Business

Here at Financial Helpers, we’ve often covered several stories involving the fall of retail. From Forever 21 to Toys “R” Us, brick-and-mortar seems to be going the way of the dinosaurs. Many cities now have massive warehouses that are empty. Malls are emptying fairly quickly as well. Even the number of people who work in the retail industry is dropping.

You might think this has to do with the economy, but it is continuing now. The economy is great and people are spending tons of money. We’ve had record-breaking holiday seasons the past few years and this season should be no different. If people are spending money, why are these stores closing down? Also, what impact is it having on the economy?

Its impact will mostly be felt if the U.S. enters a recession soon. Economists are split on whether that will happen in the next few years. Usually when a recession happens, job losses are numerous. People start spending much less money and instead start saving what they can. Right now, employment is at record numbers, so when the flow of money stops, so will job numbers.

Here’s the difficult part of this: retail jobs usually help Americans get through a recession. The number of people who leave office jobs for retail or fast foods starts to climb. They have no other choice while waiting for the job market to get better. Yet, if these places are closing down and they’re cutting jobs, where will they go?

The Recession Has Already Started in Several Retail Industries

“Brick-and-mortar retailers are already in recession,” said Mark Zandi, chief economist for Moody’s Analytics. “They’ve been laying off workers coming up on three years. And this is a time when consumers are out spending aggressively. If the broader economy is in recession, there is going to be blood in the streets.”

A major part of the problem isn’t that Americans aren’t spending enough. They’ve just changed the way they buy things. Why go to Forever 21 when you can get the same types of clothing online? Traditional stores and malls are on the outs. Not to mention, the trade war between China and the U.S. is already increasing costs. This will force many businesses with razor-thin margins to close their doors or cut back on jobs.

“If the economy were to struggle, it would accelerate the collapse of a lot more of the debt-financed retailers. And you would see an acceleration in store closures,” said Greg Portell, lead partner in the global consumer and retail practice of consultant AT Kearney.

“A lot of retailers are hanging on because the broader economic environment is strong, interest rates are low, credit is available,” Zandi said. “No sector is more dependent on credit. If a recession comes, credit will get cut off both to the consumers and the retailers. That is going to mean a rash of bankruptcies and a lot of lost jobs.”

Back in 2017, Toys “R” Us declared bankruptcy and closed its doors. One of the mega retail stores of the bygone era, they weren’t able to keep up. Their stores lacked innovation and their website game was poor. In today’s technology-driven culture, having a great website is key. You need to offer convenience to keep up with the Amazon’s of the world. Walmart has done a good job of doing that, but many others haven’t. And they’ve all died painful deaths.

Now, Target is looking to help revitalize the brand. The timing couldn’t be more perfect as we get nearer to the busy holiday shopping season. They’ve partnered with Toys “R” Us, the company that was already looking to make a comeback. They completely rebuilt their brand-new website and relaunched it on Tuesday.

Now you can order toys on the Toys “R” Us website and have them delivered to any Target store for you to pick them up. As part of their new strategy, the toy company isn’t going to have massive warehouses anymore. They will focus on their website while testing much smaller stores. While they unroll this new strategy, being able to pick up toys at Target will be helpful.

“By applying our capabilities in a new way with Toys “R” Us, we can serve even more toy shoppers, drive new growth, and build on our toy leadership,” Target executive Nikhil Nayar said in a statement. The new parent company for the brand is Tru Kids. They bought the rights to the Toys “R” Us name after the bankruptcy. They’ve since been looking at ways to bring the dead franchise back to life.

Toys “R” Us is Back in Time for the Holidays

Rather than going back to the old model of filling up a massive warehouse, the relaunch is going to be quieter. They’ve already made a deal to partner with Kroger during the holiday season. Kroger stores will have a section called “Geoffrey’s Toy Box” to help market toys and other gifts for the holidays. Geoffrey is the name of the famous giraffe mascot.

“Our US strategy is to bring back the Toys “R” Us brand in a modern way,” Richard Barry, the CEO of Tru Kids, said in a statement. The strategy is going to be slow and steady. The holiday season is always crazy busy, so smaller partnerships with Target and Kroger will do for now. They hope to have at least 10 new stores ready by the 2020 holiday season.

Make no mistake about it, there was a massive void left behind when Toys “R” Us shut down. Target has been facing major competition from the likes of Walmart and Amazon, who are always fighting for the top spot. Target hopes that partnering with Toys “R” Us will allow them to grab some of the profits.

Many millions of Americans own guns for a variety of reasons. They are hunters, providers for their family, and use guns for sport. Many use guns to protect themselves and all that they have. Currently, there’s a battle raging on in the public sector regarding guns. It’s mainly Republicans who want to continue to uphold the Second Amendment. Why should they give up their rights because of a few bad apples?

On the other hand, you have Democrats trying to create change. They believe guns are too accessible and can get into the wrong hands. That’s exactly what happened with Dick’s Sporting Goods. After the Parkland shooting, it was revealed the shooter used one of their shotguns. The outrage was enough for Dick’s CEO Edward Stark to decide to stop selling guns.

Not only did they stop selling guns, they decided to start scrapping the inventory they had. They would rather destroy the guns than allow them to be sold elsewhere. So far, they’ve removed $5 million worth of guns off the market forever. The guns were effectively turned into scrap metal.

“All this about, you know, how we were anti-Second Amendment, you know, ‘we don’t believe in the Constitution,’ and none of that could be further from the truth,” he said in an interview with CBS. “We just didn’t want to sell the assault-style weapons that could inflict that kind of damage.”

Guns and the Second Amendment

Stack says he’s a complete supporter of the Second Amendment. In fact, he even owns many guns himself and is an avid hunter. The company he now owns first started as a fish-and-tackle shop in 1948 and grew into the behemoth it is today. They were selling guns and ammunition well before Stack began his career in 1977.

For Stack, it’s hard to reconcile. He has a love for guns and the outdoors, but 17 people died. The shooting at Marjory Stoneman Douglas High School in 2018 changed his view completely. His company was now a part of the discussion. Students from this school and many others across the country were now demanding change from anyone associated with guns.

“We had a pit in our stomach,” he told CNN soon after the shooting. “We did everything by the book that we were supposed to do, from a legal standpoint, we followed everything we were supposed to do. And somehow this kid was still able to buy a gun from us.” The gun sold to the shooter was not the AR-15 he used at the school that fateful day. Still, it haunts Stack.

The decision to stop selling guns has cost Dick’s Sporting Goods a quarter of a billion dollars. That doesn’t mean it wasn’t an easy decision to pull and scrap them. Many other national chains are also deciding what to do in light of these types of tragedies. Walmart also is looking at ways to reduce gun and ammo sales through their stores.

Owning a business is an amazing, exhilarating thrill ride, full of many ups and downs.  In a lot of ways, your business will become a part of you. You must take care of it, nurture it, and dedicate yourself to making sure it’s healthy and growing.  Because having a business is a lot like raising kids, there are plenty of life lessons that 

Lesson #1: People won’t always believe in you 

This may be depressing to you.  You’d think that if you started a successful business, everyone in your life will be incredibly happy for you, but it doesn’t happen as much as you think it should.  A lot of the time, your success makes others jealous. They feel like a failure in comparison, even if they have a great thing going for themselves. This is especially true when your success translates to bigger and better toys.

Being successful can bring about struggles in a marriage.  If owning a business is a lot like raising kids, then you know having kids is time consuming and stressful at times.  What happens when you start working late? Or when you must invest gobs of money into your business? A lot of the time, a spouse might not be so understanding.  So, be prepared and make the decision now on what comes first.

Lesson #2: You must put your business first

This ties in directly with lesson one.  To be successful and thrive, all your attention and focus must go into it.  If you don’t, then you’re distracted. Distracted people rarely become the best at something.  That means you’re setting aside time with your family and friends. It means you might have to make budget sacrifices, like deciding not to go on that big vacation this year.  

You might have to sacrifice a little time with the wife and kids. It might be rough for awhile, but when the money is flowing, life will be good. You can make up for a little of the time lost. At the same time, don’t completely abandon them, either. You will harm your marriage and be so stressed out on all fronts. You can enjoy life, but you also have to give your business everything you have to make it successful.

Lesson #3: Do what you say you’re going to do

Being a man or woman of your word is crucial to your success. Honor your deals. Don’t look for shortcuts or ways to screw others to get ahead. You need to understand just how important relationships are in business. You will go a long way with a good relationship with your vendors, clients, and customers. In that way, being a person of your word means they can rely on you. They know you’ll always make it work out and that’s always good for business. 

On the flip side, if you’re dishonest, it will come back to haunt you. Customers talk to each other. They can either recommend your place or tell a friend to avoid it. Now that we have the internet, you’re one bad Yelp review away from losing business and money. If you can’t honor it, don’t promise it.

The biggest rage in the fast food industry as of late has been to appease the vegan and vegetarian crowds. Burger King’s recent slew of ads has been to promote their meatless Whopper they say tastes exactly like the real thing. The vote is still out on that premise, but the trend is growing. Even KFC got in on the move and started offering plant-based fried “chicken.”

McDonalds has been quiet on this new trend. Seeing how other fast food giants are jumping in, they decided to start testing the market for themselves. The company has now partnered with Beyond Meat to see if anyone has an appetite for what they call the P.L.T. or plant-lettuce-and tomato burger. The patty, of course, made from plants.

The test will only take place in a few select Canadian cities for the time being. There has been rumors in the market for awhile now that McDonalds was considering releasing a plant-based Quarter Pounder, Big Mac, or other items of the sort, like nuggets. Burger King’s meatless Whopper has been a commercial success so far, so it would appear as if McDonalds is behind and trying to catch up.

This isn’t Beyond Meat’s first run with a fast food giant. They’ve also made deals with Del Taco, Carl’s Jr, TGI Fridays, and Dunkin’. There are different types of plant-based burgers on the market. Impossible, the brand currently partnering with Burger King uses soy protein in their meatless patties. Another company, Incredible Burger, uses soy protein and is part of the Nestle family. McDonalds has an Incredible Burger deal in Germany, the burger called the “Big Vegan.”

Rolling Out Beyond Meat Everywhere?

Despite having already made a few big deals, Beyond Meat still has a bit of growth they can accomplish. Landing a broader contract with McDonalds would be like winning the lottery. Upon news of this limited new deal, Beyond Meat stock jumped 500%. If sales do well, then Beyond Meat could find its way into every McDonalds across the country.

Tyson and Kellogg are looking to create their own products and might sign a deal with Beyond Meat as well. Considering you can find these products in plenty of stores, it appears as if this company will have a lot of staying power. More people are deciding to eat less meat as it’s better for the environment.

It was reported last night that a new deal was “really close” between the UAW (United Auto Workers) and General Motors. As part of getting this close to finishing, GM agreed to reinstated worker’s health benefits. Currently, there are nearly 50,000 workers pounding the picket lines and demanding better benefits and a pay raise. It was announced when the strike happened that GM was cutting off their benefits, but now has decided against that move.

GM has released a statement saying that if any UAW workers have any insurance claim they wish to make, even while striking, they should do so. They will continue to provide their workers the coverage they need to get the help and treatments they need. Before, pulling their health benefits was a good tactic to get the workers back into the factory. Now, the optics behind were too much to bear.

Terry Dittes is the vice president of the UAW’s GM department. He said in a letter sent to GM that it was completely ‘irresponsible’ to terminate worker benefits. They would be “toying with the lives of hundreds of thousands of our UAW families.” In an attempt to improve the optics and soften the hearts of UAW workers, GM made the decision to return their benefits. Even if the strike continues for many weeks and/or months.

A Deal is Getting Close for UAW Workers

Not all benefits are being reinstated to the strikers, though. GM wanted to remind the workers that they are leaving behind great benefits while they decide to remain on the picket lines. Yet, the public seems to be firmly behind the UAW. In this day of social media, taking away people’s benefits is not a good look. GM has been blasted by everyone, including presidential candidates, who firmly support the workers.

“There is no doubt that (the) public … sees these actions of GM as a shameful act!” the letter from Terry Dittes continues. “Finally, it is time for GM to come to the bargaining table with an offer that reflects the hard work of our members who make you successful and will settle this strike on behalf of the hundreds of thousands of UAW families, and stop toying with our families’ health and well-being.”

Today marks the 11^th day since the start of the strike. As they continue negotiations, hopefully the strike will be over and everyone can get back to taking care of their families.

Any new entrepreneur has the challenge of finding and locking down sales in order to gain attention in their specific niche.  As time goes on, closing on sales will become more natural to you, but for those of you who are just starting out, it can seem quite daunting.  The truth is, there is an art to closing. It requires building close business relationships and trust with your clients.  

Let’s face it: if potential clients don’t trust you, you’re going to have an incredibly difficult time getting them to engage with you.  They would instead rather spend their time, energy, and money on your competition who meets their need better than you do. In this chapter, we will take a look at a handful of tips to help build trust with potential clients so you have a better chance at closing the sale.  

Secret #1: Talk Less and Listen More

When you’re new to the game and trying to build a relationship, often times it can feel a bit forced.  You need sales. You want them to know all about your amazing product or service. How can you spread the word without actually talking about what you do?  But in reality, you can’t serve a client’s needs unless you actually know and understand what their needs are.

If you’re the one doing all the talking, how well are you listening to the needs of your customer?  And if you’re not listening, how can you provide their needs? The best way to approach any business deal is to ask questions and then listen.  Take notes. If you think you aren’t clear on something, ask more questions.  

Secret #2: Be Informative and Honest

Always give 110% of yourself in everything you do.  That includes being completely honest about what you can deliver.  Again, it’s not about talking and talking and talking. Once you listen to your customer’s needs, show them what you can do and how you provide them with value.  Be authentic and relatable.  

The sad truth is, there is too much dishonesty in every market.  Snake oil salesmen fill the landscape with promises they never deliver and mess it up for everyone else.  You can stand out in your market by being honest and living up to what you say you can deliver. Otherwise, you will gain a bad reputation and that is often too much for anyone to overcome.  Going above and beyond is always appreciated and will attract new customers.

Secret #3: Be True to Your Passion

Something potential customers love to see is passion.  Drive. Confidence. You absolutely LOVE what you do and can’t see yourself doing anything else.  It’s that attitude that will take you far versus seemingly like you’re only in it for the money or it’s just a job to you.

Have you ever gone to a fast food restaurant and seen the faces of the workers there?  There is no enthusiasm. All they care about is watching the clock so they can go home.  But every so often, you find one who is in a great mood. And that great mood is contagious, right?  It sticks with you for a while.  

You are a living example of the services you offer your clients.  What you offer potentially makes their lives more joyful and happy.  As we’ve discussed before, they want to buy from you because they are looking to avoid pain or achieve gain.  By meeting their needs, you’re making their lives better, safer, and more enjoyable.  

Secret #4: Follow Up is Important! 

We have already discussed the importance of building trust.  But trust is rarely gained after just one encounter. True relationships (business relationships included!) take time to develop.  So if you really want to motivate people to trust you and buy, be sure to follow up with them.  

This is especially true even if they already decided to buy.  What better way to show you care than to drop a note in the mail or to send an email?  Keeping the dialogue going shows you care that they are happy with your product or service

Of all the things people use Alexa for, like turning on the lights or playing a song, filling out a job application isn’t usually one of them. As companies look to become more technologically reliant, McDonalds wants to make it easier for people to apply for jobs. According to the mega fast food giant, using Alexa and Google’s Assistant for applying for a job is a first. It’s these types of innovations that will make it easier for people in the future.

The system they use is called Apply-Thru and people can ask Alexa or other voice-assistance programs for McDonalds jobs in the area. They can then use the device to fill out the application and send it to the restaurants. There’s even an “I’m lovin’ it” jungle that plays as the application is being sent.

“We must continue to innovate and think of creative, and in this case, groundbreaking ways to meet potential job-seekers on devices they are already using,” said McDonald’s Executive Vice President David Fairhurst. “Alexa has many of the qualities we look for on our teams — friendly, responsive and fun. I am looking forward to having our application process simplified with Alexa.”

Still, many cities across the country are facing a worker shortage. The economy is doing so well that each location is looking for hundreds of people to fill in. Over the past summer. McDonalds said they were looking for, in total, around 250,000 new jobs to be filled. Yet, more than ever, people are choosing work outside of flipping burgers for minimum wage.

Creating a Better Way to Apply for Jobs

The job shortage is really giving many companies like McDonalds fits. They are having a tough time finding workers. This is forcing them to find innovative ways to reach out, using technology people use every day. We recently did an article that talked about how Gen Z isn’t settling for burger flipping as their first job.

Instead, they’re learning how to use technology to make money and even start their career while in high school. Middle schoolers are starting YouTube channels and making tons of money. So, this is going to force the fast food industry as a whole to rethink the way they hire people, including offering more money as a starting wage.

Still, fast food is becoming more popular. Wendy’s recently made the announcement they plan to reintroduce breakfast as more companies are jumping into the breakfast wars. They all want their share of the growing breakfast market. Less people are eating at home and choose convenience over home-cooked.

Imagine having the ability to have everyday items delivered to your home whenever you wanted? Walgreens is looking to make that a reality with a new drone delivery service. Think of all the reasons why you might stop at a pharmacy. Everything from prescriptions, other types of over-the-counter medicines, and other products we use daily. Even snacks or that gallon of milk can be delivered.

Walgreens announced last week that they are going to partner with Wing Aviation LLC. They are an up-and-coming drone delivery service that is trying to make drone deliveries commonplace. Right now, the technology is being used by Amazon and other companies to deliver packages, but hasn’t been widely distributed as of yet. It’s still a basic concept growing in popularity. It’s going to take companies like Walgreens to help make the technology mainstream.

It appears as if the program is in its infancy and will only be tested in one market in Christiansburg, Virginia. Wing Aviation LLC is a company owned by Alphabet, the parent company of Google. Walgreens’ main goal is to pull ahead of the competition by offering convenient new services. This also means we can probably expect CVS and others to step up to the plate and also start testing their own drone delivery programs.

Drone Customer Service

“Walgreens continues to explore partnerships to transform and modernize our customer experience and we are proud to be the first retailer in the U.S. to offer an on-demand commercial drone delivery option with Wing,” said Vish Sankaran, chief innovation officer, Walgreens Boots Alliance, Inc. in a statement.

Christiansburg was the place selected to carry out the tests because the program has a working partnership already with Virginia Tech University. They have been at the front lines of testing and perfecting this technology for several years. The new Walmart drone delivery service will be the next step in their process.

According to a press release from Walgreens: “Eligible customers in the Christiansburg area will have access to more than 100 products and six convenient ‘packs’ via the Wing app that include many of Walgreens most sought-after products in store. Customers can either choose the individual products they need or, for simplicity’s sake, choose one of the pre-built packs in the following categories: allergy, baby, cough/cold, first aid, pain, and kids’ snacks. Prescription deliveries are not available via this service.”

Walgreens is also the perfect fit for testing out this technology. A lot of people dare to venture out when they’re sick to get medicine and other needed supplies. With drone delivery, they can stay at home and rest while the medications and prescriptions they need are sent to them. It’s also perfect for senior citizens

The UAW workers strike continues and its impacts are being felt throughout the industry, not just with GM and their workers. Imagine all the other factories and companies that make the parts and form the metal that they assemble into cars. They outsource many parts, so when a strike goes on and GM workers are picketing, they aren’t buying more parts from vendors.

A supply backlog is happening and there are more parts and no workers to use them. That’s why vendors have decided that it’s time to start laying off their workers. If GM isn’t buying these parts any longer due to the backlog, then they don’t need people making the parts. It’s even seeping into the trucking industry.

Many pictures have come out showing how semis are being blocked from entering GM plants and deliveries aren’t being made. That means truck drivers are struggling to get paid for loads that were meant to be delivered, but still sit on their trailers. The good news here is that GM has stated recently that they have continued negotiations with the UAW and it’s going really well. Actual progress is being made, so hopefully the strike doesn’t last too long.

Other Companies Who Have Been Hit

Modine Manufacturing is a company that makes radiators. Cooper-Standard Holdings produces all sorts of car equipment, like brake lines and sealings. BorgWarner makes control panels for exhaust and emissions. These are all major companies that are suffering as the strike continues. Delphi and others have taken a loss in the stock market.

In an attempt to appease the UAW, GM has already offered to created thousands of new jobs and offer $7 billion towards other investments to create jobs and improve working conditions. They even offered better wages and health care benefits, but it was all turned down before the strike was set to take place.

GM tweeted: “The offer we presented to the UAW prioritizes employees, communities and builds a stronger future for all. It includes improved wages and health care benefits, over $7B in U.S. investments and 5,400 jobs. Let’s come together and secure our shared future.”

Nearly 50,000 UAW workers across the country are currently striking.