Walmart Engages in Retail Politics

The Wall Street Journal: “Political divide in the country is creating a new landscape for business, in which fierce debates often lead consumers and employees to demand that corporations and chief executives take positions on big issues. That is increasingly pulling Walmart, the world’s largest retailer and largest private employer, into weighing in on issues such as immigration, the Confederate flag and gay rights—generally after other companies or politicians have done the same.”

“Under its 51-year-old chief executive, Doug McMillon, Walmart has often taken a more liberal stance on issues in recent years—a gamble for a company based in Red State Arkansas. But executives see its approach as part of its mission to let potential shoppers and employees know the company aims to be socially engaged. It’s a big change for a company that built itself as a ruthlessly efficient business focused on affordable shopping and that generally avoided taking a stand on political issues.”

“Today, around 72% of Walmart shoppers want the company to ‘take a stand on important social issues’ and 85% want the retailer to ‘make it clear what values you stand for,’ said Walmart’s chief marketing officer, Tony Rogers, in a June presentation to reporters, citing a survey by research firm Kantar. Increasingly, the perception of a company’s views and deeds are linked to its brand, he said … Yet with its political stances, Walmart, with 2.3 million workers, especially risks alienating its core customers, who often live in more conservative-leaning rural and suburban communities.”

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Late & Great: Allen McKellar

The Wall Street Journal: “Allen McKellar, an African-American college senior in South Carolina, figured his chances were slight in 1940 when he entered in an essay-writing contest in a bid to win an internship at Pepsi-Cola Co … Pepsi chose him as one of 13 interns. After serving in the Army, he returned in 1947 to join a Pepsi marketing team focused on African-Americans at a time when few large companies hired blacks for white-collar jobs.”

“At Pepsi, Mr. McKellar and his colleagues persuaded Duke Ellington and other jazz stars to give shout-outs to the soft drink, according to ‘The Real Pepsi Challenge,’ a 2007 book by Stephanie Capparell, a Wall Street Journal editor. They were treated as celebrities in the black press as they crisscrossed the country to pitch Pepsi by giving interviews and visiting schools, church groups and mom-and-pop groceries.”

“Pepsi already had set itself apart by offering 12 ounces for a nickel, while most rivals sold 6-ounce bottles for the same price. Promising “twice as much,” Pepsi ads appealed to the less affluent. The soft-drink company hoped its willingness to hire African-Americans for prominent roles and to market directly to blacks would give it further advantages over Coca-Cola.” In a 2009 interview, Mr. McKellar commented: “Back in those days, there were one or two things a minority kid could expect to do: You could become a teacher or, if you had the financial resources, a doctor. I became the national sales representative for the black market in America. I have been told this was a precursor for blacks in the corporate world.”

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Slow Tickets: Swift ‘Reputation’ for Empty Seats

The Wall Street Journal: “The biggest pop star’s current concert tour isn’t a sellout. And that’s a good thing, according to some in the concert industry. Taylor Swift’s ‘Reputation’ tour, which kicked off last week in Glendale, Ariz., is a test case in squeezing out scalpers and capturing more profits from ticket sales. The strategy … is to use aggressive pricing to limit the ability of scalpers to purchase tickets and later sell them at higher prices. In addition, a program from Ticketmaster is aimed at giving passionate fans earlier access to tickets at discounted prices.”

“One downside to the plan: empty seats at some of the roughly 36 stadiums on Ms. Swift’s 53-date tour. However, even if those seats remain unsold, the ‘Reputation’ tour already has grossed more on its North American leg than Ms. Swift’s previous tour in 2015 … For decades, artists and their teams have claimed ‘sold out’ shows as a badge of honor showing the high demand for their music. The new approach is raising questions in the music industry about whether an end is nearing for the days of instant sellouts.”

“The best seats—some with added VIP perks—cost $800 to $1,500 at face value for a given show, with those immediately behind them at $250 each. Spots in the back of the house go for about $50.”

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Chik-fil-A ‘Secret Sauce’: Community

Business Insider: “Chick-fil-A’s recent dominance of the fast-food industry can be tied to one behind-the-scenes secret … It’s less expensive to open a Chick-fil-A than it is to open a location of almost any other chain. Chick-fil-A charges franchisees only $10,000 to open a new restaurant. However, unlike other franchises, it prohibits franchisees from opening multiple locations.” Industry expert John Hamburger says this franchise model puts “somebody in the store that was close to the customer. They’re dealing with the customer, they’re in the community. They’re active in the community. And that’s what Chick-fil-A does.”

“Chick-fil-A franchise owners are involved in hiring and firing employees. The company also encourages franchisees to get personally involved in the community through various local organizations. According to Hamburger, that allows Chick-fil-A to get a leg up on the competition in terms of quality and customer service.”

“Hamburger says chains such as Applebee’s are already seeing the negative impact of losing their community connections. The chain, which went to a 100%-franchised model in recent years, closed 99 stores in 2017 amid sinking sales … Chick-fil-A’s success as a rapidly expanding private company could help convince more public companies to follow in its footsteps.”

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Ohm: The Mantra of Deli

The New York Times: “You could spend your life walking past the Ohm Deli Corporation in Williamsburg, Brooklyn, and not pay it any mind. It’s just a deli. Maybe it has the brand of salsa you like. So do three other places in the neighborhood. Or you could step inside and find a man named Rick Patel, who has owned and run Ohm for 25 years, and a group of regulars who come for a social cohesion sometimes lost in the swirl of change in the neighborhood.”

“Ramsay de Give moved to Williamsburg 10 years ago and made the deli a part of his daily circuit: greeting Mr. Patel, getting to know some of the regulars, scoring a carton of eggs when he needed it … At the right time of day, he could count on seeing a crowd gathered around the television, yelling at the Lotto numbers. Of such scenes are neighborhoods built.”

“Four or five years ago he started hanging out in the deli on New Year’s Eve, and encountered ‘an intense sense of community I’ve never seen before,’ he said … New, fancier shops and restaurants popped up or changed hands almost weekly, but Ohm did not change … If anything, Mr. de Give said, it just got firmer in its character. ‘I wanted to capture the tedium of being open from 7 a.m. to midnight, 365 days a year,’ he said.”

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Hotel Shampoo: Losing its Lather?

The Wall Street Journal: “Those little bottles of shampoo, conditioner and body wash in hotels—icons of travel—are disappearing, replaced by bulk dispensers mounted on shower walls. And some travelers are in a lather … some road warriors say wall-mounted racks look low-class. They’re steamed that removing their prized individual bottles looks like just another in a long string of amenity cuts from hotels, like mouthwash, stationery, sewing kits and pens.” David Lennox, a frequent traveler, comments: “What’s next, getting rid of the packs of coffee and making us scoop out of a can? I think it’s cheap, incredibly cheap.”

“Marriott says its change allows it to offer higher-quality bath products at lower cost and reduce waste … And the landfill waste can be significant, says Liam Brown, who is responsible for Marriott brands like Courtyard, Residence Inn, Fairfield Inn and Springhill Suites in the Americas. Little bottles are never refilled and rarely recycled. The initial 450 properties where Marriott will make the change use 10.3 million little bottles a year, or 113,000 pounds of plastic, he says. When the change reaches 1,500 hotels it means 34.5 million bottles, or 375,000 pounds of plastic a year.”

“Noelle Nicolai, who leads marketing for Wyndham Hotel Group’s upscale brands, likens bath products to bread at restaurants. If it’s mediocre, you forget it. ‘If done right, it can be one of the top drivers of delight and guest satisfaction,’ she says.
Wyndham did extensive research and decided to increase the size of some of its bottles from 30 milliliters to 50 milliliters to encourage guests to take them home. ‘Maintaining that bottle experience…was really important to us,’ Ms. Nicolai says. Wyndham and most other large hotel companies send leftover soap that’s been sanitized and repackaged to a charity called Clean the World for recycling.”

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Airport Lounges: From Perk to Pathetic?

The Wall Street Journal: “Airport lounges were once a perk for business travelers and high spenders, a haven from the chaos of modern travel. Then more rewards credit cards started offering lounge access. And what was once an oasis now is more like a mall food court. Losing that ‘1%’ feeling has been jarring. Grousers say gourmet meals once on offer are now finger foods, and beverages are more likely to be guzzled than sipped. Overcrowding means seats often aren’t available.”

“Travelers say a turning point came in 2016 when JPMorgan Chase & Co. launched its Sapphire Reserve credit card. It became a huge hit, offering big rewards to offset a $450 annual fee. One of those was a Priority Pass membership that provides entry for the cardholder to around 60 lounges at U.S. airports and around 1,200 world-wide—with as many guests as desired.”

“Lounges are trying to rein things in. Following complaints from cardholders, AmEx is expanding some of its Centurion lounges and restricting access to holders of Platinum and Centurion cards, which carry annual fees of $550 and $2,500, respectively, and some business cardholders. Priority Pass, meanwhile, is dealing with the crowds in a new way. It’s offering food and booze credits of around $28 per person, with one catch: People have to leave the lounge to use them at restaurants in the airport.”

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Short Staff + Long Lines = Retail Meltdown

The Wall Street Journal: “Over the past 12 months, 86% of U.S. consumers say they have left a store due to long lines, according to a survey conducted by Adyen, a credit-card processor and payment system. That has resulted in $37.7 billion in lost sales for retailers, Adyen estimates.”

“Retailers typically set staffing as a percent of sales, but a growing body of research suggests it should be based on foot traffic. The problem is twofold: Many retailers don’t track traffic and even if they do, they are reluctant to add labor, which is already among their biggest costs.”

“After installing cameras last year, Cycle Gear Inc., a 130-store chain that sells motorcycle apparel and accessories, noticed sales dipped during the afternoon at its Orlando, Fla., store even though it was packed with shoppers. ‘That told us the salespeople were overwhelmed,’ said Rodger O’Keefe, a vice president. ‘We added two more salespeople during those hours, and sales have been up since then’.”

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Micromerch: Statements for Daily Life

The New York Times: Here comes micromerch:”personal merchandise for niche public figures and celebrities (or even not-yet celebrities) made possible by innovations in manufacturing and distribution, and with mechanisms greased by the ease of the internet. Consider it the modern-day equivalent of the private-press LP or the small-batch zine, amplified for social media and very late capitalism … small-batch merch — a couple dozen to a couple thousand items — can be made available for almost anyone, from emergent social media or reality TV demicelebrities to casual dadaists who toy with the dissemination of ideas in the modern marketplace. In an era when personal branding is presumed, no following is too small to monetize.”

“Want to show support for Sean Bryan, a.k.a. the Papal Ninja, an American Ninja Warrior contestant and lay minister? There’s a shirt (and laptop case) for that. Enthralled by the 1980s sunglasses worn by the rubber-legged teen social media star Roy Purdy in his absurdist dance videos? For a while, he sold them, too. Obsessed with Gordie, the French bulldog owned by Alex Tumay, who engineers Young Thug’s records? Buy a shirt.”

“Peloton, the home indoor cycling business, has a stable of a dozen instructors, and sells merch inspired by each. Jill Foley, Peloton’s director of boutique apparel, said the company has sold hundreds of T-shirts and tank tops with instructor catchphrases like ‘It’s Not That Deep’ (Cody Rigsby) and ‘Sweat Sing Repeat’ (Jenn Sherman).” She comments: “We’re getting messages to people in this micro way. We’re in people’s homes in their daily life.”

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Boyd’s: Retail’s Past as Prologue?

The New York Times: “Like the Liberty Bell and the stone Rocky Steps, Boyds is a Philadelphia landmark, and one equally impervious to the shifting seasons. For 80 years, the family-owned business has outfitted lawyers, bankers, doctors, politicians and famous athletes … The store is where a young man goes to buy his wedding suit, and returns 30 years later, grayer, wealthier, thicker in the middle, this time bringing his son to buy his wedding suit … in this age of dressing down and click-and-buy, in an environment where the big chains have killed off the mom-and-pops and Amazon is killing off the chains, Boyds now feels like a shopping experience out of time … Out-of-towners who happen into this retail anachronism tend to react first with astonishment, followed by a sigh of pleasure.”

“It’s very possible that Boyds isn’t just one of a dying breed of old-fashioned retailers, however. Given its scale (50,000 square feet of selling space over four floors), and the level of service it provides, and the tailor shop and complimentary parking lot, and the near century of independent operation by the same family, it may be the only clothing store of its kind anywhere in the country … To understand how Boyds has avoided oblivion thus far, it’s instructive to spend an afternoon on the selling floors … The operation has a choreographed precision. Chris Phillips, the 43-year-old men’s tailored clothing manager, on this day stood near the elevator. It was his job to greet customers, determine their needs and spin them to the right salesperson.”

“Generally speaking, the men who come to Boyds aren’t there to browse. Overscheduled high earners, they view clothes shopping as one more task to be efficiently completed, an attitude to which every Boyds employee is attuned … Marc Brownstein, the president and chief executive of the Brownstein Group … dates his first Boyds shopping trip to high school, back in the ’80s, and now especially appreciates its delivery service to home or office, and the text messages he gets from the store when a brand is going on sale.” He comments: “The family just outthinks other retailers. They’ll deliver to your house, to your office. You park for free. You know what parking costs in the center of Philadelphia? They’re going to outwork and out-service everyone else.”

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