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    Published on: May 1, 2018

    by Michael Sansolo

    There are countless things we don’t know about the future simply because we can’t possibly imagine the direction or potential of technology, competition or consumer demands.

    But there is one thing we do know: demographics. We know exactly how many 12 years olds there are today, which in turn allows us to know with fair certainty how many 22 year olds we’ll have in 10 years or 32 year olds in 20 years.

    Demographics tells us this as well: the enormous Baby Boom generation (me included) is getting old and over the next few years will retire in massive numbers leaving a huge deficit of management talent in business. We also know that Generation X is much smaller and so cannot possibly fill all those positions. For that reason we know, with certainty, that Millennials or Gen Y will have to help fill in.

    So when we talk to Gen Y, we are talking to the future.

    Last week I had that opportunity when I got to interview a panel of four young executives (three Ys and one Xer) at the Minnesota Grocers “Industry Connects” conference. While the four obviously don’t represent everything about their generation (no one could) their comments were worth hearing well beyond the meeting room in Minneapolis.

    Let’s examine three specific areas they highlighted, touching on technology and the essence of what companies will have to do to connect with future staffers and shoppers.

    First, don’t underestimate the power of Instagram. All four cited the visually heavy social site as having the most potential for the industry thanks to the ability to display photos of products in ways that can lead to recipes and menu ideas. If nothing else, their comments remind everyone that a social media strategy needs to go much further than Facebook posts.

    Second, authenticity is essential. All four said potential staffers and shoppers all put a premium on companies clearly and honestly representing themselves and their products. Plus, all four said they believe the food industry has a wonderful story to tell about products, people and services and needs to do it ever better.

    But third, and maybe most importantly, was their opinion on what companies (and maybe the industry) need do to retain good young workers. Simply put it comes down to connections and engagement. The panelists talked about the importance of involving younger staffers in decision-making, recognizing that what they lack in experience they may replace with new ideas. (Such as the importance of Instagram.)

    All four also talked of the importance of mentoring, that is, finding people in their companies or the industry at large who can help them better understand the turf and build their careers. That sounds like a recipe for a great initiative inside companies or the industry as a whole.

    None of their comments sounded to me as the rantings of entitled younger people. They sounded serious, committed and sensible. Frankly the only way I was bothered was the reality that I was older than any two of them added together.

    Here’s the thing: as Back to the Future tells us, we may not need roads in the future, but we’ll certainly need people. Luckily they are here already and can help if and when we choose to listen. Demographics can’t can don’t lie.

    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: May 1, 2018

    by Kevin Coupe

    Yesterday I had the chance not just to deliver the opening keynote at the annual Food Marketing Institute (FMI) Financial Executive and Internal Auditing Conference in Palm Beach, Florida, but also to moderate a panel discussion about The Changing Role of the CFO.

    It was somewhat amusing to Mrs. Content Guy that I was speaking at a financial conference being held at the PGA National Resort & Spa - largely because I don’t play golf and am, to put it mildly, math challenged. But I was glad to be there, and not just because it actually was warm. (A week ago I was giving a speech in Buffalo, and had to drive through the snow to get there.)

    My panelists were Michael Lockard, CFO at K-VA-T Food Stores, Clay Oliver, CFO at Brookshire Brothers, and Rick Marino, CEO at the Stores Consulting Group, which does a lot of work on the finance side of the retail sector.

    Over the years, I haven’t always been generous of spirit when it comes to finance folks, characterizing them as being so focused on money that they often lack a larger strategic vision. (I always tried to avoid the words “bean counters,” though.)

    My panel disputed that this is the case today, saying that reality has created a scenario in which CFOs are able to play larger roles within their organizations, working on a much broader portfolio of projects.

    At K-VA-T, for example, Lockard said that he even works on the site selection committee; he said that his background in both logistics and IT - he previously worked for Walmart and UPS - has given him the ability to expand his sphere of influence, though he has taken care to make sure that he has earned credibility and is not seen as an interloper.

