Social Media Is Making Blue-Collar Jobs Cool
Still struggling to hire front-line employees? You might want to try TikTok.
Good Morning!
Here are today’s highlights:
Tracy Bech talks about what you need to know to buy a business yourself.
Copycats are scamming small merchants with the help of generative AI.
All of a sudden, there’s no retail apocalypse and restaurants are considered attractive tenants.
In California, they’re having second thoughts about banning restaurant surcharges.
HUMAN RESOURCES
The latest social media stars? Gen Z plumbers and construction workers: “Skepticism about the cost and value of four-year degrees is growing, and enrollment in vocational programs has risen as young people pursue well-paying jobs that don’t require desks or so much debt, and come with the potential to be your own boss. The number of students enrolled in vocational-focused community colleges rose 16 percent last year to its highest level since the National Student Clearinghouse began tracking such data in 2018. Fostering that appeal are workers like [Lexis] Czumak-Abreu, whose short videos have racked up millions of views.”
“Czumak-Abreu makes $200,000 a year from clicks and brand deals with companies like Klein Tools and Carhartt, though she continues to work, often seven days a week. ‘I want my company to understand I’m a reliable employee,’ she says, adding that if she cut her hours, she’d miss out on the commercial jobs that form the dramatic backbone of her feed, with their oversize coils of cable, outdoor trenches and heavy machinery.”
“When it works, social media can drive business, and even inspire new recruits. In Parker, Colo., John Coffman has owned a construction company for decades. After his son Jarod, 22, partly inspired by [another influencer], began working as a framer and posting videos on social media, prospective workers started approaching the Coffmans out of the blue—even from other states. ‘Kids aren’t going to job sites saying, hey, man, can you hire me? They’re getting to know it on social media, giving them the idea that this is a legit possibility,’ says the elder Coffman.”
“‘There’s this idea that most welders are kinda dirty, like at a muffler shop,’ says Chloe Hudson, 31, who welds for Joe Gibbs Manufacturing Solutions in Huntersville, N.C. Hudson, whose Instagram posts show her welding with full makeup and mascara, describes her workplace as ‘the Taj Mahal of welding.’ Her goal: Show women it’s OK to be feminine in a male-dominated industry.” READ MORE
THE 21 HATS PODCAST: DASHBOARD
Can You DIY a Business Acquisition? This week, Tracy Bech, who is co-author of the “60 Minute CFO” and who has bought and sold businesses herself, offers some guidelines on how to approach an acquisition. Some of it is looking at the numbers, of course. Some of it is understanding the story behind those numbers. And some of it is psychological, controlling your emotions and maintaining a willingness to walk away from the deal if something doesn’t break right. And by the way, Tracy says, it’s never a bad idea to use the same lens to analyze the performance of your own business.
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
ECOMMERCE
Scammers are impersonating small merchants: “Darn Tough Vermont, a maker of merino socks, doesn’t advertise discounts, and its markdowns are modest. That made it all the more surprising when ads started popping up on Facebook and Instagram promising large discounts on the 20-year-old company’s products. The ads carried Darn Tough’s logo, images, photos and wording, all scraped from the company’s website. ‘The more you buy, the more you save,’ a banner across one ad promised. At the top was the address darntoughonline.shop. There were few clues that the ads were fake, said Ryan Dahlstrom, global director of digital commerce for the Northfield, Vt., company. ‘They’d find an old ad we had run,’ he said, ‘flip a 75 percent or 80 percent badge over that image and throw it up as a sponsored ad or a sponsored post.’”
“Shoppers who took advantage of the special offers didn’t receive Darn Tough socks—or anything at all. Many called Darn Tough’s customer service line to check when their merchandise would ship or to inquire if the discounts were legit. ‘Half of my day, five days a week, was spent tracking down these websites, taking down these websites,’ Dahlstrom said.”
“Technology has expanded the reach of even the smallest businesses, making it easy to court customers across the globe. But evolving technology has also boosted opportunities for copycats; ChatGPT and other advances in artificial intelligence make it easier to avoid language or spelling errors, often a signal of fraud.”
“Imitators also have fine-tuned their tactics, including by outbidding legitimate brands for top position in search results. ‘These counterfeiters will market themselves just like brands market themselves,’ said Rachel Aronson, co-founder of CounterFind, a Dallas-based brand-protection company. Policing copycats is particularly challenging for small businesses with limited financial resources and not many employees.” READ MORE
RETAIL
Rumors of a retail apocalypse seem to have been greatly exaggerated: “Shopping center landlords have found themselves in a wholly unfamiliar position: For the first time in 20 years, demand for retail space outstrips supply. That demand has soared recently and, after years of muted construction and a purge of weak-performing properties, met a retail market with less available space. Properties that survived the purge signed up tenants that would draw more shoppers and give them more reason to linger. That meant more restaurants and venues that promote recreational experiences, like ax throwing and, more recently, pickleball. It also meant less space for traditional retailers that weren’t performing as well, like bookstores and apparel brands.”
“Because of those moves, ‘there’s not as much redundancy from tenants, and landlords are creating much more robust tenant mixes,’ said Barrie Scardina, president of Americas retail services, agency leasing and alliances for Cushman & Wakefield, a real estate firm. ‘We are seeing some of the most productive occupancy recorded in the last 10 years.’”
“Shopping center vacancy is the lowest it has been in two decades, at 5.4 percent, Cushman & Wakefield said in a recent report, and the edge in lease negotiations has shifted from tenants back to landlords.”
“David Larcher, chief executive of Vestar, a developer in Phoenix that is planning several projects, including the second phase of Vineyard Towne Center, a 260,000-square-foot shopping center in Queen Creek, Ariz., said the pandemic had been ‘good for retail.’”
“‘There was a lot of derelict space converted into other uses, and retailers with too much debt who had been hanging on by their fingertips were wiped out,’ he said.” READ MORE
At RH (formerly Restoration Hardware), CEO Gary Friedman is investing aggressively in branding to support luxury pricing: “The twist, retail marketing experts say, is that RH is not actually a luxury brand. In the industry argot, it’s premium, which means it’s more expensive than rivals like Crate & Barrel and West Elm but less than the bespoke offerings sold in designer showrooms where only interior decorators can buy. Those showrooms are filled with handmade furniture, lighting and rugs from Italy, France and domestic hubs like North Carolina. They cost more, last longer and hold more of their resale value. By contrast, RH furniture is largely mass-produced in countries such as China, Vietnam and Indonesia.”
“‘Most people in the design industry look at RH as fancier West Elm,’ said Jason Campbell, an interior designer in Manhattan. ‘But it’s still pretty expensive. I looked for a sectional sofa for a client recently and was shocked to see one from RH for $14,000. You could buy something similar at a designer showroom for a smidgen more, and it wouldn’t be made in China.”
“This is the RH strategy: Sell a premium product in a setting so dazzling that it seems worth near-luxury prices.” READ MORE
COMMERCIAL REAL ESTATE
Restaurants are now considered attractive tenants: “Food services accounted for more than 19 percent of all retail leases last year, rising in recent years to the highest proportion for any category since data firm CoStar Group began tracking the statistic in 2007. The uptick reflects how Americans are spending more time and money at restaurants, from fine-dining hot spots to fast-casual chains. Low unemployment, rising wages, the ascent of ‘foodie culture’ and millennials’ tendency to marry and have children later than previous generations have likely contributed to increased restaurant spending in recent years, analysts say.”
“It is a far cry from the depths of the pandemic, when tens of thousands of restaurants permanently closed. Four years later, robust restaurant leasing has helped power the retail-real-estate sector to its strongest position in years.”
“The average household spent nearly 53 percent of its food budget on food away from home last year, a record-high proportion and up 10 percentage points from 2003, according to the U.S. Agriculture Department’s Economic Research Service. Total restaurant sales have never been higher. They are on track to top $1.1 trillion this year, a 5.4 percent increase from 2023’s record-high level, according to the National Restaurant Association, an industry group.”
“For years, property owners were wary of food tenants. Building out restaurant spaces is an expensive cost often borne by landlords. Many establishments fail early on. But an increase in creditworthy chains coupled with data showing that food establishments boost foot traffic to nearby businesses have made landlords eager to sign restaurant leases.” READ MORE
POLICY
In California, some lawmakers want to let restaurants keep charging fees: “Restaurant surcharges—including the increasingly common service and healthcare fees levied by local eateries—were due to be banned in July when SB 478, a new state law outlawing so-called ‘junk fees,’ was set to go into effect. But state lawmakers—including San Francisco assemblymember Matt Haney and state Sen. Scott Wiener—are looking to carve out an exemption to the ban for restaurants they claim were unintended collateral damage.”
“Sponsored by Attorney General Rob Bonta and state Sens. Dodd and Nancy Skinner, SB 478 was signed by the governor into law last year. The law was meant to protect consumers from hidden charges tacked on credit cards, bills, loans, air travel, hotel rooms, and event tickets.”
“State sens. Bill Dodd and Wiener are introducing SB 1524, which aims to allow restaurant surcharges if they are displayed conspicuously on restaurant menus. The lawmakers say the bill is meant to clarify a blind spot in the previous law. ‘Restaurants are vital to the fabric of life in California, and they should be able to cover costs as long as they do so transparently,’ Wiener said in a statement.” READ MORE
INTERNATIONAL
American fast food chains are struggling in China: “Yet even as they lose their appetite for foreign chains, Chinese consumers cannot get enough of domestic ones. Tastien, which fills hamburgers with local delicacies such as Peking duck or mapo tofu rather than beef, has opened 1,600 new shops in the past six months, bringing its total to 7,000. Wallace, another burger-flipper, now has more than 20,000. Cotti, a two-year-old coffee-shop chain, plans to have that many by the end of 2025, up from 6,000 last October. An older caffeine-pedlar, Luckin, opened 8,000 in 2023, doubling its network. Mixue hawks its bubble tea through 36,000 outlets.”
“A big reason for the sudden popularity of domestic chains is their lower prices. Rather than forgo lattes as China’s economic prospects sour, consumers are trading down. Luckin is selling coffee at a promotional price that is one-third that of an equivalent beverage at Starbucks.”
“Another explanation has to do with geography. Many homegrown chains come from places other than China’s rich megalopolises such as Shanghai. Cotti and Wallace opened their first outlets in Fuzhou, a ‘tier-two’ city in the south-east. Tastien was founded in Nancheng, an inland railway hub likewise considered second-tier.”
“Those are also the places where such chains are expanding most aggressively, in part because Western rivals have historically ignored them.” READ MORE
THE 21 HATS PODCAST
The Year So Far? It’s Difficult Out There: This week, in episode 198, we get updates from Laura Zander, Sarah Segal, and Jay Goltz. Laura wonders whether the time she’s put into integrating her latest acquisition might have been better spent focusing on her core businesses. Sarah, who has shifted to pursuing smaller clients, asks Laura and Jay to articulate the PR pitch that would interest them. But how do you evaluate the effectiveness of a PR campaign? Does it have to generate sales?
Plus: Jay explains why he views confronting his current business challenges as a matter of triage. He also says that if he could write a check for $200,000 and solve his technology problems, he would do it in a heartbeat. Any takers out there?
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
Thanks for reading, everyone. — Loren
One of my favorite Instagram accounts is chihuahuas doing construction!