business news in context, analysis with attitude

Published on: April 17, 2018

by Michael Sansolo

Compete, as we are fond of saying, is a verb. So is the word win.

It is abundantly clear in the business world today that winning is harder than ever. Nearly every day the news carries more stories of companies and sectors being relegated to oblivion by the new forces of consumer change and emerging technologies that enable vastly new behaviors and competitors.

It’s enough to make anyone consider giving up, but instead, consider taking new and unexpected directions.

A few months back I read a wonderful quote about competition from retired tennis champion Mat Wilander. Wilander said, “Against the top players, you can’t play the game you want to play. You have to play the game they don’t like.”

It’s a sentiment worth considering. To give it context, Wilander was discussing Roger Federer, the seemingly ageless tennis great who has managed to sustain play at a high level even at age 36, when most top tennis players are years into retirement.

In many ways, sports are a poor model for business success. After all, in sports are played under specific rules and always on a level playing field. In business the rules are constantly being re-written and somehow the playing field seems to constantly shift, invariably away from all of us.

But Wilander’s comment merits consideration. It would be easy if success came from only doing those things you like to do and are good at doing. Even the most innovative company can probably count on that good fortune for only a short time. Advantages, as we know, are fleeting.

Instead, you need to focus on shifting the game, creating advantages for yourself. Increasingly that seems to rely on finding a way to create connection and experiences that others can’t easily replicate. It means fully understanding your strengths and weaknesses and learning, as the old song reminds us, to accentuate the positive whenever and however possible.

As we do that, let’s remember that what once was competitive advantage might not cut it in today’s environment against today’s competition. Federer would never play with a tennis racket from the 1970s and neither should you rely on old tools. If your main marketing vehicle is a newspaper ad, that appeals to my sense of nostalgia, but it misses the huge portion of your potential audience that gets all news and information through social media. You need to constantly update.

As one last metaphor for this story, I’ll borrow a chapter from the book Kevin and I co-wrote, “The Big Picture, Essential Business Lessons from the Movies.” The chapter concerns the first movie in the now endless Pirates of the Caribbean series.

In the movie our hero, William Turner, finds himself constantly bested by the pirate captain Jack Sparrow. In his frustration, Turner says, “You’d never beat me in a fair fight.” Sparrow responds, “That’s hardly incentive to fight fair.”

Or to Wilander’s point, make the competition play the game they don’t like. It may mean pushing service, organics, local connections, price or whatever. It’s not about cheating (we’re not pirates after all) but it means identifying and exploiting advantages.

That’s the path to winning.


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: April 17, 2018

by Kevin Coupe

You may remember that a couple of months ago I did a FaceTime commentary from the new Apple Store in Chicago, relocated to the banks of the Chicago River at Michigan Avenue, overlooking the River Walk and Esplanade.

My point at the time was that, as spectacular as the new store is and as dedicated as I may be to Apple products, I’ve not yet been persuaded that I need the company’s new HomePod smart speaker system, and certainly not that I should think about replacing the Alexa-powered Amazon speakers in which I’ve already invested. I actually was surprised that, when talking to one of the folks working at the Apple Store and giving him a chance to make the case, he was honest enough to say that that he couldn’t. (Not yet anyway. He left open the possibility that future upgrades would provide him with a compelling argument.)

Now Barron’s reports that things have not gotten much better - Apple apparently “has scaled back its sales forecasts for the device as its market share has slipped … March numbers from Slice Intelligence reported a strong debut for the HomePod but put its share below 1%, well below that of a number of Amazon devices, among others. At a time when the smart speaker market is growing quickly, investors might’ve expected a warmer reception.”

Now, the story cautions that it isn’t all bad news - that there will be updates and improvements that will make the HomePod more attractive and work out whatever kinks it may have (I’ve heard that before), that it will have the 2018 holiday season to build sales (it came out too late for the 2017 holidays), and that Apple might even “produce a new, smaller, cheaper device” to build the HomePod brand.

All true.

But, Barron’s also points out that “the broader logic around smart speakers these days” seems to be that “big companies (are) racing to get them into as many homes as possible, giving them a peek at the potential of smart home technology.” These big companies want to get a head start on providing smart home technology to the masses, believing that a first mover advantage will add up to long-term relationships and sustained sales.

And, the story makes the following concluding point: “Amazon’s Echo, particularly, introduced millions to a category of product most probably didn’t even realize they wanted before it existed—and helped digital assistant Alexa rival or even surpass, in the cultural consciousness sense, Siri. HomePod flop or not, that‘s seems like a fight Apple needs to be in.”

I agree. The painful reality these days is that competitive windows are not open forever. The person and/or company that gets through them first often has the ability, more than in the past, to close it just a little bit to the people and/or companies that are late to the party.