    Lockard also had the money quote (pun intended) with which I want to leave you this morning, saying that while in the old days it often was the CFO’s role to say “No,” today he finds that his role is to say, “Yes, if…” In other words, to embrace change while establishing appropriate guard rails and discipline.

    That strikes me as an Eye-Opener.
    KC's View:

    Published on: May 1, 2018

    The National Retail Federation (NRF) is out with its quarterly Consumer View report, looking at how Millennial parents “shop, spend and engage with brands differently than parents in other generations.”

    Millennials, the report notes, “are parents to 50 percent of today’s children,” and “more than 1 million millennial women become new mothers each year … millennials make a significant contribution to the $1 trillion U.S. parents spend annually on raising their children.” They also are a relatively affluent and educated group: “40 percent hold a graduate degree, or more than double the 19 percent of other parents, and 69 percent of respondents earn more than the national median income of $59,000 a year, compared with 53 percent of other parents.”

    Some excerpted study results:

    • “With so much information available on mobile devices, millennial parents turn to their smartphones at every point during shopping. The study found 78 percent use their phones to research products (compared with 58 percent of other parents), 75 percent to check prices or availability (also compared with 58 percent) and 71 percent to pay at checkout or place an order (51 percent). In addition, 71 percent will leave a review, process a return or chat with customer service after purchasing, compared with 43 percent of other parents.”

    • “Once a brand gains the loyalty of millennial parents, they are much more likely to stick with it than other parents. The survey found 49 percent remain loyal to a brand despite cheaper options, compared with 30 percent of other parents. And 52 percent will remain loyal despite more convenient options, compared with 35 percent of other parents, and 64 percent will shop at a brand they are loyal to before looking at a competitor, compared with 54 percent of other parents.”

    • “Millennial parents are often in a hurry, and 86 percent have used same-day shipping compared with just 67 percent of parents from other generations. And they’re willing to pay for convenience – only 53 percent expect free shipping on small orders under $50 compared with 66 percent of other parents. Subscription services – which can supply automatic refills and discounted prices on items such as diapers, formula and baby wipes – are used by 40 percent, compared with 18 percent of other parents.”
    KC's View:
    I think the points about loyalty and a willingness to use subscription / automatic fulfillment services tie together, and need to be integrated into companies’ marketing programs. This is a generation that likely is more willing than previous generations to avoid the store when it comes to purchasing products that can be bought anywhere … and go to the store for products that are differentiated and reasons that strike them as compelling. And, apparently they have the education to know the difference and the money to spend when it makes sense to them.

    Published on: May 1, 2018

    In Canada, the Globe and Mail reports that Amazon “plans to create 3,000 new jobs in Vancouver as part of a complex that will be built in a former downtown Canada Post plant, a landmark building in a city that is pushing to be a high-tech hub.” The jobs there will be “focused on e-commerce technology, cloud computing and machine learning.”

    Vancouver did not make the list of finalists being considered to be the site of Amazon’s promised second North American headquarters, dubbed HQ2; Toronto is the non-US city to make that list. However, according to the story, Amazon “says it will expand its work force in B.C.’s largest city to 5,000 in coming years from its current 1,000. Across Canada, Amazon now has 6,000 full-time jobs in B.C., Ontario and Quebec.”

    Jesse Dougherty, Amazon’s general manager of web services, made the announcement at an event that also was attended by Canada Prime Minister Justin Trudeau. Dougherty noted that “Amazon has had considerable success recruiting and hiring Canadians – a mix of experienced coders, university graduates and people who have chosen to live and work in Canada.”
    KC's View:
    I continue to believe that Toronto has an outside shot at getting HQ2 - it is great city, and Amazon might find it to be both welcoming and accepting of its highly diverse workforce. But this also suggests to me that maybe, even if HQ2 goes elsewhere, Amazon is likely to continue to expanding its presence north of the border.

    Published on: May 1, 2018

    In the UK, the Independent reports that Tesco has started selling wine in two smaller sized bottles than traditionally have been sold - one that is the equivalent of four glasses of wine, and one that is equal to three.

    The goal, according to the story, is to “appeal to Brits who are reducing their alcohol consumption.”

