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    Published on: May 23, 2016

    by Kevin Coupe

    Last week, Google unveiled a new product - Google Home - which at its most basic can be described as competition to Amazon's highly successful Echo ... a voice-activated computer without a screen or keyboard that can be used to activate and access a variety of products and services.

    This new product introduction, a variety of stories point out, reflects what is likely to be a new level of competition in the high-tech sector.

    Time writes that "for consumers, Google Home and the Amazon Echo can answer questions about the weather, set alarms, and manage appointments, among other tasks. For the companies that make them, the devices offer a new source of valuable data about their customers — as well as a shiny new gizmo to keep consumers tied more closely to their respective ecosystems."

    But The New Yorker points to something more elemental about this new competition - that, as Google CEO Sundar Pichai says, "because computing technology is becoming smaller and more powerful, computers can be built in all kinds of forms. Building devices is no longer hard. The difficult part - and the part that will distinguish products from one another - is the experience that computers facilitate."

    This strikes me as an observation that is both highly specific to this competition as well as a metaphor for much of retailing.

    Specific, I think, because people are going to be making choices based on both the relevance of the accessible services and the ecosystem with which they are most familiar. I've actually got an Echo on order - mostly because the experiences that friends and family have had with it have been so positive that it simply became a no-brainer. We ordered it before the Google Home came out, but I have no regrets ... for better or for worse, I've found a home within the Amazon ecosystem and a level of comfort that I would never ascribe to Google's.

    (What is amazing to me is how irrelevant to this whole discussion Apple's Siri seems to be - it only seems to be mentioned in this conversations when people describe the Echo as "like Siri, but it works." Talk about a missed opportunity.)

    In a metaphorical sense, I think that Pichai's comments are important. The retailing box is far less important than the products and services they offered ... and those products and services have to be measured in terms of the relevant experience they provide.

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

    Published on: May 23, 2016

    The New York Times reports that the US Food and Drug Administration (FDA) on Friday finalized major changes to the nation's food labels, "with calorie counts now shown in large type and portion sizes that reflect how much Americans actually eat." The change is described as "the first significant redrawing of the nutrition information on food labels since the federal government started requiring them in the early 1990s.

    "Those labels were based on eating habits and nutrition data from the 1970s and ’80s and before portion sizes expanded significantly. Federal health officials argued that the changes were needed to bring labels into step with the reality of the modern American diet."

    The changes, the Times writes, "jump out. The calories are in large bold numbers, and are easier to spot at a glance. A single ice cream serving is two-thirds of a cup — compared with the current half cup." In addition, the new label has a line for "added sugars," which was criticized by the Sugar Association as being without "scientific justification."

    The Times reports that "most food manufacturers will be required to use the new label by July 2018. Producers with less than $10 million in annual food sales will have an additional year to comply."
    KC's View:
    This strikes me as a no-brainer. And when organizations like the Sugar Association take such entirely predictable and self-serving positions, it seems to me that they do nothing but undermine their own credibility.

    Published on: May 23, 2016

    A listeria outbreak "has been linked to foods packaged by a processing plant in Washington State," the New York Times reports, leading to "a large-scale voluntary recall of frozen fruits and vegetables marketed under 42 brand names." Indeed, a spokesperson for the Center for Disease Control and Prevention (CDC), says that the extent of the recall "reflects the severity of the outbreak of the illness ... and of concerns about how the contaminated food might have 'trickled down' into other products."

    The plant, CRF Frozen Foods, has recalled more than 350 SKUs that were sold in all 50 states and Canada, under brand names that include Earth’s Pride, Signature Kitchens and Trader Joe’s. The recall includes all frozen products processed or processed at the plant since May 1, 2014.

