The End Consumer

Few are talking about the end consumer as one of the most extensive problems in the supply chain clusterfuck.
I will be the first to acknowledge that retail therapy is sometimes what the doctor ordered. I like to wear what is in fashion. I find myself buying less and better, but that was not my mindset years ago.

Every season designers put out a new line with multiple pieces, and the majority of these lines are made in China, Vietnam, Cambodia, Myanmar, Bangladesh, and Pakistan. Through technology, what has happened is fast-casual goods giving companies the ability to make even more products. What hasn’t happened is calculating retail demand.

Brands have started to wake up to the importance of sustainability and the looming crisis of our planet. Over the past two decades, brands began to open their own retail stores. So not only were their products in department stores or small boutique stores, but they were also in their stores. Each of them chocked with merchandise. I walked through Bloomingdales last week, which was seriously painful, but the amount of inventory on the floors was mind-boggling. Knowing retail, there is no doubt that most of these goods will be marked down or sold to jobbers to get it off the floor for a new season of goods.

When I worked at Macy’s, the formula was simple. Buy enough goods for all the stores, hope that some of those purchases will be huge successes, and if not, mark it down and move it out. If the end-of-season margins didn’t make your department profitable, then make the wholesalers pay for the delta. Sometimes that meant cash and other times that meant a tremendous discount on the next season’s merchandise buy. An endless cycle.

Americans are all about new, new, new. Christmas just ended, but how much stuff was purchased and given as gifts that will never be used? I believe in changing the relationship between retailers and wholesalers, but the problems are more profound than that. It is consumer behavior that must change. When Americans want to pay $20 for a t-shirt made in the USA, once you figure out labor (including medical insurance), cost of goods, and shipping, it is impossible to do that. If you make that garment overseas, pay people $1 a day, and put it on a boat to land in the US, then you can have that $20 top. That has worked for years, but the realization is that the supply chain can no longer handle the load. That load also takes a toll on the underpaid workers and our physical world.

I am just pointing out issues. It is so layered and complicated. How much inventory is needed? Can we get better at those calculations? Can stores make money with less is best? Can fashion companies survive with less being made, or must both sides continue to make more earnings this year than they did the past year? I don’t know the answer, but certainly, retail must change.

These questions should be asked across all verticals from furniture, cars, fabrics, washing machines, dishwashers, etc. How do we create less havoc on our planet while still having profitable businesses? Who is working on that right now?

We must also change the mentality of the consumer. There are a few brands that I have always been a fan of because they aren’t about mass items. They keep the inventory lean. It forces the consumer to buy at the full price. I have never been a fan of the discount for which we have trained the consumer. Wait, and the item will go on sale. That isn’t sustainable.

Americans are huge consumers. It helps the GNP. Does it have to be this way?

A Return to a Simpler Life

The return to a simpler life began a while ago. As we all know by now, Covid accelerated everything.

What is a simpler life? That is all up for interpretation, but from what we hear is getting off the fast track of working like a dog seems to be resonating with many under between 20-35. They want to control their lives and know that someone cares about them and their work. It is a sign of massive structural change as the next generation wants to live differently. The beautiful thing is, they can.

Many of these people grew up with hovering parents who told them how fantastic they were. Then they got to college and out in the workforce and thought, this is it? They now don’t have to go to an office, so they can pursue a passion from chocolate making to pillow making. Building a business to pay the rent isn’t easy, but it is on their terms. They can also live far from urban areas building new urban outposts that have connected communities. People say hello every morning and are curious to hear how they are doing.

Years ago, I wrote about the return of Main Street. The cobbler, the tailor, the baker, the butcher, the jeweler, and all the retail components that a community relies on. Nobody wants to be burnt out anymore. There is enough anxiety of everyday life coming from politics and the massive angry divide in our country.

If you can work for yourself and afford to have a roof over your head, well, that appears to be just what a simpler life is starting to look like. The new mantra is to follow your passions, follow your heart, and get out of the rat race. This won’t be good for corporate America. Still, the reality is corporate America killed itself with its layers of politics, lousy culture, and not seeing the writing on the wall. The people are taking control of their lives, and they want a different life than the ones their parents had.

And straight from Morning Brew: “Great Resignation.” Pity HR departments. As employees reconsidered their relationship with work—and what they demanded of employers—a record 4.4 million people (or 3% of the workforce) quit their jobs in September alone. And many more could be updating their LinkedIn profiles next year, too: A recent survey showed that more than 40% of professionals are considering leaving their jobs in the first half of 2022.

Take note. Things are just starting to shake up.

Covid Caught Up

Covid finally caught up with me. My oldest daughter said this is never-ending. My friend said we were all going to get it. They might both be right.

We got out to LA last Tuesday. I wasn’t feeling myself. I started with the dry hacking cough, cold chills, and an achy body by Wednesday evening. I would have thought I got some flu in past years, but these days, I just knew what it was, Covid. The onslaught of Omi out in the world crept into my body. Where? I have no idea.

There is so much data out there it is overwhelming. Fred tested positive a few days later. He is entirely asymptomatic. Lucky him. Although the cough has started to wane, and there was a point, although brief, where I couldn’t stop sneezing like a bad cold, the exhaustion has yet to go away—a few naps in the morning and afternoon. I can’t seem to get enough.

Our friends got Covid pre-vaccinations, and they were so sick that they didn’t leave the house for a month. I figured if we get it, the week between Christmas and New Year isn’t a bad one to lay low.

I know if I did not have three vaccinations in my system, I would be seriously ill. Vaccinations are the best thing that happened to humanity. It is one of the many reasons we can all live longer. These public health initiatives have dramatically increased our life expectancy.

As my other daughter said, look on the bright side; after this is over, you can do whatever the fuck you want and not have to worry for at least a while.

Lemon Olive Oil Cake

Two of my favorite recipe makers are Mina Stone and Alison Roman. Simple, delicious recipes. Have yet to have a miss.

The latest Mina Stone cookbook, Lemon Love and Olive Oil, is a winner. Countless recipes to try. This is the cake I made the other day.

  • 1 1/2 cup extra virgin olive oil – pick one you love
  • 3 eggs – room temperature
  • 1 1/4 cups plus 1 tbsp. sugar
  • 1 1/4 cups whole milk
  • Juice and zest of 2 big lemons
  • 2 tsp. vanilla extract
  • 2 cups flour
  • 1/2 tsp baking soda
  • 1/2 tsp baking powdeer
  • 1 tsp kosher salt
  • powdered sugar for serving

Preheat the oven to 350. Spray cooking oil all over a springform cake pan (9-inch) and line with parchment paper.

In a large bowl, whisk together the eggs, olive oil, and 1 1/4 cups sugar until smooth. Whisk in the milk, lemon zest, lemon juice, and vanilla.

Mix the flour, baking soda, baking powder, and salt in a separate bowl. Make a well in the middle and slowly pour in the olive oil mixture. Using a large spatula, slowly mix the dry and wet until smooth. Whisk until as smooth as possible. A few lumps won’t kill you.

Pour into the cake pan. Bake for 50 minutes or until the top is golden. Let cool and release. Top with powdered sugar once the cake is cooled. Good with either vanilla ice cream or creme fraiche.

The Donut King

If you have ever driven around LA, you can’t help but notice countless multi-named donut stores. Watch the documentary The Donut King on Hulu or PBS if you are curious about how they came to be. There is always a sad, dark side like all great American stories, but this is mainly about an incredible man.

After our disastrous hand in the Cambodian civil war, President Ford insisted on letting 130,000 Cambodians seek asylum in the US. In the end, almost 160,000 Cambodians found homes in the states. They first came in through Fort Pendelton, where they were put in refugee camps until acquiring a sponsor. It is not surprising that many put their roots down in Southern California by proximity.

A church sponsored Ted Ngoy, aka Donut King. Religious organizations are known for this. Ngoy notices a donut store between taking care of the church and pumping gas to make ends meet for his family. That store is busy at all hours. He goes up to the window, orders a donut, takes a bite, and boom, he is blown away. The donut changes his life.

Fast forward, he opens a store after being trained at Winchell’s, the number one donut shop in Los Angeles. He sponsors hundreds of Cambodian families and teaches them how to run and own their donut shop. After they are trained, Ngoy purchases shops and leases them to the families to build their own donut business. It was a gift to the community. An incredible human being with a tremendous heart. He even wins the US medal of honor for living the American dream.

It is the classic story of hard-working immigrants coming to the US, raising the next generation of better-educated children with countless opportunities that don’t look back. The sacrifices the parents endured to get to America are enormous. The Cambodians who came here were given a gift from the Donut King, who built a thriving hard-working middle-class community in the donut business. At one point, he gets carried away with the cash, and this generation has college, medical, and law degrees, so running a donut shop is not necessarily what they want to do, but that is just a piece of the story.

If you have time over the holidays, watch the film. It feels good to watch and hear such an inspiring story these days. Puts faith back in humanity.

Banana Chocolate Chip Cake

I have made multiple banana bread over the years. Sometimes I go with a cake, other times a cupcake but generally a bread. Those black bananas just call out to me, “use me”. I found a recipe adapted by Melissa Clark. I adapted it a bit too. This is a huge hit. Buttery with an incredible soft crumbly texture. Could be the best one ever. I have made three in the past two weeks.

This makes two. You need two because one disappears too fast.

  • 2 sticks unsalted butter at room temperature
  • 2 cups all-purpose flour
  • 1 tblsp baking powder
  • 1 tsp sea salt
  • 1/2 cup olive oil
  • 2/3 cup granulated sugar
  • 1/2 cup dark brown sugar
  • 2 tblsp dark molasses
  • 1 tsp. ground alspice
  • 1 tsp. ground cinnamon
  • 1 tbsp. espresso
  • 1 tbsp. vanilla extract
  • 2 eggs at room temperature
  • 2 cups (I went with 5 bananas which is a little more than 2 cups which is fine)
  • 1 generous cup of semi-sweet chocolate chips

Heat oven to 425. Grease 2 – 8-inch round non-stick pans and line with parchment paper

In a medium bowl whisk together flour, baking powder and sea salt

In an electric mixture, using the paddle attachment, beat butter, oil, sugar, brown sugar, molasses, allspice, cinnamon, espresso, and vanilla until combined. It should still be chunky but you can still see the sugar crystals.

Use a spatula to mix eggs into the butter mixture. Then stir in the flour to combine. Fold in the bananas and chocolate chips. Evenly scrape the batter into the cake pans and bake for 25 minutes, to the second.

Let cool for 20 minutes. Run a thin spatula around the edges to separate from the pan. Invert onto a serving plate. Serve!

Finding Connections Through DNA

In 2007, 23 and Me launched with the mission for people to discover their ancestors and genetic predispositions. The concept scared the hell out of most Governments, and of course, the worries over Insurance companies finding out information and dropping one’s policy. But the company has prevailed. As time passes, there will be a lot of good coming from DNA knowledge.

I have heard countless stories of families discovering random secrets. Like it was the neighbor next door who is their father, or they have numerous siblings through donated sperm. It is crazy but indeed proves how connected we are. Remember that European ad campaign that had all these random people from different sects of life? They had them all DNA tested and ended up the angry anti-semite was part Jewish. So good.

I recently watched the documentary Found. Found follows three adopted Chinese girls who find each other through 23 and Me. These are the children from the one-child policy that reigned in China for years. The girls are cousins who came from the same village and adoption agency. One was adopted by a Jewish family and lives in Seattle and Phoenix. The other is adopted by a divorced Christian family in Nashville. And the third was adopted by a large Catholic family living in Oklahoma. They meet virtually and eventually decide to go to China together and find their roots.

Not surprisingly, companies are now trying to help children born in China find their parents during the one-child policy era. The parents are also trying to find their children. Over time, the database will grow, and all of the children, and their parents who were forced to give up their children, will find each other. Pretty sure the Chinese Government didn’t see that coming.

We also watched Arzo. A slow brilliant film that puts you on edge, trying to figure out precisely what is going on until the end. It takes place in the ’80s during the Peron era where countless loved ones and many children went missing. The film captures the elite who continue to live extravagantly, living off the destruction and putting money into Swiss bank accounts. Argentina is a country of constant turmoil. What happens when the DNA discovers the many children and parents who lost each other? It will happen.

It has taken years for Holocaust survivors to find each other, but since 2007, the stories have been countless. Last week, I read about a family who lost the eldest daughter at three months old in the camps. Through 23 and Me, they found that lost sibling living in English. Unfortunately, her Mom had already passed, but the sisters still lived. What was uncanny is she looked exactly like her mother—an insanely uplifting story.

More of these horrific stories of our combined world history are finding a brighter ending. Somehow we manage to survive and move forward. What is powerful is that it will always be the people outside of Government who fix the ill-wills of society in the end.

This is the most incredible outcome of 23 and Me.

How Do We Educate People About Cannabis?

“We are concerned that dispensaries in our neighborhoods will normalize the use of marijuana even further than it already is,” said Anita Seefried-Brown of the Watertown-based Alliance for Better Communities, which is focused on reducing underage substance abuse.

I sat down with my nieces, 22 and 19, and read the quote above. They both had the same reaction, “that’s dumb.” Agree, but why?

Their answers were spot on. People get older, have children, hear the word drugs, and freak. I asked the question, “how do we change the narrative that has been embedded in our society for decades?” Just saying no was absurd. Who would actually do what Nancy Regan said in the first place? Kids will be kids forever. Adults recreationally drink alcohol and smoke weed. Wouldn’t it make sense to teach that instead of keeping the products behind lock and key?

The cities and towns that choose to opt-out of the dispensaries are making mistakes. We can begin with the taxes that are a tremendous bonus to the town’s bottom line. These stores will have 24-hour security, a nice boon for any street. You have to be 21 to go in, like a liquor store or a bar. This is a place where people purchase weed that is Government controlled. Do you believe that keeping this out of the town will stop the kids from getting stoned? Data points to cities with dispensaries numbers have dropped in consumption.

If these stores are embraced and allowed to be more of a lifestyle concept, it is a win for any neighborhood. Those that opt-out aren’t reading the data or listening to the over 21-crowd. Times are changing, and opting out will be a scramble for towns that change their minds, waiting for the next round of dispensary licenses to be issued after the first round. That could take five years or a decade. In this instance, first in usually wins.

Von Dutch

I started my career in retail and wholesale, so watching the Van Dutch documentary on Hulu is fascinating. I remember the rise of the trucker hat and the Von Dutch line. Brilliant brand building in a time when celebrities were untouchable. Social media has changed brand building. This doc tells the eternal tale of the good, the bad, and the ugly of building a business.

Kenneth Howard was a car detailer artist who adorns cars with flames, stripes, etc. He did it all under the name Von Dutch. After he died, Howard’s daughters sold the rights of his assumed name, Von Dutch, to Charlie Kassel. Kassel had a talent for understanding brand building. He hit upon a small niche business. Eventually, he goes out to raise capital and finds it in Tonny Sorenson.

Sorenson took the concept to another level with capital. He also saw that using celebrities to build brand awareness was key. Sorenson soon realized that Kassel and Robert Vaughn (his sidekick salesperson) weren’t cutting the mustard. They were both bought out. Did they have a lawyer read their contracts when they took the money? Did they realize that they are now both out and only get to walk away with the cash while Sorenson builds the company with new people and vision? Who knows, as there are always three sides to the story.

What is classic is seeing the money come in from an extremely good business person to set the company straight. He then builds it to be a multi-billion dollar company. There was lots of anger from those who got the boot, although they did get to put some capital in their pocket. They should have held on to a small amount called “because you never know.”

The lesson here is the importance of keeping the visionary. Don’t fuck the founders but be reasonable about another role, something they enjoy and do best, which is generally creative.  How do you keep great brands forever? The right combination of creativity paired with a business operational brain. How many great brands have continued to reinvent themselves?

In the Von Dutch story, keep in mind there is a murder, a convict, drug dealers, and a gangster mentality. That was the 80’s. Many sides to this story, but watching the beginning of Kassel’s vision is genius. Kassel’s words of wisdom on building a brand are; classic never dies, what you stand for is more important than what you sell, and authenticity sells itself.  Wise words from someone who ended up with nothing.

Retail

I am in the midst of a project, so I was uptown this past week. I needed to pick up something and happened to be across the street from Bloomingdales. I admit, I hesitated to go inside. I thought about turning back when I entered the door and found out what I needed was on the fourth floor. But, I braved it and headed up the escalator.

I worked inside these massive retail stores in the late ’80s. Just like everything, you have to keep innovating to keep up. I have watched big retail stores like Barneys (RIP), Saks, Bloomies, and Macy’s do massive construction to keep a fresh look. Moving the make-up floor downstairs, which I never understood, I would love to see the data on why that was done. Or, instead of embracing the beautiful old decor, give it a good clean. Those are the countless questions I have wondered about.

I felt as if I had walked into the early ’90s when I entered the store. There is zero innovation. Even getting a salesperson to ring me up was painful. Why would I ever want to walk into this store again? The store needs to be brought down to its studs to create an entirely different experience. Financially I do not see this happening. Keep in mind these stores’ online stores are terrible too. They have never been able to get past the old department store concept, no matter how much they have tried.

I have been espousing the demise of large retail stores for easily a decade, if not more. As I walk around the city, I can see the next cycle of new interesting stores that cater to each neighborhood. There will always be a desire to walk into a store, have a chat, take a look, see new ideas and concepts. That is never going away. It is human nature. Big shiny stores with massive amounts of inventory with the same business plan from 1980, methinks that is definitely on the way out.