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Friday, April 12, 2019

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Friday Eye-Opener: All Ears

by Kevin Coupe

Bloomberg has a story saying that “Amazon.com Inc. employs thousands of people around the world to help improve the Alexa digital assistant powering its line of Echo speakers. The team listens to voice recordings captured in Echo owners’ homes and offices. The recordings are transcribed, annotated and then fed back into the software as part of an effort to eliminate gaps in Alexa’s understanding of human speech and help it better respond to commands.”

In other words, Alexa doesn’t only listen when you use a designated “wake word.”

The Bloomberg story says that “the Alexa voice review process, described by seven people who have worked on the program, highlights the often-overlooked human role in training software algorithms. In marketing materials Amazon says Alexa ‘lives in the cloud and is always getting smarter.’ But like many software tools built to learn from experience, humans are doing some of the teaching.

The teams working on the process “comprises a mix of contractors and full-time Amazon employees who work in outposts from Boston to Costa Rica, India and Romania,” Bloomberg writes.

Here’s where it gets troubling:

“The work is mostly mundane … Occasionally the listeners pick up things Echo owners likely would rather stay private: a woman singing badly off key in the shower, say, or a child screaming for help. The teams use internal chat rooms to share files when they need help parsing a muddled word—or come across an amusing recording.

“Sometimes they hear recordings they find upsetting, or possibly criminal. Two of the workers said they picked up what they believe was a sexual assault. When something like that happens, they may share the experience in the internal chat room as a way of relieving stress. Amazon says it has procedures in place for workers to follow when they hear something distressing, but two Romania-based employees said that, after requesting guidance for such cases, they were told it wasn’t Amazon’s job to interfere.”

Amazon officially responded to the Bloomberg report this way:

““We take the security and privacy of our customers’ personal information seriously,” an Amazon spokesman said in an emailed statement. “We only annotate an extremely small sample of Alexa voice recordings in order [to] improve the customer experience. For example, this information helps us train our speech recognition and natural language understanding systems, so Alexa can better understand your requests, and ensure the service works well for everyone.

“We have strict technical and operational safeguards, and have a zero tolerance policy for the abuse of our system. Employees do not have direct access to information that can identify the person or account as part of this workflow. All information is treated with high confidentiality and we use multi-factor authentication to restrict access, service encryption and audits of our control environment to protect it.”

Don’t know about you, but I’m not sure I feel protected.

I am staring at the Echo on my desk right now, and I must confess I am thinking about it differently.

What bothers me more than the fact that somebody may be listening to me through the half-dozen Alexa-powered devices that he have spread throughout our house is the idea that Amazon hasn’t been very transparent about this.

I’ll accept - with reservations - that if you want machines to be smarter, you need to educate them.

Though in this case, we’re talking about machines that are just getting better at voice recognition, not getting smarter or more intuitive or able to build on previous conversations. Actually, I’d like Alexa to be able to do all these things. I’d be willing to bet money that Amazon is working on it, and that it won’t be too long before Alexa - and maybe Alex - will be given some sort of physical representation to go with a more educated “brain.”

I’ll accept that I may need to participate in this process, and that there could be tradeoffs.

But I think people ought to be able to make that decision, one way or the other. At the very least, we ought to be told about the process. Transparency matters, and in this care, I don’t think Amazon lived up to my expectations.

And this puts aside all the moral and ethical discussions about whether, if Alexa is listening, it needs to be more proactive if it hears an assault or some other crime taking place. I’d like to take an ethics class focusing on this subject alone … but Amazon’s response to the question suggests that it hasn’t thought about it all that much.

The Eye-Opener? Alexa is listening. Amazon, maybe not so much.

Bezos’ Shareholders Letter: Three Big Takeaways

Jeff Bezos yesterday released his annual letter to Amazon shareholders, and in it dealt with a number of issues and started at least one online fight.

• At one point, Bezos said that the growth of the company’s e-commerce business has slowed, and that in fact its Marketplace business - in which third-party merchants sell on Amazon - has become a greater sales engine, accounting for 58 percent of gross merchandise sales on the site.

Bloomberg observes that this was a “veiled riposte” to calls from Sen. Elizabeth Warren (D-Massachusetts) to break up companies like Amazon, calls that have been central to her campaign for the Democratic presidential nomination.

“Third-party sellers are kicking our first-party butt. Badly,” Bezos wrote in the letter, adding that Amazon aids them in this by offering them “the very best selling tools we could imagine and build,” which then “meaningfully improved the customer experience of buying from independent sellers.”

• Noting that Amazon has pledged to pay all its warehouse employees a minimum of $15 an hour, Bezos wrote, “Today I challenge our top retail competitors (you know who you are!) to match our employee benefits and our $15 minimum wage … Do it! Better yet, go to $16 and throw the gauntlet back at us. It’s a kind of competition that will benefit everyone.”

Bloomberg points out that Amazon made its pledge last October after presidential hopefuls Warren and Sen. Bernie Sanders (I-Vermont) held out Amazon workers on food stamps as an example of the need for living-wage protections.”

CNBC reports that Amazon’s competitors did not take kindly to being lectured.

“Walmart’s executive vice president of corporate affairs, Dan Bartlett, then shared an article Thursday morning on Twitter about Amazon paying $0 in federal taxes on more than $11 billion in profits last year. He wrote: ‘Hey retail competitors out there (you know who you are) how about paying your taxes?’

“The CEO of eBay, Devin Wenig, also snapped back at Amazon on Thursday, writing on Twitter: ‘I’ll dedicate my [shareholders] letter to customers, purpose and strategy’.”

CNBC reports on the response from an Amazon spokesperson:

“Amazon pays all the taxes we are required to pay in the U.S. and every country where we operate, including paying $2.6 billion in corporate tax and reporting $3.4 billion in tax expense over the last three years. Corporate tax is based on profits, not revenues, and our profits remain modest given retail is a highly competitive, low-margin business and our continued heavy investment. We have invested more than $160 billion in the U.S. since 2011, building a network of more than 125 fulfillment and sortation centers, air hubs and delivery stations as well as cloud-computing infrastructure and wind and solar farms. We invest heavily in research and development at our Seattle headquarters and 18 tech hubs across the country. We are creating tens of thousands of quality jobs each year with industry-leading pay for people of all skill levels, bringing our total workforce in the U.S. to more than 250,000.”

• The Associated Press writes that the letter makes clear that Amazon, “well-known for giving low priority to the short-term growth interests of Wall Street, will continue taking big risks if it sees a potential pay-off in the long run.
In his letter Thursday, Bezos said Amazon's Fire phone was a failure, but that its Echo and Alexa smart speakers have been tremendously successful.

“'As a company grows, everything needs to scale, including the size of your failed experiments,’ Bezos wrote. ‘If the size of your failures isn't growing, you're not going to be inventing at a size that can actually move the needle. Amazon will be experimenting at the right scale for a company of our size if we occasionally have multibillion-dollar failures.’

“Bezos said one ‘big winning bet’ can cover the cost of the clunkers, and that calculus has been playing out at Amazon.”

KC's View: I’ll take them in order.

• I never really took Warren’s proposal seriously. It is a campaign speech, not a policy.

While I think it is entirely appropriate to have a nuanced discussion of income inequality, I don’t think breaking up Amazon does anything other than maybe tamp down on its ability to innovate. And I’m not surprised that the Marketplace is growing … there is a theory out there that Amazon would actually like it to be bigger, because that puts it more firmly in the logistics side of the business, as opposed to retailing, which is more expensive. (Think about that, by the way, when pondering what a new chain of supermarkets run by Amazon, said to be opening later this year, might look like.)

• I’m not sure that sniping at competitors does anybody any good. Just do your business, and if you think warehouse employees ought to b e paid more, pay them more … don’t wait for the competition to raise the stakes. This is all disingenuous.

• No surprise that Bezos and Amazon will continue to take big swings. he’s said it before - that as the size of the company grows, the size of the failures has to grow as well. Which also establishes that people should’t crow too much at Amazon missteps … they’ve always had them, but now they’re just more public.

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From Samuel J. Associates...

"It’s a bad time to be in the business of selling groceries, and the headlines are as bleak as you’d expect: "The Retail Apocalypse Is Coming for Grocery Stores" ... "Grocery Retail ‘Bloodbath’ Is Here" ... Conversely, it is a great time — arguably the best time ever — to buy groceries."
- New York Magazine/Grub Street


At Samuel J.Associates, we have a response to this assessment:

Bull.

We think it is a great time to be selling groceries, whether you are a retailer or a supplier. That’s because a more educated and demanding consumer, no matter the demographic, will reward businesses that are innovative, disruptive, and in touch with what people need, even if they don’t know they need it.

And, we know this: Those businesses require, and are fueled by, great people.

People who don’t just get the job done, but who set the tone in an organization, establish cultural and business priorities, who build teams, and who are able to not just adapt to competitive realities, but see the future and thrive in it.

And yes, ignore dire warnings about a "retail apocalypse" and see opportunities.

At Samuel J. Associates, we have a winning record of connecting great talent and innovative businesses ... as well as innovative talent with great businesses. We exceed your expectations so that you can do the same thing for your customers.

No bull.

Click here to find out more.

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Thousands Of Stop & Shop Workers Go Out On Strike

The Boston Globe reports this morning that as many as 31,000 “Stop & Shop workers around New England went out on strike Thursday afternoon, forcing the region’s largest supermarket chain to temporarily close a number of stores, and prompting some customers at others to refuse to cross picket lines.”

The employees, members of the United Food and Commercial Workers (UFCW), struck the company after three months of contract negotiations; a strike had been authorized last February.

According to the story, “The striking workers say they are protesting the company’s proposal to reduce pension benefits for new hires and increase health care premiums.

“Stop & Shop notes that it is offering across-the-board pay raises and increased pension contributions for current employees and that its health care costs are a ‘fraction’ of what other retail employees pay.”

The Ahold Delhaize-owned chain “declined to say how many of its stores were closed. Stop & Shop has more than 400 stores in five states, and 60,000 employees. The stores in New York and New Jersey were not affected by the strike.”

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From The Organic Produce Summit...

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Walmart Buys Ad Tech Startup

The Associated Press reports that Walmart is acquiring Polymorph Labs, described as a “San Francisco-based ad tech startup” that has developed technology that “will make advertising with the discounter easier for thousands of brands while delivering more relevant digital ads to consumers faster.”

Terms of the deal were not disclosed.

The story notes that Walmart “has been quietly building its own advertising business with a unit called Walmart Media Group, though that business is still smaller than Amazon’s.” The company apparently believes that this acquisition will help jump-start that effort.

KC's View: Good time to be in the startup business, if you’re starting something up that big companies see as being able to quickly help them ramp up necessary initiatives.

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From WAFC...

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From Cornell University...


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Rite Aid To Sell CBD, Stop Selling E-Cigarettes

Two moves by drugstore chain Rite Aid:

The company will start selling CBD hemp oil products in 200 of its stores in Oregon and Washington. KOMO News says the company is “citing interest from several customers hoping to buy those items … There's increasing evidence that CBD works with your body's own chemistry to help relieve pain, insomnia, anxiety and more.”

CBD is the non-psychoactive component of the cannabis plant.

At the same time, the chain said it would stop selling e-cigarettes in its stores nationwide.

The Wall Street Journal writes that “the company will remove all e-cigarette and vaping products, including startup Juul Labs Inc.’s popular nicotine-packed vaporizers, over the next 90 days, Bryan Everett, Rite Aid operating chief, said on a conference call Thursday. Executives said the change was in response to use of the products by children and teens.”

However, Rite Aid will continue “to sell traditional cigarettes, taking a different stance on tobacco products than its two main pharmacy rivals.”

CVS doesn’t sell any of this stuff, while Walgreens sells all of it (though it is testing some tobacco-free stores).

KC's View: Seems to me that Rite Aid is trying to be a little bit pregnant, which never works out. I think they just ought to et out of the tobacco business entirely, at least if they want to be perceived as being in the wellness/health care business.

Then again, Rite Aid generally has been sort of mediocre for so long, that doing things halfway probably has become a habit.

P&G Blasts Digital Media Companies

The Los Angeles Times reports this morning that “Procter & Gamble Co., one of the most important advertisers for Google and Facebook Inc., ramped up criticism of internet platforms, saying the problems plaguing the industry aren’t getting fixed fast enough.”

P&G’s chief brand officer, Marc Pritchard, this week “blasted the digital media industry for lack of transparency, fraud, privacy breaches and a proliferation of violent and harmful content placed next to ads. He said his company, which spends billions of dollars every year marketing products from paper towels to shampoo, would move its money to services that can guarantee effectiveness, are completely free of offensive content and are more willing to share consumer data with advertisers.”

“It’s not acceptable,” he said, “to have brands showing up where opioids are being offered, where illegal drugs are promoted, where abhorrent behavior is present or where violence is seen. The apologies are heartfelt and appreciated, but that’s not good enough.”

KC's View: This is serious. Especially for Facebook, which has for too long has tried to deny responsibility and culpability for what appears on its pages. I’m glad to see that an advertiser that matters is trying to force the issue, though it will be hard to step away from a platform with so many people on it.

I’m personally tired of Facebook. I put MNB’s headlines there, but other than that, I’m pretty much done with it … I’d rather live my life than share it. (Of course, I have MNB, where I can do all the sharing I want with people I actually like and care about.)

E-conomy Beat

• Albertsons Companies announced yesterday that it is “joining the blockchain-based IBM Food Trust network and will begin piloting the technology to improve how food is traced from farm to store shelf. The addition of Albertsons Companies to the Food Trust ecosystem of more than 80 brands,” the company says, “brings blockchain-based food traceability to more consumers and industry players – from producers to suppliers to retailers – by helping enable greater transparency and collaboration, and ultimately, a safer food supply.”


• The Washington Post reports that pilots who work for Amazon are “speaking out against what they describe as low wages, shoddy maintenance and stalled contract negotiations,” and are threatening to strike.

According to the story, “Roughly two dozen pilots in crisp white uniforms picketed on a busy thoroughfare near the Greater Cincinnati Northern Kentucky International Airport on Thursday, calling for better pay and benefits, and less erratic schedules. They held signs that said ‘Amazon: Driving down living standards of U.S. pilots’ while passing motorists honked. The protest, organized by the Airline Professionals Association Teamsters Local 1224, comes weeks after an Atlas Air flight carrying cargo for Amazon crashed in Texas, killing all three people on board.”

The Post writes that “although Amazon does not directly employ the pilots, union members said they hoped the protests would shed light on worker grievances … Amazon Air, the freight delivery arm of the retail giant, has branded planes that are operated by a handful of carriers, including Air Transport International and Atlas Air. The company has invested heavily in its facilities at Cincinnati/Northern Kentucky International Airport, where it plans to break ground on a $1.5 billion hub next month.”

The companies say that they follow “the highest standards of safety.”

FastNewsBeat

…with brief, occasional, italicized and sometimes gratuitous commentary…

• The Wall Street Journal reports that Campbell Soup “is nearing a deal to sell its Bolthouse Farms fresh-foods brands for about $500 million to a group led by the former chief executive of the troubled division.” Jeff Dunn, the former Bolthouse CEO, who is said to be “working with private-equity firm Butterfly Equity, has since entered exclusive talks with Campbell for the Bolthouse business and the two sides could unveil a deal” as soon as today.

Dunn’s interest in buying back Bolthouse was first reported by the Journal last October.


• The New York Times reports that Ron Burkle, the private equity titan often described as a “supermarket magnate” who at various times has invested in food retail chains, has been in negotiations to acquire the National Enquirer, which has supermarkets as its primary distribution vehicle.

The Enquirer is owned by American Media Inc. (AMI), which has come under fire because of its habit of buying stories from women who accused Donald Trump of extramarital affairs and then not printing them, which amounted to illegal campaign contributions; the Enquirer also is accused by Amazon CEO Jeff Bezos of trying to extort him over stories about his extramarital activities.

The Times writes that “disclosure of the talks threatened to scuttle them, leaving both sides frustrated that the news had leaked. Two people with direct knowledge of the talks said Mr. Burkle’s team was upset that news of their involvement had been made public, and they felt used by AMI. It is unclear what will happen next, but AMI was pushing to continue the talks.”

Trash publication. Anybody should be upset with having their names associated with it.

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From FMI...

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From The MNB Politics Desk

• The Associated Press reports that “Democratic presidential candidate Elizabeth Warren is proposing a new tax on corporate profits that’s designed to prevent business giants from taking advantage of the existing tax code to effectively pay a zero rate.

“The 7% tax on corporate profits above $100 million is the latest in a series of ambitious policy proposals from the Massachusetts senator. It’s in line with her broader push to rein in such industries as the financial sector and technology firms.”

The Warren campaign estimates the proposal would affect roughly 1,200 companies and “would raise about $1 trillion of new revenue over 10 years.”

The AP says that Warren is calling her proposal “the Real Corporate Profits Tax,” and says, “It will make our biggest and most profitable corporations pay more and ensure that none of them can ever make billions and pay zero taxes again.”

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From Webstop...

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Your Views

…will return next week.

A Retail Tomorrow Podcast: Storytelling & Influencer Marketing, From AI To Pop-Ups

Hooray for Hollywood! This podcast comes to you from the Retail Tomorrow Immersion conference in Los Angeles, which may have more storytellers per capita than any other place on earth. With visits to Google’s new campus in Playa Vista, in the converted hangar where Howard Hughes’ Spruce Goose once resided, and to some of the most interesting and experiential retail spaces in the city, this conference also featured several sessions that, now as podcasts, bring this fascinating content to you.

First up - a discussion of disruptive storytelling - told through stores, pop-ups and, coming soon, AI and VR - that is changing the way marketers connect with and influence existing and potential customers.

Our guests:

• Cody Rapp, CEO of Calmist, a fascinating and growth-focused retail concept recently featured on MorningNewsBeat.

• Lori Schwartz, founder of Tech Cat, which helps marketers shape their narratives in a fast-evolving environment.

• Amanda Solosky, co-founder/CEO at Rival Theory, which is developing game-changing AI capabilities that definitely will impact the relationship marketers have with shoppers.

• And Mariya Zorotovich, director of Responsive Retail Strategy and Incubation, at Intel Corporation, which helps to make all this possible.

The host: Kevin Coupe, MorningNewsBeat’s “Content Guy.”

Pictured, from left to right:

Kevin Coupe, Mariya Zorotovich, Amanda Solosky, Cody Rapp, Lori Schwartz.





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“RETAIL 2020: What’s The Future (WTF)?” - A New Presentation by Kevin Coupe


In this fast-paced, interactive and provocative presentation, MNB's Kevin Coupe challenges audiences to see the fast-evolving retail world through a radical new technological, demographic, competitive and cultural prism. These issues all combine to create an environment in which traditional thinking, fundamental execution, and just-good-enough strategies and tactics likely pave the path to irrelevance; Coupe lays out a road map for the future that focuses on differential advantages and disruptive mindsets, using real-world examples that can be adopted and executed by enterprising and innovative leaders.

Constantly updated to reflect the hand crafted news stories covered and commented upon daily by MorningNewsBeat, and seasoned with an irreverent sense of humor and disdain for sacred cows honed over 30 years of writing and reporting about the best retailers and retail strategies, “RETAIL 2020/WTF” will get your meeting attendees not just thinking, but asking the serious questions about business and consumers that serious times demand. See a sample at left…




Here’s what Lori Stillman, Executive Vice President - Analytics, Insights and Intelligence, Advantage Solutions, has to say about a recent appearance:

"Kevin joined us as a moderator and facilitator for a two-day client executive event we hosted. His role in the success of the event went far beyond his time presenting and sharing his great wisdom and content. From the moment our planning process began and we selected Kevin as a key part of our program, he dove in and worked with our team to review session topics, ideate on programming and help ensure our overall event delivered on the goals we had established. His quick wit, deep industry knowledge and ability to synthesize conversations into key take-aways enabled us to hit a home run!”

And, from Joe Jurich, CTO of DUMAC Business Systems:

”Kevin recently participated in and spoke at our Annual User Conference.  Our group consisted of independent retailers, wholesalers, and software vendors – a pretty broad group to challenge in a single talk.  While his energy, humor, and movie analogies kept the audience engaged, his ability to challenge them to think differently about how they go to market is what really captured them!  Based on dinner conversations afterward, he appeared to have left everyone thinking of at least one new approach to their strategy!”

Want to make your next event unique, engaging and entertaining? Contact Kevin at kc@morningnewsbeat.com , or call him now at 203-253-0291.

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OffBeat: What Evil Lurks

“Barry,” the wonderful series on HBO, is back for a second season, and it hasn’t lost a step. Bill Hader is marvelously contained as a hitman who decides that his real calling is to be an actor, and Henry Winkler steals every scene he’s in as his narcissistic acting teacher. The best thing about the show is its deadpan consideration of the difference between good and evil … at one point in the show, Barry asks a man who has asked him to commit murder if he is evil, and the man responds, “Of course you’re evil. Don’t I tell you that enough?”

Could evil be in the eyes of the beholder? Is real, personal change actually possible? All hard questions, and at the heart of “Barry” on HBO - terrific television at its best.



“Billions” is back. Thank goodness. If you’ve never watched the Showtime series with Paul Giamatti and Damien Lewis as battling titans in New York City - one a prosecutor, the other a gazillionaire investor - you need to start at the beginning, and keep going, as the show gets more twisty and intriguing and better written and acted with every season.

It is worth a binge - terrific TV.



I finally caught up with Bohemian Rhapsody the other evening, and I guess the best I can say is that it was perfectly fine that I waited to watch it at home instead of rushing out to the movie theater.

Bohemian Rhapsody essentially is a biopic about Freddie Mercury, the lead singer of Queen, and Rami Malek is terrific in the role, though I’d argue that the script lets him down a bit - it is sort of a paint-by-numbers approach to a film biography that left me wishing for something a little more innovative and involving.

There have been some complaints about the film’s inaccuracies, but they didn’t bother me … maybe because, not being a Queen fan, I was largely oblivious to them. I don’t worry about such thing s much - there’s a difference between a photograph and a painting, and I always think of films based on real events as being the latter. I’m more interested in emotional truth than objective accuracy.

In addition to Malek’s superb performance, and that of Lucy Boynton as his longtime love - which created a lot of personal conflicts since Mercury increasingly was in touch with his homosexuality - I was perhaps most surprised by how many of the songs I knew. Maybe, without knowing it, I was more of a Queen fan than I realized.



Two wines to recommend this week:

• the 2017 Justin Monmousseau Vouvray, which is bright, not to sweet, and drinkable on its own and with a nice light meal.

• the Bruni Vermentino, a delicious white Tuscan wine that tastes like peach - perfect as the weather gets warmer.



That’s it for this week. Have a great weekend, and I’ll see you Monday.

Sláinte!!

PWS 51