    The Times notes that while CRF has closed the plant in question and a public relations executive representing the company says that it is trying to pinpoint the source of the contamination, food safety inspectors have found "chipped and cracked pieces of plastic on parts of equipment that came into contact with onions, among other violations."
    KC's View:
    One of the things that is interesting about this recall is that regulators apparently are concerned that even though many of the products recalled have passed their expiration dates, customers may not pay attention to these dates because the food is frozen and they are under the misimpression that the dates don't matter. This comes just a few days after legislation was introduced in the US Senate and House of Representatives that would make expiration date labeling more consistent and coherent. Maybe they need to add "more visible and insistent" to the description.

    When I read stories like these, it reinforces how important the new Food Safety and Modernization Act (FSMA) is; companies - and their senior executives - need to adhere to the rules ... keep detailed and accessible records ... and be held accountable when they don't measure up.

    Published on: May 23, 2016

    The Wall Street Journal reports on how Philadelphia lawmakers are "weighing a tax that could raise the price of a can of Coke or Pepsi by more than half and sharply curb consumption of sugary drinks ... Philadelphia’s proposed levy of 3 cents an ounce is three times higher than in Berkeley, Calif., the first U.S. city to pass such a measure. Philadelphia’s city council plans to vote in June on the tax, which would cover regular soda and other sugar-added beverages including sports and energy drinks and ice tea."

    The story notes that the city's political leaders want to use the tax money "to pay for prekindergarten and other popular services."

    The tax is opposed by both corporate and labor interests, including the American Beverage Association, which has spent $3 million for advertising that criticizes the bill, as well as "local retailers, restaurants and the International Brotherhood of Teamsters," which oppose the tax, "warning grocery bills would soar, jeopardizing thousands of jobs and hitting the poor the hardest."

    It was just last week that San Francisco passed a bill requiring soft drink companies to put health warnings on their ads.
    KC's View:
    I'm not sure that it follows that creating this tax with necessarily curb the consumption of sugary drinks. And the logic of putting the tax money toward specific services escapes me ... since if the tax is successful and people stop buying the stuff that's taxed, the funding for pre-K education would then dry up. Which means that you didn't really value it very much to begin with.

    Published on: May 23, 2016

    The Associated Press reports that Leon's Frozen Custard in Milwaukee, Wisconsin, is under fire from some quarters because of its policy of only taking orders in English - a decade-old policy that got new publicity last week when "a Spanish-speaking customer was told by a Spanish-speaking employee that she was only allowed to take his order in English."

    The story says that "the Wisconsin chapter of the League of United Latin American Citizens says the policy violates federal labor law. The group is calling for a government investigation."

    Owner Ron Schneider says that "he doesn’t want to encourage non-English orders because it’s going to be 'a problem down the road,' adding that 'we can’t be the United Nations.' He says no customer has ever been turned away."
    KC's View:
    The controversy sounds similar to one created by Geno's Steaks in Philadelphia, where ownership once posted a sign saying, "This Is AMERICA: WHEN ORDERING SPEAK ENGLISH." (They said they'd taking orders in other languages, but customers should have no expectation that they'd get the sandwich they ordered.)

    In so many ways this stuff is about politics, not commerce. If you have a Spanish-speaking employee and a Spanish-speaking customer, why you'd want the employee to only use Spanish to tell the customer that he or she has to speak English to get a frozen custard beats the hell out of me. This becomes about picking a fight and making a political point, and nothing else.

    Me, I'd rather sell the cone.

    Published on: May 23, 2016

    The Seattle Times has a profile of Stephenie Landry, vice president of Amazon Prime Now, who has been spearheading the company's super-fast delivery initiative.

    Here's how the Times frames the story:

    "In spearheading the launch of the superfast Prime Now delivery service, Amazon.com executive Stephenie Landry knew the challenge would be steep.

    "It was unclear whether customers really wanted a service that delivered their Amazon purchases within one or two hours; no focus groups were held to determine that.

    "But Landry, a rising star at Amazon who has participated in a series of high-profile projects at the company, including the creation of AmazonFresh grocery deliveries in Seattle nearly a decade ago, was confident they would.

    "In the mock news release that’s part of every Amazon pitch, the 38-year old native of New York jokingly called the service 'Amazon Magic,' a reference to products appearing on the consumer’s doorstep so quickly that it could be deemed an act of wizardry. It was an idea that jibed with what is perhaps the glue that holds together Amazon’s increasingly diverse array of businesses, from cloud computing to diaper deliveries: making things convenient for customers."

    Landry is a competitor of note ... and the profile is worth reading here.
    KC's View:
    It is also worth noting that it took 111 days to take Amazon Prime Now from green-light to launch ... which is extraordinary. It also ought to scare the hell out of anyone trying to compete with Amazon using traditional metrics.

    Published on: May 23, 2016

    Internet Retailer is out with a new report saying that "10 of the largest marketplace operators in the U.S., which include Amazon.com Inc., eBay Inc., Etsy Inc., Jet.com and others, sold more than $100 billion worth of goods to U.S. consumers in 2015 ... These shopping portals, where consumers can purchase from several merchants on one website, are gaining momentum as retailers are turning to marketplaces to reach more consumers and grow their businesses."

    Furthermore, "nearly 65% of consumers surveyed said they feel comfortable purchasing from merchants they’ve never heard of before on marketplaces."

    What this means, the report says, is that online marketplaces have the potential of becoming the shopping malls of the future, with enormous implications for leveling the playing field for both big and small companies and creating enormous accessibility for shoppers.

    You can read more of the study here.
    KC's View:

    Published on: May 23, 2016

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

    • The New York Times has a story about a company called Beyond Meat that says it has come up with a robust plant-based alternative to the hamburger - and that will go on sale this week in a Colorado Whole Foods, where it will be sold out of the same case that has beef, poultry, lamb and pork. According to the story, the manufacturer was focused on several specific issues - "it had to ensure that the middle of its burger would stay moist, pink and juicy as the exterior cooked to that distinct dark brown of a traditional hamburger," and the burger had to "bleed," something that was accomplished through the use of pulverized beets. And, the burger "had to emit the same smell as cooked beef."

    I'm not saying it is impossible, but it is hard for me to reconcile in my mind the notion of a burger made from veggies - including beets, which I hate - that also smells like cooked hamburger. It just doesn't sound natural. I guess I might try it at some point ... but I'm not exactly champing at the bit.


    • The Boston Herald reports that Staples is considering the sale of its European business as it strategizes for survival after its planned acquisition of Office Depot was blocked by regulators because of concerns about competition. The story says that "Staples plans to increase its focus on mid-market business customers with 10 to 200 employees, adding 1,000 sales reps and pursuing acquisitions of business-to-business companies specializing in products beyond office supplies."

    Last week, Office Depot said that it is ""considering selling some of its European operations" to generate cash, as well as looking at "various capital structure and shareholder return alternatives."


    • The Cincinnati Business Courier reports that "Kroger Co. union workers at 41 stores in the Roanoke, Va., area have voted to authorize a strike. The roughly 1,100 United Food and Commercial Workers Local 400 members unanimously voted Wednesday to reject Cincinnati-based Kroger’s offer and authorized a strike. The union represents about 3,000 employees."

    The two sides continue to negotiate, and a contract extension through June 4 has been signed.
    KC's View:

    Published on: May 23, 2016

    Alan Young, the affable actor best known to a generation of television viewers as Wilbur Post, who owned a talking horse named Mr. Ed in a situation comedy of the same name than ran during the early 1960s, has passed away. He was 96, and passed away of natural causes at the Motion Picture & Television Home, a retirement community.
    KC's View:
    I was curious over the weekend, so I asked Mrs. Content Guy if she remembered the "Mr. Ed" theme song ... and without hesitation, she sang it, getting it word-for-word right. Which says something, I think, about how a silly idea can reside in memory for a long, long time if somehow the ingredients are right and the concept resonates.

    You can watch the very first episode of "Mr. Ed" here ... and I have to admit that I actually laughed at it. There's just something so innocent and sweet about it ... maybe it was just because we live in a world where very little seems innocent and sweet.

    Published on: May 23, 2016

    ...will return.
    KC's View: