Starting to Take a Toll
For businesses, the closings, cancellations, and postponements have begun.
Here are today’s highlights:
Businesses are confronting challenges but at least there’s Buy Now Pay Later.
There really are some useful things you can do on social media.
Some companies are finding creative ways to solve their supply chain issues.
In today’s Dashboard: How concerned should businesses be?
It can be easy to forget there are useful things you can do on social media. Here are some good suggestions from Propllr, a Chicago-based PR and content marketing firm:
“Talk about your successes AND your failures. While publicly admitting faults can be a gamble, it’s important to be vulnerable with your audience. Share how you overcame an obstacle or corrected a mistake which then led to a better product for your customers.”
“Snoop on your competitors. Make sure you’re following your top competitors. This will give you a peak into their day-to-day content and marketing tactics. Be sure to log on routinely to share these insights with your team as you learn to refine your approach to social.”
“Build reporter relationships. On Twitter, start following reporters who cover your space and see what they’re sharing. No doubt you will find them posting articles, insights, and other commentary. Use those opportunities to engage with RTs, responses, and favorites. But keep it authentic. No one likes the follower who constantly likes and RTs everything, no matter the subject.”
“And a quick trick: if you read a great article by one of the reporters who you want to know, be sure to share it on Twitter and to include the reporter’s handle so they know you did it.” READ MORE
Gene Marks says Buy Now Pay Later is saving the season for some businesses: “Supply chain issues. Labor shortages. Rising prices. Mask mandates. These are some of the biggest challenges facing small merchants this holiday season and I can tell you on behalf of many of my clients that it’s not making for a very merry Christmas. But there’s a thing that is saving the season for thousands of business owners and no, it’s not Rudolph. It’s a financing program called buy now pay later, or BNPL. And its use has exploded recently, particularly among small businesses.”
“‘It’s one of the stars, actually, of the holiday season for us,’ Dan Schulman, the CEO of the payments service PayPal told CNBC.”
“BNPL has become so popular that a report from marketing insights agency C+R Research says that about 60 percent of U.S. adults have used it when buying products and of those who’ve used it, 80 percent plan on using it for holiday gift-buying, according to data intelligence firm Morning Consult.”
“For a small business, BNPL is easy to set up. A consumer wants to buy something. The BNPL service is offered as a plug-in payment option on an e-commerce site or in-store by the merchant.” READ MORE
Today is the 12th anniversary of Ami Kassar’s pink slip: “Twelve years ago, I lost my big fat corporate job. I was the Chief Innovation Officer of the largest issuer of credit cards to small businesses in the United States. We had 1,000,000 customers, about $1 Billion of market cap, and approximately 1,000 employees, and we were completely decimated in the great recession. Before it was my turn to be let go, I helped let go over 900 people. It was hands down the most brutal professional experience I ever had. And then my turn came. On a Friday, I was let go, and on Saturday, I started working on MultiFunding. Six weeks later, we launched the company.” READ MORE
With the holidays at hand supply-chain issues continue to cost companies sales, forcing some to improvise: “After facing port delays and missing a major retail customer’s delivery deadline, Kemi Tignor’s puzzles were still stuck at one U.S. warehouse and needed to be moved to another. She said she decided to take matters into her own hands. Ms. Tignor owns Little Likes Kids, a Washington, D.C.-based company that makes racially diverse puzzles for children. Ms. Tignor rented a U-Haul in Washington, D.C., in late October, and drove four hours to a warehouse in Monmouth Junction, N.J. ‘I do not have any equipment to load the truck and I have no men with me,’ Ms. Tignor said she emailed an employee at the New Jersey warehouse. ‘Will your warehouse be able to load the U-Haul truck?’”
“Ms. Tignor got the puzzles loaded with the help of warehouse workers and drove an additional six hours to a logistics provider in Rhode Island that could ship them to retail stores.”
“The multistate dash ensured her puzzles were on store shelves at places like Target and Nordstrom for Black Friday and the busy holiday selling season, she said.”
“Some manufacturers are having to make hard choices about who gets the products that are available. A few weeks ago, MWB Toy Co., based in Danbury, Conn., temporarily cut off some wholesale business to focus on customers buying directly online.”
“Jim Barber, the managing partner of the company, which sells toys under the Luke’s Toy Factory brand, said it didn’t have enough of its buildable toy trucks to go around.”
“Mr. Barber estimated that Luke’s holiday sales could be 50 percent higher if he had enough parts. But he said he is hesitant to invest tens of thousands of dollars in new molds, because he doesn’t know how long the heightened demand will last.” READ MORE
Meanwhile, shipping and logistics costs are expected to keep rising in 2022: “Transportation and logistics providers are seeking big boosts in prices for contracts for the coming year, signaling that the inflationary pressure driven by strong demand and tight capacity in freight markets is likely to persist. With high shipping demand still far outweighing tight capacity across the freight sector, industry experts say transport operators have leverage to raise prices when negotiating new contracts.”
“Ocean-shipping executives say they expect the rates set in many annual contracts will double compared with agreements struck earlier this year, before supply-chain bottlenecks squeezed capacity.”
“Some trucking companies project double-digit growth in contract rates for 2022.”
“Overall, domestic shipping rates for moving goods by road and rail in the U.S. are up about 23 percent this year from 2020, according to Cass Information Systems, which handles freight payments for companies.” READ MORE
THE COVID ECONOMY
Omicron is starting to take a toll: “Covid-19’s accelerating spread has hampered operations and slowed sales at some companies in a matter of days, but many say they hope precautions adopted during previous surges will help them motor through this one. Restaurants were among businesses most immediately hit. Chris Fuselier, owner of the Blake Street Tavern in downtown Denver, said his business has fallen since the Omicron variant began to be detected in the area and the city instituted new Covid-19-related restrictions last month. ‘We’ve had a huge slowdown the past three weeks,’ he said.”
“For the week ended Nov. 28, U.S. restaurant seatings were down 4 percent from 2019 levels, according to data from the website of reservation service OpenTable. A week later, they were down 9 percent by the same metrics. The following week, ended Dec. 12, seatings were down 12 percent, according to the company.”
“‘The last 72 hours is really where things seem to be escalating,’ said New York restaurant owner Gabriel Stulman on Saturday night, after around nine employees across his four restaurants tested positive for Covid-19. Others were struggling to get tests, he said.”
“Foot traffic to stores was 23 percent lower for the week ended Dec. 18, compared with the same week in 2019, according to Sensormatic Solutions, which tracks footsteps with cameras placed at stores.” READ MORE
Return to office dates are now history: “The latest developments around Covid could very well kill the return-to-office date as we know it, business and health experts say. ‘These RTO dates are now history,’ Nick Bloom, a Stanford Graduate School of Business professor who researches remote work, tells CNBC Make It. ‘Everything is completely off.’” READ MORE
Hospitals in Cleveland are begging people to get vaccinated: “Facing an increase in coronavirus cases as the omicron variant rapidly spreads through Ohio, leaders of six health-care facilities in the Cleveland area took out a full-page ad in the state’s largest newspaper pleading with residents to get vaccinated. One word anchors the message: ‘Help.’”
“‘We now have more COVID-19 patients in our hospitals than ever before,’ the ad in Sunday’s issue of the Plain Dealer says. ‘And the overwhelming majority are unvaccinated. This is preventable.’”
“It ends with a desperate plea for the attention of a pandemic-fatigued public: ‘We need you to care as much as we do.’” READ MORE
Over the summer, Abbott Labs stopped making Covid tests and destroyed its inventory: “For weeks in June and July, workers at a Maine factory making one of America’s most popular rapid tests for Covid-19 were given a task that shocked them: take apart millions of the products they had worked so hard to create and stuff them into garbage bags. Soon afterward, Andy Wilkinson, a site manager for Abbott Laboratories, the manufacturer, stood before rows of employees to announce layoffs. The company canceled contracts with suppliers and shuttered the only other plant making the test, in Illinois, dismissing a work force of 2,000.”
“‘The numbers are going down,’ he told the workers of the demand for testing, saying it wasn’t their fault. ‘This is all about money.’”
“As virus cases in the U.S. plummeted this spring, so did Abbott’s Covid-testing sales.”
“[More recently] CVS, Rite Aid and Walgreens locations have been selling out of the at-home version, and Amazon shows shipping delays of up to three weeks. Abbott is scrambling to hire back hundreds of workers.” READ MORE
The Biden administration is delaying enforcement of its vaccine-or-test mandate: “Employers will be given more time to comply with a federal requirement that workers get vaccinated for Covid-19 or be regularly tested, the U.S. Department of Labor announced Saturday after a federal appeals court allowed the rule to go forward. Workers who are not fully vaccinated won’t have to be regularly tested for the coronavirus until Feb. 9, more than a month after the original deadline of Jan. 4. The department said it is exercising enforcement discretion to ‘account for any uncertainty’ caused by the legal challenges that had blocked the rule.”
“Businesses with at least 100 employees were to have determined the vaccination status of workers – and require unvaccinated workers to wear masks – by Dec. 6.”
“The agency’s announcement arrived hours after the Ohio-based U.S. Court of Appeals for the 6th Circuit reinstated President Joe Biden’s requirement late Friday.” READ MORE
THE 21 HATS PODCAST
Dashboard: How Concerned Should Businesses Be? This week, Loren Feldman and Gene Marks talk about the arrival of omicron. With holiday parties and sporting events getting canceled and offices either closing or postponing plans to reopen, it’s starting to feel a lot like --- well, not Christmas but maybe March of 2020. Are businesses in for another rough patch? Or is that just Covid hysteria? Plus: Gene confesses he likes ABBA.
You can find Dashboard in your 21 Hats Podcast feed.
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