Tag Archives: Business model

Food Prices

Let’s think about what’s been going on with food prices this Foodie Friday. I do the bulk of the food shopping so I might be more attuned to both the food supply and food prices than many of you, I get that. However, this is something that affects us all (unless you don’t eat, which is another issue altogether).

You’ve probably noticed that your grocery bills have gone up steadily over the last six months. That’s been due to the pandemic. You’ve read about the problems in meat processing plants as well as shortages of many other items due to supply chain disruptions and the shift from many of us working in an office (and eating meals away from home) to working at home (where we’re supplied by grocery stores). You’ve probably also recited the “supply vs. demand” mantra to yourself as prices rose, as the supply of some food items diminished, and the demand grew.

What you might not realize is that many of those issues have gone away. Have prices fallen? Not so much although they are down a little from their peak. As an NBC News article said:

Pandemic grocery prices shot up like a rocket and fell like a feather, even after supplies recovered. While the average price of ground beef was down by over 9 percent last month, shoppers are still paying nearly 13 percent more than they did in January.

Do I think it’s all price gouging or companies taking advantage of a horrible situation? No, not all of it, but you can’t help but wonder why prices for many items that are in abundant supply remain high. An analysis of consumer price index data for February through June, conducted by 24/7 Wall St., is shedding some light on the exact items that are driving up your grocery spending the most. According to the analysis, you’ll find that foods like dried legumes, peanut butter, ham, and potatoes have seen a price increase of 7% or more. However, the five items that top the price-growth list are mostly found in the meat aisle. Hot dogs, chicken, pork chops, and most beef cost quite a bit more than they did pre-pandemic even though, based on what I see in the stores I patronize (and supported by the data I could find), the shortages are pretty much over.

I think we’re all aware of the unemployment situation and the fact that the support system for those folks who’ve been fired or furloughed is shaky at best. Food insecurity has been a problem in this country pre-pandemic and it’s only been exacerbated. I also get that many variables go into establishing the price of foods in grocery stores, including costs to the grower, the processor, the manufacturer, the distributor, and lastly, the retailer. Increases in food prices are driven by dozens – if not hundreds – of different factors. But I also see that the food producer stocks are doing pretty well, and they’re still paying dividends. Maybe now is the time for them and others in the food chain to think about putting the customers ahead of shareholders, at least in the short term? Is taking a short-term hit or foregoing a dividend a fair price for supporting your customers and building goodwill?

Now, ask yourself a similar question.

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Filed under food, Thinking Aloud

The Maine Event

You may or may not know that in addition to your phone or your web browser tracking your every move that your Internet Service Provider (ISP) does as well. Naturally, they use the data themselves to sell ads or they sell it to others who do so on their behalf.

Last June, the good legislators of Maine passed a bill that prohibits the practice. It’s not revolutionary. Until the current administration took office in 2017, there were Federal regulations that prohibited it as well. To make up for this, in June 2019, Maine Governor Janet Mills signed a law designed to prevent ISPs from “the use, sale, or distribution of a customer’s personal information by internet providers without the express consent of the customer.” The law had bipartisan support and passed the state senate unanimously.

I’ll let MediaPost take it from here:

Broadband carriers are suing to block a Maine privacy bill that requires Internet service providers to obtain consumers’ opt-in consent before drawing on their web activity for ad targeting.

“Protecting customer privacy is a laudable objective that ISPs support,” the major broadband industry organizations write in a complaint filed Friday in U.S. District Court in Maine. “But Maine has not shown — through evidence in the legislative record — that ISPs’ privacy practices are causing any harm whatsoever to consumers.”

Here is where I come out on this and it’s something that might just apply to your business as well. First, privacy is going to become THE issue over the next couple of years as more people become aware of just how ubiquitous tracking is in their lives. There was a frightening report in the Times a couple of weeks ago that detailed just how much information was being collected. Does it seem unreasonable that some folks would like to take back a modicum of control? WE need to respect people’s wishes, or at least make a cogent argument about why they should let us have their data in return for the services we’re providing. I’d gladly give my ISP data if they’d cut the price of my internet service in half. But at least ask me for permission to track me and make me aware of what you’re collecting and why.

Second, ISP’s make an insane amount of money selling broadband access. Don’t buy their stuff about how much they invest in infrastructure – it’s trivial. Do they really need to sell ads on top of this? I’m a capitalist but I’m also a customer-advocate. Know when to say when people. When you’re already drunk on cash from your basic business, maybe it’s time to step away from the bar when you’re starting to treat your customers as a commodity.

When you’re suing to overturn this law, you’re suing your customers, plain and simple. Do any of you believe that having all of your personal data out there for anyone to purchase and use (and it’s out there) isn’t causing harm as the ISP’s allege? It’s a similar situation to the growth of ad blockers – the limit of consumers’ tolerance was hit and suddenly they revolted. This might be a good time to buy stock in VPN companies and the ones that still make dumb phones – text only, minimal tracking. We’ll see, won’t we? But I know for sure that suing and otherwise abusing your customers is a bad idea for any of us.

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Filed under Consulting, digital media, Huh?

Tasks And Experiences

Happy Foodie Friday! This article came into my news feed this morning. It’s about Walmart’s store of the future, where robots can fill grocery orders up to 10 times faster than humans. Pretty spiffy and it’s an interesting read, but it also got me thinking about a pretty important distinction about which I think you may want to ruminate.

When I go to the grocery store (every Thursday!), I have a list of things I want to buy. Most of the things on that list are there because I’ve planned out meals for the week and I need things to make those meals possible. It’s a pretty straightforward task. Other things are on the list because I use them in general and they’re on sale. Maybe I have a coupon that for them that is expiring. Maybe they’re on sale AND I have a coupon (can you feel the excitement?). Again, it’s pretty cut and dry – here’s the thing on the list, buy it and bring it home.

That’s really only half the trip, however. Inevitably, I find things to buy that aren’t on the list. I’ve found them as part of the shopping experience. Maybe it’s an unadvertised sale, maybe some local produce came in and looks spectacular. This is experience-oriented shopping versus the aforementioned task-oriented shopping.

Back to the article. It’s lovely that Walmart (and Amazon and others) are extremely efficient in servicing these orders, but they’re only serving the task-oriented shoppers. In-store discovery is impossible when there is no in-store experience. That’s why you always see “people who bought (the thing you’re buying) also bought (another thing).’ I think it’s also why Amazon is moving into physical stores, both through Whole Foods and their own “register-less” stores. Obviously, serving the task-oriented shopper is only half the battle.

I think it’s the same in other businesses.  Almost every business interacts with customers, partners, vendors, and employees in a task-oriented framework. When you stop and think about it, good businesses make sure there is an experience-oriented aspect to the relationship as well. What I mean is an experience that the participants can enjoy for its own sake and not as a means for accomplishing a task or achieving an extrinsic goal. Maybe it’s just drinks after work with no agenda. Maybe it’s a round of golf. All of my best business relationships had both task-oriented and experience-oriented aspects.

Think about how you interact with your customers. Is everything a task where items get ticked off a list or is there an experience that’s part of the relationship? How can you bring that balance?

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Filed under food, Thinking Aloud