The Eye-Opening point, I think, was made by Leonardo da Vinci, who once spoke of “the urgency of doing.”

“Knowing is not enough; we must apply,” he once said. “Being willing is not enough; we must do.”

Published on: April 17, 2018

On top of its announcement last week that it plans to hire 11,000 people across the country, including people who can fill out 2,000 management positions, Kroger said yesterday that it is making “new investments in employee benefits, education and wages as retailers across the board are spending more on their employees to keep pace in a tighter labor market,” CNBC reports.

According to the story, “Among the new initiatives, Kroger is introducing a Feed Your Future program to support continuing education for all part-time and full-time associates following six months of employment. As part of the program, Kroger will offer up to $3,500 annually ($21,000 over the course of employment) to support educational advancements like high school equivalency exams, professional certifications and advanced degrees. The grocer is offering employees the opportunity to take leaves from work for these educational pursuits while maintaining their role and seniority … It is also increasing the company match for its 401(k) program to 5 percent, up from 4 percent previously. It is expanding its employee discount program for associate shopping in its stores. It is investing $5 million more into its Helping Hands program, an internal fund to aid associates during hardship.”

Kroger CEO Rodney McMullen tells CNBC that “what we found through our research is people are incredibly interested in education and fearful of debt. And the other part is we thought [that] it is important to support that ... in terms that it will help you get your GED, English as a second language [classes], or a college degree or MBA or whatever works for you.”

Published on: April 17, 2018

The Wall Street Journal reports that Walmart “wants its website to look less like a Walmart store,” and plans “to redesign the site next month by decluttering the product listings, de-emphasizing the Walmart name and using a lot less bright blue. Executives say the goal is to make a site that appeals to higher-end brands and encourages shoppers to browse for products.”

Rather than the traditional Walmart logo, the story says, “the new home page will highlight only a small yellow ‘spark,’ the internal name for Walmart’s star logo. Instead of seeing a hodgepodge of products, shoppers will more often see which products are selling best in their city or past purchases that can be reordered quickly, shown with high-quality photos of people using products.”

Marc Lore, chief executive of Walmart U.S. e-commerce, tells the Journal that the redesign “is meant to be cleaner and more modern and more appealing such that we are able to open up more relationships with brands … It allows us to broaden the assortment we are able to offer.”

Published on: April 17, 2018

CNBC reports that Amazon “has shelved its plan to sell and distribute pharmaceutical products after considering it last year,” but instead will focus, through its Amazon Business division, “on selling less sensitive medical supplies to hospitals and smaller clinics.”

The CNBC story says that the change “comes partly because Amazon has not been able to convince big hospitals to change their traditional purchasing process, which typically involves a number of middlemen and loyal relationships. Moreover, Amazon would also need to build a more sophisticated logistics network that can handle temperature-sensitive pharmaceutical products, according to these people.”

However, the decision is not set in stone: “Multiple reports have speculated that the company will someday add a direct-to-consumer prescription drug business,” CNBC reports. “Amazon Business could also reconsider getting into the pharma space once it gains more scale, multiple people said.

“Meanwhile, the company continues to explore other health-care projects through different teams across the company, including Alexa and the secretive Grand Challenge team, sometimes referred to as ‘1492’.”

Published on: April 17, 2018

National Public Radio’s The Salt has a story about a study of food waste conducted by The Center for Biological Diversity and The "Ugly" Fruit and Veg Campaign, which asked “the 10 largest US supermarkets how they handle food waste, and gave each store's efforts a letter grade … Letter grades took three overarching categories into account: how much public information a store shared about food waste, what it was doing to prevent food waste, and where its discarded food went.”

Not one company got an A.

According to the story, “Walmart ranked highest with a B. Kroger, Albertsons and Ahold Delhaize, the parent company that owns Food Lion and Stop & Shop, all got Cs. Costco, Publix, Whole Foods, Trader Joe's and Target all got Ds, and the German-based discount grocer ALDI got an F.”

You can check out the entire story, and find out more and best - or at least better - practices here.

Published on: April 17, 2018

The Associated Press reports that pizza chain Domino’s will begin delivering pizza and other food items to customers at US beaches, parks and landmarks: “Domino’s said it will deliver to 150,000 outdoor locations including under the Gateway Arch in St. Louis; by the Las Vegas welcome sign; or next to a statue of soul singer James Brown in Augusta, Georgia. The locations show up in the company’s app or website as ‘Domino’s Hotspots’.”

The story goes on to note that “delivery is a key part of the company’s business, and it has been aggressive in making it easy to order through tweets, text messages and Amazon’s voice-activated Echo. But competition has grown from other fast-food chains that are offering more delivery options. McDonald’s has a deal with online service UberEats, and the parent company of KFC and Taco Bell recently teamed up with Grubhub to expand delivery.”

And so, the pizza chain had to take delivery to the next level: “Drivers will pull up to the curb to meet customers, Domino’s said, and people can tell the app what they’re wearing so they’re easier to spot.”

Published on: April 17, 2018

• Variety reports that “Netflix once again beat expectations on subscriber growth, packing on 7.4 million net streaming customers worldwide for the first quarter of 2018.” Netflix, the story says, “added 1.96 million net U.S. streaming subscribers and 5.46 million internationally for the quarter ended March 31. The company’s total net gain of 7.4 million subs in Q1 — a new record for the first quarter — topped its previous guidance of 6.35 million by more than a million. The company counted 125 million subscribers worldwide as of the end of March.”

Published on: April 17, 2018

• The Washington Post reports that a new report from investor research firm Moody’s says that “bankruptcies in the retail sector were at a record high during the first quarter of 2018. There were nine defaults in the sector - including Sears and Claire’s - during the three months ended March 31. Tops Friendly Markets, a supermarket chain, and the Bon-Ton department store chain also filed for bankruptcy during the period. The only non-U.S. default that occurred in the first quarter was Britain-based BrightHouse Group, which sells rent-to-own refurbished sofas, televisions and refrigerators.”


• Crain’s Detroit Business reports that Meijer is rolling out a new “Scan & Go” program that “allows customers to scan products with their phone and bag them as they shop so that once they hit the checkout, all they have to do is scan their phone once more and pay.”

Meijer began testing the system in seven stores last November, and will have it in all 235 of its stores by the end of the summer.

Published on: April 17, 2018

• CVS announced that Kevin Hourican, CVS Pharmacy’s executive vice president of retail pharmacy, has been named president of CVS Pharmacy. He succeeds Helena Foulkes, who went over to Hudson’s Bay as its new CEO.

Published on: April 17, 2018

Harry Anderson, who parlayed an occasional guest spot as grifter Harry ‘the Hat’ Gittes on the TV series “Cheers” into the lead role as Judge Harry Stone on the sitcom “Night Court,” which ran on NBC for nine seasons, has passed away at age 65. No cause of death has yet been announced.

Published on: April 17, 2018

We had an email yesterday from an MNB reader who had some complaints about a Starbucks experience that did not live up to the brand promise.

Another MNB reader responded:

It's fashionable to hate on Starbuck's these days. I still remember when coffee was almost uniformly terrible - Starbuck's was the first chain to popularize the idea, nationally, that coffee should actually taste good. (The local exception in my youth was George Howell's Coffee Connection...acquired by Starbuck's.) So I think I know what Jim Swoboda must have been feeling when I woke up early to visit the Starbuck's Reserve in my Washington DC hotel lobby. And it was...underwhelming. Asking the staff behind the counter what made it a Reserve, their answer that, "Sometimes we get new coffees to try, and we have a Clover," didn't get me excited. And they were consistently out of the nitro cold-brew. When your flagship store is no better than the location down the street you should be worried.

Agreed.

Of course, complaining about the coffee at Starbucks doesn’t seem all that big a deal compared to the two African-American gentlemen at a Philadelphia Starbucks who appear to have been arrested for waiting-while-black. (The police were responding to a call from store staff - the fault seems to entirely rest with the employees, not the authorities.)

We had the story yesterday, promoting one MNB reader to respond:

Suggests racial bias??? It was clearly racial discrimination!

Starbucks should give these people free coffee for life along with a public apology, in my opinion.

That may be the least of what they get.

Published on: April 17, 2018

On the cold, windy and rainy day that was one of the worst in recent history for the running of the Boston Marathon, Desiree Linden became the first American woman to win the race with a time of 2 hours, 39 minutes, 54 seconds.

On the men’s side, Yuki Kawauchi was the winner, with a time of 2:15:58.

Published on: April 17, 2018

Tom Murphy, an industry veteran who, with companies like Kroger and FedEx, and later as a consultant to major retailers, has helped companies develop IT and logistics strategies, as well as enabling them to engineer disruptive cultures and become change agents, joins Tom Furphy and Kevin Coupe for a two-part Innovation Conversation Podcast.

Part One looks at the difference between stopgap tactics and long-term strategies - and how to make tough choices in demanding times, while Part Two focuses on the retailers best positioned to compete with Amazon, the places where Amazon is most vulnerable, and what the biggest impediments are to innovation by traditional retailers.

This two-part podcast can be played below, or can be accessed and subscribed to on both iTunes and GooglePlay.

This Innovation Conversation Podcast is sponsored by ReposiTrak, and brought to you by GMDC.