    The group seems to be expanding. According to the story, “The smaller bottles come at a convenient time, with Brits drinking less than ever before according to figures from the Office for National Statistics. The rise of teetotalism is particularly prevalent in young adults, with more than a quarter (27 per cent) of 16 to 24-year-olds abstaining from alcohol completely.

    “This figure has risen substantially in the last decade, when 19 per cent of those in that same age group said they didn’t drink alcohol. Meanwhile, one in five Brits of the broader adult population do not drink, with the proportion of adult drinkers at its lowest level since 2005.”
    KC's View:
    A little surprising, though not quite into “I’m gobsmacked” territory. I just think if I were living through Brexit, I’d be drinking more, not less.

    (I wonder if alcohol consumption will go up on May 19. I hear there’s a big wedding planned in the UK…)

    Published on: May 1, 2018

    The Dallas Morning News has a story about Aldi’s continuing efforts to upgrade its US fleet, reporting that its “aggressive nationwide remodeling plans will soon reach a halfway point in Dallas-Fort Worth, where it operates 54 discount grocery stores … The North Texas expansions are part of the grocer's $1.6 billion plan to remodel 1,300 stores nationwide.”

    Aldi, the story says, “has finished upgrades to 17 stores and will start work on another batch of makeovers.” Aldi is spending $66 million just in the Dallas-Fort Worth market, according to the piece.
    KC's View:
    This story should be seen within the context of what’s happening in the UK right now - Aldi and Lidl have combined to erode the market shares of the top four grocers to the point where one of them, Walmart-owned Asda, may be sold to another, Sainsbury. (Walmart would retain 42 percent of ownership.) Now, Amazon has been part of this equation, too, but the attacks by discounters Aldi and Lidl have been a major factor.

    Lidl is hitting the pause button on many of its US plans, but it will get aggressive again. And Aldi is hitting the gas on its US intentions. A semblance of what’s happening in the UK could be seen in the US, and retailers need to be prepared.

    Published on: May 1, 2018

    • Ahold Delhaize-owned Food Lion said yesterday that it is acquiring four Bi-Lo stores from Southeastern Grocers. All four are in South Carolina - two in Myrtle Beach and one each in Florence and Columbia. Terms of the deal are not disclosed.
    KC's View:

    Published on: May 1, 2018

    Content Guy’s Note: Stories in this section are, in my estimation, important and relevant to business. However, they are relegated to this slot because some MNB readers have made clear that they prefer a politics-free MNB; I can't do that because sometimes the news calls out for coverage and commentary, but at least I can make it easy for folks to skip it if they so desire.

    CNBC has a story about how Sen. Marco Rubio (R-Florida), is saying that there is “no evidence” that the recently passed federal tax cut is really helping US workers.

    “There is still a lot of thinking on the right that if big corporations are happy, they're going to take the money they're saving and reinvest it in American workers," Rubio told the Economist. “In fact, they bought back shares, a few gave out bonuses; there's no evidence whatsoever that the money's been massively poured back into the American worker.”

    Rubio, the story points out, voted for the tax cut, which was promoted as being something that would lead to larger corporate profits, which then would result in higher pay for American workers.

    "Senator Rubio pushed for a better balance in the tax law between tax cuts for big businesses and families, as he's done for years,” his office said in a follow-up comment to CNBC. “As he said when the tax law passed, cutting the corporate tax rate will make America a more competitive place to do business, but he tried to balance that with an even larger child tax credit for working Americans.”
    KC's View:
    I bring this up only because it reflects a theme that I’ve tried to return to frequently here on MNB. I’m in favor of tax policy that enables companies to be more profitable, but my concerns about this from the beginning has been that the rewards would be enjoyed by top execs and shareholders, and not so much by front line personnel who make companies, especially retailers, successful.

    By the way, we took note here the other day of a story about a company where this does not seem to be the case - Kroger says it is investing in wages, benefits and employee education, not just in its shareholder rewards. I think that’s admirable.

    Published on: May 1, 2018

    …will return.
    KC's View: