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    Published on: April 15, 2016

    by Kevin Coupe

    When I was working my way through high school as a salesman in a men's clothing store, my boss, Dick Coulter, was pretty much willing to do anything for any reasonable charity that came in the front door. He was a big guy with a big heart.

    The one place where he drew the line was politics. Never get the business involved with that stuff, he'd say. All you can do is irritate half your customers. (He used a different word than "irritate.")

    I've always thought that this was an appropriate position to take. That's not to suggest that business owners shouldn't vote or get involved in politics and governance on a personal level ... but when business takes a stand, it can be a mistake.

    Or an instance in which the business believes it simply doesn't have any choice.

    This seems to be the case in North Carolina, where a law fast-tracked and passed by the legislature, and then signed by GOP Gov. Pat McCrory, superseded a recently enacted Charlotte City Council ordinance extending protections to gays and lesbians as well as bisexual and transgender people while at hotels, restaurants and stores; it also allowed people to use restrooms aligned with their gender identities, not the gender of their birth. Not only did the law overrule the Charlotte ordinance, but it also prevents any other local government from approving any similar ordinance.

    The Washington Post reports that "McCrory has defended the state law as being needed to respond to what he called the 'government overreach' of a Charlotte city ordinance that expanded civil rights protections for people based on sexual orientation and gender identity." Though he has "responded to a backlash ... by signing an executive order Tuesday aimed at calming the firestorm ... McCrory said he was expanding protections for state employees, which would prevent these workers from being fired for being gay or transgender. He also said he would seek legislation restoring the right to sue for discrimination."

    But he didn't change any of the law's provisions about gender identity and the use of bathrooms - the parts of the law that generated the biggest backlash.

    As noted here on MNB a few days ago, more than 120 executives with a wide variety of companies that do business in North Carolina have raised objections - including Salesforce, Levi Strauss & Co., Airbnb, Barnes & Noble, Kellogg's, Apple, Pfizer, LinkedIn, Hyatt, YouTube, Starwood, Facebook, Google, Bank of America, Hilton, American Airlines, IBM, Starbucks, Microsoft, and Wells Fargo.

    It has extended farther than that. The NBA is considering moving to another state the 2017 All-Star game that was scheduled to be played in Charlotte. Bruce Springsteen cancelled concerts there, saying that it was "the strongest means I have for raising my voice in opposition to those who continue to push us backwards instead of forwards.” And in what has to be the funniest response to a very un-funny situation, a popular porn site (and by popular, I mean that it is one of the 100 most visited websites in the world) announced that anyone trying to access it from a North Carolina IP address would only see a black screen.

    Not everybody felt that the best way to protest the law was to stop doing business in North Carolina. Jimmy Buffett perhaps was the most quoted entertainment figure in this regard, saying that while it is a "stupid law, based on stupid assumptions," his shows were booked and sold out long before it was passed. "I happen to believe that the majority of our fans in North Carolina feel the way I do about that law ... I am not going to let stupidity or bigotry trump fun for my loyal fans this year." But, he said, he probably won't be scheduling any future concerts in North Carolina until the law is changed.

    We've seen this happen before.

    NBC News reports that in Georgia, "where lawmakers last month approved HB 757, a bill allowing businesses to deny services to gay and lesbian couples by citing religious principles. Disney and the NFL were among the major corporations threatening to boycott the Peach State over the legislation. But Republican Gov. Nathan Deal ended up citing 'the character of our state and the character of our people' when he vetoed the bill on March 28." And similar debates have arisen in places like Indiana and Mississippi where laws framed as protecting religious freedom are seen by many as actually trying to institutionalize prejudice.

    In so many ways, these debates put businesses in a very difficult position - though I think it is noteworthy that many companies are choosing to alienate the customers they have who favor these laws rather than offend people who are fighting against them. I suspect that this in part is because these so-called religious freedom laws actually do seem at odds with the human values espoused by these companies; to be fair, they also are aware that how they react in North Carolina will get ample publicity in states and communities where such laws are seen as bigotry, plain and simple.

    There is no reason to think that these cultural debates ever are going to end, but there's every reason to think that businesses are not going to be able to stay on the sidelines, to remain neutral. In the end, they can't ... because their customers won't let them.

    The Eye-Opening fact is that they really don't have any choice.
    KC's View:

    Published on: April 15, 2016

    Tech Times has a story about how some scientists are working to create product packaging that would include an electronic screen that will give consumers access to information far more than just ingredients.

    According to the story, "The technology involves printing of electronic tracks onto the packaging material and by using an electric-conducting adhesive, the polymer LED display and small battery-powered electronics can be fixed onto the packaging. The scientists also created a touch pad keyboard to the paper, which allows consumers to control the LEDs in the display."

    The story also notes that "the technology ... is not only limited to food packaging items. It could also be used in greeting cards and other products that needs to display information or messages."
    KC's View:
    This all sounds very interesting, especially because it has the potential to radically expand the kind of information made available in spaces that formerly were static and limited. But it also occurs to me that in so many ways, the potential already exists for people to simply scan a static code on a package and access this information via a smartphone ... retailers and manufacturers can just open the door for people who already are carrying around enormous amounts of computing power.

    Published on: April 15, 2016

    The Motley Fool offers two reasons it believes that Whole Food's new "365" concept - a smaller format with lower prices and a more edited selection than traditional Whole Foods stores, along with features designed to appeal to millennials - will be successful.

    First, "More than any other supermarket chain, the new 365 seems to resemble Trader Joe's, the alternative grocer that has grown to nearly 500 stores nationwide." Since Trader Joe's clearly "is doing something right," the analysis suggests, "mixing the Whole Foods brand with the Trader Joe's operational model should be a winning combination."

    Second, "when Whole Foods first announced its Friends of 365 program, it was mocked for suggesting the idea of tattoo parlors in its stores, but its plans for the first store make it clear that the company will include mostly food and beverage concepts in the new stores, which seems to be the most logical addition." Expect that the sum of the parts will be greater than the whole, the analysis predicts.
    KC's View:

    On the other hand, if 365 is seen as imitative of Trader Joe's, it may not be seen as a long term and sustainable business model. Whole Foods has been arguing that this format will be innovative, and while there's nothing wrong with trying to compete with Trader Joe's for a specific customer, it would be an enormous mistake to just imitate another retailer. It has to give people a compelling and differentiated reason to not shop at TJ's.

    Plus, it remains to be seen whether the Friends of 365 concept will work ... and we won't have any sense until after a few of these puppies open for business.

    Published on: April 15, 2016

    Fortune has a story about how Target Corp. recently brought in Starbucks CEO Howard Schultz to "rally the Target troops" as the company tries to recapture the "cheap chic ethos" that differentiated it for so long.

    Schultz was asked to reflect on how the company got its mojo back after it foundered in 2008; as the economy worsened, people resisted paying $4 for a cup of coffee, and it hit Starbucks hard.

    “Our brand comes to life by uplifting our people," Schultz told the Target employees. "So when I stopped hearing my team having conversations about the people and the coffee, and only focusing on the numbers and getting bigger, faster … that’s when I realized something was wrong ... For the Starbucks team, it all comes back to one person, one cup, one community, and getting the details right. We needed to get back to basics, the values that our customers fell in love with in the first place.”

    Schultz's mission was to reinforce Target's internal message - that CEO Brian Cornell is taking the company in the right direction as it tries to reduce bureaucracy, get more nimble, differentiated and customer-focused, and stop trying to compete with Walmart and others on price.
    KC's View:
    Schultz is one of our generation's premier entrepreneurs, and certainly one of our great salesmen. (After all, he got people to buy $4 lattes and helped democratize the notion of differentiated good taste in this category.)

    But I think it is important to note that Starbucks and Target share something else in their comeback stories - Starbucks got better as the economy did, and Target is trying to get better as the current economy improves. That helps the cause of non-price-oriented differentiation a lot easier.

    Published on: April 15, 2016

    USA Today reports that "Chipotle will have lost three years of earnings between fiscal year 2014 and fiscal year 2017 after suffering through multiple food-related illness outbreaks since last year, according to a research note out Thursday from J.P. Morgan. Analysts said they expect the company's earnings per share in fiscal year 2017 to roughly equal what they were in fiscal year 2014, despite the sales bump from adding roughly 700 stores over that time period."

    However, the analysts added that they expect this to be a short-term hit, that Chipotle is "a highly meaningful brand, that with time and expense can regain customer trust."
    KC's View:
    Maybe it can, maybe it can't. I think that Chipotle is just one more food safety problem away from utter disaster ... and for some reason, it just feels like the company is not out of the woods yet.

    Published on: April 15, 2016

    There's a new study from Salsify pointing out that 94 percent of US consumers (or at least US consumers polled in this study) "either abandon a site or just give up if they can't find the information they need."

    The vast majority of these consumers - 66 percent - just go to another site, while 28 percent simply decide not to buy the product.
    KC's View:
    Be a resource for information, not just a source of product..

    Sound familiar?

    Published on: April 15, 2016

    Noting that Apple has just celebrated its fortieth birthday, The New Yorker offers a perspective on the company's lifespan, arguing that its first four decades "were not just forty years in a very successful company’s life. They were a unique time. Transformative technologies were invented, and their place in society was contested and defined. A spectacularly unique person led those efforts. And—arguably—a threshold in human affairs was crossed, as many of us began to live four-dimensional lives."

    But while "Apple is a spectacular American success story," The New Yorker writes, "one begins to wonder how long any institution can expect to hold on to greatness."

    To answer that question one has to consider what made Apple not just great, but different. Or, not just different, but great.

    A good and provocative piece of writing, and you can read it here.
    KC's View:

    Published on: April 15, 2016

    ...with brief, occasional, italicized and sometimes gratuitous commentary…

    • The Boston Globe has a review of We the People: The Market Basket Effect, the new documentary that looks at the controversial 2015 standoff over the ownership and management of Market Basket, the New England supermarket chain.

    Calling it a "feel-good souvenir" of the events rather that an unbiased and thoughtful exploration of the issues that divided the two sides of the Demoulas family that controlled the company, the Globe says that "the filmmakers have made this for the purposes of near-term celebration rather than long-term understanding."
    KC's View:
    That's a shame. The battle between Arthur T. Demoulas and his cousin, Arthur S. Demoulas, was often cast in black-and-white and simplistic terms, and it always seemed clear to me that this wasn't fair to either side. Instead of waiting for the movie, we'll have to wait for the book ... which hopefully will get into the nooks and crannies of the contentious and controversial story.

    Published on: April 15, 2016

    • The Food Marketing Institute (FMI) announced that Susan Borra, RD, senior vice president for Communications and Strategic Planning, has been named as chief health and wellness officer and executive director of the FMI Foundation.

    She will be succeeded by David Fikes, the organization's vice president, Consumer/Community Affairs & Communications.
    KC's View:

    Published on: April 15, 2016

    ...will return next week. Really. I mean it.
    KC's View:

    Published on: April 15, 2016

    Hulu, the cable-and-streaming network, has available for streaming an ambitious adaptation of 11.22.63, the Stephen King novel about a time traveling English teacher who returns to the early sixties in order to stop the assassination of President John F. Kennedy and put right much of what he sees as wrong with the world.

    As in the book, the protagonist is Jake Epping, a recently divorced thirtysomething Maine high school teacher, who discovers a kind of “rabbit hole” that allows him to travel back in time to September 9, 1958, at 11:58 am. He can spend as long as he wants there - a minute, an hour, a year or a decade - and when he returns to the present, it will always be two minutes later than when he left. (Though he will have aged the actual amount of time he was gone.) For Epping to succeed, he will have to live in the early sixties for five years, submersing himself in the time and culture while doing everything he can to stop JFK's murder without changing the timeline in any other ways.

    I don't always love King's work, just because it isn't my favorite genre, but I really liked this book - it seemed more rooted in reality, and I'm a big fan of time travel stories. The eight-part TV series version diverges from the book in some ways - compressing some elements and expanding others - but it struck me as faithful to the tone without being slavish to every plot element, which is what all good adaptations from one media to another should be.

    Oddly enough, my biggest problem with the TV version is the actor who plays Epping - James Franco, who happens to be someone who I only occasionally like on film. (His 127 Hours was one of my favorite films of 2010, but he's not an actor I'll rush out to see at the multiplex.) He just doesn't occupy the center of the film with the kind of actorly charisma that creates instant identification; he seems to view his character at a slight distance, and therefore so do we.

    The major exception to this is in Franco's many scenes with Sarah Gadon as Sadie Dunhill, a woman with whom Jake becomes captivated ... Franco comes alive in those moments, and we feel his passion. (It helps that Gadon, an actress with whom I am unfamiliar, is luminous ... she lights up every scene she's in.) There's also excellent supporting turns by Chris Cooper and Nick Searcy, who brings moments of unexpected pathos to his role as a Texas high school principal. (Watch for his scenes with Tonya Pinkins, which are among the best in the series.)

    The production design is gorgeous, and the writing and direction are first-rate, as befits a series produced by the estimable JJ Abrams. 11.22.63 is an excellent piece of work, not without flaws, but diverting, occasionally provocative, and certainly worth your time and consideration.

    That's it for this week. Have a great weekend, and I'll see you Monday.

    KC's View: