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Thursday, March 07, 2019

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FaceTime with the Content Guy: Diamond Hopes & Business Lessons


This commentary is available as both text and video; enjoy both or either ... they are similar, but not exactly the same. To see past FaceTime commentaries, go to the MNB Channel on YouTube.

Hi, Kevin Coupe here, and this is FaceTime with the Content Guy … coming to you this week from Port St. Lucie, Florida, where I’m spending some time watching the New York Mets in spring training.

There is, needless to say, a business lesson to be found here.

Jim Palmer, one of the great Baltimore Orioles pitchers of the 60’s, 70’s and 80’s, once said that he hated spring training, because he hated the incessant work on fundamentals.

Sandy Koufax, on the other hand, had a different opinion. Koufax, one of the greatest pitchers ever, once said, “People who write about spring training not being necessary have never tried to throw a baseball.”

In other words, spring training is essential to continued excellence.

Don’t know about you, but if I have to choose between Koufax and Palmer for my all-time all-star team, I know who I’m choosing. And it isn’t Palmer.

There’s a great business lesson in how teams approach - or should approach - spring training.

When spring training is done right, it is all about getting the little things right. Pitching. Catching. Fielding. Throwing. Hitting the cutoff man. Running the bases. Even bunting … though for my money, far too little attention is paid to bunting.

Do these things right, and it is the difference between good and great. It is the difference between winning and losing. It is the difference between the minor leagues and the major leagues.

In the words of Crash Davis in Bull Durham, “Know what the difference between hitting .250 and .300 is? It's 25 hits. 25 hits in 500 at bats is 50 points, okay? There's 6 months in a season, that's about 25 weeks. That means if you get just one extra flare a week - just one - a gorp... you get a ground ball, you get a ground ball with eyes... you get a dying quail, just one more dying quail a week... and you're in Yankee Stadium.” (Kudos to Ron Shelton for writing those words, and Kevin Costner for delivering them so convincingly.)

The business point is this: I know that companies have to focus on big ideas, big initiatives, big strategies, big swings. Not only do I know it, but I believe in it … companies that get in trouble and say they need to get back to fundamentals largely got that way because they didn’t do the little things right, which meant they couldn’t do the big things right.

It is critical to get the small things right. To execute, over and over. To understand that tactics effectively implemented allow strategies to flourish.

That’s a pretty good business lesson, I think … especially when it comes to you while standing in the sun, listening for the crack of the bat, and watching players wander the baseball diamond, making people like me - long-suffering Mets fans - feel that hope springs eternal.

It always does in March. I hope I feel the same way in September, when I go to Citi Field to worship a religion that, in the words of Annie Savoy, is “full of magic, cosmic truth and the fundamental ontological riddles of our time.”

That’s what is on my mind this morning. As always, I want to hear what is on your mind.


Thursday Eye-Opener: Keep On Truckin’

by Kevin Coupe

We report here a lot about the problematic mall business; numerous malls and shopping centers around the country are in trouble because of the impact of e-commerce, shifting consumer shopping patterns, and the decline of many retailers that formerly would have served as anchor tenants.

But now, Trucking Info has a story about how the Delta Square Shopping Center in Memphis, Tennessee, has found new life - as the headquarters for JNJ Express, a trucking company.

It cost about $84 million to turn the mall into a logistics center, the story says.

According to the story, JNJ “operates more than 450 trucks, and its customers include major players in the new e-commerce economy, including Amazon, Walmart, FedEx, and UPS.” The company “received a 15-year payment-in-lieu-of-taxes incentive worth $5.8 million to build the $20.5 million headquarters and bring new life to the ‘severely distressed’ shopping center.” JNJ also reportedly plans to spend another $63 million on new trucks.

Just another Eye-Opening illustration, I think, of how the public and private sectors have to think differently about the use of assets and the importance of joint investments that will turn situations in distress into situations that can thrive.

Amazon Makes Major Shift In Bricks-And Mortar Strategy

Amazon plans to shut down 87 pop-up stores around the US, the Wall Street Journal reports, “ending the retailer’s yearslong experiment with these small shops as the company tinkers with an evolving bricks-and-mortar strategy.”

At the same time, Amazon says it plans to expand its Amazon Books chain, and Amazon Four Star stores, each of which offers what the company calls “a more comprehensive customer experience and broader selection.”

