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    Published on: January 4, 2017

    by Michael Sansolo

    As a lifelong gym rat, I have to admit that this week starts what is both my favorite and most hated month of the year. Here’s why:

    For the next four weeks I know my gym will be more crowded than usual thanks to all the newbies showing up to fulfill resolutions to get in shape. So for one month I get to have a strange feeling of satisfaction as the people next to me can’t work out as hard as I do. At the same time, all these new people jam up the parking lot.

    From experience I know the rush won’t last. By mid-January the ranks will start to thin and by mid-February the crowds will be gone for good.

    My observation on this is hardly rare. There are countless articles on the web this week offering strategies for starting a sustainable workout routine. Essentially it comes down to this: start with small steps and build from there. Or don’t mimic the person quoted in the Washington Post whose goal involves training to climb Mount Everest.

    Big, audacious goals are wonderful, but sometimes just getting into first gear is the best place to start.

    That is a great lesson for all of us in business. All sectors of the food industry have a lengthy to-do list for 2017. There’s clear recognition that the world is changing and the challenges are getting daunting, but there’s no magic bullet solution. Rather, it’s going to take many steps - small and large, but mostly difficult.

    E-commerce is no longer a plan; it’s increasingly becoming a reality. The odds of you (or anyone) getting it perfectly right this year are slim, but surely you need to think about what approach you will take as a start.

    Likewise, new competitors are always coming. If they’re entering your market, hopefully you’ve started planning already; if they aren’t, you still need to consider how the marketplace might change and how you need to shift with it.

    And consumer behaviors are constantly growing more fragmented, putting pressure on you to better use analytics so you can better align with those desires. Beyond that you need to better understand changing employee needs, technological advancements, logistics and more than we want to consider.

    It’s a huge list of challenges and you need to get working on all of them and that’s why we need to consider the laws of inertia: that a body at rest tends to stay at rest, while a body in motion stays in motion. The trick is to get started.

    So think about those lessons from the gym. Start small to get motion and momentum going. It’s great to dream of climbing Everest. The goal may seem both grand and glorious, but also likely very unachievable.

    Instead, think about small steps, maybe better engaging your entire team to build an environment of improvement, importance and urgency.

    Remember, a climb up Everest, like all journeys, begins with small steps.

    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 on Amazon by clicking here. And, his book "Business Rules!" is available from Amazon by clicking here.
    KC's View:

    Published on: January 4, 2017

    by Kevin Coupe

    AdWeek has a story about how artificial intelligence-empowered systems are invading the retail space.

    For example, "Last December, The North Face started piloting a website that greets coat-seeking shoppers with a series of questions - like where and when they plan to use the coat - to create contextual product recommendations. Shoppers who use the AI tool convert more often than those who do not ... What's more, The North Face's shoppers are queried after they use the AI tool to learn if they would use it again. Three out of four customers say yes, they would. After a year's worth of testing, Bouchard says she's now looking for ways to build content - like say, a travel guide about the location where someone is going - into the site."

    At the same time, the story says, "The next time you want a triple venti soy no-foam latte, don't be surprised if you place your order by talking to your smartphone. Indeed, typing is so 2014 for digital-savvy Starbucks, and AI-powered, voice-activated apps are the new red-hot piece of technology."

    In 2017, AdWeek writes, Starbucks "will up the ante on ordering by building a Siri-like virtual assistant into its (mobile) app. The feature - dubbed My Starbucks Barista - allows users to place their order by tapping a button and talking to the virtual barista. The bot then pings the order to a nearby store where an employee makes the drink. Users can then pick it up within minutes, bypassing stores' long lines to the cash register." It isn't that different from the mobile app as it currently exists, except with no typing - which seems to be the secret sauce that many companies are pursuing.

    I find this stuff fascinating, though I'm not suggesting that everybody has to adopt AI technology to the same degree. What I am saying is this technology is changing the face of competition and consumer perception ... and if companies don't have it, they damned well better have a compelling alternative.

    Because that's what consumers increasingly will want. And businesses better have their Eyes Open.
    KC's View:

    Published on: January 4, 2017

    Business Insider reports that "retailers are bracing for a fresh wave of store closures at the start of the new year. The industry is heading into 2017 with a glut of store space as shopping continues to shift online and foot traffic to malls declines, according to analysts."

