49."

Published on: January 12, 2016

• The Wall Street Journal reports that Starbucks "is upping its bet on Chinese consumers’ growing taste for coffee, despite global jitters over the country’s slowing economy and market turmoil." The plan is to "open 500 stores in China each year for the next five years," in addition to the 2,000 that it already has there.

"We have confidence in the future of the Chinese economy, despite all the rhetoric, noise and issues,” says CEO Howard Schultz. “People are looking for reasons not to believe. I’m on the ground and I see firsthand. I am bullish.”


• The Chicago Business Journal reports that Roundy's Supermarkets is suing the now-extinct Dominick's, which was owned by Safeway (which is now owned by Albertsons), over unpaid property taxes.

The story says that "Roundy’s claims that Dominick’s still owes more that $563,000 for three Chicago-area stores ... That situation arose because Roundy’s bought several properties from Dominick’s in recent years, and, the suit says, the agreements called for Dominick’s to pay property taxes for a certain period after transferring ownership to Roundy’s."

Albertsons says it is working to resolve the dispute.


• Walgreen announced that it has sold 56 of its in-store clinics to Advocate Health Care, which now will be branded as Advocate Clinic at Walgreens. The company says that the new ownership "will strengthen care coordination for patients, while also furthering overall convenience and access."

Published on: January 12, 2016

• The National Grocers Association (NGA), yesterday announced the promotions of four of its staff.

Matthew R. Ott, who has been overseeing NGA’s membership, business development, partnership and technology initiatives, has been named the trade association's Chief Operating Officer.

Greg Ferrara, who has been responsible for the government relations and communications and marketing departments, has been named Senior Vice President of Government Relations and Public Affairs.

Maggie Lyons has been promoted to Senior Director of Government Relations, taking on an expanded role in managing NGA’s relationship with Congress and federal agencies to advance the organization’s legislative and regulatory priorities.

And Laura Strange has been promoted to Senior Director of Communications and Marketing, where she will continue in her role running NGA’s communications and media relations functions in addition to managing marketing for NGA events and programs.

Published on: January 12, 2016

The annual National Retail Federation (NRF) "Big Show" is scheduled to take place next week, from January 17- 20, in New York City's Jacob Javits Convention Center ... and I'm planning to spend some time there next Monday, January 18.

If there are any MNB readers who'd like to get together, I'll be camping out from 1-3 pm at the MyWebGrocer booth, #4452 ... I'll have some copies of my books to give away, and I'm always happy to catch up with members of the MNB community. Hope to see you there...

Published on: January 12, 2016

Got the following email from MNB reader Joe Elledge, responding to our stories about Amazon getting into the package shipment business, which would put it in competition with the likes of FedEx and UPS:

Perhaps Amazon’s exploration of an entry into the package shipping business is an admission that its core business model is unsustainable?

I am a logistician.  Could it be Amazon’s speed, innovation, and executional excellence are indications of a frantic effort to make an unsustainable business model viable?   Amazon’s core operating model is the business equivalent of defying gravity.  Exploring an expansion that would have it competing with UPS and FEDEX smacks of desperation to me.

You have consistently refused to look beyond Amazon’s speed, innovation, customer focus, and executional excellence to the persistent failure of its core operating model to deliver competitive levels of profitability.  Until it delivers competitive levels of shareholder profitability, Amazon will be just an experiment as opposed to a viable business.

If I had a dollar for every time someone has said that Amazon's business model is untenable ... well, I'd have a bunch of dollars.

To be fair, it is possible that you're right. And I don't have a fancy title like "logistician," so I could be wrong.

But...

I have to say that I think this is an old-world way of looking at things.

First of all, Amazon's lack of profitability can be traced directly to its constant and persistent investment in innovative technologies; they believe that they cannot let up on the gas for even a minute, because to do so is to risk being overtaken by the competition. If you invest in Amazon stock, you have to know that going in. It is a long-term play.

