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    Published on: April 9, 2019

    by Michael Sansolo

    The rapper Nipsey Hussle was tragically killed last week and like you, I was filled with questions. No, not about the senselessness of the murder, but rather about how there could be so much attention and concern paid to someone whose name I had never heard before.

    What’s more, and I know I’m not alone in this, was his name somehow a tribute to Nipsey Russell, a comedian I knew of mainly from Hollywood Squares? (The rapper’s birth name was Ermias Joseph Ashgedom. His stage name was suggested by a friend and actually was a play on Nipsey Russell. Go figure.)

    As I said, I had a lot of questions and largely the simple recognition that like everyone else, I only know what I know.

    It’s not just rappers. My son, a classical musician, excitedly texted me recently with the news that he was in Chicago performing with Renee Fleming and Eric Owens. In the world of opera, that is apparently a really big deal.

    A few days later, he texted me (far less excitedly) that his girlfriend - a French horn player - had been hired to play in an upcoming concert with The Who. This time, I got really excited, though a little confused as to why The Who needs a French horn. (Then again, who cares? I now have a connection to some great tickets!)

    But here’s what I think we can glean from all of this. Nipsey Hussle was obviously a really big deal in his community as are both Renee Fleming and the Who, but I’m probably not alone in getting excited about only one-third of those names. Once again, we only know what we know.

    In the immediate aftermath of the invasion of Iraq, then-Secretary of Defense Donald Rumsfeld talked about the challenges US troops were facing in the country. As Rumsfeld put it, some problems were the “known knowns” or issues we knew we’d face. Some were the “known unknowns” or issues we expected to face, but didn’t fully understand.

    Most troubling were the “unknown unknowns” or the problems we didn’t expect and didn’t understand at all.

    In so many ways, that perfectly describes the challenges we all face these days. There are issues we find difficult and maybe troubling, but we at least know what they are. Or maybe we simply know those issues are out there. But what we can’t know is what we simply don’t know at all—those unknown unknowns.

    And that brings us back to an issue we talk about here frequently, the importance of diversity and inclusion of varied and different viewpoints. Nipsey Hussle, Renee Fleming and the Who may not explain everything you and your business faces, but symbolically they explain everything. Somehow you need surround yourself with people who know and appreciate what you can’t or don’t know. Otherwise, none of us have any chance of connecting with the unknown unknowns and who knows how much business we are missing because of that.

    About 10 days ago, I had a Lyft driver who got very excited talking to me about supermarket shopping. Her favorite store is Aldi and not because of prices. In her opinion, Aldi’s meat makes it her store of choice. I’m betting that comment will leave many industry people puzzled, but that’s a real opinion from a real shopper with real needs and values.

    Remember, you can’t possibly understand the unknown unknowns. But you might be able to find someone who can.

    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: April 9, 2019

    by Kevin Coupe

    CNBC picked up on a some new numbers put out by the National Association of Convenience Stores (NACS), which pointed out that “convenience stores experienced a 16th straight year of record in-store sales in 2018, with total sales surging 8.9% to $654.3 billion.”

    Perhaps even more impressively, the industry continues to grow in fresh directions: “produce sales in convenient stores are now about $242 million per year … While this is still a fraction of the $3 billion in produce sold at grocery and big box stores annually, it demonstrates new opportunities for convenience store operators.”

    Another bit of context: While c-stores saw sales go up almost nine percent last year, “growth among large North American grocery chains has been just 2%, according to a recent report by McKinsey,” which projects that “by 2026, $200 billion to $700 billion in grocery sales could move toward other nontraditional channels, like convenience stores.”

    It wasn’t that long ago that the Food Marketing Institute (FMI) came out with its 2019 Power of Produce analysis, suggesting that while “produce is a big, profitable focus for food retailers,” the reality is that “the produce purchase is losing momentum to other channels, and younger shoppers are catalysts for this shift … While traditional grocery maintains a dominant lead in sales, a younger generation shows a greater propensity for supercenters and alternative channels, including online, dollar stores, convenience stores and farmers’ markets. In fact, only 34 percent of older Millennials identified a supermarket as their primary grocery store for produce.”

    C-stores are making their move … they are aggressive and ambitious, and they seem to sense vulnerability.

    This ought to be an Eye-Opener for traditional supermarkets.
    KC's View:

    Published on: April 9, 2019

    The Wall Street Journal reports that Walmart “is expanding its use of robots in stores to help monitor inventory, clean floors and unload trucks, part of the retail giant’s efforts to control labor costs as it spends more to raise wages and offer new services like online grocery delivery.”

    Walmart tells the Journal that “at least 300 stores this year will add machines that scan shelves for out-of-stock products. Autonomous floor scrubbers will be deployed in 1,500 stores to help speed up cleaning, after a test in hundreds of stores last year. And the number of conveyor belts that automatically scan and sort products as they come off trucks will more than double, to 1,200.”
    KC's View:
    Walmart says that the investment in automation allows it to replace people with machines in appropriate areas, though it is quick to say that it is reassigning people, not laying them off. At the same time, the money it is saving in stores allows it to make greater investments in e-commerce and fight off challenges from Amazon.

    Seems to me that this resets all the competitive battles, creating a lot of challenges for companies that cannot make these kinds of investments. They’re not insurmountable challenges, but everybody has to be aware of them.

    Published on: April 9, 2019

    USA Today reports that Sears is looking to reacquire the 41 percent of the Sears Hometown and Outlet Stores that it doesn’t own, having spun them off in 2012.

    The story says that the company “received a proposal Friday from its largest shareholder and Sears Holdings chairman Eddie Lampert's hedge fund ESL Investments to purchase the remaining shares of the company for $2.25 per share,” which works out to about $21 million.

    The story notes that the offer is made as Sears announced the opening of three small format stores, apparently trying to move away from its image as a company that only closes stores and lays off employees.

    Sears “was on the brink of liquidation” earlier this year, the story notes, “but Lampert’s hedge fund made a $5.2 billion offer for the company that was approved by a federal bankruptcy judge in February. About 425 stores and 45,000 employees were transferred to ESL.”
    KC's View:
    Sounds like a rigged game to me, since Sears and Lampert already own 59 percent of this company. I have to be honest, though … it is hard for me to think that any of these moves will be good for anyone other than Lampert. Lots of history here.

    Published on: April 9, 2019

    Bloomberg has a story about how Sriracha pioneer Huy Fong Foods, which controls almost 10 percent of the $1.55 billion American hot-sauce market, is about to face some new competition - from a brand called Sriraja Panich.

    There are some differences between the two companies, according to the story:

    “The Huy Fong factory in Irwindale, California, about 20 miles east of downtown Los Angeles, is a pristine facility with silver conveyor belts that each day shuttle hundreds of thousands of bright red bottles of Sriracha and their distinctive green caps into cardboard boxes. The factory, which operates up to 16 hours a day most days of the week, uses 100 million pounds of chilies each year. That’s enough spice to irritate the senses of some Irwindale neighbors.”

    In addition, Huy Fong’s Sriracha “uses fresh red jalapeños from across the U.S.”

    Here’s how Bloomberg describes Sriraja Panich:

    “More than 8,000 miles away in a suburb of Bangkok, factory workers toil without air conditioning as forklifts roll through 90-degree heat hauling boxes of the same kind of chili sauce—this one with a red and yellow label and called Sriraja Panich. Most Americans haven’t heard of the Thai brand, which claims to be the original Sriracha recipe, and that’s something the family behind the sauce is hoping to change … the less viscous Sriraja Panich uses cayenne peppers from northern and central Thailand.”
    KC's View:
    It is extraordinary the degree to which Sriracha has insinuated itself into so many people’s food lives, and all through word of mouth, since Huy Fong, as I understand it, has never taken out a consumer ad. Ever.

    I don’t know about you, but it is a huge part of how I cook and eat at home … and while I am willing to try the new version, I kind of like the uniquely American story of the original - a Vietnamese refugee comes to the states, starts a business, and grows it to unimaginable heights while being unwilling to sell it to the behemoths that would like to acquire it.

    Published on: April 9, 2019

    In Minnesota, the Star Tribune has a story about how “Walmart is putting the word out for its sixth Open Call event, which now runs for two days, June 18 and 19, at the company's headquarters in Arkansas. The retailer will accept applications through April 30 for any company whose products are made, sourced or grown in the United States … The Open Call event is tied to a pledge Walmart made in 2013 to purchase $250 billion of American-made products over the next decade. The retailer estimated the move would create 1 million new U.S. jobs, including 250,000 in manufacturing and a ripple of 750,000 indirect jobs to support and service the products.”

    According to the story, “Prospective suppliers will have 30 minutes to stand in a 6-foot by 10-foot room and make a product pitch to a representative of the largest company on the planet. Products could wind up in Walmart stores, Sam's Clubs or on"

    Last year, the story says, “Walmart buyers listened to nearly 600 pitches in every major product category, including toys, apparel, health and beauty, and food. It drew prospective suppliers from 46 states, Washington, D.C., and Puerto Rico.

    "More than half self-identified as minority-owned, including nearly a quarter that were owned by women, the retailer said.”
    KC's View:
    This is the kind of great story that allows Walmart to burnish its reputation, as it supports small companies that might ordinarily not be able to get into its system.

    Published on: April 9, 2019

    Fortune has an interview with Danny Meyer, CEO of Union Square Hospitality Group, which has Shake Shack among its fleet of brands, in which he talks about the controversial trend toward no-cash stores, which have are being banned in some communities.

    “The fact is that most of our guests use credit cards anyway,” Meyer says. “So it’s almost irrelevant. When I wrote an article about this for LinkedIn, if someone absolutely can’t get credit, and yet they can afford to eat with us, we find some way to serve them. And we always have. Sometimes we give it away. We’ll obviously abide by whatever laws there are. I do think that the world is moving to using less cash. I don’t go to the ATM nearly as much as I used to.

    “Look, I’m sensitive to the notion that some people can’t get a credit card, including, by the way, kids. Say a kid has a really big allowance and they can afford to eat at one of our restaurants, but they can’t get a credit card. I still want to take care of that kid. We always find a way to serve a guest.

