business news in context, analysis with attitude

Published on: January 26, 2022

The continuing 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.

This week, Tom and KC discuss a series of retail-centric innovations - a suburban Amazon Go store, a new Amazon fashion format, Instacart's new credit card, 7-Eleven's new subscription program, and more - within the context of a constantly quickening pace of innovation that challenges every business.  They suggest that innovation can take many forms, and that the most impactful innovations will always be customer-driven.

If you'd like to listen to The Innovation Conversation as an audio podcast, click below.

Published on: January 26, 2022

by Kevin Coupe

One of my favorite podcasts is "Pivot," hosted by Kara Swisher and Scott Galloway, largely because they bring a unique irreverence to the subjects they cover - technology, business, and culture - all mixed together for always provocative, sometimes NSFW conversations.

The podcast that dropped on Tuesday was typical - it covered a number of issues, including the troubles affecting Peleton and why it seems likely to be a takeover target (Apple?), tech lobby, stock market woes, and Mark Cuban's new online pharmacy business.  And then they did what they often do - Kara and Scott took a listener question.

This time, the question was from me.  (I first learned that they used the question when I started getting emails about it from members of the MNB community.  Proving, I think, that MNB readers largely are a discerning bunch.)

My query was one that would be familiar to MNB readers, but I really wanted to get their take on it:  If the government is going to regulate Amazon for using shopper data to decide which private label items to feature and how to prioritize them, shouldn't the government also regulate every bricks-and-mortar retailer (which is to say, almost every bricks-and-mortar retailer) that uses shopper data to decide which private label products to carry, how to promote them, and where to place them on shelves.  Sure, Amazon does it better and faster and smarter, but is it really any different from Walmart, CVS, Walgreen, Kroger, Albertsons, and so on and so on?

You can listen to the podcast here - it is the one entitled "Stock Market Blues, a Crypto Crash, and Mark Cuban's Pharmacy" - as well as pretty much anyplace you get your podcasts.

(It is worth listening to the whole thing … but if you are interested, I come in at about the 42-minute point.)

I think their points are excellent, and I wouldn't disagree with Galloway's position that behemoth companies need to be broken up because they are are taking up so much oxygen that smaller companies cannot find the air to survive, much less thrive - the ecosystem will be healthier, he suggests.  I'm okay with that … but I still am not sure you can impose one set of rules on a company like Amazon and others on smaller, bricks-and-mortar retailers.  I am sure, however, that someone is likely to try.

Published on: January 26, 2022

The Information reports that Amazon has decided to suspend a program that paid warehouse workers $5,000 to quit their jobs after the holidays.  The reason:  Like every other business, Amazon is having staffing shortages.

The story points out that Amazon launched the program in 2014 as a way to help the company "quickly trim the size of its workforce, which expands significantly during the holiday season to keep up with a flood of online shopping … Amazon has offered the one-time payments once a year to warehouse workers and other full- and part-time hourly employees who agree to leave their jobs and never work for Amazon again. While paying employees to leave may seem counterintuitive, the internet retailer viewed it as a way to ease out workers who weren’t happy at the company."

Published on: January 26, 2022

CNBC reports that Walmart is investing on Plenty, described as a vertical farming company that will enable it to carry leafy greens grown by the company year-round;  Plenty's goal is to eventually "use the technology to grow other crops, including strawberries and tomatoes."

The size of the investment was not disclosed.

Some context from the CNBC story:

"With the move, the country’s largest grocer is diving into a trendy area of food tech that brings farm produce closer to customers’ kitchen tables to boost freshness, limit waste and promote sustainability.

"Food and agriculture start-ups have become a hot area for venture capital during the pandemic, particularly as consumers eat at home more often and retailers face supply chain challenges. Indoor agriculture also has become a potential solution to unpredictable weather patterns and natural disasters, such as California wildfires, fueled by climate change."

Published on: January 26, 2022

FMI-The Food Industry Association has released a new report from NielsenIQ that it says reveals "continued high demand among consumers for transparency from food retailers and manufacturers, particularly in a more omnichannel marketplace. According to the report, two-thirds of shoppers (64%) say they would switch from a brand they usually buy to another brand that provides more in-depth product information, beyond nutrition facts."

According to the study, "Some 89% say general nutrition facts about a product are at least somewhat important in deciding which products to buy when grocery shopping — while 66% find this important or extremely important. Beyond nutrition facts, the majority (80%) of shoppers cited other transparency indicators of importance to include allergen information, certifications and claims, and values-based information such as animal welfare, fair trade and labor practices."

The report goes on:

"In 2018, just over one-fourth of shoppers (26%) purchased groceries online in the past 30 days. According to the latest findings, that number has now ballooned to 55%, making the online marketplace an ever more critical juncture for consumers to find their preferred brands and discover new ones. For example, 47% said discovery of new products – including information about sourcing and manufacturing processes – is easier online, compared to 23% saying harder and 30% saying about the same. When it comes to online shopping and transparency shoppers say they want faster delivery (42%), easier to use websites (37%), more and better product information (30%), retention of order history (29%), more accurate search functionality (28%) and product recommendations based on preferences (23%)."

Published on: January 26, 2022

Business Insider reports that "Google's latest e-commerce push appears to be bearing fruit, as new data reveals that more people are starting their online shopping journeys using Google, taking valuable market share away from Amazon.

"A pipeline of updates to the search giant's shopping experience is leading to an increase in Google Shopping transactions, Morgan Stanley said in a note sent out Monday.

"Analysts at the firm added that more people are also starting their online shopping journey through Google. Perhaps most interestingly, this shift is also happening among Amazon Prime subscribers, who are starting e-commerce searches less frequently on Amazon's website.

"According to a survey carried out by Morgan Stanley in November 2021, 57% of respondents first went to Google platforms, including Search and YouTube, to research a new product, up from 54% in May. The number of Amazon Prime subscribers turning to Google for these initial searches jumped to 56% from 51% in the same period … The survey results are particularly striking because Google has been steadily losing share of lucrative shopping searches to Amazon for years. If Google has managed to halt or reverse this trend, that will likely mean billions of extra dollars in search advertising revenue and other potential benefits."

Published on: January 26, 2022

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…

•  The United States now has reported a total of 73,449,185 Covid-19 coronavirus cases, resulting in 894,880 deaths and 45,119,980 recoveries.

Globally, there have been 359,854,075 total cases, with 5,636,526 resultant fatalities and 284,988,274 reported recoveries.   (Source.)

•  The Centers for Disease Control and Prevention (CDC) says that 75.7 percent of the US population has received at least one dose of vaccine … 63.5 percent has been fully vaccinated … and 40.3 percent of the US population has received a vaccine booster dose. 

•  The New York Times reports that "the Biden administration is withdrawing its requirement that large employers mandate workers be vaccinated or regularly tested, the Labor Department said on Tuesday.

"In pulling the rule, the department recognized what most employers and industry experts said after a Supreme Court ruling this month — that the emergency temporary standard could not be revived after the court blocked it … The Supreme Court’s decision, which was 6 to 3, with the liberal justices in dissent, said the Labor Department’s Occupational Safety and Health Administration, or OSHA, did not have the authority to require workers to be vaccinated for coronavirus or tested weekly, describing the agency’s approach as 'a blunt instrument.' The mandate would have applied to some 80 million people if it had not been struck down."

The story notes that "without the Labor Department’s standard in effect, employers are subject to a patchwork of state and local laws on Covid-19 workplace safety, with places like New York City requiring vaccine mandates and other governments banning them."

•  From the Wall Street Journal this morning:

"Covid-19 deaths in the U.S. have reached the highest level since early last year, eclipsing daily averages from the recent Delta-fueled surge, after the newer Omicron variant spread wildly through the country and caused record-shattering case counts.

"The seven-day average for newly reported Covid-19 deaths reached 2,191 a day by Monday, up about 1,000 from daily death counts two months ago, before Omicron was first detected, data from Johns Hopkins University show. While emerging evidence shows Omicron is less likely to kill the people it infects, because the variant spreads with unmatched speed the avalanche of cases can overwhelm any mitigating factors, epidemiologists say."

There are a lot of columns being written and commentaries uttered by people saying they are "done with Covid."  Which is nice, except that Covid clearly is not done with us.

Not that the world has to end.  We have to continue being masked indoors, especially with people we don't know.  We have to practice prudent physical distancing.  And we have to continue to improve our vaccination rates so that, even if people continue to get infected, we can stem the tide of serious illness and death.  Do all those things, and we get to live our lives.  "Normal" is such an imprecise word, because it means different things to different people.  I prefer "reality" - it is more specific, tangible and we can create a new reality if we're willing to accept and deal with the facts of our current reality.

Published on: January 26, 2022

•  From Bloomberg:

"Nearly half of the 6,143 Amazon.com Inc. warehouse workers eligible to vote in a union re-do election in the coming weeks in Bessemer, Alabama, are new and didn’t vote in a drive that failed last year, union officials said Monday, highlighting how a high turnover could bring a different outcome this time around.

"The Retail, Wholesale and Department Store Union appealed the results of an election it lost last year, alleging Amazon intimidated workers. The lopsided results cast doubt if a do-over would change the outcome. Workers voted 1,798 against and 738 for forming a union. The 505 contested ballots weren’t considered since they wouldn’t have changed the outcome.

"A National Labor Relations Board official in November ordered that the union election be redone since Amazon 'hijacked the process' by installing a mailbox close to the employee entrance. Ballots in the re-do election are due March 28.

"Alabama is just one front for Amazon as it grapples with unprecedented labor unrest. A fledgling union founded by former and current Amazon workers is trying to unionize four facilities in Staten Island, New York. Meanwhile, the Teamsters Canada are also looking to organize facilities."

Published on: January 26, 2022

With brief, occasional, italicized and sometimes gratuitous commentary…

•  The Conference Board yesterday reported that its Consumer Confidence Index declined in January, going to 113.8 from 115.2 in December.

The Conference Board also said that "the Present Situation Index - based on consumers' assessment of current business and labor market conditions - improved to 148.2 from 144.8 last month. The Expectations Index - based on consumers' short-term outlook for income, business, and labor market conditions - declined to 90.8 from 95.4."

•  SpartanNash yesterday announced that "it is expanding its distribution footprint with new operations out of a facility in Stockton, Calif. The expansion - executed through SpartanNash's long-standing partnership with Coastal Pacific Food Distributors, Inc. - enhances SpartanNash's coast-to-coast supply chain capabilities, in addition to supporting the Company's Environmental, Social and Governance (ESG) priority to reduce fleet mileage and greenhouse gas emissions."

•  BJ's Wholesale Club announced that it has acquired its longtime partner Burris Logistics, which will give it "the assets and operations of four distribution centers and the related private transportation fleet."

The company says that "the transaction will allow BJ’s to insource its perishable supply chain. The terms of the transaction were not disclosed."

•  The Seattle Times reports that "employees at two more Seattle Starbucks locations hope to unionize, expanding the nationwide union push in the coffee giant’s hometown.

Starbucks workers at a drive-thru location on Westlake Avenue and the store at Fifth Avenue and Pike Street said Tuesday they have filed for union elections. They join a store in the Capitol Hill neighborhood, where workers announced plans to unionize last month."

The story notes that "the campaigns come in the wake of workers at two stores in Buffalo, New York, voting in December to join Workers United, an affiliate of Service Employees International Union. A third Buffalo store voted against unionizing. The Seattle stores are three of more than two dozen across the country where employees have filed for union representation."

The Times writes that Starbucks opposed unionization, and that "the union effort could upend dynamics at a company that hasn’t had broad union representation in decades, but for now the push remains narrow in scope.

"Employees have filed for union elections at about 30 stores across the country, according to National Labor Relations Board records. Starbucks has roughly 9,000 company-owned stores in the United States."

•  The New York Post reports that "Ben & Jerry's and other ice cream brands owned by parent company Unilever will operate as a standalone unit, the company announced. 

"Ben & Jerry’s parent company Unilever plans a massive overhaul that includes job cuts and a global restructuring that will have the Vermont-based ice cream maker operate under a separate umbrella along with its sister brands Breyers and Klondike."

It may not be the biggest reason for such a spinoff, but it can't hurt that this will put Ben & Jerry's - which takes very progressive political positions, often controversial and sometimes provocative - outside the Unilever walls … which means that the investors that have a problem with Ben & Jerry's won't be able to rattle Unilever's cage.

Published on: January 26, 2022

…will return.

Published on: January 26, 2022

David Ortiz, who during his tenure with the Boston Red Sox was a prolific designated hitter, a 10-time All-Star and who had a .286 lifetime batting average with 541 home runs (17th all-time), 632 doubles (12th all-time), and 1,768 RBIs (23rd all-time), was elected yesterday on the first ballot to the the National Baseball Hall of Fame.

Some context from MLB.com:

"Ortiz truly cemented his place in Red Sox and baseball lore with his performance in the postseason. He was instrumental in Boston breaking the so-called 'Curse of the Bambino' in 2004, and he also helped power the Red Sox to titles in 2007 and 2013. In 85 career postseason games, Ortiz slashed .289/.404/.543 with 22 doubles, two triples, 17 homers, 61 RBIs and 51 runs. In perhaps the most consequential playoff series in franchise history – the 2004 ALCS against the Yankees – he went 12-for-31 (.387) with three homers and 11 RBIs in seven games, with the walk-off RBIs in Games 4 and 5.

"Nearly a decade later, his inspiring speech and play in the wake of the 2013 Boston Marathon bombing and the club’s subsequent title run was testament to his importance to both team and town."

When Ortiz mounts the stage at the Hall of Fame induction ceremonies in Cooperstown, NY, this summer, he will join six selections of the Golden Days and Early Baseball Era committees -- Jim Kaat, Tony Oliva and the late Bud Fowler, Gil Hodges, Minnie Miñoso and Buck O’Neil.

Ortiz - or, as he is better known, "Big Papi" - was the sole selection in the annual balloting by the Baseball Writers’ Association of America, being named on 77.9 percent of ballots;  there is a 75 percent threshold for entry to the Hall of Fame.

Not elected in their final year of eligibility in the Baseball Writers’ balloting were Barry Bonds and Roger Clemens, as "voters decided for a 10th time that they would not overlook the superstars’ connection to performance-enhancing drugs," the Wall Street Journal writes.  "Their failure to win enshrinement to Cooperstown serves as a powerful rebuke of the faces of the sport’s Steroid Era."

The Journal notes that "in 2009, the New York Times reported that Ortiz was one of 103 players to have tested positive for PEDs in survey testing conducted in 2003 that was supposed to have remained anonymous. Ortiz never tested positive again once Major League Baseball began penalizing players for PEDs in 2005, and commissioner Rob Manfred has publicly questioned the scientific validity of the 2003 positive. Voters ultimately determined Ortiz’s alleged transgression wasn’t enough to deny him in the wake of his 541 homers and legendary World Series heroics."