There Will Be Spending
There Will Be Spending
Today’s Highlights: The SBA releases restaurant grant details (but no money). A digital platform wants to simplify home contracting. And what does this video have to do with marketing or recruiting?
Is this a marketing video?
THE 21 HATS CONVERSATION
The issue business owners struggle with more than any other is marketing—at least that’s been my observation talking to owners the past 20 years: Which platform should they be on? How much should it cost? How will they know if it’s working? Should they manage it in-house or outsource it? If they outsource, how do they know which self-proclaimed guru to trust? Tuesday at 3 ET, I will talk to two business owners who have confronted these challenges and come to some counter-intuitive conclusions, including that those aren’t necessarily the most important questions to ask. They will also explain why the robot-chainsaw video above has been a marketing coup. Please join me and my guests, Shawn Busse, CEO of Kinesis, and David Nichols, CEO of Loupe, Tuesday at 3 to hear their hard-won lessons about marketing. Bring your own questions!
REOPENING
Retailers are preparing for extraordinary spending levels this year: “The big question for many retailers is whether they can correctly predict what consumers will flock to next and then keep enough inventory in stock during a period of prolonged disruption in global supply chains. ‘How are we preparing for this? It’s hold on for dear life,’ said Jeff Enright, the head of supply chain and logistics for Ocean State Job Lot. ‘We started selling above-ground pools in December. We started selling gazebos in January. We started selling air conditioners in the beginning of March.’”
“At L.L.Bean, the demand for bicycles, kayaks, roof racks, and canoes is already outpacing that of last year. Camping and hiking categories are up as much as 144 percent, while bathing suit sales in March were up 500 percent above a year ago. All-weather furniture sales are up an eye-popping 754 percent.”
“A year ago, Ocean State increased its orders for pools by 25 percent; this year it has raised that amount another 30 percent. But shipping containers are tied up throughout the international supply chain and are costing as much as five times more to move, cutting deep into the stores’ margins.”
“‘There will be extraordinary spending,’ said Jack Kleinhenz, the [National Retail Federation’s] chief economist. ‘I don’t know how else to put it.’” READ MORE
GOVERNMENT SUPPORT
The SBA has released new details about its Restaurant Revitalization Fund: “Over the next two weeks, the SBA said it would establish a seven-day pilot period for the RRF application portal and conduct outreach and training, ahead of the application launch, which is still unknown. Pilot participants will be randomly selected from existing PPP borrowers in priority groups for RRF; they'll not receive funds until the application portal is open to the public. It's not clear if this added bit of testing will help resolve any of the technical issues that confronted the $16 billion Shuttered Venue Operators Program, a similar grant offering, which the SBA temporarily halted at 4:15 pm Eastern on April 8, its first day in operation.”
“While the RRF and the SVOG are similarly styled grant programs—both operated by the SBA—there are a few key differences: The RRF, which is open to food-service businesses including bars, restaurants, and caterers with up to 20 locations, will be run on the same system that the SBA uses for the Paycheck Protection Program.”
“The amount of funding a business may receive is the difference between a business's gross revenue in 2019 and 2020, up to $5 million per location and $10 million total. The grant would be reduced by the aggregate disbursements a business received in PPP loans. The minimum grant amount is now set at $1,000.” READ MORE
STARTUPS
A digital platform is streamlining the home-repair and contracting processes: “Leap is a business-to-business app licensed to contractors, which they use to manage mostly residential projects such as deck and roof replacements or larger remodeling jobs. The platform allows contractors to estimate projects remotely, execute work orders, schedule jobs and collect payments on a secure system. It also works to the client’s benefit, said Patrick Fingles, the company’s chief executive. ‘We want to change the buying experience and simplify the estimating process,’ he said. ‘We are doing to home contracting what Carvana has done to car sales.’”
“The Columbia, Md.-based company has 60 employees and nearly 7,000 licensed users at 1,000 companies in the United States and Canada.”
“Fingles said Leap has been profitable since its 2016 launch and expects it will gross about $10 million this year.”
“Leap users, most of whom are in the home repair business, pay $78 a month, on average, to use the app.” READ MORE
READER FEEDBACK
My heartfelt thanks to everyone who took time over the weekend to comment on how this newsletter might be improved. While my favorite suggestion came from Jim Kalb of Triad Components Group (“Don’t change anything!!”), there were lots of great ideas—some delivered privately—and I will be reviewing and considering all of them. One idea that emerged requires no further thought: I have never asked Morning Report subscribers to suggest either publications or specific articles to be highlighted. Please know that I would love to hear any and all suggestions, and you can always shoot me a link simply by replying to this email. READ THE COMMENTS HERE
CANNABUSINESS
Canada’s Green Rush has not gone according to plan: “Analysts say one reason the sunny projections have failed to materialize is the tightly regulated distribution system introduced by Canada, which largely bans advertising and marketing. The halting roll out of stores in some provinces — particularly Ontario — is also a factor. Plus, surveys have suggested that many Canadians are simply not interested in adopting a new vice.”
“The investment craze produced a strong echo of the dot-com stock boom of the late 1990s. And it ended with the same collapse.”
“Two and a half years after legalization, most marijuana producers in Canada are still reporting staggering losses.”
“While initial hopes for marijuana wealth were overly optimistic, Professor Murray said he was confident that a viable business will emerge, with the rising number of Ontario shops one sign of that.” READ MORE
SOCIAL MEDIA
There are already indications that Clubhouse may be fading: “One of the main gripes with Clubhouse is that there’s a lack of relevant talks, or rooms, that users see when they open the app. ‘I tried to get into it for a bit, but the only rooms it was showing me were run by the kinds of people who unironically call themselves ‘growth hackers,’ one user told CNBC, adding that it felt like social media managers arrived before everyone else. [Social media analyst Matt] Navarra said Clubhouse’s challenge ‘is making sure when you open the app you discover lots of great rooms and speakers, every time.’”
“‘The content quality issue is only going to get tougher as more users are added and quality content gets diluted. Much like when Meerkat users started to see endless dull live streams, Clubhouse is full of spam, scams, and snake oil salesmen.’” READ MORE
PROFILE
In Wahl Street, a six-episode HBO documentary, Mark Wahlberg lets us see his business struggles: “‘It’s a much more honest depiction of where I’m at in life,’ Mr. Wahlberg said in an interview. ‘I’ve certainly learned more from the failures and the losses than I have the victories. Social media people are always showing you all these great successes, and I want to show the journey, the struggle, the learning curve, the bumps in the road.’ He puts it more bluntly in the series. ‘Do you know why this show’s going to be such a hit?’ he asks the camera crew after a tense business meeting. ‘People are going to love watching me f—implode.’”
“Mr. Wahlberg’s confidence runs high in the early episodes. He envisions more F45 franchises than Starbucks storefronts, mulls designs for an elevated ‘hot guy shirt’ for Municipal, boasts about the fast growth of Wahlburgers and flirts with investing in a health-conscious convenience store business called Green Zebra.”
“Then the pandemic hits. Many F45 studios close temporarily and Municipal loses a major funder. Mr. Wahlberg spends all day on depressing Zoom calls. He and his business partners invest more of their own money. The actor admits to feeling depressed at times. A couple of his colleagues battle tears.” READ MORE
HUMAN RESOURCES
A McDonald’s in Florida is paying job candidates $50 to show up for an interview: “Blake Casper, the franchisee who owns the restaurant, told Insider that a general manager and supervisor came up with the idea for the interview reward after he told them to ‘do whatever you need to do’ to hire workers. ‘At this point, if we can't keep our drive-thrus moving, then I'll pay $50 for an interview,’ said Casper, who owns 60 McDonald's restaurants in the Tampa, Florida area.”
“Casper said that, to his surprise, offering people $50 simply to come in for an interview still has not convinced many people to apply for jobs.”
“He has found more success with referral programs, signing bonuses, and allowing people to apply via text message.”
“Last week alone, his 60 restaurants hired 115 new workers.” READ MORE
West Virginia is offering remote workers $12,000 to relocate: “The $12,000 West Virginia is offering is paid over two years, with $10,000 divided in monthly payments for the first year and $2,000 paid at the end of the second year, according to the program's website. If you move early, you keep the money that you've earned so far.”
“The incentive package also includes a year's worth of free outdoor recreation, bringing the total value to $20,000, the website said.” READ MORE
COMPETING WITH AMAZON
Philadelphia is now encircled by more than 50 Amazon warehouses, including “a forthcoming mega-warehouse in New Castle, Del., or the new fulfillment center in Carneys Point, New Jersey, down the river from the West Deptford facility. Both of these warehouses will be well more than a million square feet once completed and are among nine new Amazon facilities that the company has announced for the region in the next year, with more in the works. That’s in addition to 14 sites added in 2020.”
“Siting the warehouses along I-95 also allows the Philadelphia-area infrastructure, especially the hulking fulfillment centers, to help serve even larger markets to the north and south.”
“Now, the e-commerce giant is building the nation’s largest logistics firm to ship its own packages, a sign of how much business it was giving its former partners FedEx and UPS.” READ MORE
No, it’s not just you. Amazon trucks really are everywhere:
