When it comes to CPG markets, companies must include data in their plans to compete sustainably. Most companies whose operations are driven by data mindsets do their best to identify insights and trends that support their business models. Any data-driven corporation uses CPG data to establish cycles of improvement, which help them adapt and remain ahead of their competition.
To address brand loyalty, we need to understand what it means and what merits it brings to a firm and mothers as the primary customers. Brand loyalty is when consumers choose to buy a product manufactured by the same firm repeatedly without replacing it with products from rivals. It is essential to understand that brand loyalty generally refers to a product rather than a corporation. But there are times when companies might enjoy the benefits of commitment when they produce goods of better quality than the competitors or in an event where a company is a monopoly.
To companies, brand loyalty from mothers is essential for many reasons.
1. Increase in profit margins
Mothers loyal to a brand will return to your goods, allowing a business to generate more income without spending more money on marketing. According to a Super Office poll, client retention was the largest source of revenue for 52% of respondents. A mother might influence her children to adore a company brand, meaning increased profits.
2. Improved Brand Recognition
When your committed consumers start talking about your items, which is a thing that mothers do mostly, it increases brand recognition. Mothers devoted to your brand suggest your items to relatives and friends, providing free promotion. Finally, this brand devotion will result in good word of mouth, making your brand more popular and simpler to recognize.
3. Competitive advantage
Brand loyalty is one of the most potent types of competitive advantages a firm may have. When mothers are emotionally connected to a brand, it creates a strong relationship and a competitive advantage since they do not need to switch brands.
The data that is collected can be measured;
1. Customer satisfaction
2. Switching costs
3. Brand performance
Gathering CPG data
Sales, observational, and panel data.
You can view much information, including price, volume, promotions, and more, every time one of your goods is scanned at a register. This point-of-sale data is helpful for both large and small manufacturers since it helps them grasp critical performance indicators and competitive information. Sales data is how much of each product is sold at each shop location during a specific period. This one is simple, and, probably, your company is currently tracking it. However, when combined with your team’s Observational and Activity Data, it takes on new significance, providing you a sense of which activities and store circumstances lead to the most significant sales.
We mean the particular actions your team performs in the field when we say Activity Data. How frequently do they visit accounts, how effectively they cover their region, and what activities do they do most often in the store? Activity Data provides a snapshot of your team’s particular efforts to optimize store execution. Measuring and tracking these activities is critical for determining which have the most influence on sales.
Panel data can also be used to determine;
·Penetration — How many homes in each market buy your product?
· Purchasing Rate — What is the total amount spent per family during a specific period? (i.e., monthly, quarterly, or annually.)
Data is meaningless unless you know how to read and comprehend it. On a brand level, CPG data analytics should notify firms of development opportunities and decrease losses and expenditures. Firms must adhere to a continuous improvement cycle that is only possible with data-driven analysis. Otherwise, you risk making changes that harm your brand more than they help.
Businesses in the CPG market are no longer battling for shelf space as much as they used to, thanks to the Internet of Things and many new methods to buy items online. Instead, companies must promote their items so that consumers will draw mothers on the internet to them. According to Nielsen data, one in every four families worldwide with an internet connection has purchased groceries online, and 55 percent of customers with internet access are interested in placing an online order in the future. Businesses in CPG can use the data collected to evaluate how satisfied their mothers are. This can be important in designing ecosystems that leave mothers more satisfied. Mothers can feel better when they are guaranteed that a company will be transparent and secure their data; once customers are assured of such measures, they can feel safe even when companies add data traceability to their systems.
Switching costs may be classified into three types: transaction costs, learning costs, and artificial or contractual costs. Transaction costs are incurred when beginning a new connection with a provider and, in some cases, the costs incurred when terminating an existing partnership.
Learning costs describe the amount of work the consumer needs to achieve the same degree of comfort or facility with a new product with an old one. Firms establish artificial switching costs by purposeful acts such as frequent flyer programs, repeat-purchase discounts, and click-through rewards.
Companies can use the data acquired to compare if mothers do price comparisons using third parties. This is possible with the rapid rate at which we are adopting I.T. Mothers are price-conscious, and understanding the cost of switching from your brand to the next will help a company device means to ensure mothers don’t switch.
Because of the growing acceptance and use of many technologies via which mothers engage with companies, acquiring and sustaining loyal customers has become increasingly difficult for brands in today’s industries. Mothers seek information about a brand through various channels (physical, digital, applications, and social media), connect with the brand, discuss the brand, and purchase its items. Firms are thus constantly modifying and adjusting their operations to give customers agile communication channels and coherent, integrated brand experiences across all channels where customers are present. Understanding how brand management may enhance value is essential in this environment.
CPGs have been under intense pressure to innovate and meet these new mothers’ demands. The alterations in demand drivers have been reasonably substantial in certain circumstances. For example, in sustainability, a Cap Gemini survey discovered that concerns about sustainability are currently impacting the behavior of 53% of all customers. Sustainability is even more essential to Generation Z; 57% of 18–24-year-olds have switched to brands because they are sustainable.
Moms will put their confidence in businesses that make their lives simpler. Brands that offer simple online transactions, compelling content, and personalization are more likely to gain this confidence. Brands that acquire parents’ trust will witness increased consumer loyalty, enhanced word-of-mouth marketing, and increased sales. A firm with a reputation for unrivaled security, limitless selection, and lightning-fast shipping helps it win returning customers. Firms with a recommendation system suggest different things depending on what someone has just purchased. This simple attention to detail may save a lot of time for busy moms.
Moms have an emotional connection with them, especially regarding their baby items. This emotional bond is complicated to sever, especially between a mother and her kid. Johnson & Johnson offers new mothers personalized content, moving T.V. advertising, and even text message health advice. Create a solid relationship with moms to gain her trust and keep your business in front of her thoughts.
Demonstrate that you value mom’s opinion by soliciting customer feedback. This demonstrates that you care about what she thinks and desire to enhance your items better to meet her demands. Take the time to respond to any criticism made on social media or product evaluations. Unless they are improper, try not to delete negative posts — parents trust businesses that take the time to react to customer complaints with excellent and valuable comments. Allow this transparency to develop a human connection that extends well beyond your products.
CPG firms will benefit significantly if they can fully utilize predictive analytics and approach their marketing campaigns holistically, comprehending and then enacting the complete shopper’s trip. The union of organized and unstructured data opens up a slew of analytic opportunities that businesses may utilize to plan ahead of time can sway customer purchasing decisions.
1. Improved customer experience
Whether they realize it or not, the customer experience is the primary reason individuals do business with particular organizations. Approximately 80% of consumers have abandoned a purchase due to a single poor service encounter. You can get the same product at several locations; therefore, its exemplary customer service distinguishes great stores from ordinary ones.
Excellent customer service is made possible by big data. Companies can take the input mothers to provide and use it to improve the whole experience thanks to collecting customer feedback through online reviews, social media, and other brand references on the internet.
2. Better improved products
Companies may also exploit the flood of data to better their goods. Companies may transform that knowledge into Product 2.0 as they learn how you use their interests, in what context you use them, with whom you use them, and how you evaluate them.
Big data is why some companies are producing new products annually or after two years. Or the reason why our computers and laptops become thinner and more innovative with each new edition. The internet hears what customers want from their products and relays that knowledge to corporations, implementing significant product modifications.
3. Data protection
Security measures are constantly improving, owing to big data’s ability to detect and prevent hacking nearly immediately. Most service providers will see fraudulent activity and notify you of the problem within seconds. These tremendous developments are a big reason why 88 percent of Americans trust internet businesses with their personal information today. When you offer mothers safety on their data, they will trust your firm.
Couponing and special offers are some of the oldest marketing strategies. Still, data-driven targeted advertising allows firms to provide these discounts to clients when they need them the most while they’re buying. This isn’t only limited to the retail and consumer packaged goods (CPG) businesses. The model can extend to Insurance companies and construction companies dealing in décor, such as ArchLaw Interiors.
5.Data that drives new product and service strategies
Personalization based on data collected from mothers also influences new products and solutions. With today’s superior technology and broad media networks, businesses can analyze and predict market demands for new goods, line expansions, and service enhancements, allowing them to fulfill better customers’ desires and needs on an individual and aggregate level. For firms, this method increases the likelihood of a sale and lowers the waste of developing items with no market need. The advantages are evident to customers. Company leaders and product strategists need to analyze their markets and how their goods and services are utilized by assessing how mothers use their products.
Coca-Cola is one of the companies committed to continuous innovation. It has built an infrastructure that uses data to collect customer insights by giving consumers a voice and detecting new products trends. They employ technology and advertisements driven by CPG data they collect directly or through third parties.
Coca-Cola employs AI-powered soda dispensers to identify changing consumer preferences and then uses the data gathered to improve the product and user experience. The A.I. allows the machines to modify the “mood” based on their surroundings and determine which beverages to advertise, resulting in more likely purchasing drinks. Data from these dispensers are also utilized to develop Sprite Cherry’s new products. Furthermore, Coca-Cola makes use of data mining.
With years of research and construction services in building and improving homes, offices, and other private properties, the company has gained traction in the industry. They have been focusing on assisting customers in experiencing the appropriate scope and establishing appropriate interpretations and findings within the context of sustainable building. Archlaw Interior as a company understands why research is important in building products and improvements which are data-driven. The company offers residential and commercial designing and has a diverse portfolio in Kenya, and seeking to expand into Rwanda. Their decadent luxury interior designs and effectiveness give them elegance.
Unilever employs a data-driven strategy to see a significant increase in the efficacy of its marketing activities, expenditure optimizations, and return on investment. To sustain campaign success, Unilever has founded its digital advertising brand messages on rigorous and data-driven audience segmentation, as well as a programmatic approach to media buying. Unilever can save time for its salespeople by utilizing a flexible workforce. The machine vision-driven insights also save sales teams time that would otherwise be spent on manual audits.
is standing its ground against an activist investor pushing for a quick and wide-ranging overhaul of the country’s biggest freight broker as the company battles declining freight demand and growing competition.
Executives said on an earnings call this week that they are focused on a broad and thorough search for a new chief executive and that they aren’t working on selling C.H. Robinson’s international freight forwarding business, a central goal of investor Ancora Holdings Group LLC as it seeks an overhaul of the business.
“We’re going to take our time,” C.H. Robinson interim Chief Executive
who most recently served as the company’s chairman, said of the search for a permanent replacement for
who was ousted as CEO on New Year’s Eve.
Ancora, which owns 1.9% of C.H. Robinson, launched a campaign in early 2022 to have the company, which counted $24.7 billion in gross revenues last year, focus more tightly on its core domestic operations and challenges by digital-focused upstart companies.
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C.H. Robinson executives said on the Wednesday earnings call that the global forwarding arm, which moves freight by air and ocean, is essential to the company’s success.
C.H. Robinson’s chief financial officer, said more than half of the company’s revenues are generated by customers who use both the company’s global forwarding and its domestic unit, which moves freight by truck, rail and air. He said revenues from customers using forwarding services combined with other services grew at a 4% higher compound annual growth rate than revenues from shippers using single services.
“We believe in the ability to leverage both of those businesses, and that’s our plans going forward,” Mr. Zechmeister said.
Fourth-quarter revenue at the forwarding arm fell 53% to $1 billion and the operating profit plunged 81% to $28.2 million.
C.H. Robinson is by far the largest player in the U.S. domestic freight brokerage market that matches freight shippers with available trucks. It is also among the top two U.S.-based companies in the global forwarding market that transports cargo by air and ocean.
The Eden Prairie, Minn.-based company is struggling as freight volumes and rates drop from record highs during the Covid-19 pandemic. The company recently laid off 650 employees, 3% of its global workforce, as part of cost-cutting measures designed to deliver annualized savings of $150 million.
The company overall recorded a 14% increase in gross profits in 2022 of $3.6 billion. But earnings fell in the second half of the year when freight demand softened as consumers pulled back spending on goods.
Revenues dropped 22% year over year in the fourth quarter of 2022 to $5.1 billion and operating profit fell 43% to $164 million.
Several analysts issued reports following the earnings call expressing frustration the company wasn’t moving more quickly to change its business strategy or to replace its CEO. Bascombe Majors, an analyst at Susquehanna Financial Group, wrote on Thursday that C.H. Robinson appeared to be “in limbo.”
Acquisition-focused Danish forwarder DSV A/S was reported last year by Reuters to be a prospective buyer of C.H. Robinson’s forwarding operation. Chief Executive
Jens Bjørn Andersen
said on a Thursday earnings call that the company is still looking for acquisitions.
Cleveland-based Ancora in the past has taken small stakes in underperforming companies and launched public campaigns calling for changes to boards and executive leadership as well as the sale of assets. It is active across a swath of industries, with stakes in companies ranging from struggling retailer
Bed Bath & Beyond Inc.
to packaging manufacturer
Berry Global Group Inc.
In the logistics sector, the firm launched a campaign in 2021 targeting expedited trucking company
Forward Air Corp.
Ancora launched a proxy fight at the Greeneville, Tenn.-based company and pushed executives to quickly refocus on Forward Air’s expedited less-than-truckload business, which consolidates small shipments in a single trailer. The business has since become more profitable.
Groupe SA said Thursday that organic revenue grew 9.4% in the fourth quarter as its data and technology services continued to capture a shift in client spending.
The Paris-based advertising holding company, which owns agencies such as Saatchi & Saatchi, Leo Burnett and Zenith, said brands continued to move spending to tasks like managing first-party data collected from their consumers. It also cited demand for its digital business transformation offerings. The company and its competitors have developed consulting businesses to help clients adapt their businesses digitally, whether it be building apps or developing new e-commerce strategies.
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Data and technology services now represent a third of Publicis’s revenue. Publicis and its peers have restructured in recent years to focus more heavily on areas beyond traditional advertising including data and e-commerce services, which could help them handle a downturn better than in the past, marketing experts have said. The company said Thursday that this dynamic of clients shifting their spending into first-party data management, commerce and business transformation has also boosted its creative and media businesses.
Publicis in May said it had acquired e-commerce software company Profitero, which helps brands compare prices with competitors, monitor product availability and track customer ratings and reviews, among other offerings.
The growth in the quarter ending Dec. 31 brought Publicis’s full-year 2022 organic revenue growth to 10.1%. The results beat the average analyst estimate of 5.3% growth for the quarter and 8.8% for the year, according to FactSet.
Publicis said it expects organic revenue growth of 3% to 5% in 2023. Organic growth refers to the change in net revenue excluding the impacts of acquisitions, disposals and currency fluctuations.
said the company is confident about 2023, despite uncertainty about the macroeconomy.
“Although we have not seen a major change in client behavior when it comes to their spend so far, we do see some traditional marketing spend cuts at the local level here and there, but at the same time, what we see is truly an ambition and a commitment for our clients to continue to invest in their own transformation,” Mr. Sadoun said.
a senior media tech analyst at Macquarie, said in a research note in January that the firm was raising its estimates for 2023 organic revenue growth at Publicis and its competitors
Interpublic Group of
Omnicom Group Inc.
He acknowledged concerns about a potential recession but said current economic conditions are different from those in past downturns. “This is not a dot-com bust, financial crisis, or pandemic, and inflation is actually good for advertising while unemployment is low,” Mr. Nollen said. He said consumers are spending more during periods of inflation, so brands are spending on marketing to reach them—and with low employment, more people have more money to spend.
Agencies are in greater demand to help manage areas such as the complexities of data and information technology, privacy regulation and automated ad buying, Mr. Nollen added.
“A quarter or more of agency revenue comes from such nontraditional activities,” he said. “Ad agencies have restructured themselves to meet this new world.”
Publicis reported net revenue of 12.57 billion euros for full-year 2022, equivalent to $13.86 billion, up 19.9% compared with the prior year. Net income attributable to Publicis was €1.22 billion for the year, up 19% from a year earlier, while earnings per share were €4.82, up 16.7%.
Net revenue in the fourth quarter 2022 was €3.46 billion.
Diesel makes the economy go, but it was only last year that the price of the fuel became the stuff of dinner-table conversation.
Retail diesel prices soared to an all-time high of $5.816 a gallon last June 19, part of the big run-up in energy costs following Russia’s invasion of Ukraine that strained transportation budgets and fed inflationary pressures. Though prices have dropped by more than $1 a gallon since then, many of the same elements that drove the surge in prices remain firmly in place.
Throughout the U.S., diesel supplies remain tight; the East Coast in particular has been pressed to keep tanks fully stocked. Based on data from the Energy Information Administration, U.S. distillate stocks, which include diesel, are at least 28 million barrels below the five-year average. The East Coast accounts for more than half that deficit.
Some of the supply issues go back to pre-Covid 19 events, including a June 2019 fire that took out a key East Coast refinery. The Philadelphia Energy Solutions refinery had provided about 30% to 35% of diesel to the mid-Atlantic and Northeast markets. The permanent loss of that refinery has made the East Coast dependent on supply from a pipeline to the Gulf Coast and overseas imports, as well as local refineries.
A few more events on the horizon are likely to keep prices for refined products like gasoline, diesel and jet fuel at relatively high levels through the second quarter.
The first is the U.S. refining maintenance season.
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This is expected to be a year of hefty maintenance because refineries deferred important work during 2020 and 2021 due to Covid-19. Many limited the movement of outside maintenance contractors on their sites, and in 2022 maintenance work was put off as companies sought to shore up deteriorating profit margins.
But refineries can’t postpone maintenance forever, and the bill is coming due in terms of costs and down time at the facilities.
The Phillips 66 Bayway Refinery in Linden, N.J., is scheduled to begin important work on Feb. 2 that may affect output. The refinery is a crucial provider of New York Mercantile Exchange ultralow sulfur diesel, or NYMEX ULSD, and what is known as RBOB, or gasoline blendstock before ethanol is added.
Any complications in restarting the facility could push diesel and gas prices higher once maintenance is complete.
The second event is the European Union’s restrictions on Russian refined products scheduled to begin Feb. 5. Europe has been weaning itself off Russian crude oil and natural gas, but replacing Russian diesel may prove trickier. World markets may feel the impact as Russia tries to find new customers.
The sanctions on Russian products mean Europe’s diesel imports will be covering longer distances on oceangoing tankers, tying up capacity and likely raising shipping costs.
Prices for diesel have been relatively stable in January thanks to a mild winter in the Northern Hemisphere, save for a few blasts of Arctic weather. But those patterns are forecast to change in February, with temperatures in the Northeast expected to fall to below-average levels, adding to demand for heating oil.
The NYMEX ULSD futures market is still pricing in a near-term, tightly-supplied market through what is known as backwardation. This is where current prices are higher than forward deferred prices. At the moment, ULSD futures are trading at their highest levels since before Thanksgiving.
At that time, diesel prices at the retail level in the U.S. were in the $5.25-5.30 a gallon range. Based on the most recent U.S. average price of about $4.60 a gallon, a run to more than $5 should not be ruled out in the near-term. By the end of January, retail diesel prices should be approaching $4.75 a gallon.
Despite continuing supply pressures, however, the steep highs of 2022 are likely to stay in the record books and not be exceeded this year.
Denton Cinquegrana is chief oil analyst at the Oil Price Information Service. OPIS is owned by Dow Jones, which also owns The Wall Street Journal.
is shuffling its executives, moving Chief Financial Officer Chelle Adams, who took that job less than a year ago, to the newly created role of chief transformation officer.
Ms. Adams will work to streamline organizational processes and oversee business development and growth activities, the company said. SeaWorld named Jim Forrester, who joined the company in 2019, to the role of interim finance chief and treasurer.
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Mr. Forrester most recently served as vice president of finance for SeaWorld’s Orlando, Fla., parks and has held theme-park finance roles at
Walt Disney Co.
and Hershey Entertainment & Resorts.
said the shakeup “will help us better execute our plans and initiatives, capitalize on opportunities, and deliver improved operational and financial results.”
Additionally, the company named Kyle Miller, who has served as the park president for SeaWorld Orlando, Discovery Cove and Aquatica Orlando since 2019, to the post of co-chief parks operations officer. Mr. Miller will oversee all Florida parks, alongside another co-chief parks operations officer, Byron Surrett, who will oversee all non-Florida parks.
The company also named three new park presidents, and promoted Shekufeh Boyle to the role of chief accounting officer. Ms. Boyle most recently served as the company’s corporate controller and vice president of accounting.
Companies in critical infrastructure sectors say weak cyber defenses at suppliers are becoming a significant threat to their business, and that rules to boost security down the supply chain might be needed.
While federal and industry rules for specific areas such as aviation, pipeline companies and other critical infrastructure operators are well-established, said
vice president and deputy chief information security officer at power utility
, cyber regulations for businesses supplying those operators are less so.
“The supply chain is the area where the threats are growing the most for us, but the regulations aren’t targeted to those who are providing the products,” Mr. Henry said, speaking on a virtual panel hosted Thursday by industrial cybersecurity firm Dragos Inc.
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“While I agree with the need for regulations for us, in critical infrastructure, oil and gas, manufacturing, that’s an overlooked area that needs to get a lot of focus,” he said.
Mr. Henry’s comments reflect long-held concerns of government officials and security chiefs about the security of supply chains, and the impact that a breach of one company can have on many others.
High-profile examples include the successful breach of a product used by software provider Kaseya Ltd. in July 2021 that resulted in hundreds of companies being infected by ransomware, and an attack on
software in 2020 that resulted in compromises of multiple federal agencies.
Companies in supply chains, which are often small to medium-size businesses, might not have the resources necessary to fund a full cybersecurity program, but a successful attack could stymie production further up the line, said
director of the Operational Technology-Cyber Emergency Readiness Team at Dragos. The OT-CERT provides free cybersecurity resources and runs cyber exercises for companies that use industrial systems.
“We have to be thinking not just about our own companies, but about the whole ecosystem,” she said, speaking on the same panel as Mr. Henry.
Ms. Cappelli, former CISO at manufacturing-tech company
Rockwell Automation Inc.,
said that a supplier doesn’t necessarily need to pose a direct cyber threat to a company, such as through a software or network link, for a disruption to have a significant impact.
During her tenure at Rockwell, she said, manufacturing companies struck by ransomware would be unable to produce parts Rockwell needed to build its products, sometimes for weeks or months at a time.
“They didn’t present a cyber risk to us, but I realized they presented an operational risk,” she said. Larger companies should perform cyber assessments of their suppliers, and where possible, assist them with strengthening their defenses, Ms. Cappelli said.
The world’s two biggest shipping lines said they would end their vessel-sharing partnership in 2025, a move that would shuffle a lineup of global alliances as demand for trade is weakening.
and Mediterranean Shipping Co. created the so-called 2M alliance in 2015 to help them reduce costs by sharing cargo on major ocean routes. Rivals formed similar partnerships, creating the Ocean Alliance and THE Alliance. The three groups account for about 75% of global container-shipping capacity, according to data company Statista.
The decision to wind down the 2M alliance comes as shipowners are dealing with a drop in cargo and excess vessel capacity that has pushed down freight rates to prepandemic levels. That has shifted the balance of power back to customers of these alliances.
The alliances were formed to cut costs and squeeze smaller competitors, but now that volumes are falling there is less reason to share capacity, industry executives said. Some customers had complained to regulators the alliances were anticompetitive.
Global trade volumes fell 9.5% year over year in November 2022, according to London-based Container Trade Statistics, and global shipping rates have been sliding at a steep pace since early last year.
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Big cargo owners such as
are securing ocean freight rates that are about one-third less than last year’s contracts, according to container shippers and retail executives.
Retailers that import large volumes of goods typically sign fixed-term contracts with ocean shippers to avoid uncertainty in deliveries. When the Covid-19 pandemic upended supply chains and normal delivery patterns, shipowners were able to charge importers top dollar to secure spots on vessels moving containers from ports in China to the U.S. West Coast.
Some importers are now opting to pay market rates instead of securing fixed-term contracts. The spot rate to send a container from Shanghai to Los Angeles was $1,323 this week, down from about $15,200 a year earlier, according to the Freightos Baltic Index. The average along the route was $1,525 in 2019.
In a joint statement, the chief executives of Maersk and MSC said that much has changed since the 10-year deal was signed, and terminating the agreement will allow both companies to continue to pursue their individual strategies.
Maersk and MSC’s strategies have changed over the past five years, with Maersk pushing to become an end-to-end logistics operator with the focus on inland supply services while MSC has overtaken Maersk in the number of ships it operates, sharply building up its fleet.
MSC Chief Executive
said that while 2M was instrumental in stabilizing the fragmented container market, MSC now had the scale to service all its customers on its own.
“Even if 2M formally runs until January 2025 it should be expected that Maersk’s and MSC’s networks on the alliance trades will begin to deviate even more in 2023,” said
CEO of Denmark-based Vespucci Maritime.
He said the winding down of 2M raised questions over the future of the other two alliances, Ocean Alliance and THE Alliance. “This is only the beginning of a reshaping of vessel-sharing agreements on especially the major east-west trades,” Mr. Jensen said.
Container volumes across the Pacific are down about 30% so far in January compared with last year, according to operators and charterers. Shipowners have withdrawn sailings they added at the height of the Covid-19 pandemic. Retailers have scaled back imports as they adjust to weak holiday sales and bloated inventories.
“‘The ports have normalized. So the in-transit issues and all the penalties have pretty much faded away.’ ”
— Wade Miquelon, chief executive of retailer Joann Inc.
“Our ocean freight has basically normalized to what it was prepandemic after paying up to 10 times more last year,” said
CEO of fabrics and craft retailer
at an analyst event this month. “The ports have normalized. So the in-transit issues and all the penalties have pretty much faded away.”
Target said in an email that it renegotiates its shipping rates regularly. The retailer’s chief operating officer,
said in November that container rates had come down by one-third and that they would come down further. He said the windfall would become evident this year when Target renegotiates freight rates.
A spokeswoman for Amazon declined to comment.
“It’s very unpredictable, both for us and our customers,” Maersk CEO
said in a December interview. “We made significant capacity adjustments, but the inventory corrections can take a few months to sort out.”
The uncertainty has cut down the duration of fixed-rate contracts that shipowners are offering from one year to as short as three months. That is because daily spot rates are on a downward spiral, giving cargo owners the option to pick spot deals for some shipments rather than committing to longer contracts.
Pricing will be under pressure for shipowners this year—and while cargo owners are getting discounted rates, they could face disruptions if ships end up idled or sailings are canceled, said
chief analyst at shipping trade body Bimco.
—Sarah Nassauer and Dominic Chopping contributed to this article.
Businesses hope the artificial-intelligencetechnologybehind ChatGPT can turn ordinary chatbots into impressive fonts of information, potentially transforming customer service.
But many executives said they are proceeding with caution, given the limitations of ChatGPT—fine-tuned from GPT-3.5, a model created by startup OpenAI—as well as OpenAI’s older AI language system, GPT-3, which companies are already starting to integrate into digital products.
ChatGPT, launched by OpenAI in November, quickly went viral for its often elegant, information-packed responses to various questions, gripping the imaginations of regular people, business leaders and investors including
, which began backing OpenAI in 2019 and said Monday that it would make a multibillion-dollar investment in the startup.
OpenAI last week said it would soon add ChatGPT, which stands for chat generative pre-trained transformer, to its application programming interface, or API, which lets developers embed OpenAI technology into their own products.
But customer-experience executives said overreliance on such AI models could lead to companies dishing out incorrect information to customers online without knowing they are doing so.
While many chatbots are trained to deliver a version of “I don’t know” to requests they cannot compute, ChatGPT, for example, is more likely to spout off a response with complete confidence—even if the information is wrong.
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“We don’t want to be in the bad answer business,” said
vice president and general manager of digital at Nice Ltd., a customer-experience software company. “A really bad answer in a very critical situation would be a very real problem.”
chief executive of OpenAI, has warned against relying on ChatGPT “for anything important right now.”
“Fun creative inspiration; great! Reliance for factual queries; not such a good idea,” Mr. Altman wrote in a tweet last month.
Using AI to write chat responses in sensitive situations has backfired. Koko, a chat app used for emotional support, this month was criticized for an experiment in which human volunteers crafted their responses to the app’s users with the help of GPT-3.
Koko’s co-founder said in a tweet that the startup pulled the AI from its system: “Once people learned the messages were co-created by a machine, it didn’t work. Simulated empathy feels weird, empty.”
But for a more typical customer-service interaction, such as querying the status of an online order or editing account details, the technology could prove useful.
Fanatics Inc., a seller of sports memorabilia, digital collectibles and trading cards, said it plans to use a customer-service chatbot fueled in part by GPT-3 when it launches an online sports-gambling division this year.
The company hopes a fast, reliable chatbot will be a differentiator for customers, said
vice president of operations for the new division. “Speed equates to great customer experience in the betting and gaming industry,” he said.
Fanatics’ customer-experience team is testing the chatbot before making it live, conscious of the risks using AI carries if not properly managed, Mr. Donaldson said.
Chasing the dream
Companies for decades have searched for automated solutions that can resolve customer requests as well as humans, or even better. But chatbots are often seen as clunky and not very helpful.
“There was a lot of hype around chatbots, probably five, six years ago, and a lot of vendors wanted to make people believe that it was magical, that it worked out of the box, that it was easy,” said
vice president of AI technologies and products at Waterfield Technologies, a contact-center solutions provider owned by WTI Holdings LLC. “But the reality is that it wasn’t.“
ChatGPT stands out for its ability to provide reasonable-sounding answers to most prompts, regardless of users’ spelling, grammar and phrasing, and to respond in full, natural-sounding sentences that don’t require scripting, said
a principal analyst specializing in technology and design at
Forrester Research Inc.
It is also trained to admit to mistakes, challenge incorrect premises and reject inappropriate requests, according to OpenAI.
But companies should exercise care when dealing with the new AI, Mr. Truog said. “It’s appropriate to be doing some experimentation,” he said, “but it’s too early to deploy mission-critical systems based on this.”
Putting it into practice
Fanatics said its sportsbook’s chatbot will run on technology from Ada Support Inc., a customer-service automation platform. Ada has integrated GPT-3 and other such AI systems known as large language models into its chatbot offering, according to the company’s co-founder and chief executive,
Mr. Murchison said Ada allows clients to customize these large language models by adding company-specific information or anonymized customer data, and deleting irrelevant material. Ada encourages clients to continually update their customized bots’ information, for instance when prices or company policies change, he said.
“Most brands are going to underestimate the importance of continuously improving this over time,” Mr. Murchison said.
Some Adaclients are restructuring their customer-service organizations to put some contact-center workers in charge of monitoring chatbot conversations, reviewing where the technology gets things wrong or can’t answer, and feeding it new or updated information, he said.
Fanatics plans to follow that approach, as well as ensure that its chatbot interface lets customers reach a human right away, Mr. Donaldson said.
Nice is also working on building OpenAI’s language models into chatbots, Mr. Willcutts said, adding that the company plans to run more tests and fine-tune more models before selling its own take on ChatGPT to clients.
“We don’t get a chance to make a second impression on this one,” he said. “You do this badly once and it’s in the newspaper, and that’s not the kind of reputational risk we’re prepared to take.”
Innovations Inc. to lead its finances as the tool maker works on substantial cost cuts.
The New Britain, Conn.-based company on Monday said
will become CFO, effective April 6. Mr. Hallinan will join Stanley Black & Decker after a 17-year career at home- and security-products maker Fortune Brands.
Fortune Brands, meanwhile, named
as its finance chief, effective March 2. Mr. Barry has served as Fortune Brands’ senior vice president of finance and investor relations for nearly two years. Mr. Hallinan will remain CFO at Fortune Brands until March 2.
At Stanley Black & Decker, Mr. Hallinan will succeed
who stepped in as interim finance chief last July when
Donald Allan Jr.
, the previous CFO, was elevated to chief executive officer. Mr. Walburger will resume his prior role as vice president of business development, the company said.
“Patrick is a seasoned executive who has led global, high-performing finance functions across top consumer brands,” Mr. Allan said in a statement, referring to the incoming CFO.
As CFO, Mr. Hallinan is set to receive a base salary of $800,000 and a one-time signing bonus of $350,000, the company said in a filing with regulators. He will also be eligible for an annual bonus with a target this fiscal year of 100% of base pay as well as a one-time restricted stock grant with an aggregate grant date value of $2.65 million.
Mr. Hallinan’s appointment follows Stanley Black & Decker’s announcement last July of ambitious cost-cutting plans, including $1 billion in reductions by the end of this year and $2 billion by 2025. The company, whose brands include DeWalt and Craftsman tools as well as Cub Cadet riding lawn mowers, said it is simplifying its structures and processes, reducing certain spending and streamlining operations. The cost-cutting efforts have included head count reductions, which are “largely complete,” Mr. Allan told analysts in October.
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During the quarter ended Oct. 1, the company’s revenue rose 9% from the prior-year period, to $4.1 billion, with profits rising to $845 million from $414 million a year earlier.
Stanley Black & Decker, which was able to carry out a $290 million inventory reduction in the quarter, cut its annual guidance for diluted earnings per share under generally accepted accounting principles to between 10 cents and 80 cents per share from a range of 80 cents to $2.05 per share.
The company will report on its fourth quarter next week.
Demand for Stanley Black & Decker products surged during the pandemic as consumers spent on home improvement and yard work, but waned last year as high inflation and a murky economic outlook took their toll.
A key task for Mr. Hallinan will be addressing the company’s supply chain and inflation difficulties, said
a senior equity research analyst at Northcoast Research Partners LLC. He will also likely focus on restoring investor confidence, Mr. Hayes said, noting that Stanley Black & Decker’s stock price has dropped to around $87 from roughly $175 a year earlier. On Monday, it traded at $88.74.
“I think certainly Stanley continues to face on the financial side a number of challenges” that the incoming CFO will grapple with, Mr. Hayes said.
Write to Jennifer Williams-Alvarez at email@example.com, Will Feuer at firstname.lastname@example.org and Chris Wack at email@example.com
Managers, as the individuals within the organization tasked with setting goals, should always consider how they will evaluate progress and hold their employees accountable to strict deadlines. In order to do this, it is essential that the management and the team work together to determine the most effective means of achieving the desired outcomes.
Most managers mistakenly believe that their sole responsibility is to stay in their assigned role and help get projects off the ground. The hallmark of great managers is that they do this while simultaneously wondering about better ways to accomplish this through research.
Managers should know that setting a sales objective and saying nothing else won’t get them anywhere. For accountability to work, you must first lay out a clear path to success, including not only the end state but also the essential “leading” and “lagging” measurements you will use along the way.
Build up the skills of your team.
Supervisors have the dual responsibility of overseeing their employees’ professional growth and performance. When shorter-term job requirements compete with employees’ longer-term aspirations for career growth, these two responsibilities might become at odds with one another.
Managers should utilize people’s natural abilities to help them achieve more of what they excel at. Helping workers can piece a puzzle that can steer an enterprise forward.
Recruit Capable Individuals
It has been observed by great managers that the best managers place a premium on the interview process, seeking for candidates that will not only contribute to the success of the organization but also enrich the team dynamic.
They argue that the capacity to assemble a strong team is crucial for managers, because their own success is tied to that of their subordinates.
However, many managers fail to adequately address this issue. Gallup showed that 82% of hires in 2019 had inadequate abilities for the positions they accepted.
The best way for managers to improve their hiring practices is detailing the employment outcomes you expect. As a result, those who are interviewing a candidate of yours are very clear on the four to five essential outcomes you, the hiring manager, are looking for.
Some examples of these major results are increased sales and profits, more operational efficiency, or the recruitment of a championship-caliber squad. The markers of success, or key performance indicators, should be listed next to each result. The prospective employee’s prospective employer might utilize this checklist to focus the interview on relevant skills and experience.
The scorecard should also include a section outlining the most important behavioral abilities and personality traits the recruiting manager is looking for in the role, in addition to the aforementioned outcomes. The interviewers would do well to be aware of, and to probe for, any specific requirements of the position they are filling, such as the candidate’s need for perseverance due to navigating a matrixed organization, or the candidate’s need for resilience and openness to criticism due to the contentious nature of the position.
You’ll find a better fit in the hiring process if you put in the time and effort up front to define precisely what you hope to achieve in your new position.
The manager’s ability to convey orders, expectations, and the corporate leadership’s perspective is crucial, as they serve as the connecting link between upper-level management and front-line employees. Managers should provide clear instructions and explain the rationale behind their requests.
It is imperative that leaders first assist their teams in visualizing what victory would look like for the organization. leaders should ensure that team members agree on what is most important.
One-on-one meetings is a vital aspect of coaching and development, and which has been recommended. The elements should be broken into three sections: performance indicators, progress on projects, and people.
So, if a meeting is an hour long, the first 20 minutes may be spent going over the performance dashboard discussed and agreed upon at the beginning of the quarter or year. The second 20 minutes would consist of a discussion regarding the status of major initiatives, with a particular emphasis on the need for resources and the obstacles that the manager may need to help remove to ensure the initiative’s timely completion. The next 20 minutes would be spent discussing team member career growth in addition to staffing changes, opportunities, and problems.
These days, retailers and distributors want their newest warehouses to serve more purposes than just storing goods. These companies include outdoor goods retailer Recreational Equipment Inc. and drug distributor McKesson Corp.
Industrial sites are adding features such as natural light, automation aimed at easing work burdens, fitness centers, and outdoor work areas to make the industrial sites more inviting as they compete to recruit and retain workers in a tight job market.
The upgrades are a departure from the often-grim industrial facilities at the heart of a warehouses business that has been booming in recent years even as getting workers has grown more difficult. Developers say the working environment in a warehouse, long considered simply utilitarian, is a growing consideration as firms talk about new sites.
“It’s something that even we’re thinking about as we build these buildings,” said Dominic DeRose, director at real-estate investment firm Cresset Partners LLC. “How do we make them attractive to not only the users but the people the users are going to hire, the employees?”
Warehousing and transportation has been one of the fastest-growing job sectors in the country in recent years, as booming e-commerce demand driven by Covid-19 pandemic lockdowns pushed companies to fill up distribution space to get goods closer to consumers.
Warehousing and storage companies added nearly 100,000 jobs over the past year, according to the Bureau of Labor Statistics, and employment in the sector has doubled since 2016, reaching nearly 1.8 million workers in September 2022, according to the BLS.
Pay is also rising. The average wage for warehouses workers rose from $17.39 an hour in May 2019 to $18.38 in May 2021, according to the most recent BLS data available.
which has added tens of thousands of warehouses jobs in recent years as it has expanded its logistics network, recently said it would raise the average starting pay for warehouse workers to $19 an hour.
As the sector has grown, there have also been more questions about the working conditions in warehouses. Companies are under more scrutiny about the physical demands of working in these huge industrial buildings.
Warehouses Designs and Upgrades
Amazon has become a lightning rod for criticism over the tough requirements it imposes in the name of efficiency. The e-commerce giant has said its expectations for employees are set based on workers’ aggregate performance in each warehouse to ensure people aren’t pushed beyond what’s reasonable. Other companies have faced questions over the treatment of workers in jobs that can require long hours of walking and lifting.
The newest warehouses are still built to fit their industrial jobs, but operators are hoping that upgrades inside and around the buildings will help soften the work environment to get new workers in the door and reduce employee turnover.
“You think of distribution centers, typically it’s just these ugly concrete boxes, and they’re not anymore,” said Ammie McAsey, senior vice president of distribution operations for the U.S. pharmaceutical business at McKesson. “A lot of different things that typically you might see in an office environment, we’re bringing that into our distribution centers.”
REI is building a distribution center in Lebanon, Tenn., with skylights, a fitness center, bike storage, and a trail outside for employees to use on breaks. A mural of the nearby Smoky Mountains on the 400,000-square-foot building’s exterior is aimed at making the site more attractive from the outside.