business news in context, analysis with attitude

Published on: October 6, 2021

The goal of "The Innovation Conversation" is to explore some facet of the fast-changing, technology-driven retail landscape and how it affects businesses and consumers. It is, we think, fertile territory ... and one that Tom Furphy - a former Amazon executive, the originator of Amazon Fresh, and currently CEO and Managing Director of Consumer Equity Partners (CEP), a venture capital and venture development firm in Seattle, WA, that works with many top retailers and manufacturers - is uniquely positioned to address.

Tom and KC discuss the top leadership changes at Instacart, as the company has brought in two former Facebook executives to run the company.   What do these changes tell us about Instacart's strategic and tactical future?  And, based on what we've learned about Facebook's culture and priorities from a whistleblower's compelling Senate testimony and media interviews, do the Instacart changes suggest a pattern that could be bad news for its retail clients and their customers in the long term?

If you're interested in listening to an audio version this Innovation Conversation, you can do so here (or can download this file):

Published on: October 6, 2021

CNBC reports that Walmart and Home Depot are partnering, with Home Depot using Walmart's GoLocal service to make deliveries.

Terms of the arrangement have. not been disclosed.

According to the story, "The home improvement retailer is the first retail client to sign up for Walmart’s new delivery business, GoLocal. Walmart launched the business in late August, with plans to pick up customers ranging from local stores to national players and make money from last-mile deliveries, similar to a third-party service like Instacart. Deliveries are made by gig economy workers who use Walmart’s delivery platform, Spark Driver.

"Walmart will begin the deliveries at select stores in New Mexico in the next few weeks, and then expand to other markets across the country before year’s end, two companies’ spokespeople said. The same-day and next-day delivery service will be limited to items that can easily fit into a car, such as fasteners, boxes of nails or paint brushes. Those that qualify will have that option offered at online checkout."

The arrangement gives Walmart a new revenue stream, and gives Home Depot faster accessibility to its online shoppers.

Published on: October 6, 2021

TechCrunch reports that Amazon "has been working on a smart fridge that can monitor items and help you order replacements if you’re running low on something.

"The team behind the Amazon Go systems is said to be heading the charge on the project, which has been in the works for at least two years. The Just Walk Out tech used at Go stores tracks what shoppers put in their carts and automatically charges them when they leave. Members of the Amazon Fresh and Lab126 hardware teams are reportedly involved with the fridge project too.

"The fridge would monitor the items inside and keep tabs on your purchasing habits, according to the report. If you run low on something you buy frequently, the fridge would notify you and make it easier to order more from Whole Foods or Amazon Fresh, which could give the company’s grocery division a boost. The fridge could offer recipe suggestions too, which may prove useful if you forget about an item that’s about to expire."

Published on: October 6, 2021

Target announced yesterday that it will pay its store employees an extra $2 an hour if they "pick up shifts during peak days of the holiday season," according to a CNBC story.

The piece says that "the extra pay will go to store employees and service center employees who work on Saturdays and Sundays from Nov. 20 to Dec. 19, on Christmas Eve or on the day after Christmas. Select headquarters employees also qualify, Target said in the announcement on its website.

"Hourly supply chain employees can get the additional pay for peak two-week periods between Oct. 10 and Dec. 18, a crucial time for moving goods to shelves and packing boxes. The specific timing will depend on where the employees work."

Target already has a minimum wage of $15 an hour.

Published on: October 6, 2021

Lunds and Byerlys said yesterday that, "in appreciation for the remarkable efforts of Lunds & Byerlys staff throughout the ongoing COVID-19 pandemic, the company will again close all of its stores and production facilities on Friday, November 26 and provide its staff with an extra day of pay. This is in addition to the company’s customary paid holiday for Thanksgiving on Thursday, November 25. 

"This holiday perk will be available to all existing staff members and new staff members who join the company prior to November 26."

The company also said that it is "doubling its discount to 20% for employees, their families and retired employees from October through December."

Published on: October 6, 2021

The New Yorker has an interview with Moe Tkacik, described as "a former journalist who now works on delivery-app regulation" as a senior fellow at the antitrust think tank the American Economic Liberties Project and the founder of the A.E.L.P.-funded Protect Our Restaurants.  The piece focuses on the greater regulation of delivery apps by cities that include San Francisco and New York, and notes that Tkacik believes that "the apps may be fighting a losing battle" against stricter regulation.

An excerpt from what Tkacik tells The New Yorker:

"The idea that (delivery apps) would be extracting thirty per cent from every transaction was just unthinkable to me. And I knew immediately: oh, that’s not cool. It’s unsustainable for anybody, and it’s going to kill restaurants. They couldn’t have arrived at that number in a good-faith way. And indeed, as I began to probe the history of the delivery-app sector, the thirty-per-cent commission really only shows up when Uber Eats entered the market. And when they enter a market, suddenly DoorDash and Grubhub are raising their commissions, too. We actually have e-mails that certain restaurants have gotten that say, 'As you are aware, the market rate for online/mobile delivery ordering is now thirty per cent,' and accordance with that, we will be raising your fees."

The concern is that while  competition is supposed to drive costs down and quality up, delivery apps actually are doing the opposite.

Indeed, one experts says, "COVID-19 is exposing the fact that delivery platforms are not actually in the business of delivery. They are in the business of finance. In many ways, they are like payday lenders for restaurants and drivers. They give you the sensation of cash-flow, but at the expense of your long term future and financial stability. Once you 'take out this loan' you will never pay it back and it will ultimately kill your business."

You can read the entire piece here.

Published on: October 6, 2021

Random and illustrative stories about the global pandemic and how businesses and various business sectors are trying to recover from it, with brief, occasional, italicized and sometimes gratuitous commentary…

•  In the US, there now have been a total of 44,781,200 Covid-19 coronavirus cases, resulting in 724,728 deaths and 34,282,121 reported recoveries.

Globally, there have been 236,704,318 total cases, with 4,833,888 resultant fatalities and 213,815,312 reported recoveries.  (Source.)

•  The Centers for Disease Control and Prevention (CDC) says that 76 percent of the US population age 12 and older has received at least one dose of vaccine, with 65.6 percent being fully vaccinated.

The CDC also says that 8.4 percent of the US population age 65 and older has received a vaccine booster shot.

•  From the New York Times:

"Even in its first months, the U.S. coronavirus vaccination campaign saved the lives of tens of thousands of older people, according to a federal government report released on Tuesday.

"From January through May, vaccination prevented about 265,000 cases, 107,000 hospitalizations and 39,000 deaths among Medicare recipients, who are either over age 65 or are disabled, the Department of Health and Human Services analysis said.

That includes a period of time when relatively few people had received the shots. Vaccination began in the United States in mid-December, and at first was generally limited to the elderly and people with serious underlying conditions.

"But the rollout was uneven, and vaccine production and distribution were still ramping up. In mid-February, only 4 percent of the U.S. population had been fully vaccinated, but by the end of May, the figure was 41 percent, and about 80 percent for people over 65."

•  The Washington Post has a story about how, even as major US companies have b been finding success with vaccine mandates for their employees, "in an economy facing gaping labor shortages and where vaccination rates have slowed, executives at smaller companies are less certain of their ability to compel compliance. They are trying to gently prod reluctant workers to get vaccinated ahead of an expected federal vaccine mandate for private employers with more than 100 workers. And they want to avoid business disruptions at the same time."

Hundreds of companies, the Post writes, have "turned to a little-known group created to provide corporations with a road map for selling vaccination to their workforces - which could prove critical to ensuring a smooth transition as vaccination moves from mostly encouraged to mostly required.

"The Health Action Alliance - launched earlier this year by a group that includes the Business Roundtable, the CDC Foundation and the Ad Council - offers a detailed blueprint for companies intent on boosting immunization rates, down to the words they use: Don't say 'anti-vaxxers' or 'back to normal.'  Do stress 'personal responsibility' and 'public health' … The alliance - which works with companies such as Starbucks and Target and shares findings with groups such as the National League of Cities - also coordinates calls to allow corporate officials to hear directly from public health experts. One recent meeting featured a former federal workplace safety official offering advice and a current NFL executive discussing how the league persuaded more than 90% of its players to get vaccinated."

•  The New York Times also reports that "New Zealand hopes to vaccinate as many as 350,000 people in a single day next week, the country’s largest Covid inoculation effort to date, as it pushes closer to reopening its economy.

"Vaccination clinics will be open all day on Saturday, Oct. 16, said Chris Hipkins, the minister leading New Zealand’s Covid-19 response. The facilities will be able to vaccinate 350,000 people — about 8.3 percent of the eligible population of people 12 and older, he said."

Published on: October 6, 2021

•  From the Financial Times:

"Amazon has won a record amount of tax breaks this year as local officials try to lure the online shopping giant to expand its one-day or same-day delivery networks in their areas.

According to data from Good Jobs First, an economic development watchdog based in Washington DC, Amazon has so far secured about $650m in sweeteners from local and state governments in 2021, a mixture of grants, tax exemptions and other incentives.

This was likely to be a conservative estimate, the group said, because of the secrecy around some of the deals.

With three months still to go, 2021 already has the largest yearly tally since Good Jobs First began collecting the data in 2000, excluding incentives for non-logistics projects, such as filmmaking and office development, and the more than $750m package Amazon was awarded in 2019 to build its “second” headquarters in Arlington, Virginia.

"The bumper deals for Amazon’s delivery network come as local authorities grapple with rebuilding their economies and job markets in the wake of the coronavirus pandemic, a crisis that has seen Amazon’s profits soar because of its pivotal role in distributing goods during lockdown and beyond."

•  Bloomberg reports that Amazon CEO Andy Jassy "is open to a reset in his company’s sometimes-contentious relationship with Seattle, but made clear that he’s hedging his bets with plans to expand in neighboring cities."

While Amazon, with more than 50,000 local employees, is by far the largest private employer in Seattle, it has not been a residency without issues, with complaints arising about traffic, high housing costs and an exacerbation of the area's homelessness problem.  

•  Bloomberg reports that "Amazon, along with other businesses, successfully beat back a proposed per-employee tax on large businesses in 2018. The next year, it helped bankroll a slate of business-friendly city council candidates with a $1 million contribution to a fund affiliated with the local chamber of commerce. The largest political contribution by a company in memory backfired, and most of the chamber’s slate lost."

Now, in addition to occupying an enormous amount of space in the South Lake union neighborhood of the city, Amazon has shifted some of its local growth to neighboring cities like Bellevue and Redmond.  Jassy says that "he wouldn’t be surprised if Amazon opened other offices in additional cities in the region."

Indeed, Bloomberg notes, "A few years ago, Amazon stopped referring to Seattle as its hometown, instead citing the Puget Sound region, the Pacific Ocean inlet abutting Seattle and neighboring cities, as its headquarters."

•  CNBC reports that "Amazon CEO Andy Jassy said Tuesday the company could do more to treat employees better and acknowledged one of its approaches to worker safety during the coronavirus pandemic fell short.

"'I think if you have a large group of people like we do — we have 1.2 million employees — it’s almost like a small country,' Jassy said on stage at the GeekWire Summit in Seattle. 'There are lots of things you could do better.'

"When asked what Amazon could do better, Jassy pointed to the company’s processes around pandemic leave in its warehouses. Amazon told workers it would provide up to two weeks of paid sick leave for employees who showed symptoms, had the virus, or were in quarantine."

"During the pandemic in our fulfillment centers, we had a system and a process around people being able to request short and long term leave and the process just didn’t scale,” Jassy said. “We never anticipated having a pandemic or having demand like that. It didn’t work the way we wanted it to work.”

Published on: October 6, 2021

•  Bloomberg reports that Walmart "has demoted the chief operating officer of its core U.S. business and installed a finance expert in the role, shuffling its senior leadership team just before the key holiday period.

"Dacona Smith, one of the retailer’s highest-ranking Black executives, will shift to become executive vice president and chief operations officer of Walmart’s U.S. stores … Chris Nicholas, previously finance chief of the U.S. unit, will take over the COO role."

The story notes that "the timing of the shuffle is unusual, as Walmart typically makes senior-management moves at the start of its fiscal year in February. Walmart is gearing up for the holiday sales season amid global supply-chain bottlenecks that have forced it to charter its own cargo vessels, and it’s trying to add 150,000 new employees to its massive 1.5 million-person U.S. workforce despite a tight labor market."

“Our goal is to do a better job of connecting the dots and flow our inventory in new and more productive ways,” CEO John Furner said in a memo to employees.

While Smith used to report to Furner and now will report to Nicholas, a company spokesperson told Bloomberg that it does not constitute a demotion.

•  Walmart said this week that its Sam's Club division will begin offering its members access to Fresh n’ Lean, described as a "prepared meal delivery services that is ready to eat in 2-3 minutes, non-bioengineered, and always fresh, not frozen … The meal plans, which each feature five meals, are available for $58.98 for Members and $53.98 for Plus Members."

Published on: October 6, 2021

•  Kroger yesterday announced its "second nationwide hybrid hiring event, including virtual and on-site interviews, will take place from 2-5 p.m. ET on Wednesday, October 13. The organization's mission is to hire 20,000 associates by finding talent for retail, e-commerce, manufacturing, supply chain, merchandising, logistics, corporate, and pharmacy and healthcare roles."

•  The Wausau Daily Herald reports that Skogen’s Festival Foods "will purchase three central Wisconsin Trig’s stores from the T.A. Solberg Co."

The acquired stores are in Wausau, Weston and Stevens Point, Wisconsin.  

The story says that "the T.A. Solberg Co. will continue to operate stores in Minocqua, Eagle River, Tomahawk, Rhinelander and Manitowish Waters along with several fuel and convenience stores."

Terms of the deal were not disclosed.

•  The New York Times reports that some 1,400 Kellogg factory employees in Michigan, Nebraska, Pennsylvania and Tennessee have gone on strike over issues of  job protections, vacation and holiday pay, and health care.

“For more than a year throughout the Covid-19 pandemic, Kellogg workers around the country have been working long, hard hours, day in and day out, to produce Kellogg ready-to-eat cereals for American families,” said Anthony Shelton, president of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, which represents the striking workers, adding, “We are proud of our Kellogg members for taking a strong stand against this company’s greed and we will support them for as long as it takes to force Kellogg to negotiate a fair contract that rewards them for their hard work and dedication and protects the future of all Kellogg workers.”

Published on: October 6, 2021

Got the following email from MNB reader Steve Burbridge:

As a loyal Morning NewsBeat reader, I know you are always looking at experiences that your readers have with retailers in the market.  I thought I would share an experience that I had today with Walmart.com.

I ordered a new desk lamp from Walmart last week.  I decided to give Walmart.com a shot versus paying for Jeff Bezos' next space trip.  While the delivery was going to be later than if I ordered through Amazon, it wasn't an immediate need.

I was informed it would arrive by 10/6, but the tracking stated that it was delivered 10/4 by USPS at my mailbox at 1:35pm.  It was not.  I went onto the website to the "Can't Find Your Package?" and got this message:

Sorry!  If the tracking details show your package was delivered and you can't locate it, please wait two full days (excluding Sundays and holidays) for the package to arrive.  We recommend checking arounds your home and asking your neighbors if they may have received it for you.  If after that time you still haven't received it, contact us after 8 pm local time on the second day and we'll be happy to help.

So, I went to their chat window and asked why there would be very specific delivery information and yet they would ask that I wait 2 more days.  Of course, I got a robot first.  But, when I did get a human - finally - she stated she would look into it.  She then came back on to say "that is a Beta order from our Beta department" and that she didn't have access to that system so I would have to call an 800# as she couldn't transfer me to another chat operator.  I could also try closing this chat and opening another to get to the right group.  What?

If Walmart wants to effectively compete with Amazon, they need to make the customer experience as seamless as the Amazon environment.  I guess I will wait the two more days... 

Good luck.  All I could think while reading Walmart's response is that these are the guys who want us to let their folks into our homes when we're not around.

Don't think so.

MNB reader Steve Ritchey had a thought or two about the speculation from a consultant floating the idea that Walmart and Home Depot ought to merge:

When I read of this possible merger I couldn't help but think that it's a marriage made in Heaven or Hell, I can't decide which. 

These two companies are made for each other, bot offer some of the worst customer service I've ever witnessed.

Case in point.  Several years ago I was building a tool shed in my back yard.  I needed pressure treated lumber and 3/4" plywood, plus concrete building blocks for the foundation, all heavy stuff.  I was on the floor loading this mess up on my cart as the fat HD employee stood watching me talking to his friend.  10 HD employees must have passed me, no one offered help..

I got it up front and checked out, then had to ask for help in loading my truck.

Why did I go to HD, because they had the dimensions I needed, so I wouldn't have a lot of waste?

Contrast that with the next weekend when I went to Lowes for lumber to frame the walls.  I think I needed like 40 2x4's for wall studs, an employee saw me, asked how many I needed and I told him, he helped load them, plus all the other dimensional lumber I needed for framing the walls..  Then he went and got the 80 lbs. box of framing nails I needed for my nail gun.  Then he led me to a register, checked me out and helped load my truck.

See why Lowes is my first choice for Home Improvement materials.

Whenever I go to Wal Mart, I seldom see an employee out on the floor, the store is always a mess, and checkout is a joke.  Plus in my dealings with them as a rep, I found their managers frequently arrogant and very condescending..  their relationship with vendors isn't a partnership, but is adversarial.

Just my 2 cents worth, for what it's worth.

I must admit that I'm really impressed,.  I can do none of the things that you describe.

Responding to my criticisms of Facebook, one MNB reader wrote:

A personal observation. I'm the oldest of three (I'm now in my 50s). We were raised together. My sister and I lost our mom, brother and dad (separately) in separate instances a couple of decades ago. It was incredibly hard for us both and we drifted apart. I found her on Facebook in 2012. We reconnected very gingerly and mostly just messaged each other and/or "liked" each other's posts. We spoke for the first time in decades in 2014 and we saw each other in person for the first time in 2017. 

I ignore the nonsense on Facebook (the memes, the quizzes designed to get us to give up sensitive information and such). I found my sister and from there discovered my nephews. 

I'm torn by the awful things Facebook has allowed because without it I don't know if I ever would have found my sister. 

I wouldn't ever argue that Facebook is all bad, or that it has enabled only bad things.

But there's an awful lot of chaff to get through to get to the wheat.

Regarding the difficulty many chains may have finding enough employees to work in coming months, one MNB reader wrote:

Baby boomers retiring by the thousands daily isn't helping this situation either.

Wait a minute.  Baby boomers are retiring?  How come I didn't get the memo?

We had a piece yesterday about how a number of IT departments are holding off investments, and I commented:

This strikes me as being an interesting and Eye-Opening problem.  It has become a cliché to talk about the pace of change, especially since we've been living with this gathering, propulsive momentum for years now.  I find myself wondering which is the bigger risk - making the wrong bet, or succumbing to analysis paralysis because the next big transformational thing may come out tomorrow or next week.

I was curious about how to avoid analysis paralysis, and came upon a blog (FacileThings.com) that suggested something called satisfying, which means "choosing the first option that you have evaluated as reasonable enough … Don’t look for the perfect solution from the start. Focus on the basics and ignore the details, at least at the beginning. Don’t waste your time in things that are likely to change later on anyway … Don’t consider the fact that you are making a big decision, but multiple and smaller decisions. Each decision that you take is not final, you can tinge and correct them with the following decisions you make."

Though it also occurs to me that this is easier said than done when millions of dollars - and maybe even the future viability of a company - are at stake.

MNB reader Phil Herr responded:

Hi Kevin, I was struck by this article. I have always been a fan of the concept (read “The Paradox of Choice” by Barry Schwartz). His argument is that we tend to be satisficers or perfectionists. And because there are always so many choices in any situation, perfectionists are always unhappy — they could always have made  a "better" choice. Me, I am delighted to be a satisficer.

One MNB reader responded to yesterday's piece about William Shatner going into space in Jeff Bezos' rocket, and my posting of an old FaceTime video about a one-man show I saw in which Shatner talked about greeting every opportunity with four words:  "I can do that."

“I can do that” is so simple, yet so compelling.  So difficult and so easy.  A tiny mantra that grows into a life force.  Brilliant.  So easy to add the “ ‘t “ to the can and it turns it into an excuse from an exclamation.

Glad I clicked on this today.  Always happy to be schooled by one of the OG’s as I face down retirement.

Boldly go where no man or woman has gone before, William Shatner. Enjoy your trip.

Thanks for the FaceTime.  You made my whole day.

And finally, from MNB reader Joe Ciccarelli:

Kevin – thanks for the recommendation of Sfoglini’s Cascatelli. Got my order yesterday and made some sauce / gravy to have tonight. The pasta cooked up really well and it was excellent – held the sauce as you said. The instructions say cook for 13 to 17 minutes but I did just 13 minutes and it was perfect – ala dente. I paired it with a Santa Margherita Chianti.

Thanks.  Keep the recommendations coming.

I will.  I'm thrilled you liked it.

Published on: October 6, 2021

In the American  League single-elimination Wild Card game, the Boston Red Sox beat the New York Yankees with a convincing 6-2 win.

The Sox now go on to face the Tampa Bay Rays in the AL Division Series.