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    Published on: November 22, 2013

    by Kevin Coupe

    Amazon's quest for world domination continues…

    The Financial Times reports that Amazon has hatched a plan to turn London's underground subway system, known as "the Tube," into one big depot for product deliveries.

    According to the piece, in 2015 London will simultaneously turn the Tube into a 24-hour system as way of "boosting night-time businesses and adding lustre to its global status as it sharpens competition with 24-hour cities such as New York," and will convert all of its ticket offices into automatic ticket kiosks, which it believes will cut personnel costs and improve productivity.

    And so, London is engaged in negotiations with Amazon that would turn all those ticket offices into drop-off lockers where it can deliver items it sells online.

    According to FT, "Amazon did not return requests for comment. But Asda this week announced a deal … to launch 'click and collect' services from car parks outside six Tube stations. Orders made before noon will be ready for collection after 4pm."

    Beyond the obvious lesson, which is how online shopping increasingly is being integrated into so many touch points in our lives, there is another interesting passage from the story worth noting:

    Very few large cities in the world run 24-hour metro services. New York is an exception but unlike London, its network was designed with round-the-clock operation in mind.

    Tube bosses are confident of making the switch at weekends because of a multibillion pound modernisation programme that has seen large parts of the network fitted with new signalling and trains.


    This passage makes me think that a lot of cities are going to have to rethink their approach to mass transit, moving to 24-hour services … because we live in a global, 24-hour world. It won't be a cost, but an investment … because to do business in a global environment, cities have to create an infrastructure that embraces the opportunities rather than looking to the past.

    And as cities rethink their approach to services like mass transit, retailers are going to have to rethink how they make themselves accessible to shoppers.

    It's all an Eye-Opener.
    KC's View:

    Published on: November 22, 2013

    "Twas the month before Christmas, and all through the media…

    • The Huffington Post reports that while Walmart was hit with a $7,000 fine (yes…that's seven thousand dollars) five years ago when a New York employee, Jdimytai Damour, was crushed and killed by rampaging Black Friday shoppers - the fine was assessed by the Occupational Safety and Health Administration (OSHA) - the check to OSHA remains unwritten and Walmart continues to contest it.

    The reason, according to HuffPo:

    "If the fine is upheld, Walmart would essentially be deemed negligent in Damour’s death, as far as OSHA is concerned. That could pressure the company — and other retailers, in theory — to invest in greater safeguards against shopping crowds in order to shield itself from liability in similar cases, meaning more staff, more planning and perhaps even more infrastructure. In other words, if it’s ultimately deemed that Walmart should have foreseen Damour’s death in 2008, then it will be much easier for the government to say Walmart should have foreseen another tragedy like it."


    Yahoo! News reports that while many retailers opening on Thanksgiving will pay their employees time-and-a-half for working on the holiday, Walmart calculates its "holiday pay" differently.

    The good news, according to the piece, is that "Wal-Mart gives employees a regular hourly wage plus additional pay for working the Thanksgiving holiday. The additional pay is equal to the average daily wage in the two weeks leading up to the holiday."

    But the bad news, some employees say, is that Walmart goes out of its way to reduce hours for employees during those two weeks, thus lessening its exposure for holiday pay increases.

    Walmart confirms to Yahoo! News that this is how it structures its holiday pay scales, but does not respond to accusations that it reduces hours during the previous two weeks.


    Salon.com reports that "the group behind the past year’s Wal-Mart strikes pledged Thursday to back an unprecedented 1,500 protests for 'Black Friday' next week, but stopped short of predicting an increase in the number of Wal-Mart employees on strike compared to last year … According to OUR Walmart, the 1,500 Black Friday protests will include major demonstrations in over a dozen cities including Los Angeles, Miami, Minneapolis and Washington, D.C. The campaign has said that last year’s Black Friday actions included tens of thousands of supporters and more than 400 striking Wal-Mart employees."


    All Things D reports that Walmart has lowered its minimum purchase for free shipping from its website during the holiday season to $35.

    That move matches Amazon's minimum price for free shipping. Ironically, it was just a month ago that Amazon raised its free-shipping minimum from $25 to $35.
    KC's View:
    When I read the stories about the $7,000 fine not being paid, and about the way Walmart seems to be handling Thanksgiving pay, I return to something I've believed for a long time - that the company ought to hire someone who is required to not drink the Kool-Aid, who is required to sit in meetings and say to senior executives, "Do you know how this is going to look to the outside/real world?"

    Some would say that Walmart can do these things because, well, it can. But I would argue that Walmart should not do these things because it shouldn't.

    Published on: November 22, 2013

    The Hill reports that new legislation introduced in the US Senate yesterday by Sen. Roy Blunt (R-Missouri) and Sen. Angus King (I-Maine) "would exempt pizza delivery joints and grocery stores from upcoming federal rules requiring restaurants to post the number of calories in their food," rules that "store owners say would be nearly impossible to fulfill … For instance, there are 34 million different combinations of pizza toppings, according to an industry trade group. It’s impractical to require that they list all of the options, they say."

    The story notes that "the Senate bill is a companion to legislation introduced in the House earlier this year. That bill was led by Reps. Cathy McMorris Rodgers (R-Wash.) and Loretta Sanchez (D-Calif.), and has 50 co-sponsors."

    Trade associations immediately endorsed the legislation.

    • “We are encouraged by the bipartisan, bicameral support for FDA to follow a more practical approach to menu labeling," said Food Marketing Institute (FMI) Senior Vice President of Government and Public Affairs Jennifer Hatcher. "The Common Sense Nutrition Disclosure Act is consistent with an alternative proposal by FDA, as well as state and municipal menu labeling laws, to limit menu labeling to establishments that are primarily restaurants. By definition, and by almost all preceding food laws, grocery stores are not restaurants."

    • "The scope of the nutrition labeling provision as proposed by Congress was to provide a uniform standard for chain restaurant menu labeling, not grocery stores," said Peter J. Larkin, President and CEO, NGA. "NGA applauds Senators Blunt and King for introducing this commonsense legislation, and we look forward to working with Congress to pass this key legislation and prevent such a large and costly regulatory burden from passing onto our members."

    • "This legislation will allow the Food & Drug Administration (FDA) to satisfy Congress’ objectives without unnecessarily burdening most convenience stores,” said NACS Senior Vice President of Government Relations Lyle Beckwith. “It treats restaurants like restaurants and convenience stores like convenience stores.”
    KC's View:
    I get, and am sympathetic to, the arguments against holding certain kinds of retailers to the labeling requirements. But the bottom line for every retailer and manufacturer ought to be, regardless of legislation, how can we provide the maximum amount of information to our customer?

    Because making information available and accessible is good business that engenders trust.

    Published on: November 22, 2013

    Bloomberg has an interview with Walgreen CEO Gregory Wasson, in which he says that he believes that employers looking to attract high-quality employees will continue to offer health care benefits. “We’re going to continue to see large employers want to offer high-quality health insurance,” he says. “The private sector is advancing health care in this country.

    The story notes that Walgreen is moving its employees "into a private health insurance exchange run by Aon Plc. (AON) for company-subsidized coverage," believing that this is the best way to provide high-quality care and wellness programs at affordable prices.
    KC's View:

    Published on: November 22, 2013

    Wall St. Cheat Sheet reports that Macy's plans to use Apple's wireless iBeacon system, linked with Shopkick's ShopBeacon, in two flagship stores - in New York City's Herald Square and San Francisco's Union Square - to send alerts to iPhone users.

    According to the story, "The system will provide a personalized, interactive shopping experience for shoppers by providing information about nearby products or special offers based on their specific location in the Macy’s store. According to Shopkick’s website, the company has 'the only smartphone application capable of knowing when a consumer is physically in a store'."
    KC's View:
    If the information is relevant and customer-specific, I think this is a good thing. Just don't bother me with crap I don't want or need.

    Published on: November 22, 2013

    • The Washington Post reports that "the average cost of a full turkey dinner for 10 people will be $49.04, which is 44 cents lower than a year ago, according to an annual survey by the American Farm Bureau Federation, a trade group. Last year’s tally of $49.48 was the highest in the 28-year-old survey’s history."

    Cheaper turkeys are said to be mostly responsible for the drop. Booze is not included in the calculations.


    • The Associated Press reports that the 2nd U.S. Circuit Court of Appeals has ruled that "Starbucks baristas must share their tips with shift supervisors who do much of the same work."

    According to the story, "Citing the findings by the New York Court of Appeals, the three-judge panel of the 2nd Circuit noted that it was undisputed that Starbucks’ shift supervisors spend a majority of time performing the same duties as baristas: serving food and beverages to customers.

    "Shift supervisors assign baristas to particular duties during their shifts, administer break periods and provide feedback to baristas about their performance. They also can open and close stores, change cash register tills and deposit money in the bank. But the appeals court said those were limited supervisory duties and do not include hiring and firing employees," which mans that they should be allowed to share in tips.


    Time reports that "two groups representing major retailers in the United States and Europe, including Walmart, said Wednesday that they had agreed on stricter inspection standards for thousands of garment factories in Bangladesh. The new requirements, including more sprinkler systems and fire doors, come amid concerns over garment worker conditions following a series of deadly incidents, including the collapse of a factory building in April that left more than 1,130 people dead.

    "The two groups were formed after that disaster, representing stores like Walmart and Gap in America, and H&M and Carrefour in Europe, to help determine industry standards amid pressure from labor and consumer groups."
    KC's View:

    Published on: November 22, 2013

    • Walgreen said yesterday that it has named Sona Chawla, its president of e-commerce, to be its new president of digital and chief marketing officer, leading a newly created Digital and Marketing Division.
    KC's View:

    Published on: November 22, 2013

    Yesterday's "FaceTime" commentary decried what seems to be the common practice of using the holiday season as a way of racing to the finish line with countless sales and promotions that try to make up for the mistakes of the previous 11 months, as opposed to using the holidays to build on consumer relationships built during the previous year.

    Which led one MNB user to write:

    On great retailers who build on their brand equity for the past 11 months – all you need to do is look at Nordstrom.

    I walked through my favorite lunch-time oasis, Nordstrom, this week.  No Christmas decorations, no holiday music.  Instead, they have a banner which proudly displays their philosophy on celebrating Thanksgiving (remember that holiday?)  Nordstrom has pledged not to decorate for Christmas until the day after Thanksgiving.  It is so refreshing!  I have seen sales associates working on their window displays, but they are doing so behind big white sheets so as not to be seen.  If the new strategy is to jockey for position during the holidays, Nordstrom has done it by not going out early.  And this shopper loves it!


    I'm with you.



    Responding to the piece yesterday about the US Postal Service opening windows in select Staples stores around the country, one MNB user wrote:

    I’ve written to you before about how USPS is extremely limited in how much good advice like yours they can take.

    Most of the financial troubles they have had are by design, created as a result of our Congress passing the Postal Accountability and Enhancement Act of 2006 which forced them to pre-fund 100% of its entire future obligations for 75 years of health benefits to its employees by the year 2016.  Funding at more than 30% is unprecedented in any other organization of any type.  In addition, the law severely limits the ability of the USPS to change business practices in order to better compete with competing private companies. (Refer to Title IV and V provisions.)

    I’ll avoid injecting politics about why our Congress would want to do this to our nation’s third largest civilian employer, but I think that it’s important that any discussion or criticism of the current state of the Postal Service also inform readers about the 2006 law signed by President Bush on December 20, 2006.


    Agreed. But that doesn't change the fact that there USPS has to find new ways to be relevant to American consumers.

    From another reader:

    Finally at the end of another year of disturbing losses the USPS takes a couple baby step in the right direction with Amazon and by testing some Staples locations. Sure beats the idea of stopping service on Saturdays that is a clear advantage over their more recent born competitors.  The business model needs to be one of eventual profit, not Band-Aids that cannot even capture all the blood. One has to wonder what the plans are for the satellite locations: Can it replace some post offices? Can current employees be an option to work at them? Is it the start of independent run offices? A revenue increase this year with a $5 Billion dollar loss requires digging quite deep into the system. Can the current leadership team be trusted to make their own decisions? Kevin, don’t let up on them…

    I promise.




    Regarding our story about how Costco got in trouble with a local pastor - who expressed his objections via social media, which then got him on Fox News - by having a stack of Bibles in the "fiction" section, one MNB user wrote:

    Interesting argument. First off, all books on religion should be put in a 'religious' category.

    However, if we are going to label them as fiction or non fiction, then isn't this a matter of your point of view? I would think that since there are many religions in the world that not all of them can be correct. Perhaps one of them is the 'true' religion and in that case only the books associated with that religion can be considered Non Fiction and all of the rest are Fiction.

    I have the same thoughts when people discuss their passion for including 'under god' in the pledge of allegiance. Which god are they referring to? Personally I believe that the founders of our nation, who had a belief in the freedom of religion, would appreciate the vagueness of the phrase and would be opposed limiting this to a specific god. Isn't it enough that people in our society have some guiding principles of religion and a set of morals and we shouldn't be so concerned with where they claim to have originated from.


    And from another reader:

    I can’t help but wonder if it would have bothered pastor Kaltenbach to have found the Koran in the same place?
    KC's View:

    Published on: November 22, 2013

    In Thursday Night Football action, the New Orleans Saints defeated the Atlanta Falcons 17-13.
    KC's View:

    Published on: November 22, 2013

    As has been made abundantly clear by the media this week, it was exactly 50 years ago today that President John F. Kennedy was assassinated in Dallas, an event that changed the trajectory of the country forever. I was nine years old at the time, but I can vividly remember relating to Kennedy - I was an Irish Catholic kid from a big family, and somehow that connected us, at least in my young mind and heart.

    My two most vivid memories from that weekend both have to do with my parents. The first was on that Friday afternoon, when the nuns sent us home early from school once news of the assassination reached us. (Talk about times changing. The assumption was, in 1963, that mothers would be home when we got there.) I ran home and woke my mom, who was taking her usual afternoon nap. I told her that President Kennedy had been shot, and she got mad at me. That's not a funny joke, she said. I convinced her to turn on the TV, and she wasn't mad at me anymore.

    And then, on Sunday, I remember watching television with my dad, and seeing live coverage when Lee Harvey Oswald was shot by Jack Ruby.

    Most of us of a certain age - regardless of political persuasion - will never forget that weekend, when the world changed forever. You can draw a direct line from that event to the assassinations, just five years later, of Rev. Martin Luther King Jr. and Robert F. Kennedy.

    It is almost facile to say so, but that was the beginning of a loss of innocence (never mind that JFK was far from being an innocent), and maybe even more importantly, a loss of clarity. Today's nine year olds are so much more knowledgeable, experienced and jaded than that nine year old kid who ran home from Sts. John & Paul School that November day 50 years ago. Not sure that's a good thing.

    I love some of the sentiments - some of them decidedly current - that would have been expressed by JFK the afternoon of November 22 had he not been killed…

    This link between leadership and learning is not only essential at the community level. It is even more indispensable in world affairs. Ignorance and misinformation can handicap the progress of a city or a company, but they can, if allowed to prevail in foreign policy, handicap this country's security. In a world of complex and continuing problems, in a world full of frustrations and irritations, America's leadership must be guided by the lights of learning and reason --- or else those who confuse rhetoric with reality and the plausible with the possible will gain the popular ascendancy with their seemingly swift and simple solutions to every world problem.

    There will always be dissident voices heard in the land, expressing opposition without alternatives, finding fault but never favor, perceiving gloom on every side and seeking influence without responsibility. Those voices are inevitable … We cannot expect that everyone, to use the phrase of a decade ago, will "talk sense to the American people." But we can hope that fewer people will listen to nonsense.





    One more time, let me thank you for all your good wishes during what has been a tough week for the family. Mrs. Content Guy really appreciates it … I think she is continually stunned by the MNB community's connections, which are, by any measure, remarkable.




    My daughter sat us down the other evening and made us watch a documentary, Blackfish, which she'd actually bought on DVD because she felt so strongly about the subject. I'm glad she did.

    Blackfish is an extraordinary piece of work, a look at the questionable wisdom of capturing and training Orcas, or killer whales. Based on issues raised by former SeaWorld trainers and using some amazing footage, Blackfish paints a picture of a practice that is at best questionable, challenging common assumptions about killer whales, and making as compelling case for why SeaWorld is guilty of ethical negligence in how it treats these whales and lies to customers and the general public.

    SeaWorld, to be fair, did not participate in the documentary and does not respond to the charges. I'm not surprised; the last thing it wants to do is engage in this debate, and I'm sure the guys at corporate just hope they can wait out the controversy and that it eventually will go away.

    I hope it doesn't.

    I do know this. I'll never go to SeaWorld or any of its brethren again. Perhaps even more importantly, neither will my daughter, who is feeling a sense of political activism on this issue. I'm happy about that. And I hope that Blackfish (available on DVD or as a streaming video) gets widely seen.




    Two wines to recommend this week:

    • 2008 Monte del Fra Ca Del Magro Custoza Superiore, a delicious Italian blend of white wines that is delicious with a good seafood pasta. (I served it with Shrimp It's All Greek To Me," one of my favorite dishes.)

    • 2009 Field Stone Cabernet Sauvignon, which was terrific the other night when I made steak (seasoned with my favorite grilling rub from Dorothy Lane Markets) and roasted fingerling potatoes.




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

    Slàinte!
    KC's View: