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Monday, October 29, 2018

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Monday Eye-Opener: Nanny State

by Kevin Coupe

Not sure if this is ironic or counter-intuitive. But it certainly is odd and unexpected.

The New York Times reports that there is a new trend in California’s Silicon Valley, a place where tech gazillionaires a) make their fortunes exploiting opportunities in the digital revolution, and b) work so hard and long that they often have to hire nannies to help raise their children.

But now - apparently because many of these parents know the inherent dangers of the technologies they develop and sell - they are asking their nannies to guarantee that they will severely limit the amount of time tat their children spend in front of electronic screens of any kind.

According to the Times, “From Cupertino to San Francisco, a growing consensus has emerged that screen time is bad for kids. It follows that these parents are now asking nannies to keep phones, tablets, computers and TVs off and hidden at all times. Some are even producing no-phone contracts, which guarantee zero unauthorized screen exposure, for their nannies to sign.

“The fear of screens has reached the level of panic in Silicon Valley. Vigilantes now post photos to parenting message boards of possible nannies using cellphones near children. Which is to say, the very people building these glowing hyper-stimulating portals have become increasingly terrified of them.”

At the very least, I think, this ranks high on the hypocrisy scale … and maybe we all ought to take a page from the parenting book that these folks are using. Not the one that has other people raising their children (which I get, because we had to hire nannies for three years a long time ago, when we both needed to work outside the home and it seemed like the best alternative), but the one that is strict about screen time. I’m actually sort of grateful that my kids are grown and I don’t have to raise them in an environment as tech-infused as this one. Back in the day, all we had to do is limit how much TV they watched. I can only imagine how tough it is these days.

The story about how tech entrepreneurs are handling it is an Eye-Opener.

Walmart Looks To Get (Town) Centered

Having been accused through much of its recent history of doing its best to destroy many town centers, Walmart now, ironically, seems to want to create them - in its own parking lots.

Business Insider reports that Walmart wants to convert space in many of its parking lots of pseudo town centers that will feature tenants such as Chipotle, Shake Shack and Orangetheory Fitness, as well as green spaces that will prove to be a lure to local residents.

According to the story, “These new hubs would feature a ‘carefully curated mix’ of ‘local, regional, and national’ retail tenants, according to a website for the project, not to mention … parking systems overhauled to better facilitate the store's grab-and-go services.” Walmart, the story says, “ is looking to fill these town centers with restaurants, day care establishments, health clinics, bowling alleys, food trucks, bike rental stations, driving ranges, fuel stations, and more.”

Such projects are saids to be “underway at select Walmart stores in Arkansas, California, Colorado, Iowa, Missouri, Oregon, Texas, and Washington,”with local Walmarts starting to resemble“open-air malls more than standalone big-box stores … By enticing a slew of new potential partners into its planned town centers, Walmart may redefine what it means to be a one-stop shop. Rather than simply offering a wide variety of goods and services within its stores, the big-box giant instead would be establishing itself as a retail hub with an orbit of complementary tenants.”

KC's View: The irony here is rich. Walmart spends decades turning town centers into ghost towns, and now it wants to recreate the experience in its parking lots … albeit with a curated experience that is designed to support its own vision of what a physical bricks-and-mortar ecosystem should be.

I have to wonder if some communities will fight back with planning and zoning regulations that will prevent Walmart from making such moves, and that will favor businesses that want to help revitalize downtowns. If I were in local government, that’s certainly a position I’d want to explore a bit, rather than having Walmart create de facto malls in their own parking lots.

How One Company Changed A Brand, Hopefully Without Tears Of Regret

Fascinating piece in the Wall Street Journal about how Johnson & Johnson is making a big gamble with its iconic baby shampoo brand - it is “cutting out chemical dyes and adding natural ingredients like coconut oil. It has updated its packaging and rolled out a new digital marketing campaign. And it’s trying to reconquer the baby-care market it has dominated for more than a century.”

While those may all seem like natural moves - pun intended - at a time when young parents are putting a greater premium on organic, natural brands that are viewed as the opposite of a legacy brand like Johnson & Johnson, it actually is a risk, since it is messing around with a product that is seen as having value way beyond its sales.

Here’s how the Journal frames the legacy:

“Johnson’s - J&J’s flagship baby products line - accounts for only about $1.5 billion of the company’s $76.5 billion in yearly sales. J&J gets most of its revenue from its higher-margin prescription-drug and medical-device businesses. But Johnson’s significance extends well beyond the revenue it generates.

“Johnson’s is the only product line in the U.S. that carries the company name. Many consumers come to know - and trust - J&J through the brand. That trust spurs sales of other products.”

Part of the problem facing the company was a fear that in changing its baby shampoo flagship, it would make the shampoo clear in color - which, while it would signify its new composition, also would be a radical change from the golden color with which generations have become familiar. In some ways that was a bigger problem than changing the product’s composition, until the folks at J&J came up with a novel solution - it changed the color of the plastic bottle, so that the shampoo still appears to be golden in color from the outside.

KC's View: This is just one of the problems that J&J had to face … the other was reorganizing itself around the premise that e-commerce is a large and growing piece of its business.

I do find interesting that the “new” version of its baby shampoo is for sale on Amazon, but that the description makes it sound different as opposed to being an improved version of the old shampoo (which still is for sale on Amazon, though apparently not via Subscribe & Save anymore). This creates consumer confusion, and I think the language and positioning needs to be a little clearer.

For Sam’s Club, The Time For Innovation Is Now

Bloomberg reports that Walmart-owned Sam’s Club is opening a new store in Dallas called Sam’s Club Now that is designed to be a testing ground for new technologies that can be used in the membership club’s stores as well as in other Walmart formats.

For example, the store will enable all shoppers to make “their purchases on their smartphones, which they’ll also use to build shopping lists and navigate around the store. The location, which at just 32,000 square feet is a quarter the size of an average Sam’s Club, will also feature electronic shelf labels that instantly update prices and augmented reality displays that can transform digital shopping carts into pirate ships.”

Reuters writes that “the focus on opening more research labs and investments in that direction are the latest sign that Walmart is doubling down on making its stores better even as it competes to gain ground against rival Amazon.com Inc in the business of selling goods online.”

KC's View: No question in my mind that Sam’s needs to find ways to differentiate itself from Costco, and this certainly is a good step in that direction. Add this to the fact that Sam’s also has been closing stores and converting some of them into e-commerce distribution centers, and you see a retailing entity that seems to be developing a specific and differentiated world view.

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Corporate Drumbeat

From Samuel J. Associates...

"It’s a bad time to be in the business of selling groceries, and the headlines are as bleak as you’d expect: "The Retail Apocalypse Is Coming for Grocery Stores" ... "Grocery Retail ‘Bloodbath’ Is Here" ... Conversely, it is a great time — arguably the best time ever — to buy groceries."
- New York Magazine/Grub Street


At Samuel J.Associates, we have a response to this assessment:

Bull.

We think it is a great time to be selling groceries, whether you are a retailer or a supplier. That’s because a more educated and demanding consumer, no matter the demographic, will reward businesses that are innovative, disruptive, and in touch with what people need, even if they don’t know they need it.

And, we know this: Those businesses require, and are fueled by, great people.

People who don’t just get the job done, but who set the tone in an organization, establish cultural and business priorities, who build teams, and who are able to not just adapt to competitive realities, but see the future and thrive in it.

And yes, ignore dire warnings about a "retail apocalypse" and see opportunities.

At Samuel J. Associates, we have a winning record of connecting great talent and innovative businesses ... as well as innovative talent with great businesses. We exceed your expectations so that you can do the same thing for your customers.

No bull.

Click here to find out more.

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Amazon Continues Play For Small Business

Bloomberg reports that Amazon and American Express are teaming up for a new “co-branded card for small businesses … Cardholders with an Amazon Prime membership will be able to choose between an interest-free loan for 90 days or 5 percent back on purchases made at Amazon.com, Amazon Business, Amazon Web Services and Whole Foods Market, the companies said in a statement. The no-fee metal card will also offer 2 percent back on purchases at U.S. restaurants and gas stations and on mobile-phone services.”

The story notes that “Amazon has been rolling out more products for small businesses in the hopes of providing them with everything from office supplies to factory parts. Last year, it started a Prime membership program offering fast, free delivery for companies. The e-commerce giant also offers small-business loans so borrowers can add more inventory or expand their businesses with new products.”

KC's View:


I find it fascinating the degree to which Amazon is trying to establish itself as a friend to small business … as in this commercial that’s been on the air recently. That’s fine, as far as it goes … though it also is important for these businesses to remember that you can conduct commerce through Amazon, but never with Amazon, an entity which has only its own survival and supremacy as the highest priorities.

Not that they’s anything wrong with that. it is just reality.

Canadian E-commerce Company’s High Hopes For Cannabis Business

Bloomberg reports that Canadian e-commerce company Shopify, which has turned its platform into a place for people north of the border to buy now-legal recreational marijuana, hopes its market lead will “give it a leg up as other countries begin to legalize the drug for medical and recreational use.”

CEO Tobias Lutke tells Bloomberg that “the e-commerce company has proven it has an ideal product for regulated industries which require ‘nimbleness because compliance with laws is always changing’ … ‘As more countries think about their own regulated industries, whether it’s cannabis or otherwise, we become that first phone call,’ he said on the company’s third-quarter earnings call.”

The story notes that Shopify “was praised for the fact that its websites didn’t crash on the first day of legalization, when demand was through the roof. The Ontario Cannabis Store, for example, saw 1.3 million unique visits in the first 24 hours and received approximately 100,000 orders.”

KC's View: The biggest problem that the Canadian cannabis business is having has less to do with infrastructure and more to do with supply … there have been shortages of product during the first two weeks that have been testing people’s patience.

The issue is that nobody really knew how huge demand would be … and Shopify is smart to position itself as a go-to resource.

E-conomy Beat

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

MarketWatch has a story suggesting that while last week’s quarterly report by Amazon may have taken a little starch out of its financial success story (sales and profits were up, but not as much as expected, leading some to believe that its prospects are plateauing), it actually may reduce some of the heat on the company.

GlobalData Managing Director Neil Saunders tells MarketWatch that “in a perverse way, this is good news for Amazon as it underlines the fallacy that the company is a monopoly or has some kind of special powers to force consumers to shop with it … There has been persistent chatter about the possibility that politicians and regulators would take steps to look into whether Amazon has gotten too big. With the company and Chief Executive Jeff Bezos in President Trump’s crosshairs, that seemed a little more likely.

“Amazon’s sales numbers may put those antitrust questions to rest, at least for now.”

One could call this, I suppose, the law of unintended circumstances. Or, it is just a case of “always look on the bright side of life…”

The MNB Walmart Watch

• The Wall Street Journal reports that Walmart has “agreed to pay $160 million to settle a long-running shareholder class-action suit related to the U.S. government’s continuing investigation of the retailer for alleged bribery. The settlement with the City of Pontiac General Employees Retirement System adds to the hundreds of millions of dollars the retailer has spent over six years related to the investigation. Walmart didn’t admit fault as part of the settlement, the company said.”

The Journal notes that “in late 2011, Walmart said in a financial filing it was investigating possible bribery within the company, without giving specifics. In 2012, a series of New York Times articles alleged that Walmart paid bribes in Mexico to win government zoning changes and permits to open more stores … Since 2012, Walmart has spent $892 million on an internal investigation of the allegations and related compliance improvements. Last year, the company also said it would set aside $283 million in anticipation of a likely settlement with the U.S. government. Walmart has yet to reach a settlement with the Justice Department and Securities and Exchange Commission.”

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From City of Hope...

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FastNewsBeat

CNBC has story suggesting that troubled Campbell Soup may be best suited to an option that few would’ve considered not that long ago - dumping all non-core brands and going private, where it can pursue the soup business without interference from troublesome shareholders and stock analysts.

The story says that “taking Campbell's soup business private would give the company's founding family a reprieve to feast off its cash flow and iconic stature with less public pressure. The company could save the millions of dollars it and all publicly traded companies spend on securities filings, controls and accounting,” as well as avoiding the “acquisition mistakes” that often cost too much and require too much attention for too little return.

“Campbell could use some of the cash it saves by avoiding such deals to invest in its soup business,” CNBC suggests. “The business is profitable, but it still needs investments, like new equipment to make its soup healthier. Condensed soup is Campbell's past, it is not its future. Under pressure to deliver quarterly results, Campbell has been slow to innovate its soup business, simply countering slowing demand with higher prices.”


CNBC has a story about how some mall owners, taking yet another hit because of Sears’ bankruptcy, which raises the specter of yet more empty space that becomes a drag on their image and profitability, are trying to see the likely availability of square footage as an opportunity.

Mall owner Simon Property Group, for example, “has diversified the types of tenants it usually courts to fill empty stores and currently is replacing an old Belk department store at Phipps Plaza in Atlanta with a Nobu hotel, office space and a 90,000-square-foot Life Time Athletic center. Landlords are also starting to look at co-working spaces and apartments as other fillers … Overall, shopping mall owners are saying Sears' bankruptcy allows them to bring in more stable tenants and better traffic drivers - budding e-commerce brands like Untuckit and Casper, medical facilities, food halls or play spaces for kids.”

Your Views

…will return.

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“RETAIL 2020: What’s The Future (WTF)?” - A New Presentation by Kevin Coupe


In this fast-paced, interactive and provocative presentation, MNB's Kevin Coupe challenges audiences to see the fast-evolving retail world through a radical new technological, demographic, competitive and cultural prism. These issues all combine to create an environment in which traditional thinking, fundamental execution, and just-good-enough strategies and tactics likely pave the path to irrelevance; Coupe lays out a road map for the future that focuses on differential advantages and disruptive mindsets, using real-world examples that can be adopted and executed by enterprising and innovative leaders.

Constantly updated to reflect the hand crafted news stories covered and commented upon daily by MorningNewsBeat, and seasoned with an irreverent sense of humor and disdain for sacred cows honed over 30 years of writing and reporting about the best retailers and retail strategies, “RETAIL 2020/WTF” will get your meeting attendees not just thinking, but asking the serious questions about business and consumers that serious times demand. See a sample at left…




Here’s what Lori Stillman, Executive Vice President - Analytics, Insights and Intelligence, Advantage Solutions, has to say about a recent appearance:

"Kevin joined us as a moderator and facilitator for a two-day client executive event we hosted. His role in the success of the event went far beyond his time presenting and sharing his great wisdom and content. From the moment our planning process began and we selected Kevin as a key part of our program, he dove in and worked with our team to review session topics, ideate on programming and help ensure our overall event delivered on the goals we had established. His quick wit, deep industry knowledge and ability to synthesize conversations into key take-aways enabled us to hit a home run!”

And, from Joe Jurich, CTO of DUMAC Business Systems:

”Kevin recently participated in and spoke at our Annual User Conference.  Our group consisted of independent retailers, wholesalers, and software vendors – a pretty broad group to challenge in a single talk.  While his energy, humor, and movie analogies kept the audience engaged, his ability to challenge them to think differently about how they go to market is what really captured them!  Based on dinner conversations afterward, he appeared to have left everyone thinking of at least one new approach to their strategy!”

Want to make your next event unique, engaging and entertaining? Contact Kevin at kc@morningnewsbeat.com , or call him now at 203-253-0291.

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From The MNB Sports Desk

The Boston Red Sox defeated the Los Angeles Dodgers last night 5-1, to win the best-of-seven World Series four games to one. This followed an 18-inning Friday night game that
the Dodgers won 3-2 (in a game that lasted longer than the entire 1939 Word Series between the New York Yankees and the Cincinnati Reds), and then a Saturday night game that the Red Sox roared back to win 9-6 in the late innings.



In Week Eight of the National Football League…

Philadelphia 24
Jacksonville 18

Baltimore 21
Carolina 36

Denver 23
Kansas City 30

Cleveland 18
Pittsburgh 33

Seattle 28
Detroit 14

Tampa Bay 34
Cincinnati 37

NY Jets 10
Chicago 24

Washington 20
NY Giants 13

Indianapolis 42
Oakland 28

San Francisco 15
Arizona 18

Green Bay 27
LA Rams 29

New Orleans 30
Minnesota 20

PWS 54