Archive for category: Reading List

It wasn’t that long ago (actually it was, I’m afraid) when I reported, in a somewhat sarcastic tone, about Quiksilver trying to sell surf trunks in vending machines at resorts.  This was before their bankruptcy filing.  I thought that if they were highlighting this effort in a conference call, they were really struggling to find good news.  I’m not aware that they ever sold any that way.

Maybe they were just ahead of their time.  In “Cannoli kits and prime aged steaks: Here’s how the pandemic has revolutionized vending machines,” Laura Reiley describes where and how vending machines are being utilized.

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NOTE: I recognize there are paywalls and not all of you can read these.  Often though, you can get a few free articles every month.

About four weeks ago I got a new shoulder so I’ve been quiet for a while. This had been coming on for decades. It’s healing fine but leaves me with only one arm to type with. Happily, I’m discovered dictating in Word. We’ll see how that works.

This shoulder is what made me give up snowboarding about five years ago. We’ll see if things change next season.

Meanwhile, there’s a lot going on, and with the drugs out of my system I’m hoping to address them coherently.

I’m going to start with some articles I’ve discovered.  Between the virus, the weather here in the Northwest, and my shoulder I’ve had lots of time to read.

From the New York Times Magazine last August comes “Sweatpants Forever,” by Irina Aleksander.  “Even before the pandemic, the whole fashion industry had started to unravel. What happens now that no one has a reason to dress up?”

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Emerald Raised the Money

As I reported in June, Emerald Expositions was raising $400 million through a convertible, preferred stock offering.  Part of it was an offering to its stockholders with its majority owner, Onex, agreeing to take whatever part of the offering those smaller shareholders did not purchase.

I was skeptical in the article that shareholders other than Onex would participate in the offering.  Now we know.  In an 8-K filed on August 13^th, Emerald tells us they “…sold a total of 71,446,346 shares of Series A Preferred Stock pursuant to the Investment Agreement and the rights offering, of which Onex purchased a total of 69,718,919 shares, including the shares purchased pursuant to the Backstop Sale.”  The deal is done.

Millennials Buying Old Houses

And why would you care?  Take a look at this article about them buying old, cheap, beat up houses that need a lot of work.  Any of you who have been through a significant remodel, especially with an old house (I’ve done both) are smiling, looking at the pictures of the houses in the article and thinking, “They have no idea what they’ve gotten themselves into.”  I can’t help flashing back to the 1986 Tom Hanks movie, “The Money Pit.”

The point is they are going to make choices leaving them with less money and time for the things we’d like them to buy and do.  I’m not saying this is a problem you have to react to right now.  However, the evolution of generations through phases of life is a constant.  In the same way winter resorts are having to figure out what to do as the baby boomers aren’t going big anymore, we’re going to have to consider the changing needs and priorities of the millennials.

How Much Does It All Cost?

Robin Lewis wrote this excellent article on subscription models.  As a lead in, he quotes this first line from one of his earlier articles, ““Bring it to me, just for me, new, now & more often,” and I found myself thinking, “How much does this all cost?”

But that was the wrong question.  What I want to know is how your cost structure is going to evolve.  Forget the hopefully short-term costs associated with Covid 19.  When the working vaccine has been distributed (sooner rather than later would be nice), when social distancing and cleaning inefficiencies go away, when the supply chains are less disrupted where are you going to be spending money?

Consistent with Robin’s quote above, I expect you to be spending it on being flexible- in acquiring product, in moving it around, in getting it to and from the customer, in changing it based on customer expectations in collecting and managing data.  Other costs, such as advertising and promotion, I expect to decline.  You will also have had general and administrative costs decline as you resolve the issue of merging ecommerce and brick and mortar expenses in such a way that they are supportive rather than competitive.

If you don’t do that, well, you won’t have to worry about any other issues.  Ever.

While expenses may rise, I’m thinking that margins will rise as product quality is emphasized and as the overwhelming number of brands and retailers declines.  Completing that process probably requires a normalization of interest rates that is not in our immediate future.

That pandemic accelerated decline in the number of brands and retailers may start to restrain consumer dominance and return some balance to the relationship between consumer and brand/retailer.  At this point that’s sheer speculations on my part.

 

 

 

 

I imagine it’s happened to all of us.  You need to paint (or if you’re lucky, have painted) a wall/room/house.  You go into the store to pick “the right” paint color and are confronted with literally an infinite number of choices- because they can match any color you want.  As if the paint chips by themselves weren’t more than you could possibly parse.

Home you go with a big bunch of small chips.  After some agonization, you come back and maybe (at a paint specialty store) get some large chips.  Then on the next visit, you get some small sample paint jars and slap them on the wall.  By this time, any thoughts you may have had about being daring and, for example, having a bright accent wall has been bludgeoned out of you.  You just want to get “the right” color.

I spend way too much time choosing and about 14 nano seconds after the project is complete, it’s fine and I never think about it again.  I may not have gotten “the right” color but I sure spent a lot of time doing it.

Some new paint companies are trying to help me.  They offer curated palettes of between 50 and 150 colors.  One of the company names is actually Curator.

It was a decade or two ago when I suggested that snowboard companies should stop picking their SKUs based on what their competitors were doing.  What mattered was what your customer wanted.  More SKUs wasn’t automatically better. 

True- following your competitors’ lead was easy, but it was lazy.  It didn’t answer the question, who are my customers and what do they want?  Mostly, I think we’ve figured that out.  Many of you, I know, have cut your SKU count.  It’s good for inventory management, cost of goods sold, branding and holding margins.  May not help your top line, but it will sure help the bottom line.

Have you cut it enough?

If a paint company believes they can compete with just fifty colors against Benjamin Moore’s 3,500, well, maybe they are on to something.  When you read this article think about how they’ve tried to have colors with a common theme that fit together.  Looks to me like a lot of their colors work with each other.  These companies are betting that the customer will have a better shopping experience with fewer choices with a product I’d have previously characterized as a commodity. 

Can you make your brand special by offering fewer choices?  Perhaps a lot fewer.  You can if you improve their shopping experience.