I think it is sort of ironic that in saying that Amazon does not deliver "competitive levels of profitability" (an analysis that depends, I think, on your definition of "competitive"), you concede the existence of "Amazon’s speed, innovation, customer focus, and executional excellence."

I've said this before, and I'll say it again. Realities of the modern world may demand a rethinking of how companies and investors define the balance between innovation and profitability.

Asked to make a bet, I'd put my money on Amazon being a viable business, not just an experiment.

But I could be wrong.




Last week we had a story about a smart refrigerator, which prompted the following email:

Yep, just what we need. One more piece of technology the increases the laziness of Americas and dumbs down society…Pretty soon Americans will be so lazy they won’t even have to drive their own cars. Probably a good thing. Without having to worry about driving their cars they can spend time on more important things like posting their thrilling lives to Facebook or texting their coffee orders to Starbucks.

I responded:

This strikes me as such an inaccurate, disrespectful and cynical reading of a tech-oriented generation ... and it doesn't even account for the possibility that a smart refrigerator will give people more time to read great books, go get exercise, cook great meals, play with their kids, enjoy fulfilling and even occasionally intimate relationships ... need I go on?

Smart technology doesn't make people dumber. It allows them the opportunity to be smarter and more fulfilled, and to do things that matter and have consequence.

Will everyone use smart technology this way? Of course not. But such generational cynicism, in my view, is far more poisonous to the culture than someone going on Facebook.

This prompted yet another email, from MNB reader Jim Mahern:

Good morning. I am a daily reader of MNB and do enjoy your perspective all of the time, even when I disagree with it. Friday 1/8/2016 is one of the latter.

For the sake of full disclosure, I am 72 years wise. Your description of the fellow who questioned talking to his refrigerator as "generational cynicism" and later as "poisonous to the culture" is interesting, and perhaps offensive to someone of my generation (read "me"). We are all entitled to an opinion, just as I respect yours.

I use email (obviously) as a form of communication, shop regularly on Amazon, occasionally download movies and was active in the food industry when scanners first arrived in the marketplace. I believe all of them have led to an exciting time in our industry in America. While I am not a Facebook user, I am on Linked In. I will probably never talk to my refrigerator either, unless of course my mind deteriorates.

When I was involved in business on a daily basis, I hired people who were smarter, and usually younger, than me. I was able to help them learn the business from my perspective and they helped me understand it from theirs. I believe it was helpful for each of us. We did have healthy disagreements, but I always listened.

While I understand the impact of millennials, and the changing aspects of retailing, I do have one caution.

At age 72, in good health and taking no regular prescription medications, it is estimated that I will live till at least the age of 88. If a retailer ignores my generation for those 16 years, they do so at their own peril.

Thanks for listening.

I certainly didn't mean to offend you ... and for the record, our ages aren't that different. You are 72, and I'm 61.

When I referred to that correspondent's attitude as cynical and culturally poisonous, I was talking about what I continue to believe is a stereotype of young people as being lazy and addicted to Facebook postings about their "thrilling lives." (I sensed some sarcasm there...)

In your business career, it seems, you didn't indulge in that. Which I respect. And it seems to me that you understand that characterizing young people in the way that the previous writer did only serves to heighten disconnections, as opposed to forging real and useful connections that can make businesses - and the culture - stronger.

I would never suggest that business ignore people your age ... or my age, for that matter. But I do think that business - especially retailing - are in the unique position where it has to figure out how to do that and still create strategy and tactics that will appeal to younger people as well.

Stereotyping and mischaracterizing them doesn't do that. It just creates the kind of echo chamber that Michael wrote about in his column this morning ... you listen to yourself and people like you, and lose connection to the world as it really is.

No offense meant.

Published on: January 12, 2016

In the NCAA college football championship game, the Alabama Crimson Tide defeated the Clemson Tigers 45-40, achieving its fourth championship crown in seven years.