The not-so-common, Common Sense

Life is about what we leave behind; leaders who are determined don't leave that to chance.

Leadership: 8 Things The Best Executives Do

1. They put the organization and its people ahead of their own self-interests.
2. They are careful not to wear their political stripes on their sleeves; they know it comes with business, employee, and customer consequences.
3. They dismiss nothing; they know that where there is smoke, there is fire or opportunity.
4. They are data-driven and know that time is their enemy.
5. They are well-read, at the forefront of change, and able to speak about how these changes can impact their business and the marketplace. And what to do about it.
6. They know that to have positive employee behaviours, they need to provide them with the resources and operational execution needed to be successful.
7. They know that leading in any category means that their organization must be continuously innovative.
8. They know their leadership is about what they leave behind as a legacy; they don't leave that to chance. Bonus: Today, they are not sitting on the sidelines when it comes to Ai. They know that it will be fast and disruptive as more competitors embrace it.

Personal Log: Common Sense...Who's?

I laugh at the concept of common sense. Politicians use the term frequently. It means nothing concrete. Don't be fooled by this phrase. It is subject to the bias of the people who are referring to it and, often, their limited knowledge of the issues. Have you ever heard of the Dunning-Kruger Effect? "People who know the least about a subject are often the most confident about their "common sense" solutions precisely because they don't understand the issue's complexity." Here is a funnier explanation: remember the Holiday Inn commercial and the customer with no medical background who had a good night's sleep showing up to conduct surgery? Same thing! But common sense is a political and media attempt to impress you. It really has no teeth or substance. Think about it. What we call common sense is nothing more than ideals or biases made to draw us in. They may draw us all in over an issue, but underneath that can be racism, hate and an intent to marginalize the weak and vulnerable, to remove rights and equality. I have met some common-sense thinkers who openly state they hate certain groups their common sense is etched in their minds because they blame others for their failings in life they can't take personal responsibility like the rest of us.

ECONOMY

The pain of groceries

People have told me at grocery stores that they are cutting back, and If they have to go further, they are cutting into the bone. I feel for them, not for any politician, grocer or industry association.

No matter how you shake this, consumers are paying more for food than they did 12 and 24 months ago. In 2022, the biggest impact on food was the war in Ukraine, making up over 1/3 of food inflation that is still there! We are only comparing 2022 to 2023, which is also up by 3.0%. Today, some politicians are telling us that the carbon tax is the culprit. According to the Bank of Canada, it is not. I will go with the BOC on this one. Are grocers being greedy? I don't believe they are, not all of them. However, the three biggest grocers in this country have 60% market share selling their house brands through 40 different retail outlets that they operate. It is hard for consumers to believe that there is no advantage to this market position. The industry was also involved in price fixing with bread. They have huge real estate portfolios as well. Some may have subsidiaries that make these house brands and profit in different ways. What consumers want is transparency. Whether there is a meeting with the Prime Minister or not, Grocers have lost consumer trust. But when there is an oligopoly, and that's what this is. Why should they worry about what consumers think? I've sat on industry associations like the ones making statements about the unfairness to grocers. That's just a paid-for voice. Ignore it. That 60% market share is worth $100 Billion in revenue, and their supporters are saying it's just 3.6% profit. Well, that profit happens to be $3.6 Billion, not million. In addition, real estate is a separate company asset collecting rent. I remind you that the Competition Bureau said Canada needs more competition. Impossible; what is left by way of grocers in Canada is fragmented and weak. One LinkedIn connection reminded me that the Government has the power to challenge this oligopoly and even break it up. Perhaps each of them needs to sell one brand to a foreign grocery retailer so that we can have true competition in Canada. Just food for thought.

Retailing in Q4

Dining out is slowing down. Read more. This is a sure sign that consumers are pulling back. Add in consumers buying more essentials at retailers like Dollarama L.P. It is clear that things have shifted. Most consumers are also aware that inflation is geopolitical right now with OPEC cutting back production and the war in Ukraine, and we should start factoring in climate change because it will impact fresh food production. It's not an easy landscape to navigate, and most governments have no influence. However, Canada and the US still have some of the lowest inflation rates in the world. But retailers are going to need to rethink how they compete in the fourth quarter and beyond.

What does that mean?

Shopping behaviours are being reset at home. Both current and next-generation shoppers are becoming more frugal, and this will have lasting implications that will likely be felt throughout 2024. As a result, we will see increased shopping at convenience, discount and off-price retailers. Grocery stores are going to feel the pressure, as will many apparel and department stores. The Christmas season will likely start early to take advantage of any deals, and prominent #ecommerce players will pick up in volumes.

Planning for 2024: Ai, Art, Aspirational, Innovation, Branding

By now, most retailers have already carved out their targets for 2024, and I believe that they are looking at a tough year ahead. A recession, not sure, but a slowdown that will hurt all those struggling. It is pretty much like I said it would be in my book The New Bricks and Mortar Future Proofing Retail.

There are a number of elements to your 2024 planning that should have been addressed. The first is what worked in 2023 and what didn't. Analyzing that experience for both the objectives and the execution behind them is very important, and don't repeat what didn't work. Usually, business plans fail because there is a lack of knowledge, resources or execution. Hopefully, it's not all three; that's not a good place to be. An analysis of what went well and wrong is essential. Secondly, where are you at with understanding the category you serve? How is it reshaping itself? Who did well and why? What was the difference in your organization? What changes need to be made? Who is leading those changes that need to take place? Third, I hope you are ahead of your peers on the AI equation. I say equation because my PR manager has suggested I keep what I believe will happen for my presentations instead.

What I can share, I know that literacy around Ai is low in many organizations, but it is very important to begin learning at an accelerated pace. You will not learn from what others are doing; most are not going to share. Fourth, if you are still thinking of Generative Ai as a writing tool, you are going to be very disappointed.

Environment - Things are changing...faster

Seriously, stop paying for gas

What does it cost to charge an EV? The Tesla I drive has a range of 450 km. I've had the car for four years, and it has 61,000 km. If this mid-size car ran on gas, it would get about 12.5 Km per litre, so if we divide 61,000 Km by 12.5 = 4,880 litres of gas at $1.69 a litre = $8,247 over four years or $2,061 per year. However, because it is electric, according to the Tesla App, I use 2,880 kWh annually; I only charge after midnight and at home, which is a cost of about $0.08 per KWh; it costs me $230.40 (2,880 x $0.08) to charge the car annually. I save $1,830 per year in gas or $152 per month. That's enough to offset the difference price of an EV car payment. Of course, I have not included oil changes, air filters, radiator or exhaust expenses because they don't exist for this vehicle. It's a great way to protect the environment and not have to pay the carbon tax. Tesla now has 50,000 charging stations across NA. Canada has over 8,700 charging locations. And the average Canadian drives about 55 km per day. You will not run out of energy. And the Tesla motors can supposedly last 500K to one million miles.

Every car has a carbon footprint during production. But by not using gasoline, we can remove up to 4.6 metric tons of CO2 annually per car.

What happens if we ignore the environment and climate change?

There is an environmental emergency. Look at what's happened in Libya this week with the flooding. Over 5,000 are confirmed dead, and 10,000 are still missing. As this gets worse over time, we will see massive shifts in retail shopping behaviours and purchases globally. As an analyst, I expect supply chains to get snarled, coupled with the loss of arable land, creating sustained global inflation. Based on temperature predictions, I also hypothesize that there is a high potential for refugee migration into North America, the northern US and Canada specifically because of more tolerable temperatures (not much). But that also opens the door to Geopolitical standoffs as well.

So, what do we do with all of this? Kick the can down the road for the next generation because we can't be bothered. Are we willing to accept human losses? A good strategist doesn't ignore the world. They ask the toughest questions. Are we choosing to protect high-carbon-emitting industries rather than saving the planet and people? I leave it to you to answer.

Apple reports to Mother Nature

If there is a company that's sending a message on ESG, it's 苹果

Watch this video. Thanks to Brenda Seto for showing me the post.

Upcoming events - It's all about Artificial Intelligence

I have a few presentations and executive discussions happening over the next 30 days; we are also preparing for one particular event. Yes, it is all about Ai, but I have a very different view, and it has to do with both how Ai will be used and how organizations need to transform themselves.

For more information, contact me at [email protected] in the subject line type "Ai Transformation"

#retailing #strategy #ceo #technology #innovation #business #marketing #future

#environment #marketing #climatechange #artificialintelligence #grocery