The pop-up stores operate in malls, department stores like Kohl’s, and even in some of Amazon’s own Whole Food stores. “These shops,” the Journal writes, “typically occupy a few hundred square feet of space and showcase devices like voice-assistant speakers, tablets and Kindle e-readers. They feature staff, dressed casually in black Amazon T-shirts, who encourage passersby to sample the newest products … Amazon has been experimenting with the pop-up concept since at least 2014, using such stores to educate customers about its Echo and Alexa devices and to allow customers to trade in old Kindles or Fire tablets for credit. Some of the stores have been open only for a few months.”

The Journal notes that “the pop-up-store closings come as Amazon takes new steps to offer a wider variety of products in an effort to improve how it interacts with its millions of customers. The company is preparing to roll out a new line of grocery stores and ramp up its Amazon Go cashierless convenience stores in more locations.”

KC's View: Let’s go back to something that Tom Furphy said yesterday in “The Innovation Conversation”…

We have always said that Amazon will experiment with a variety of formats as they work to solve the totality of their customer's needs. This likely means developing physical experiences that don't conform to traditional paradigms. Formats evolve. They have forever and the will continue to do so forever.

This is yet another example of this approach.

Jeff Bezos likes to say that “it isn’t an experiment if you know how it is going to turn out.” The pop-up stores were an experiment, almost certainly one from which Amazon learned a lot, and now it is time to move on.

A friend of mine Patrick Spear of GMDC, likes to say that it is important to make sure that “the juice is worth the squeeze.” Amazon constantly measures, constantly evaluates, and constantly thinks of its efforts within the context of solving the totality of its customers’ needs.

Some will position this move as representing a failure. Maybe…but maybe it is a failure the same way that its smart phone was a failure. It didn’t succeed, but everything Amazon learned from the experience informed its highly successful Alexa-based systems.

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From The Organic Produce Summit...

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Made In The USA, But Not Really

The New York Times has a story about how four companies went to market as selling “made in the USA” products were found to be selling products actually made in China and were prosecuted by the Federal Trade Commission (FTC) for having engaged in “unfair or deceptive acts.”

But, the Times writes, “The companies faced no fines and were not required to admit any wrongdoing or to notify customers of their false marketing. The trade commission entered into proposed consent agreements with each firm barring them from falsely marketing their products with the threat of fines if they violated the agreement. A final decision on the penalties is expected in the coming weeks after a public comment period ends.”

The story notes that “the F.T.C. has a long history of weak enforcement in ‘Made in America’ cases … The commission lists on its website 26 ‘Made in America’ cases it has reviewed since 1999.”

KC's View: To me, this is a problem that transcends any political party or administration. If you’re going to have regulations, they have to have teeth. Lying to consumers - which is exactly what this is - ought to be severely punished.

Saying something is made in America when it is not … saying something is local when it is not … saying something is organic when it is not … all fall into the category of being pretty much reprehensible. Make those claims, and you ought to be responsible for proving it through certifiable means.

Doesn’t seem all that complicated to me.

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From WAFC...

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New Healthcare Business Finally Gets A Name

The New York Times reports this morning that the new healthcare venture being created by Amazon, Berkshire Hathaway and JPMorgan Chase finally has been given a name.

Haven.

It even has a slogan.

“It’s Time for Better.”

And a website.

And a mission statement:

“Our mission is to transform health care to create better outcomes and overall experience, as well as lower costs for you and your family. We want you to get the right care, every time so that you can live your best life possible.”

And an elaboration:

“Haven was established by Amazon, Berkshire Hathaway, and JPMorgan Chase to bring together the resources and capabilities of the three companies to create better outcomes, greater satisfaction, and lower costs for their U.S. employees and families.

“Today, if you have a regular and reliable source of care, including preventive care, and can afford your medications and treatments, you can live more than 80 years, on average, with better quality of life than ever before. The advances in modern medicine have been remarkable, but even with insurance, many Americans do not have the basics — because medical treatment and prescription drug costs are high, the system is hard to navigate, and patients don’t consistently get the right care for their needs.

“We believe it is possible to deliver simplified, high-quality, and transparent health care at a reasonable cost. We are focused on leveraging the power of data and technology to drive better incentives, a better patient experience, and a better system. Our work may take many forms, and solutions may take time to develop, but Haven is invested in making health care much better for all of us.”

The site goes on:

“It’s very simple: our goal is not profit. We’re able to focus on creating value for families, not shareholders, since we are free from profit-making incentives and constraints. The organization will reinvest any surplus back into our work to improve health outcomes, patient satisfaction, and lower costs for individuals and families.”

There’s also a letter from the venture’s CEO, Dr. Atul Gawande, who says that “we will be an advocate for the patient and an ally to anyone – clinicians, industry leaders, innovators, policymakers, and others – who makes patient care and costs better” … “we will create new solutions and work to change systems, technologies, contracts, policy, and whatever else is in the way of better health care” and “we will insure our work has high impact and is sustainable.”

KC's View: It all sounds pretty good, though extremely amorphous. That said, it will be extremely interesting when they start to actually roll out programs and initiatives, and are able to gauge impact on both services and cost.

Heaven knows that the health care business can use a little disruption.

Facebook Gets Privacy Religion

Axios reports that Facebook CEO Mark Zuckerberg said yesterday that his company - “perpetually on the defensive over privacy issues” - plans to “rebuild its services around several privacy-focused principles: ‘private interactions,’ ‘encryption,’ ‘reducing permanence,’ ‘safety,’ ‘interoperability’ and ‘secure data storage’.”

“I believe the future of communication will increasingly shift to private, encrypted services where people can be confident what they say to each other stays secure and their messages and content won't stick around forever,” Zuckerbeg said. “ This is the future I hope we will help bring about.”

KC's View: Lots of stated intentions, but not a lot of specifics at this point. The problem is that, at least from where I sit, Facebook seems to say the right thing a lot of time, and then dopes whatever the hell it wants to.

Sears Sued By Stanley Black & Decker Over Craftsman Brand

Reuters reports that Sears has been sued by Stanley Black & Decker, the company that bought Sears’ Craftsman tool brand in 2017 for about $900 million.

The reason? Sears has launched a new line of “professional-grade mechanics tools under the Craftsman Ultimate Collection brand,” and has been describing its stores as “the real home of the broadest assortment of Craftsman.”

The suit accuses Sears of breach of contract, and argues that “Sears' actions threaten to confuse shoppers and irreparably harm Stanley's own Craftsman brand and trademarks, as well as its goodwill and customer relationships.”

Sears’ defense is that the terms of the sale granted it a “limited license” to sell some Craftsman products.

Reuters notes that “Sears emerged from Chapter 11 in February after longtime Chairman Edward Lampert, who oversaw its years-long descent into bankruptcy, won court approval for a $5.2 billion takeover, which included the Craftsman licensing rights. The reorganized company was expected to have about 425 Sears and Kmart stores, down from roughly 3,500 when those companies merged in 2005. Sears brands also include DieHard and Kenmore.”

KC's View: Not being a lawyer, I have no idea if Sears’ “limited license” argument will hold up, though it just seems typical of the Lampert regime to pull a stunt like this.

There has been a lot of speculation that Sears also would sell off the DieHard and Kenmore brands, which somehow have managed to maintain brand equity and integrity despite the fact that the Sears brand has taken on so much fire. This Craftsman stunt, I suspect, could impact Sears’ efforts to sell off those brands … any company that is interested in buying them is going to be careful about the small print, especially any “limited license” caveats.

After Kraft Arrest, P&G Petitioned To End Gillette Stadium Relationship

USA Today reports this morning that more than 13,000 people have signed an online petition asking Procter & Gamble to take its Gillette brand name off Gillette Stadium, home to the New England Patriots.

The petition has nothing to do with fan hatred for the Patriots, but rather because the team’s owner, Robert Kraft, “as charged in February with two misdemeanor counts of soliciting prostitution following a police investigation of a Jupiter, Florida, spa” that also has been implicated in a human trafficking investigation.

Kraft has not been accused of being involved with human trafficking. Authorities, however, have said that there is videotape of his soliciting prostitution.

Kraft has pleaded not guilty. The Patriots have denied any illegal behavior. The National Football League (NFL) has not yet taken any action in the case.

KC's View: Procter & Gamble finds itself being hoisted on its own petard in this case, since its Gillette brand recently launched a marketing campaign built around standing up to “toxic masculinity” and asking men to be “the best they can be,” a play on its longtime slogan, “the best a man can get.”

I do wonder how many of the 13,000 petitioners are Pats fans, or live in New England. Not that it matters, but I’m curious.

In another time and place, the Kraft story never would’ve gotten the traction and publicity that it has received. It simply would’ve gone away. But in a world of social media and 24-hour news, that isn’t going to happen.

I’m not sure what should happen to Kraft. I know what the second sentence of his obituary is going to be, though … and the reputational damage is enormous.

P&G has to make a decision, but I think that the Gillette name should remain on the stadium … Gillette is an iconic New England brand name, and I’m not sure that the entire franchise should be tarred and feathered just because the team’s multi-billionaire owner likes to drive his Bentley to a strip shopping center and pay for sexual services at the Orchids of Asia Day Spa - an offense that is classified as a misdemeanor.

Kraft’s behavior is weird and disgusting. But I’m not sure P&G has any responsibility to take its name off the stadium.

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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.

Now back to regularly scheduled editorial...

Worth Reading: The Last Picture Store

The New York Times reports that a Blockbuster video rental store in Western Australia will close at the end of the month, leaving just one Blockbuster open anywhere in the world.

It is in Bend, Oregon. And the people who work there have no intention of closing anytime soon.

But, the Times writes, “this is no elegy for Blockbuster, no lament for how Netflix killed the video star. There were plenty of those when the company filed for bankruptcy protection in 2010, shriveled to 300 stores and then mostly closed.

“This is about the ability of the Bend store, like sturdy links in other dying chains, to live on and avoid being turned into a pawnshop or a fast-food restaurant … Such holdouts have bucked the norm in the retail and restaurant industries, which have shed stores by the hundreds in recent years.”

Good piece, and you can read it here.

KC's View: This gives me yet another reason to visit Bend this summer during my annual adjunctivity at Portland State University.

First, I need to visit the great Newport Avenue Market, a great independent serving a wonderful community. It’s been too long, and I’m a big fan.

Second, there’s the food at Ariana.

And now, there’s the last Blockbuster store.

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From Webstop...

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Industry Drumbeat

From City of Hope...


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From FMI...

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Mario Batali, Accused Of Sexual Misbehavior, Out Of The Restaurant Business

The New York Times this morning reports that “the 20-year partnership between the celebrity chef Mario Batali and the Bastianich family of restaurateurs was formally dissolved on Wednesday, more than a year after several women accused Mr. Batali of sexual harassment and assault.”

Batali also is reported to be selling his minority interest in the Eataly chain of gourmet markets/restaurants.

According to the story, “Mr. Batali ‘will no longer profit from the restaurants in any way, shape or form,’ said Tanya Bastianich Manuali, who will head day-to-day operations at a new company, as yet unnamed, created to replace the Batali & Bastianich Hospitality Group.

“The new company will operate the group’s remaining 16 restaurants under a new management and financial structure. Mrs. Bastianich Manuali and her brother, Joe Bastianich, have bought Mr. Batali’s shares in all the restaurants. They would not discuss the terms of the buyout.”

The Times writes that “several famous chefs and restaurateurs have recently been accused of sexual harassment, but Mr. Batali is the first to surrender all his restaurants … In December 2017, news accounts of Mr. Batali’s history of sexual aggression touched off police investigations, torpedoed his career and cast a shadow over all the restaurants he was involved in.” A number of those restaurants were closed, and most of those that remained open saw their business shrink considerably.

KC's View: First of all, it is a good thing when people like Batali are made to be culpable for their behavior. If all that happens is that he loses his business, he’s lucky … because he could’ve (and maybe should’ve) gone to jail.

This is an important move for the company. I know that there is a Tarry Lodge, which it owns, up in Westport, Connecticut, where I liked to go occasionally for the black fettuccine served with rock shrimp, fennel and chilis … but I haven’t been since the Batali sexual harassment charges broke. Just couldn’t do it. But now, I feel like I can go back.

The MNB Walmart Watch

• The Wall Street Journal this morning reports that Walmart “is raising its delivery goal posts for suppliers, asking them to deliver more goods on time as it competes with Amazon.com Inc. for shoppers online and in stores.”

The story says that Walmart “wants suppliers that ship full trucks of products to deliver orders within a specified two-day window 87% of the time, up from an 85% rate it targeted previously. Suppliers that fill part of a truck with their goods must hit a 70% on-time threshold, a significant jump from the previous target of 50%.

“Walmart also is changing how it penalizes suppliers when they make partial deliveries, an effort to make sure products are on shelves when needed, a particular focus for Walmart as it ramps up online grocery pickup and delivery services that pull from store inventory to fulfill orders.”

FastNewsBeat

• The Wall Street Journal reports that Dollar Tree plans to close 390 of its Family Dollar stores, just three years after it acquired the smaller dollar store chain. It also will convert some 200 Family Dollar stores to the Dollar Tree banner.

The story points out that “Family Dollar’s sales have lagged behind for years, hurt by neglected stores, poor product selection and unhappy workers, according to analysts. The problems date to before Dollar Tree beat out Dollar General to acquire the chain, and left Family Dollar unprepared to benefit from a decade of overall strength in the dollar-store segment as shoppers gravitated to low-cost goods in the wake of the recession.”

The story says that the company had around 8,200 Family Dollar stores and 7,000 Dollar Tree stores at the end of the latest quarter.


• The National Grocers Association (NGA) and the Retailer Owned Foods Distributors & Associates (ROFDA) yesterday announced the co-location of the organizations’ annual fall conferences. The joint event will take place November 6 – 10 at the Sawgrass Marriott Golf Resort and Spa in Ponte Vedra Beach, Florida.

The organizations said that the NGA/ROFDA Fall Meetings “will bring together senior decision-makers and business leaders from across the supermarket industry in a series of business to business meetings, education sessions and networking opportunities for attendees to discuss strategies to drive profitability and growth.”


WBTW-TV News reports that Ahold Delhaize-owned Food Lion will spend $158 million to remodel 98 stores in the Myrtle Beach, Florence, Columbia, and Charleston areas this year, “lowering prices, and expanding the assortment of products available at each store … Food Lion is also expecting to hire nearly 2,000 new associates at these stores as part of its commitment to enhancing the customer experience.”


CNN reports that department store chain Kohl’s is experimenting with its format by shrinking 10 of its stores by between 20,000 and 25,000 square feet, and then leasing out the space to Planet Fitness, the gym chain.

The story points out that Kohl’s “says this is just the latest effort to attract customers. Last month, they partnered with W.W., formerly Weight Watchers. And last year, they teamed up with supermarket chain Aldi.”

As noted in another story this morning, Kohl’s also has been putting Amazon pop-up stores inside its units, but those will be going away as Amazon shifts its bricks-and-mortar strategy.


USA Today reports that women’s clothing retailer Charlotte Russe “will close all of its stores and is in negotiations to sell its intellectual property.” The story note that “the San Diego-based mall chain filed for Chapter 11 bankruptcy protection in early February and outlined plans to close 94 stores. The chain also put itself up for sale and said if it didn't find a buyer it would liquidate.”

The going out of business sales are expected to commence immediately.

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Industry Drumbeat

“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.

Now back to regularly scheduled editorial...

Your Views

…will return.

A New Podcast: Independents Face Retail Tomorrow

A New Podcast about “Technology, Innovation, and the Independent Retailer”

From the floor of the National Grocers Association (NGA) Show in San Diego, “Retail Tomorrow” host Kevin Coupe engages with a power panel of retailers and experts in a discussion of the unique technology challenges and opportunities facing independent retailers, which often are without the resources available to larger competitors, but that often have the cultural flexibility to experiment and innovate.

This Retail Tomorrow podcast is sponsored by the Global Market Development Center (GMDC).

Our guests (pictured below, next to the Content Guy, from left to right):

• Lauren Johnson, CEO/President, Newport Avenue Markets, Bend, Oregon.

• Lisa Mangino Swanson, Communications Director, Hugo's Family Marketplace, Grand Forks, North Dakota.

• Sterling Hawkins, Co-founder, Center for Advancing Retail & Technology (CART).

• Tom Furphy, CEO/Managing Director, Consumer Equity Partners.

• Glen Terbeek, the retired force behind Anderson Consulting’s Smart Store initiative (who brings uncommon sense and historical perspective to the conversation).

This podcast, as well as past editions, also can be found on the Retail Tomorrow site. In addition, check out more details about GMDC’s Retail Tomorrow initiative here.

Enjoy!




PWS 53