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Tuesday, April 16, 2019

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Sansolo Speaks: Changes to Die For

by Michael Sansolo

Forget the old adage about death and taxes being the only sure things. Change has everything beat and it’s not even close anymore. Even death is being impacted.

Well, not so much death as the way we do funerals, burials and the other things that follow death.

The Washington Post reported Monday on the tidal wave of change hitting the funeral home industry. Thanks to myriad societal issues—environmental concerns, the far-flung nature of families today—funerals simply aren’t what they use to be.

The article details how funerals - like so many other things in life - are becoming a completely new experience.

Increasingly, those last rites are less somber and more a reflection and celebration of the person being laid to rest, with at times raucous parties, favorite foods and even, in one specific case, parting comments by Jerry Seinfeld. Now we might not all get the Seinfeld touch, but the odds are increasingly likely that cremation and not burial is in our future.

The article details the incredible shift to cremation and cites many reasons, among them worries about the environmental impact of burials and the reality that families are so far flung these days that no one is pushing for a single gravesite to visit. In fact, there are businesses springing up around the new opportunities including the possibility of human composting (can Soylent Green be far behind?) and even converting remains into jewelry and other keepsakes.

The funeral industry seems to be taking a pro-active approach to this challenge that should resonate with any business today. As one director told the Post, “Services are more life-centered, around the person’s personality, likes and dislikes. They’re unique and not standardized. The only way we can survive is to provide the services that families find meaningful.”

Funerals are hardly the only industry facing such existential, pardon the expression, life and death challenges. Consider how legalized sports gambling, soon to be a reality in many arenas and stadiums, might impact the incredibly large and lucrative world of bookies and underground betting. (Estimates are that Americans illegally gamble around $150 billion annually.)

I’m betting that bookies won’t be looking for ways to create “meaningful” experiences like the funeral homes, but perhaps we already know how this turns out. It’s not that long ago that the only casinos in the country were in Las Vegas before state after state found ways of legalizing gaming in various ways. Yet as I find on near constant travels, Las Vegas seems to be doing just fine.

Then again, today’s Las Vegas is nothing like the city Moe Green imagined back in the 1950s. Sin city is now home to fabulous restaurants, hotels that explode travel concepts and an incredibly booming conference and convention clientele. And the city has done it all while maintaining its allure as a kind of shady playground (“what happens inn Las Vegas stays inn Las Vegas”) even while increasingly catering to families.

It’s a reminder to all businesses that staying relevant in the midst of fast-changing times requires incredible focus on what people really want from you and finding new and better ways to deliver that service than ever before.

Because if you want a sure bet this is it: more change is coming. Even death can’t take a holiday from that.


Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com . 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.

Tuesday Eye-Opener: Hats Off

by Kevin Coupe

I’m the recipient of dozens of emailed press releases every day. To be honest, I don’t pay attention to most of them and don’t write about most of the ones I do read; they’re usually from companies looking for free publicity, and I can usually tell in about five seconds that the people sending them have no idea what MNB is.

But every once in a while…

I’ve gotten several emails recently from a publicist on behalf of a company called Canopy Hats. Here’s how the press release describes the company:

“The time of buying different hats to represent your favorite interests, designs and places has come to an end. Canopy has made it its mission to deliver consumers the last hat they’ll ever need to own. Today, sustainable apparel brand Canopy announced its inaugural collection of eco-friendly hats with interchangeable patches. Instead of crowding your closet with thirty hats, you now can purchase one hat from Canopy and add your choice of patches that you can place on and swap out whenever you want, anywhere you want.”

This pitch grabbed my attention because I’m one of those people with 30+ hats in my closet and on hat racks, and I’d probably have 130+ if Mrs. Content Guy hadn’t stepped in years ago with an appeal to sanity.

But what really grabbed me about this business idea is that the people who came up with it, while their hearts may be in the right place when it comes to sustainability, they may not have a clue about why people own so many hats.

We have them because they remind us of a place and/or time, or speak to our allegiances and passions. They aren’t about rationality, and they’re not interchangeable or even replaceable. They speak to and about our hearts, not our minds.

I look up from my desk and I can see three different New York Mets caps (one blue, one black, one spring training model), one Brooklyn Cyclones cap (from its inaugural season), one Brooklyn Dodgers cap and one from the Full Sail brewery. And that’s just in my office. None of them could be eliminated by the swapping out of a replaceable patch. To suggest that would be to miss the point.

Now, I may be alone in this. Though I’m guessing I’m not. (I got a lot of email a few years ago when I wore a Red Sox cap while doing a FaceTime video. People pay attention to this stuff.) I still miss the old Utica Blue Sox cap I picked up years ago that somehow got lost (though I hold on to the faint hope that I’ll find it in a box somewhere in our hopelessly cluttered basement.) And I still remember with a certain amount of envy how my old friend Vic Magnotta had several rooms in his house where he had lined the top of his walls with hat racks where he had displayed dozens and dozens of ball caps. (He was a bachelor. Enough said.)

My Eye-Opening point is this. It is important to understand not just what people do, but why they do it.

It may be that Canopy Hats will be a huge success. I could have this wrong. But I’ll be wrong while wearing the new Portland Mavericks cap that my son Brian gave me the other day.

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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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Walmart Gets Into Clothing Subscription Business

Walmart is getting into a Stitch Fix-like business by partnering with Kidbox, which is a subscription clothing plan focused on babies and children.

CNBC reports that “Walmart shoppers will be able to purchase as many as six different boxes from Walmart.com, curated by Kidbox, each year. That means there’s one new box available for each season, as well as for going back to school and the holidays, the companies said. Each box will include four to five items and cost $48, which Walmart says will be about 50 percent off the suggested retail price. Parents will have the option to either keep all the items in the box for no additional fees, or return everything and receive their money back. Kidbox curates the boxes based on a styling quiz that’s completed before an order is placed.”

The move comes as Walmart has been ramping up its clothing offering, with both private label and national brand items for sale both in its stores and online.

The CNBC story points out that the children’s market has been getting a lot of attention lately: “Target has found incredible success with its Cat & Jack line of kids’ clothing, which brought in more than $2 billion in sales in its first year in business. Gap tested out kids’ subscription boxes, but it ended the effort after a 14-month pilot.

“Stitch Fix has a children’s category, now, while Rent the Runway — which offers apparel on a rental basis — just earlier this month announced it would be getting into kids’ clothing. Foot Locker, meanwhile, recently invested $12.5 million in kids’ clothing company Rockets of Awesome, which offers boxes to parents as a subscription, but clothing can also be purchased a la carte.”

This is not Walmart’s first foray into the subscription business; it has had Beauty Box, offering cosmetics samples and related items, since 2014.

KC's View: I think that the children’s clothing subscription business may have some inherent challenges. The good news is that they grow, and so always need new clothes. But the secret sauce at Stitch Fix is that it fixates (pun intended) on style choices made by its members and learns from them; kids, on the other hand, can be more fickle in their choices, largely because they are vulnerable to all sorts of cultural and peer influences. That’ll be something that Walmart and Kidbox have tio navigate through.

But … for the most part, I think this is a very smart idea. As I said, kids grow and always need new clothes, and Walmart/Kidbox will be locking in at least some of this business. I’ve said it here often - automatic replenishment and subscriptions are a wonderful opportunity for retailers, and way too few of them are taking embracing it … which means that they are vulnerable to those that do (like Amazon’s Subscribe & Save).

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From The Organic Produce Summit...

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Is Stop & Shop Strike A Last Stand For Unionized Grocery Workers?

The Boston Globe has a story about how the strike by members of the United Food and Commercial Workers (UFCW) against Ahold Delhaize-owned Stop & Shop - now in its sixth day - could be “a last stand for unionized grocery workers, whose stores are under attack by a host of competitors, all looking to grab a piece of the supermarket bounty.”

Burt Flickinger of the Strategic Resource Group puts it this way: “Stop & Shop is the last, best, and final hope for the great Roman empires of unionized food retail chains.”

Here’s how the Globe puts it in context:

“Stop & Shop, one of the last remaining union shops in the industry, is the largest grocery store chain in New England. But the dynamics affecting its fortunes reach around the world; over the last two decades, the company has been buffeted by the forces of consolidation and globalization and by the rise of the Internet … One by one, union powerhouses that used to reign over swaths of the New England grocery industry, including A&P, Pathmark, and Grand Union, fell into disarray. Stop & Shop, which was acquired by Netherlands-based Royal Ahold in 1996, stepped in to scoop up some of the languishing players. But in the process, it acquired their pensions and other benefit plans, some of which are now at issue in the ongoing labor dispute.
Ahold Delhaize, now the fourth-largest supermarket owner in the United States, also owns the Hannaford and Food Lion chains and the Peapod delivery service.”

Flickinger tells the Globe that “the cost of benefits can be difficult to convey to union workers. ‘It really becomes a challenge to communicate to the team members at the stores that while the compensation could be going up 5 to 8 percent,’ other factors, like filling the hole in an unfunded pension plan, providing a robust health insurance package, and accommodating new minimum wage laws, hurt profit margins, he said. Especially when primarily nonunion players like Aldi and Costco can run their payrolls at a fraction of the cost.”

The Globe points out that as Ahold Delhaize has tried to hold the line on some costs while dealing with others that it often cannot control, there is only a growth in competition - from other chains, family-owned independents, non-traditional formats that now are selling food, and, of course, online retailers with completely different economic models.

“It really has become a perfect storm for the unionized grocery stores like Stop & Shop to withstand,” the story concludes.

KC's View: And, of course, we know how The Perfect Storm ends. (Spoiler alert!) The ship goes down. The crew dies. (Even George Clooney and Mark Wahlberg.)

A friend of mine called me yesterday to suggest that when I mentioned that I live in a union household - my wife and daughter are both members of the teachers union - I might be running the risk of alienating MNB readers who see unions as the problem and who then might be see me as consorting with the enemy.

I’m sympathetic to the UFCW in this case, but mostly that’s because I think that organized labor hasn’t yet figured out a way to pivot to a new role in the management-labor construct. Too often, I think, the negotiations and tensions are focused around arrangements that make labor part of the problem, not part of the solution. Now, to be fair, I’m not sure that traditional corporate interests always allow for this … the two sides have been in opposition to each other for so long that it may be hard to find another way.

I must admit that I wonder if, at the beginning of the negotiations between Stop & Shop and the UFCW, the labor folks looked at management and said, “Tell us about your problems, and tell us how you think we can help solve them.” And if management looked at the labor representatives and said, “Tell us about your problems and how you think we can help solve them.”

Do you think that they discussed each other’s problems as opposed to their negotiating positions?

I wonder about this stuff. I wonder if they’ve ever considered what Shakespeare wrote: “The quality of mercy is not strained. It droppeth as the gentle rain from heaven upon the place beneath. It is twice blessed. It blesseth him that gives and him that takes.”

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From Cornell University...


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As Individual Battles Rage, Kroger May Be Winning The War

USA Today has a story about how Kroger may be wining the nation’s grocery wars.

Here’s how it frames the story:

“Battered by a two-year price war and waging an expensive battle for superior home delivery, Kroger's profits have taken a hit. But it has steadily increased sales even as it cuts prices.

“New market share data shows Kroger getting traction in several of America's largest metro areas over the past two years … Some of the metro areas nabbing extra sales are where Kroger has added additional stores, such as Dallas where it increased its share 1.2%, and Phoenix, where it gained 3.9% market share. In Los Angeles, where Kroger has trimmed a few stores, it gained 2.3%. Each of these gains marks slightly bigger pieces of astronomically large pies, with tens and sometimes hundreds of millions of shifting shopper dollars.”

However, one analyst points out to USA Today that the competition is only going to become tougher, and that, for example, Amazon only has owned Whole Foods for just over a year: “Call us back when Amazon has fully implemented its strategy,” he says.

KC's View: The thing about these battles and wars is that they’re never going to end, never going to be resolved. There will always be new battlefields and new hills to take, new weapons to employ, and new competitors.

Ulysses S. Grant once wrote that “the art of war is simple enough. Find out where your enemy is. Get at him as soon as you can. Strike him as hard as you can, and keep moving on.Little did he know.

E-conomy Beat

• Amazon announced this morning that it has opened its third Amazon Go checkout-free store in San Francisco - at 575 Market Street, less than a mile from the Go stores located on California Street and Post Street there.

The 1,750 square feet unit in the city’s Financial District will be closed on Sundays. It is the 11th Amazon Go store to be opened by the company; the others are in Seattle and Chicago.


Billboard reports that Amazon may launch a free, ad-supported music service that would intensify “its competitive threat to global streaming leader Spotify … The world’s biggest e-retailer would market the free music service through its voice-activated Echo speakers, sources say, and would offer a limited catalog. It could become available as early as next week.”

The story says that “the move underscores Amazon’s growing power in the music market, as a distributor that can afford to discount music as a loss-leader to support its core retail business. That’s a luxury Spotify doesn’t have, as its shareholders pressure the music-focused public company to turn a profit … Amazon hasn’t disclosed how many paying music subscribers it has, but some reports last year estimated it counts over 20 million subscribers across its offerings and expect it to gain steadily thanks to integration with its market-leading smart speakers.”


Reuters reports that “workers at four Amazon logistic centers in Germany went on strike on Monday, the latest action in a long-running campaign for better pay and conditions.

“Trade union Verdi said workers at warehouses in Rheinberg, Werne, Bad Hersfeld and Koblenz had stopped work, with the strike set to last until Thursday in some centers, and others potentially joining over the Easter holiday period.”

The story points out that “Verdi has organized frequent strikes at Amazon in Germany since 2013 to press demands for the retailer to raise pay for warehouse workers in accordance with collective bargaining agreements in Germany’s mail order and retail industry. Amazon has repeatedly rejected Verdi’s demands and the spokeswoman said the company is a fair and responsible employer without a collective agreement, with wages at the upper end of what is paid in comparable jobs.”

FastNewsBeat

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

AndNowUKnow quotes H-E-B president Scott McClelland from a speech he recently gave to the Houston Northwest Chamber of Commerce’s annual Economic Outlook Forum in which he said the following:

“[In the future], there’s going to be brick-and-mortar [stores], and there’s going to be online. We think we can do both, but the brick-and-mortar [store] has got to be exciting and interesting and compelling for you to want to come in.”

Exactly. McClelland concedes that H-E-B’s online efforts are not yet entirely frictionless, but his company definitely is going in the right direction. (And its Central Market stores are the very definition of differentiated.


• The Californian reports that “Taylor Farms has purchased organic grower Earthbound Farm, the Danone produce company.” Terms of the deal were not disclosed, though the story also points out that Danone acquired Earthbound in 2014 for $600 million.

Executive Suite

• Best Buy CEO Hubert Joly, who was brought in from the outside seven years ago to re-engineer the company and make it more competitive on a fast-shifting economic battlefield being disrupted by Amazon, announced yesterday that he will step down in June and be succeeded by Corie Barry, the company’s chief financial and strategic transformation officer.

The Los Angeles Times writes that the company “is handing the reins to the architect of the retailer’s current growth strategy, widely considered to be one of the industry’s most remarkable turnarounds … In her outgoing role, Barry oversaw the company’s expansion announced in 2017, a rare consumer success story in the age of Amazon. The plan found new revenue streams, including an in-home advisory program to help customers with any tech-related issue.

“The Barry-led push into services has helped Best Buy buck the trend of legacy retailers succumbing to the shift online. During the holiday-shopping season, the chain again topped expectations when many peers struggled.”

Joly will remain with Best Buy as executive chairman; the Times notes that he has mentored Barry, 44, for several years.

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From FMI...

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Your Views: Self-Inflicted Wounds

Yesterday we took note of a Bloomberg story over misleading advertising that Hormel, the accused company, managed to win … though it may have been on a legal technicality that makes it a hollow victory.

Essentially, the lawsuit challenged Hormel’s use of the word “natural” to describe a product that comes from pigs sometimes given antibiotics. Hormel’s successful defense was that government regulations allowed it to do so.

My comment:

Speaking as a civilian/consumer - I am neither a lawyer nor a food company executive - I’d like to suggest that while Hormel may be disingenuous in its approach, the core problem is with regulations that in some cases are a joke. I cannot imagine what the regulators were thinking when they posited that meat from animals given antibiotics could be labeled as ‘natural.’ I’m pretty sure that’s not what consumers are thinking when they see that word, and maybe it is time that regulations reflect reality, not what lobbyist gave the most money to some political party. (Forgive my cynicism.)

This is especially true at a time when, as Bloomberg writes, “American shoppers are reaching for healthier, more environmentally and animal-friendly meat products, with 39 percent saying ‘all-natural’ is the most important claim when purchasing red meat, according to a recent survey by Mintel.”

If USDA’s definitions don’t match consumer expectations, then we have a problem - and the problem is with the USDA, not shoppers.

By the way … it’d be nice if Hormel went beyond what the government expects and actually live up to what consumers expect. They should be transparent, not tricky.


MNB reader Jim Huey responded:

If most retailers (especially the larger ones) would follow your recommendations about transparency we would have a lot less regulations and the country would be a much better place.

Although I am not a fan of government regulations, I also do not feel sorry for the companies affected as they often bring it upon themselves. Sadly the larger corporations, (rather than leading), support government regulations because they believe it gives them an advantage over smaller rivals.




On another subject, MNB reader Rich Heiland wrote:

Ties to nothing you’ve written about recently, but...

Big grocery war in our small city. New super-size HEB, Kroger Country Market, revamped Brookshire Brothers.

And, Aldi came to town. 

My wife came home from Aldi’s the other day with two potted hyacinths, one to be used for a hostess gift.

“Where’d you get those?” I asked.

“Aldi’s,” she said.

“Really?” I asked.

“Yeh. You know, they are getting to be my favorite store. They always surprise me. I never know what they might have.”

My thought? Not a bad thing to have folks say about you.


Yikes.



And, from MNB reader Patrinka Crammond:

Been out of the country and was catching up on my reading when I chanced on your article. Got a good laugh out of it. Most millennials don't have the work ethic that Baby Boomers have and it is more important for them to have a 'work/life balance'. You don't put in the work, you don't make the money. The decline for the millennials is of their own making.

I profoundly disagree with this. I’ve met Baby Boomers who are hard workers, and Baby Boomers who are entitled, lazy slugs. Same goes for people of every generation … and I will tell you that many of the young people I meet at Portland State University each summer are as hard-working and focused as one could imagine.

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From Webstop...

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From The MNB Sports Desk

• Kenya’s Lawrence Cherono won the Boston Marathon yesterday, winning by two seconds in one of the closest finishes in race history, and completing the race in 2 hours, 7 minutes, and 57 seconds.

On the women’s side, Worknesh Degefa of Ethiopia won the race with a 2:23:31 time, 42 seconds ahead of the second-place finisher.

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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.

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A Retail Tomorrow Podcast: Storytelling & Influencer Marketing, From AI To Pop-Ups

Hooray for Hollywood! This podcast comes to you from GMDC’s 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.





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