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Friday, April 05, 2019

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Friday Eye-Opener: Vested Interests

by Kevin Coupe

Patagonia, the outdoor gear and clothing purveyor that has taken an increasingly high profile public policy profile in recent years especially when it comes to environmental issues, has decided that there are certain people to whom it does not want to sell clothing.

The specific clothing in question are its fleece and puffer vests and jackets that have become a wardrobe staple for many Wall Street and Silicon Valley executives; Patagonia’s corporate sales division apparently has made a pretty good living by selling these items with corporate logos on them.

In the past, Patagonia sold them to anyone who wanted them. But no more.

Bloomberg reports that Patagonia “has shifted its focus to ‘mission-driven companies that prioritize the planet,’” and now wants to “add more companies that have the B Corp designation to its client list -- businesses that meet certain environmental, social and transparency standards and are certified by a private organization. Patagonia itself is a B Corp and some financial and technology firms also have that status.”

The story notes that “current customers shouldn’t fret. Existing corporate customers will remain in the program and still be able to order more branded items from Patagonia.”

I’m sure that Patagonia will get some grief for this Eye-Opening approach to business … but not from me. I’m perfectly happy to do business with a company that makes quality products and has rejiggered its corporate motto to say, “We’re in business to save our home planet.”

As the great John Mellencamp sings, “You gotta stand for something, or you’ll fall for anything.”

CVS Expands Same-Day Rx Delivery Nationwide

CNBC reports that CVS is expanding same-day delivery of prescriptions after a successful test in several big cities.

The story says that the rollout comes “almost a year after introducing one- and two-day shipping … CVS will partner with Shipt, a Target company, to deliver prescriptions the same day they're filled. The service will cost $7.99.”

CNBC goes on: “People can select delivery through CVS' app, via text or by calling the pharmacy. They can also add health and household items, such as cough medicine, vitamins and diapers, to the delivery. CVS will keep the option for one- or two-day delivery at a price of $4.99.”

KC's View: The Shipt connection makes sense, since Target already is using CVS for all of its in-store HBC and pharmacy services. (Makes me wonder if a merger of these two companies could be somewhere down the road?)

Interesting that as Walgreens seem to have trouble defining itself in the marketplace, CVS keeps doing things that entrench it more firmly as a healthcare company connected to its customers/patients.

To be clear, this isn’t just about vision. A lot of it is about playing strong defense and working to make sure that Walmart/Jet and Amazon aren’t able to poach your customers by leap-frogging your services. But that’s okay … the game is played with both offense and defense, and the best companies embrace their options wherever and whenever they find them.

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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 To Build Internet Network With 3,000 Satellites

Amazon has confirmed the basic details of what it has been calling Project Kuiper, which would put more than 3,000 low-orbit satellites around the Earth that would high-speed internet connectivity to people who do not have broadband access.

Amazon is not along in this goal; Elon Musk’s rocket company SpaceX and Airbus-backed OneWeb also are engaged in similar projects.

Reuters reports that “companies such as SpaceX, LeoSat Enterprises and Canada’s Telesat are working to enable data networks with hundreds or even thousands of tiny satellites that orbit closer to Earth than traditional communications satellites, a radical shift made possible by leaps in laser technology and computer chips.”

KC's View: I’m glad that these companies are making broadband access for all such a priority. I understand that it will potentially benefit their companies greatly, and I’m okay with that, because I long have felt that in the US, it is almost political and public policy malpractice that there are people in this country who do not have cell service and do not have broadband access. How can we be expected to be a 21st century nation if we equip our people with the tools of the 20th century?

By the way, I was just curious where the name of the Amazon project came from, so I did a little research … and this is what I found on Wikipedia:

Gerard Peter Kuiper (December 7, 1905 – December 23, 1973) was a Dutch–American astronomer, planetary scientist, selenographer, author and professor … Kuiper is considered by many to be the father of modern planetary science.[1] As professor at the University of Chicago, he was dissertation advisor to Carl Sagan.

Now, my next question was, what the hell is a selenographer?

Again, from Wikipedia:

Selenography is the study of the surface and physical features of the Moon. Historically, the principal concern of selenographists was the mapping and naming of the lunar maria, craters, mountain ranges, and other various features.

Just in case you were interested. (I was.)

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From The Organic Produce Summit...

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Some Online Ad Spending Shifting Away From Google

The Wall Street Journal reports this morning that there appears to be some movement of online ad dollars from Google to Amazon, which the story says is “a sign of how the online retailer is capitalizing on becoming the top destination for consumers’ product searches.”

One example: “WPP PLC, the world’s largest ad buyer, spent about $300 million on behalf of its clients on Amazon search ads last year, and about 75% of that money came from Google search budgets, according to people familiar with the matter. It spent between $100 million and $150 million on Amazon search in 2017, the people said.
WPP spent north of $3 billion globally on Google search advertising last year, one of the people said.”

The Journal points out that “while Google has long been the dominant player in online searches of all sorts, some 54% of people looking for a product now begin their search directly on Amazon, a jump from 46% in 2015, according to Jumpshot, a research firm that collects data from 100 million devices.”

KC's View: At its most simplistic, this trend has to be viewed by retailers as just one more way that Amazon is rigging the game in its favor. Not that it is doing anything wrong, but by playing chess instead of checkers, Amazon is generating yet more revenue that gives it a financial advantage everyplace else it wants to be competitive.

This should scare some folks.

Here’s what Deren Baker, Jumpshot’s CEO, tells the Journal: “I have to pay them for a top placement [in search results], I have to give them a cut of the money that I might generate if that product is sold, and Amazon might try to market their own private label for the exact product that the customer is looking for. If I was an advertiser, I would be a bit worried.”

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From WAFC...

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From Cornell University...


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Study: One-Fifth Of Global Deaths Related To Poor Diet

Men’s Health is just one of a number of publications reporting on a new study, from the University of Washington’s Institute for Health Metrics and Evaluation, saying that “20 per cent of all global deaths are linked to poor diet.”

“Diet is an equal-opportunity killer. People — independent of age, gender, country of residence and socioeconomic status — to some extent are affected by poor dietary habits,” says study co-author Dr. Ashkan Afshin. “Low intake of healthy foods and high intake of unhealthy foods is the leading cause of mortality, globally and in many countries.”

According to the study, “Most of the top dietary risk factors were related to not consuming enough nutritious foods. These include fruit, vegetables, whole grains, nuts and seeds, legumes as well as polyunsaturated fats … Unfortunately, the results paint a grim picture. No region in the world actually met the dietary requirements that the team suggests.”

KC's View: I’m not sure anyone is surprised that a poor diet can be a killer. But one fifth of all global deaths? That strikes me as tragic, and eminently preventable if the world actually were focused on the welfare of the people who live here in some sort of global way.

Target Raises Its US Hourly Minimum Wage To $13

Reuters reports that “Target Corp will raise its U.S. minimum wage to $13 an hour in June, from $12, increasing its payroll costs and putting new pressure on rival Walmart Inc to follow suit, given a labor market that is among the tightest in half a century.”

Target has committed to a $15 minimum wage by the end of 2020.

The story notes that raising the minimum wage has become a hot topic on the campaign trail, as Democratic candidates for their party’s presidential nomination have focused on the issue, linking it to national concerns about income inequality. Reuters writes that “amid the growing political pressure, other companies have also moved to raise wages. For example, Costco Wholesale Corp raised its minimum wage twice in a year and since March has been paying employees at least $15 an hour.”

Analyzing Amazon’s Prime Motivations For Whole Foods Price Cuts

Interesting this week to see different stories and perspectives about this week’s price cuts at Amazon-owned Whole Foods…

MarketWatch writes that “new lower prices at Whole Foods Market may not dispel the natural grocery chain’s ‘whole paycheck’ reputation, but it could build stronger relationships with owner Amazon.com Inc.’s Prime members, much like Costco Wholesale Corp. has with its loyal repeat customers.”

The story quotes Kathy Gersch, executive vice president at Kotter, a strategy execution and change management firm, as saying, “It looks like the strategy is to create a Costco-like relationship by providing another benefit rather than putting a dent in the ‘whole paycheck’ reputation … There’s a continued strategy of driving up Prime membership by creating more perks whether that’s video, shipping benefits, [etc.] The more benefits, the larger the share of wallet.”

The analysis at Eater goes like this:

“Be prepared to pay up for Prime if you want to get discounts
Amazon started this week by attempting to lure more customers into Whole Foods by announcing that it would be ‘slashing’ prices (again) — but really, the company just wants to lure you to join Amazon Prime. While Whole Foods described the price cuts on ‘hundreds’ of items as its ‘biggest investment in lowering prices’ to date, with the discounts averaging 20 percent, the key part of the announcement is that it’s ‘expanding Prime member deals’.”

