A Fabulous Conversation About Marketing

Today’s highlights: Restaurants find new ways to use Instagram. Americans have a lot of pent-up savings. And is the office of the future a hybrid model? (Maybe not!)

THE 21 HATS PODCAST

Episode 46: A Fabulous Conversation About Marketing: This week, we introduce Stephanie Stuckey, a new regular on the podcast who tells Dana White and Laura Zander about the iconic, road-stop business her grandfather founded: when it peaked, what went wrong, why she bought it back, and how she plans to rejuvenate it. Along the way, we discuss whether small businesses should outsource their marketing, how hard it is to find an agency that listens, and what an agency should cost. Plus: Stephanie offers a tutorial on how to engage followers—and get free consulting—on LinkedIn.

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MARKETING

In Philadelphia, restaurants and bars are finding new ways to use Instagram: “Instagram ‘is the only thing that my business is right now,’ says Nano Wheedan, a Mount Airy native who co-owned a bustling pizza restaurant in Austin before moving back to the area in May. He’s been selling breakfast tacos in South Philly via the account @nanostortillas since September; the flour tortilla-wrapped tacos are snapped up virtually, seconds after he posts his weekly menu. ... Wheedan is far from alone in using the app as a launch pad. Plenty of other Philly startups — Heavy Metal Sausage, Juana Tamale, Pizza Jawn, Micah’s Mixx lemonade stand, not to mention a slew of budding bakeries — have charted the same course, moving on to full-fledged websites and sometimes brick-and-mortar shops.”

• “That’s how Barry Johnson used @bartender_barry when his private bartending gigs evaporated in March and he had to cancel a spring soiree at the Philadelphia Ethical Society. But Johnson took to Instagram with original cocktail recipes and livestreams. They eventually led to bookings for private virtual classes.”

• “Before he was limited by geography, but now, ‘I can host cocktail classes with people in New Jersey or even in California. The possibilities and opportunities have just been expanded in some ways.”

• “The whole front of my place at one point was covered with signs of what the hell we were doing. And people don’t read signs — but they look at the internet.’” READ MORE

RETAIL

Nike is opening another small-format, Nike Live store: “The neighborhood stores emphasize localization and community, tailoring the assortment, design and community engagement elements to what customers in the area want most. In Eugene, new assortments will drop every three weeks, and the store will also offer a selection of University of Oregon merchandise. The main welcome area will serve as a meeting place for running groups and other athletes to meet ‘when it's safe to do so,’ the company said. New arrivals and employee picks will be featured at the front of the store, and the store will build relationships with local organizations that encourage kids to be active.”

• “A digital vending machine dubbed the ‘Unlock Box,’ which lets members redeem free products and gifts, will be a feature of the store.”

• “Customers will also be able to text store associates about product availability, recommendations and current offerings.” READ MORE

THE COVID ECONOMY

Americans have a lot of pent-up savings: “An analysis by the Federal Reserve Bank of New York found that consumers socked away more than a third of the first stimulus checks, which were sent to households as part of the $2 trillion Cares Act enacted last March. Just under a third of the stimulus payment, 29 percent, got spent, while 36 percent was saved and 35 percent used to pay down debt. The survey also found that consumers expected to spend an even smaller share of future stimulus payments, and use a higher share to pay down debts.”

• “Once business restrictions are lifted and people feel it is safe to go out again, ‘there will be a lot of spending—my guess is the beaches will be crowded, the pubs will be crowded’ and, ‘by May and June it will be in full swing,’ [Berenberg’s chief economist, Holger Schmieding] said.” READ MORE

Economic research suggests it wasn’t about the lockdowns: “The coronavirus pandemic has killed more than 416,000 Americans and recently pulled the U.S. economic recovery into reverse. Some states have shut down again to get a handle on surging caseloads. And critics have blamed those states’ governors, typically Democrats, for job losses. But pandemic-related economic research shows the shutdowns aren’t killing jobs; the virus is. In the first outbreaks last spring, people stayed home to avoid contracting the deadly novel coronavirus, regardless of what their governor said.”

• “If stay-at-home orders poisoned an otherwise healthy economy, business should have crumpled the moment they kicked in. But cellphone activity data analyzed by Gupta, Simon and Wing show a different trend: People started to stay home well before states imposed shutdowns.”

• “If the shutdowns had been the major obstacle to business activity, consumer spending built up during the shutdown period would have been unleashed in a torrent of pent-up demand when the shutdown was lifted. Instead, Goolsbee and Syverson found, economic activity returned about 5 percent faster in places that lifted their shutdowns compared with those areas not shut down.” READ MORE

MANUFACTURING

With the shift to electric cars, more American startups are making lithium-ion batteries: “Sila Nanotechnologies, a Silicon Valley startup that makes silicon anode materials used in batteries, is among the latest to attract Wall Street backing. The company plans to announce Tuesday that it has raised $590 million in new funding, Chief Executive Gene Berdichevsky told The Wall Street Journal. Much of that money will be used to build a factory in the U.S. for making battery materials, he said. The location hasn’t yet been selected.”

• “Other battery-focused startups, such as California-based Romeo Power and Canadian mining firm Lithium Americas, which has U.S. operations, have also recently tapped public markets.”

• “Romeo went public late last year, while Lithium Americas said Friday that it sold $400 million of stock in a public offering intended to finance a lithium project in Nevada.” READ MORE

GOVERNMENT SUPPORT

European governments trying to help businesses avoid bankruptcy may just be postponing the pain: “Romain Rozier’s cafe should be bankrupt by now. Since the coronavirus hit last spring, sales at the once buzzing lunch spot in northern Paris are down 80 percent. The only customers on a recent day were a couple of UberEats couriers and a handful of people spaced far apart at the counter, ordering takeout. ‘We’re at death’s door,’ Mr. Rozier said, tallying the 300 euros ($365) he had made from the lunch shift, well below the €1,200 he used to pull in. ‘The only reason we haven’t gone under is because of financial aid.’”

• “France and other European countries are spending enormous sums to keep businesses afloat during the worst recession since World War II.”

• “But some worry they’ve gone too far; bankruptcies are plunging to levels not seen in decades.”

• “Analysts say the government programs are already seeding the economy with thousands of inefficient businesses with low productivity, high debt and a high prospect of default once low interest rates normalize.” READ MORE

HUMAN RESOURCES

Amazon is confronting a union drive in an unlikely place: “The largest, most viable effort to unionize Amazon in many years began last summer not in a union stronghold like New York or Michigan, but at a Fairfield Inn outside Birmingham, in the right-to-work state of Alabama. It was late in the summer and a group of employees from a nearby Amazon warehouse contacted an organizer in the Retail, Wholesale and Department Store Union. They were fed up, they said, with the way the online retailer tracked their productivity, and wanted to discuss unionizing.”

• “By late December, more than 2,000 workers signed cards indicating they wanted an election, the union said.”

• “Success at the Bessemer warehouse, which opened in March, could inspire workers in the booming e-commerce industry more broadly, said Nelson Lichtenstein, a labor historian at the University of California, Santa Barbara.”

• “‘If you can do it in Alabama, we can do it here in Southern California for sure,’ he said. ‘It would have a huge ripple effect.’” READ MORE

READER FEEDBACK

Jerald Broussard responds to yesterday’s item suggesting that increasing wages can increase profits: “Going from $12 to $15 may very well give an increase in productivity that makes it worthwhile. However, a worker who may barely have the skills to justify his $8 an hour job will not be able to almost double his productivity and the business owner can’t afford it. These will be the first jobs to go via automation. There is already a machine that will cook a burger, bun it and put it in the package. This will crush first time job seekers.”

OFFICE SPACE

Is the office of the future likely to be some sort of hybrid? “The hybrid office sounds like a logical post-pandemic approach, and many companies are trying it, but mixing in-person and remote workers presents new challenges for managers. Ethan Bernstein, a professor at Harvard Business School who studies the workplace, told me that a hybrid setup is very hard to get right, and that he advises businesses to avoid it: ‘I’d say stay all virtual—hybrid is likely to deliver the worst of both worlds.’ A hybrid company still has substantial real-estate costs, and it also has to contend with the potentially serious threat to company culture posed by resentful remote workers who feel that they’ve been unfairly denied plum assignments and promotions.” READ MORE

When software company Invoca left its Santa Barbara offices, 20,000 honey bees moved in: “Using thermal imaging, the technician tracked down the nest within five minutes, Arango says. It held 10 gallons of beeswax, honey, and pollen. The insects had found their way in through a hole in the building's exterior brick wall and took up residence in a crawl space between the second and third floors. The technician estimated they had been there at least six months.”

• “The following week, the technician cut a hole in the ceiling of a second-floor bathroom and spent all day luring the bees into a container.”

• “The nest and the bees, including the queen, were extracted safely and moved to a natural environment.”

• “‘We've talked a lot about the challenges of coming back to the office,’ says Gregg Johnson, the company's CEO. ‘We have not thought about this one.’” READ MORE