    “This is all kind of ironic. Because in the old days, the controversy was that restaurants only took cash and wouldn’t let you use your credit card because they didn’t want to pay the fee. And so the irony is that now restaurants are willing to pay more of a credit card fee, often for the safety of their staff. It is a very dangerous thing to have cash around a restaurant. That’s been the primary motive for us.”

    Meyer also compares his policy of eliminating tipping to the banning of smoking:

    “It wasn’t nearly as scary as people think. That consumers have been very, very willing and ready to accept it. One of the last ones we converted was Porchlight (a Southern-inspired cocktail bar in New York). Because we said, of all places, a bar

    “We found that, too, when we eliminated smoking. The one we were most concerned about was our jazz club, the Jazz Standard. Everyone smokes in a jazz club, don’t they? But that only helped our business. And the artists were happy that they didn’t have to be inhaling that when playing a saxophone.”
    KC's View:

    Published on: April 9, 2019

    The Wall Street Journal this morning has a story about the “awkward standoff” that sometimes occurs when young employees have certain expectations about raises and promotions that work against how companies traditionally have done business.

    An excerpt:

    “More than 75% of Gen Z members believe they should be promoted in their first year on the job, according to a recent survey of 1,000 participants ages 18 to 23 by InsideOut Development, a workplace-coaching company. Employers see similar patterns among younger millennials in their late 20s and early 30s.

    “The trend has managers scrambling to manage young employees’ expectations without driving them out the door."

    You can read the entire story here.
    KC's View:

    Published on: April 9, 2019

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

    • Here’s the press release copy, verbatim:

    “Soylent Nutrition, Inc., the makers of Soylent, today announced that five of their complete meal replacement drinks, including the new four-bottle multipack, will now be available nationwide in all 4,378 US Walmart stores. Such rapid expansion with the nation’s leading grocer reflects Soylent’s massive success in retail outlets since making the jump from e-commerce to brick-and-mortar distribution in early 2018.”

    At he same time, Bryan Crowley, CEO of Soylent, said in a prepared statement:

    “Soylent is committed to providing affordable, accessible and appealing complete nutrition to the masses and Walmart’s tremendous presence and reach makes them a great customer for us.”

    I know this product has achieved a measure of success, but I still think it is the most unfortunate name for a food items that I can imagine. I’m sorry, but I’ve seen the movie … and there’s no way I could ever eat this product. On the other hand, to build on what Michael wrote this morning, the movie Soylent Green came out in 1973 and starred Charlton Heston, Leigh Taylor-Young and Edward G. Robinson, actors whose names have faded in most people’s memories. But I remember…
    KC's View:

    Published on: April 9, 2019

    USA Today reports that “Target's popular car seat trade-in event returns on Earth Day.

    “From April 22 through May 4, Target stores will accept and recycle car seats, including infant seats, convertible seats, car seat bases, harness or booster car seats, the retailer announced in a statement. In exchange for the old car seat, get a coupon for 20% off ‘a new car seat, car seat base, travel system, stroller or select baby home gear, such as play yards, high chairs, swings, rockers and bouncers’.”

    The story notes that “since Target introduced its first car seat trade-in program in April 2016, half a million car seats and more than 7.4 million pounds of materials have been recycled.”
    KC's View:

    Published on: April 9, 2019

    …will return.
    KC's View:

    Published on: April 9, 2019

    Hooray for Hollywood! This podcast comes to you from the Retail Tomorrow Immersion conference in Los Angeles, which may have more storytellers per capita than any other place on earth. With visits to Google’s new campus in Playa Vista, in the converted hangar where Howard Hughes’ Spruce Goose once resided, and to some of the most interesting and experiential retail spaces in the city, this conference also featured several sessions that, now as podcasts, bring this fascinating content to you.

    First up - a discussion of disruptive storytelling - told through stores, pop-ups and, coming soon, AI and VR - that is changing the way marketers connect with and influence existing and potential customers.

    Our guests:

    • Cody Rapp, CEO of Calmist, a fascinating and growth-focused retail concept recently featured on MorningNewsBeat.

    • Lori Schwartz, founder of Tech Cat, which helps marketers shape their narratives in a fast-evolving environment.

    • Amanda Solosky, co-founder/CEO at Rival Theory, which is developing game-changing AI capabilities that definitely will impact the relationship marketers have with shoppers.

    • And Mariya Zorotovich, director of Responsive Retail Strategy and Incubation, at Intel Corporation, which helps to make all this possible.

    The host: Kevin Coupe, MorningNewsBeat’s “Content Guy.”

    Pictured, from left to right:

    Kevin Coupe, Mariya Zorotovich, Amanda Solosky, Cody Rapp, Lori Schwartz.

    KC's View:

    Published on: April 9, 2019

    In the NCAA Men’s Basketball Final last night, Virginia defeated Texas Tech 85-77 in overtime, willing its first championship ever and, according to the Washington Post, becoming “the first first-time men’s college basketball national champion in 13 years.”
    KC's View: