Maybe It’s Not the Marketing
In our latest 21 Hats Podcast episode, we introduce a new regular, Shawn Busse, who talks about what it takes to break through what he calls “the marketing industrial complex.”
Good morning!
Here are today’s highlights:
Hit hard by omicron, manufacturers are trying expensive and unconventional tactics.
Two sisters launch a Tinder-style app that connects service workers and employers.
The founder of the “Bloomingdale’s of discounting” dies at 101.
The restaurant industry has never known how to treat sick workers.
THE 21 HATS PODCAST
Maybe it’s not the marketing: This week, we introduce a new member of the 21 Hats Podcast team, Shawn Busse, who tells Jay Goltz and Laura Zander about an intriguing challenge he faces. Twenty-two years ago, Shawn co-founded a marketing firm called Kinesis, but now he’s trying to convince clients that it takes more than just marketing. Sometimes, it’s not enough just to drive more leads. Sometimes, you have to step back and take a deeper look at your business, which not every client is ready to do. In fact, it took Shawn 10 years (and the Great Recession) to do it with his own business.
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HUMAN RESOURCES
These days, being head of HR can feel more like being a school nurse: “As Covid first started to spread, [Gia Ganesh, chief of human resources at Florence Healthcare] made sure employees had stipends to set up work spaces at home and planned virtual activities, like a magic show and a cooking competition, to keep people connected. By last fall, she was in the meeting with the chief executive writing up her company’s vaccine mandate, which requires that all employees, even those working remotely, be fully vaccinated against the coronavirus. She reviews every request for a vaccine rule exemption from people who would rather submit to regular coronavirus testing.”
“Just as the Covid-19 crisis made amateur epidemiologists of people trying to go about their daily lives, it also forced HR professionals, especially those at small and midsize businesses, into a new focus on public health.”
“Then there’s the tug of war over return to office plans, with the pull of executives eager to see workers in person meeting the push of soaring Covid case counts.”
“Some executives are outsourcing Covid safety work to companies that set up turnkey vaccine and testing systems. DocGo, for example, a health care and technology company, creates testing programs for businesses and monitors the maintenance of employee confidentiality, data privacy and compliance with federal government standards.” READ MORE
RETAIL
Buy-now-pay-later can boost revenue for smaller retailers, too: “A retailer — whether selling in-store or online — signs up with a provider like Afterpay, Affirm, Klarna, PayPal Credit, and Zip. When it comes time to purchase, the customer can choose BNPL instead of paying by credit card or cash. The BNPL service does a quick online credit check, generally relying on the customer’s credit history. The merchant then gets paid in full and the customer leaves with the product and the commitment to paying off the purchase in the near term. If you’re a small business, the offering gives your customers more payment options and helps you sell your products to customers who might not otherwise have purchased it. Many are crediting BNPL with generating more revenues over the holidays.”
“‘We’re seeing average order values through our BNPL service of up to 40 percent higher than regular checkouts,’ says Erin Houston CEO and co-founder Wearwell, a membership platform where customers can shop for sustainable clothes and accessories. ‘The increased revenue opportunity is by far the most positive impact.’”
“There are costs, of course. Merchants can pay a fee of anywhere from 1.5 percent to 1.7 percent of the purchase value (including tax), as compared to the cost of a typical debit or credit-card transaction which ranges from 1 percent to 3 percent, according to the Kansas City Federal Reserve.” READ MORE
STARTUPS
Two sisters have launched a Tinder-style app that connects service workers with employers: “The app is free for job seekers, while employers subscribe to post job listings. QuickHire also doesn't require a résumé, which can be a barrier for service workers. It's designed like a dating app. Job seekers set up a simple profile and swipe left and right on postings, and employers swipe on job seekers. When they ‘match,’ the app automatically prompts the user to schedule an interview.”
“The app is focused on the Midwest, has over 12,000 users, and works with 70 companies.”
The youngest of five siblings, [Deborah Gladney and Angela Muhwezi-Hall] are also the daughters of Ugandan immigrants who worked in the service industry in the U.S.” READ MORE
THE COVID ECONOMY
The spread of omicron is forcing factories to consider expensive and unconventional options: “Mounting absences among Covid-infected workers are bringing masks back to some factory floors, executives said, while manufacturers shuttle available workers to jobs and plants where they are most needed. Companies are also redoubling recruiting efforts to fortify workforces already worn thin by high turnover in a tight job market. The speed at which the highly contagious variant is spreading has stunned some executives, who said they had grown increasingly confident over recent months that their companies had navigated the worst of the pandemic.”
“Precision Associates has been closely tracking where employees appear to have caught the virus and believes they are getting it off hours, Mr. Kadue said. That includes four employees with Covid-19 who had attended a funeral together.”
“At Rich Specialty Trailers in Topeka, Ind., owner Sheldon Rheinheimer said finding truck drivers has become more difficult in recent weeks, as he monitors rising coronavirus cases in the state. He said he has started sending his own employees on additional trips to pick up supplies themselves.”
“With generator sales booming because of weather-related power outages and many at-home workers, Generac has been building a buffer of employees, Mr. Jagdfeld said. It is overstaffing plants on the assumption that some new hires will leave quickly or that another Covid-19 outbreak will hit the production workforce.”
“To attract workers, Generac raised starting hourly wages by nearly 30 percent in 2021 to above $17, after having increased pay by more than 20 percent in 2020. The company has tried to raise its profile among potential employees, sponsoring a music stage at a popular summertime festival in Milwaukee.” READ MORE
HUMAN RESOURCES
The restaurant industry has never been great about taking care of sick workers: “For as long as there have been restaurants, or at least for as long as anyone can remember, it was simply understood that an employee would not stop working simply because she or he was sick or hurt. Cooks cauterize wounds and share stories of cutting off the tips of their fingers, only to put them back on with glue so they can keep working. A particularly gruesome injury might require a trip to the hospital for stitches before the worker returns that same night to finish a shift. People work through physical disabilities, visible and invisible, in an industry that doesn’t prioritize health. A cold, the flu, or a fever are simply ailments that workers are expected to push through.”
“In a 2015 survey of food-industry workers — including those in restaurants, dairies, slaughterhouses, and other businesses — 51 percent of respondents said they ‘always’ or ‘frequently’ work when they are sick; only 5.6 percent said they ‘never’ do.”
“According to a report by the nonprofit worker center ROC United, the poverty rate among restaurant workers is 16.6 percent, compared to 6.6 percent of the workforce overall.”
“While New York is one state where employers are required to offer paid sick leave, the law does not require employers to pay out lost tips, and workers say the policy is often not discussed.” READ MORE
CLOSINGS
Dress Shoppe II, a beloved Indian boutique in Manhattan’s East Village, is closing: “After nearly 50 years of business, the treasured East Village store is shutting down. Following nearly two years of pandemic-related struggles, combined with a landlord dispute, the loss of her husband and her own health problems, Saroj Goyal, the owner, decided that closing the store was the best choice. ... For decades, the couple would travel to India to find one-of-a-kind objects to sell. ‘My husband walked from village to village to collect all these things. He had a very unique taste,’ Ms. Goyal said, picking up a hand-beaded textile.”
“On top of grieving his loss, Ms. Goyal had to figure out how to keep the store running; administrative matters had been her husband’s domain.”
“Then, in February 2021, she was diagnosed with breast cancer. About four months later, in June, [her landlord] sued her for more than $265,000.”
“Brandon Stanton, the creator of the blog Humans of New York, which has more than 17 million followers on Facebook, wrote a post on Ms. Goyal in July.”
“Ms. Goyal being kept out of the loop on the inner workings of the business left her in a vulnerable situation, Mr. Stanton added, which was something that his readers empathized with.” READ MORE
Even head shops are having a hard time: “Michael Katz, the longtime owner of the Wonderland head shop off Philadelphia’s Rittenhouse Square, is hanging up the hookah. He’s discounting smoking-related merchandise 50 percent to 75 percent on most items and plans to close for good in early February after nearly 50 years in business. ‘I had a good run,’ Katz said on Saturday of the store that opened in 1975. Partly it’s retirement, Katz said. He’s 74. But Wonderland also didn’t recover from the pandemic and the 2020 demonstrations in Philadelphia triggered by the murder of George Floyd. Crowds broke one of Wonderland’s front windows and looted the store, tossing merchandise to the sidewalk.”
“‘It broke my heart,’ Katz said of the destruction to Wonderland, which an employee of 25 years said was a ‘counterculture epicenter’ at one time.”
“Wonderland boomed between the mid-1990s and 2005, or before the advent of online selling. Katz employed at one time 13 workers and opened the store seven days a week.”
“‘I made a nice living for a lot of years,’ he said. ‘We did extraordinarily well. I’ve had enough.’” READ MORE
ENERGY
Bill McKibben says that 40 percent of the world’s shipping consists of sending fossil fuels around the globe: “That’s a remarkable snapshot: almost half of what we move around the seas is not finished products (cars) nor even the raw materials to make them (steel), but simply the stuff that we burn to power those transformations, and to keep ourselves warmed, cooled, and lit. Which is great news. Because it means that if and when we make the transition to solar power and wind power, we will not just stop pouring carbon into the atmosphere, and not just save money—we will also reduce the number of ships sailing back and forth by almost half.” READ MORE
OBITUARY
Carl Bennett, founder of Caldor Discount Stores: “Carl Bennett, who transformed an $8,000 investment in a second-floor ‘Walk-Up-&-Save’ store in Port Chester, N.Y., in 1951 into Caldor, the regional discount powerhouse chain that he sold three decades later for $313 million, died on Dec. 23 at his home in Greenwich, Conn. He was 101. His death was confirmed by his daughter, Robin Bennett Kanarek. Mr. Bennett and his wife, Dorothy, blended their first names and business acumen to create one of the largest and most aggressive retailers in the Northeast, combining cut-rate pricing on quality brand-name goods with a liberal return policy.”
“Known as ‘the Bloomingdale’s of discounting,’ Caldor reduced costs by paying suppliers promptly and thrived by stocking quality merchandise rather than irregular items and cheap goods from closeouts.”
“But the company was liquidated in 1999 after facing similar stiff competition from nationwide retailing behemoths like Target and Walmart.” READ MORE
If you see a story that business owners should know about, hit reply and send me the link. If you got something out of this email, you can click the heart symbol, you can click the comment icon below, and you can share it with a friend. Thanks for reading, everyone. — Loren