KC's View: None of this should be a surprise to anyone, especially anyone who reads MNB, and particularly our “Innovation Conversations” with Tom Furphy. In fact, both observations are true, though I think the Costco observations are a little off, only because I think it could be argued that Prime members may have a stronger, more consistent relationship connection to Amazon than Costco members have to that company. I certainly do … in fact, Prime has largely supplanted Costco in my shopping universe.

I’ve always argued here that Amazon should more directly connect Prime to Whole Foods … hell, I’d even suggest only Prime members should get sale prices there. That may be a little extreme, and I can understand why they wouldn’t want to go that far … but Jeff Bezos always has said that he wants to make Prime so valuable that it is irresponsible not to be a member.

Ikea Expands Furniture Rental Program

Reutersm reports that Ikea plans to expand its furniture rental program to all the markets it serves “in a bid to appeal to its increasingly environmentally conscious and transient customers.”

The company started testing the idea of leasing furniture some months ago, in a move the Reuters writes “was driven by a recognition that many consumers change homes more frequently but can’t afford new furniture every time they move … It is also motivated by environmentalism, with IKEA surveys showing that 90 percent of its customers are ready to change their behavior, even if most don’t know how to do that.”

The story says that Ikea, “which had global sales of 39 billion euros ($44 billion) last year, will test a range of subscription-based leasing offers in all 30 of its markets by 2020 so products are reused as often as possible before being recycled.”

KC's View: I continue to believe that Ikea is going to be a very interesting company to watch, as it tests out new services like furniture rentals … links with companies like TaskRabbit that will send people to your home or office to build the furniture (which dolts like me can’t figure out) … works on being more environmentally conscious … and even tests small stores that challenge the fundamental business model of the big stores it traditionally has operated.

This is what every retailer has to do.

Walmart Loses Innovation-Centric Exec

Published reports say that Katie Finnegan, who has been instrumental in some of Walmart’s innovation initiatives, is leaving the company to begin what she calls “a new adventure outside the company.”

Finnegan was part of Jet when it was acquired by Walmart, and subsequently served on the board of Jetblack, its New York-based concierge shopping service, and and worked on the company’s Store No. 8 and Spatial projects.

Bloomberg writes that “the departure of another tech-friendly executive could be seen as a blow for a company that’s emerged as the main competitor to Amazon.com Inc. as retail is rapidly reshaped by online commerce. Her departure closely follows that of Chief Technology Officer Jeremy King, who also left Walmart to become the head of engineering for Pinterest. Seth Beal, who co-led Store No. 8 with Finnegan, also departed last year.”

KC's View: I wish I were a lot smarter than I am, because I think the competition for top-tier, innovation-minded executives is going to be a lot hotter as we move forward. (I also wish I were younger, thinner and better looking … but a wish is a just dream your heart makes, and some things are never going to happen. S

Sears To Open Small Store Format

The Wall Street Journal reports that after years of closing stores, Sears actually plans to open three new ones next month - small format units that will “attempt to reclaim shoppers by selling tools, appliances and other hard goods … The new stores, called Sears Home & Life, will be a fraction of the size of a typical Sears department store and will also sell mattresses and lawn and garden equipment.”

The stores will be located in Anchorage, Alaska, Lafayette, La., and Overland Park, Kan., and will be between 10,000 and 15,000 square feet.

Separately, the story says, “Sears plans to expand its DieHard automotive brand into new categories such as lawn and garden and camping equipment. And it is expanding its relationship with Amazon.com Inc. for the Kenmore appliance brand, which will now be available for Amazon’s Dash service allowing shoppers to automatically reorder products … Sears is also considering selling Kenmore products through other channels besides Sears and Amazon.”

KC's View: I have two quick questions…

1. Sears is going to be featuring mattresses in these small stores, but does this make sense at a time when brands like Casper and Tuft & Needle have upended the traditional mattress business?

2. Sears wants to make its products available via Amazon’s Dash program … but does this make sense (or have much of a lifespan) since Amazon is ending its Dash button program?

Not to be overly cynical, but I have to wonder if Sears is making moves that are, at the very least, too late and too little. I’m willing to be contradicted on this, but it sure looks like same-old Sears to me. It may be opening smaller stores, but does that just mean it will have less stuff being sold by a company with which I have no desire toi do business?

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From FMI...

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The MNB Walmart Watch

CNBC reports that “Walmart announced its new online baby registry Thursday morning, as the world's largest retailer continues its aim to grab the market share left by the Babies R Us liquidation … In this revamp, Walmart is adding ‘thousands’ of new baby products online and ‘dozens’ of new baby brands in-store, according to a blog post.

“It also announced new mobile features that make it easier to create, and buy, from baby registries. Users can share their registry, use Siri to open it, easily mark items as purchased and add items to their list while browsing in-store.”

FastNewsBeat

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

Bloomberg reports that “lawmakers and food-safety advocates are pressing the Food and Drug Administration to quit dragging its feet on finalizing rules that retailers must follow for letting people know when food has been recalled—rules Congress intended to have been in place years ago.

“The Food Safety Modernization Act (Public Law 111-353), also known as FSMA, was signed into law by President Barack Obama in 2011.

“The FDA’s failure since then to develop the final rules requiring in-store recall notifications has caused concern from consumer advocates and lawmakers, who say better notices could cut down on the number of food-borne illnesses.”


USA Today reports that FedEx Office is celebrating the opening of its 2,000th store - an expansion effort that has been aided by the installation of units inside Walmarts.

The two companies announced plans to put FedEx Office stores inside 500 Walmart stores about a year ago; to this point, they’ve opened 150 of them.

The story notes that “Walmart isn’t alone in its alliance with FedEx: FedEx packages can be picked up or dropped off at nearly 8,000 Walgreens locations.”

Great example, I think, of how companies can fuel growth and expand customer relevance through smart partnerships and alliances.

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From Webstop...

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Executive Suite

• StubHub, the online ticket platform, announced this week that it has made two new hires - from Amazon and Walmart.

Arnie Katz, hired as vice president and chief product and technology officer, was the vice president of international eCommerce at Walmart.

And Stephanie Burns has been named vice president and general counsel; she previously was vice president and associate general counsel, worldwide operations, at Amazon.

Your Views

…will return next week.

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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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OffBeat: Scary Stuff

Us, the new Jordan Peele thriller, is a terrific and terrifying freakin’ movie.

All I can tell you about it is that Us is about what happens when a family on vacation comes face to face with people who appear to be their doppelgängers. The parents are played by Lupita Nyong'o, who is amazing, and Winston Duke, who erases our image of him from Black Panther as a fierce warrior. And Elizabeth Moss makes the absolute most of a small role as a friend and neighbor.

More than than, I’m not going to tell you, because you need to see it for yourself.

I will, however, tell you a story as I urge you to see Us. I was in Chicago, and on Sunday night I was having dinner with my son, David, who lives there. David was raised on movies - he is, after all, my son - and he’s one of my favorite people with whom to go to the movies.

I knew he’d seen Us and loved it, and so we talked about it a bit and I detailed my trepidations - I don’t like horror movies, have trouble with graphic physical violence onscreen (I’m not crazy about it offscreen, either), and was worried that Us would be too much for me.

David, however, assured me that I could handle it … and then said that we should go right to a theater from dinner and see it together. He bought the tickets online, I paid the check for dinner, and off we went.

I remained nervous as the curtain went up, but he whispered to me, “I’m here for you.” I’m glad he was, because he would whisper to me at moments of extreme tension that I was going to be okay … and besides, I held his hand - tight - for at least 30 minutes of the two hour movie.

And I’m not ashamed of it at all. Everybody should have a David.

And I repeat - see Us. It is destined to be considered one of the year’s best movies.



During dinner, before we got to Us, I recommended a movie to David - The Highwaymen, which is on Netflix. He burst out laughing, because he’d just read a review of the movie that carried the headline, “This is cure to be your dad’s favorite new movie.”

I can see why. The Highwaymen is the story of two aging Texas Rangers who come out of retirement to track down Bonnie and Clyde; it is based on the true story of Frank Hamer (played by Kevin Costner) and Maney Gault (Woody Harrelson), who brought years of experience, instinct and righteous indignation to the hunt for the infamous outlaws.

The Highwaymen is a fairly straightforward piece of work by director John Lee Hancock and writer John Fusco, but the period details seem authentic and the performances by Costner and Harrelson are terrific. I’m not sure the kids are going to love it, but for me, watching a couple of sixty-something guys go out and kick a little butt and demonstrate that they’ve still got game … well, I’m not ashamed to say that I found The Highwaymen to be a very nice way to spend a couple of hours.



One last thing. If you want to laugh hard, watch John Mulaney’s Netflix special, “Kid Gorgeous at Radio City,” which is just laugh-out-loud funny. Especially the bit about college’s looking for donations from alumni, which seems particularly pointed these days.



I also have a wine to recommend this week - the 2016 Three Degrees Pinot Noir from the Momtazzi Vineyard in Oregon’s Willamette Valley, which is fresh and vibrant and absolutely yummy.



That’s it for this week. Have a great weekend, and I’ll see you Monday.

Sláinte!!

PWS 54