    The story goes on to say that "nearly every major department store, including Macy's, Kohl's, Walmart, and Sears, have collectively closed hundreds of stores over the last couple years to try and stem losses from unprofitable stores and the rise of e-commerce.

    "But the closures are far from over.

    "Macy's has already said that it's planning to close 100 stores, or about 15% of its fleet, in 2017. Sears is shuttering at least 30 Sears and Kmart stores by April, and additional closures are expected to be announced soon. CVS also said this month that it's planning to shut down 70 locations.

    "Mall stores like Aeropostale, which filed for bankruptcy in May, American Eagle, Chicos, Finish Line, Men's Wearhouse, and The Children's Place are also in the midst of multi-year plans to close stores.

    "Many more announcements like these are expected in the coming months."
    KC's View:
    This shouldn't be a surprise to anyone, though I think it'd be a mistake to ascribe it only to the growth of e-commerce. I think in a lot of these cases it is because the businesses did not continually reinvent their retailing entities ... they got complacent. And then irrelevant.

    There is no retailer out there who should think that this cannot happen to them. Because it can.

    Published on: January 4, 2017

    The Seattle Times reports this morning that more than two billion items were shipped by the Fulfillment by Amazon program during 2016, essentially doubling the number of items sold in 2015 by third parties on Amazon and then shipped by the e-tailer.

    Additionally, the story says, "Amazon said that there were 70 percent more sellers using Fulfillment by Amazon (FBA), which not only pads Amazon’s revenues but also gives it a tighter grip on customer satisfaction."

    The Times also notes that Amazon said "third-party sellers received orders for more than 28 million items on Cyber Monday. That’s up from 23 million items in 2015."
    KC's View:
    This is an enormous advantage for Amazon, both in terms of its ecosystem expansion and its ability to generate revenue. And I would imagine that it will try to be even more essential to these companies' businesses as it expands into the shipping lanes, supplementing/replacing services offered by entities such as FedEx and UPS.

    Published on: January 4, 2017

    Ahold Delhaize-owned Peapod is out with a new survey from ORC International saying that "the home cooking trend - 72% of Americans already report cooking at home four nights or more per week in 2016 – is not slowing down for 2017. In fact, over a third of Americans surveyed (34%) are planning to cook dinner at home even more in the New Year! Leading the cooking movement are Millennials, who are twice as likely as their older counterparts (49% of Millennials vs. 24% of Boomers) to make this a resolution for 2017."

    The survey goes on: "Of those that cook at home, 53% would like to meal plan more in 2017. It seems Americans think a little more planning will pay off for many reasons. The top three reasons for meal planning are to save money (60%), eat healthy (59%) and waste less food (55%)." And, the survey says, 51 percent of Americans say they "would prepare dinner at home more often if they had new ideas. Millennials need the most inspiration at 63% compared to the more experienced Boomers at 42%."
    KC's View:
    So, people want to cook at home ... but they also want some inspiration and even instruction. (Gee .. does this sound like they want a resource for information as well as a source of product? That's what it sounds like to me...)

    This is an enormous opportunity for retailers. It is what companies like Blue Apron are tapping into, and I suspect there will be a lot more competition in this space.

    Published on: January 4, 2017

    Time reports that Whirlpool announced yesterday that it will shortly begin shipping new appliances - such as ovens, refrigerators and washing machines - that are compatible with Amazon's Alexa voice activated computer system.

    According to the story, "This means these appliances will be designed to respond to voice requests for tasks like pausing and starting a load of laundry, asking for the time remaining on a wash cycle, adjusting the cooking mode on a smart oven, and turning on maximum cool settings for refrigerators among other commands."

    People who want to access their appliances via Alexa will have to have Amazon hardware - the Echo or Echo Dot, for example - to make the system work.

    Time goes on: "Amazon’s competition in the smart home space will likely thicken as companies like Apple and Samsung continue to develop their own smart home ecosystems and virtual butlers. Samsung acquired Viv Labs last year, a company that makes an advanced voice assistant, and Apple expanded Siri’s capabilities to work with third party apps and services last fall."
    KC's View:
    Not to mention the fact that Amazon is working with Ford and BMW, among others, who install Alexa technology into cars.

    It's going to be Alexa's world, and we'll just be living in it.

    Published on: January 4, 2017

    The New York Times has a story about how "a slew of major American brands — including Honey Maid, Microsoft, Chevrolet, YouTube and CoverGirl — prominently featured everyday Muslim men, women and children in their marketing last year. While such ads were apolitical in nature, focused on themes of community and acceptance, they were viewed as bold, even risky, in a year when there were campaign statements by Donald J. Trump about a Muslim registry and a ban on Muslim immigrants."

    Perhaps most notable was the Amazon holiday commercial, which we reported on here.

    The Times writes that "several advertising executives likened the movement to the decision by mass marketers to cast same-sex couples and their children in ads for the first time in 2013 and 2014, making inclusion and acceptance a priority over potential criticism from some customers." And the Amazon experience demonstrated how positive such efforts can be - the ad went viral, and most people seemed to respond positively to the message of respect and inclusion.

    That said, it isn't always the case. The Times writes that "ads showing any kind of racial diversity can now attract heaping amounts of vitriol online — most of it delivered anonymously — as State Farm discovered last month when it posted an ad of a black man proposing to a white woman on Twitter. Anti-Muslim remarks, like 'they don’t belong here,' peppered the comments under Chevrolet’s video in June of two twins from Los Angeles, named Ruqaya and Qassim, who were accepted into a soccer program the company sponsors. They were 8 years old when the video, which did not mention religion, was made."
    KC's View:
    I love these sorts of commercials, and try to bring them to MNB when I get the opportunity. The fact is that we're living in a far more diverse and multicultural world than in the past, and I think companies are smart to recognize and embrace it.

    Though, as our next editorial story points out, it is possible that such decisions can land companies in hot water.

    Published on: January 4, 2017

    There are a piece in The New Yorker that I think is worth checking out about how companies are navigating new and sometimes treacherous political waters, when controversies can emerge, boycotts can be called for, and headlines can result - and that even being neutral sometimes doesn't work.

    In The New Yorker, James Surowiecki writes that "thanks to social media, boycotts are easier to organize than ever. They used to face a classic collective-action problem: taking part makes sense only if everyone else is. Unlike a street protest, a boycott isn’t inherently visible: you can’t really watch someone not buying Frosted Flakes. Now you can see how many people have signed online pledges, and view videos of burning sneakers. All this helps project a feeling of momentum and critical mass, which in turn attracts more participants."

    You can read The New Yorker piece here.
    KC's View:

    Published on: January 4, 2017

    Rarely has someone been banned from a coffee shop and gotten so much attention.

    But that's what happened recently when a 37-year-old man was banned from a Spokane, Washington, Starbucks when he hit on a 16-year-old female barista there. According to various news stories, the man engaged in conversation with the barista while she was making his coffee, and then slipped her a note in which he asked her out on a date.

    The next day, when he returned to the Starbucks, there was a local policeman there who told him that he was no longer welcome to patronize the store; management had gone to the police after determining that the note was inappropriate.

    Now, the man has gone on Facebook to complain of ageism in his treatment.

    "“I know the female Starbucks barista was of legal age to date," he wrote. "I broke no laws. I merely took a chance with my heart. I’m tired of hearing the word ‘creep’ as any black person or gay person is tired of hearing certain words. I have a whole webpage dedicated to age gap love."

    A Starbucks spokesperson says that the company approves of how local management handled the situation.
    KC's View:
    Count me among the many, many people who have absolutely no interest in reading this creep's webpage about age gap love.

    Sixteen may be "legal," but it also means she could've been a high school sophomore - and she ought to be able to work a part-time job without some creep who is more than two decades older hitting on her.

    He's lucky it wasn't my daughter. Because my inclination would've been to deal with him myself the next day. (I have a baseball bat that I keep around the house for just such purposes.)

    He doesn't want to be called a creep? Then he should stop acting like one.

    Published on: January 4, 2017

    TechCrunch reports that Coca-Cola has decided to shut down the program that the company used to nurture and fund startups, hoping to be able to take advantage of some of those entities' entrepreneurial energy. The Founders Program, as it was called, apparently did not work as well as hoped in terms of applying cool startup ideas to the larger corporation's culture.

    The dozen or so companies that got funding from The Founders Program will continue to receive support from Coke, but just not through the now-shuttered division.

    Bloomberg reports that "Starbucks Corp. is poised to overtake McDonald’s Corp. as the world’s most valuable restaurant company, and the coffee giant could ultimately have 50,000 locations -- more than any current chain. That’s the prediction of Nomura analyst Mark Kalinowski, who named Starbucks his top restaurant stock for 2017 in a report on Tuesday. He estimates that the company will increase its worldwide restaurant count by 8.4 percent this year and boost same-store sales by more than 5 percent."
    KC's View:

    Published on: January 4, 2017

    We had a piece yesterday about how many companies are engaging in mergers and acquisition as they seen innovation and inspiration, and I commented:

    Of course, gaining inspiration and innovation is not just about writing checks. One of the things that companies have to do is be willing to absorb culture and lessons that will make them better - mergers and acquisitions only really make sense if at the end both entities are more effective and efficient as a result.

    To which MNB reader Tom Murphy responded:

    Your comments are right on.  I have a friend who worked for Hewlett Packard on acquisitions.  He got so frustrated by HP buying up hundreds of little start-ups and then burdening them with administrivia, legacy company constraints, and conflicting cultures…all of which led to employees leaving and HP winding down the business.  Having worked on M&A’s for years, I can tell you that most fail because the two C-suites think the deal is done when the ink dries!  Unfortunately, changing human behavior occurs one person at a time, and over many months…generally well beyond the timeframe in the deal benefits spreadsheet and what was promised to the board and shareholders.

    On another subject, one MNB reader wrote:

    The article on the Arkansas prosecutor serving Amazon with a search warrant for info from an Echo smart speaker finalized for me that I will not have it in my home. Despite all the conveniences Alexa may offer, the thought that of a device that is “always listening” to what is happening in my home is frightening. It is a short leap to some inquisitive Amazon-ian deciding they would like to ‘listen in’ to some unsuspecting subscribers’ homes  – perhaps mine or yours (which would quickly bore them), so they move on to a CEO, U.S. Senator or President’s Chief of Staff. Perhaps it is the paranoia developed from having spent part of this past weekend watching old episodes of The Twilight Zone on the SyFy channel, but I’ll steer clear for now.

    Yesterday, MNB took note of a Wall Street Journal report that despite Amazon's apparent momentum toward world domination, 17 percent of US primary household shoppers say they never shop on Amazon. And, "while the percentage has steadily declined over the past five years, roughly 22 million American households didn’t use the retailer this year."

    I commented:

    There are about 125 million US households. Just 22 million of them didn't use Amazon this year. I suspect that Jeff Bezos probably is pretty okay with that.

    MNB reader Joe Axford responded:

    He probably is happy KC, but I'm sure he's trying very hard to figure out how to get those 22 million into the Amazon ecosystem!

    From another reader:

    I have to admit, until recently, I've been one of those 22 million households. Then I signed up for Prime, justifying it on movie/video streaming and some shipping savings. Then I installed their app on my iPad and the whole world of buying suddenly changed. I've bought more from Amazon in the past 60 days than I probably have in the past 2 years. That app is super easy to use and truly 1-button buy. I still price compare b/c they're not always competitively priced but, they've hooked me.

    Resistance is futile.
    KC's View:

    Published on: January 4, 2017

    There is a piece in The New Yorker that I think is worth checking out about how companies are navigating new and sometimes treacherous political waters, when controversies can emerge, boycotts can be called for, and headlines can result - and that even being neutral sometimes doesn't work.

    In The New Yorker, James Surowiecki writes that "thanks to social media, boycotts are easier to organize than ever. They used to face a classic collective-action problem: taking part makes sense only if everyone else is. Unlike a street protest, a boycott isn’t inherently visible: you can’t really watch someone not buying Frosted Flakes. Now you can see how many people have signed online pledges, and view videos of burning sneakers. All this helps project a feeling of momentum and critical mass, which in turn attracts more participants."

    You can read The New Yorker piece here.
    KC's View: