Bookmarks: 5 Interesting Articles That May Help You This Week

Each week, I select a few articles that rise above the fray and hopefully help you on your journey in the CRE world. They pull from one of four "corners:" corporate real estate, technology, management science and anything positive. I welcome your comments on these articles.

1. How to Negotiate with a Procurement Team

Imagine the feeling: after months of courting a new client, who has given every indication that a lucrative contract award is imminent, you receive an email from their procurement team. The letter states that there will be a competitive bidding process; that all bidders must agree up-front to standard (onerous) terms and conditions, and that any attempt to speak directly with the client will result in expulsion from the process.

This unsettling scenario is increasingly familiar to many sellers – and most assume that negotiating is more or less futile. Their choice, as they see it, is either to walk away, or capitulate to procurement’s game rules, thus losing the opportunity for potentially significant value creation (and future profit). They are about to enter a predicament we call “winning the pitch but losing the negotiation.”

Over the last several decades, we have coached and trained both buyers and sellers through many similar situations. We have seen buyers waste time and money by structuring pitches in ways that destroy value – and sellers lose time, money, and emotional balance by navigating those processes naively.

2. Why Grocery Stores Have Tiny Kid-Size Carts

When Danielle Eskinazi’s 4-year-old son gets his own small cart to push at the grocery store, he carries himself differently. “His back straightens up a little bit,” she told me. “He looks around like a peacock to make sure everybody's watching [and can see that] he has a bit of independence in what he chooses to eat.”

Or at least the illusion of independence. As he tools around the store, he’ll often add copious amounts of junk food—chocolate, mostly—to his cart that Eskinazi, a casting director living in Santa Clarita, California, will frequently veto before the end of the shopping trip.

That doesn’t stop him, and countless other children, from wanting to steer shopping carts tailored to their small frame. These mini carts, a fixture in many grocery stores in the United States and abroad, are widely adored by children and generally useful to retailers’ business strategies, even if they are also occasionally irritating to the shoppers who must dodge them in the aisles.

According to Sheila Williams Ridge, who teaches early-childhood education at the University of Minnesota’s Institute of Child Development, kids relish the sense of ownership that comes with pushing their own cart. “Children get to do real work and they love that,” she wrote to me in an email. “They get to drive the cart independently because the grown-ups have their own. That feeling of autonomy is important for young children.”

3. The Era of Antisocial Social Media

Social platforms are still reporting robust growth — yes, even Facebook — despite a growing chorus of opposition. Social conversation continues to shape everything from culture to the media cycle to our most intimate relationships. And we now spend more time than ever on our phones, with endless scrolling through our social feeds being a chief reason why.

But dig a little deeper, and a more nuanced picture emerges about social media users today that has important implications for the ways in which brands reach customers. Specifically, when you look at who is — and more importantly, who is not — driving the growth and popularity of social platforms, a key demographic appears to be somewhat in retreat: young people.

For example, 2019 findings from Edison Research and Triton Digital show social media usage overall among Americans 12 to 34 years old across several platforms has either leveled off or is waning, while 2019 research from Global Web Index suggests that the amount of time millennial and Gen Z audiences spend on many social platforms is either flat, declining, or not rising as greatly as it has in years’ past.

4. Blackstone Goes All-In on Industrial, Ventures Boldly Into Retail

Blackstone is all-in on industrial, viewing the favored asset class that has seen vacancies at record-lows thanks to e-commerce as poised for even greater growth as more and more investors seek to gobble up warehouses closer to dense city centers.

And aside from betting on the tried and true industrial asset class, the alternative asset manager is tooting its horn about venturing off the beaten path as it continues to tap into the retail market more broadly through its non-traded REIT the Blackstone Real Estate Income Trust, according to Stephen Schwarzman, chairman, CEO and co-founder of Blackstone at Goodwin’s Real Estate Capital Markets Conference 2020.

Blackstone started buying warehouse logistics in 2010, betting it was a good investment as e-commerce behemoth Amazon began to increase its market share, predicting that other retailers would follow suit, thus leading Blackstone to sell-off its shopping malls and acquire an estimated one billion square feet of warehouses across the world to date. “Once you understood what was happening with online shopping and that every retailer in scale would need to do something similar [to Amazon], the whole game was gonna change,” Schwarzman said.

5. Job Growth Surges In January, Beating Wall Street Expectations

The U.S. jobs market grew at a better-than-expected rate in January, thanks to unseasonably warm weather, beating Wall Street forecasts and suggesting that the labor market can continue to fuel economic growth in 2020, the latest monthly report from the Labor Department shows.

January saw a pickup in hiring, as 225,000 jobs were added to the U.S. economy last month—better than the 158,o00 jobs expected by economists, according to Dow Jones. That’s an uptick from the 145,000 jobs added in December: The labor market in January benefited from warmer-than-usual weather, which encouraged more hiring than expected in construction and other industries.

The unemployment rate, however, climbed to from 3.5% to 3.6%, no longer holding steady at its lowest level since 1969, according to CNBC.

Your success blesses others. I wish you a great a hugely impactful week!

Ken Ashley