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    Published on: August 21, 2017

    by Kevin Coupe

    The US Department of Commerce is out with a new study saying that “self-driving vehicles have the potential to reshape a wide range of occupations held by roughly one in nine American workers,” according to a story in the Wall Street Journal.

    The math, as laid out by the story, seems pretty simple: “About 3.8 million people drive taxis, trucks, ambulances and other vehicles for a living. An additional 11.7 million workers drive as part of their work, including personal care aides, police officers, real-estate agents and plumbers. In all, that’s roughly 11.3% of total U.S. employment based on 2015 occupational data.”

    At the same time, car and technology companies “are racing to develop vehicles that can operate without a human driver. If successfully introduced in the coming years or decades, self-driving cars and trucks have the potential to reshape whole industries — and change the careers of millions of people who work in them.”

    This is just another example of all the collateral damage that technological advances can and likely will create. They can’t and shouldn’t be stopped … but it is incredibly important that private companies and those who fashion public policy to have their Eyes Open to inevitabilities and possibilities.
    KC's View:

    Published on: August 21, 2017

    Walmart reportedly has applied for a patent on a “floating warehouse,” described in a Bloomberg story as a “blimp-style machine (that) would fly at heights between 500 feet and 1,000 feet, contain multiple launching bays, and be operated autonomously or by a remote human pilot,” with the ability to deliver products to shoppers’ homes.

    The patent application is said to be similar to one granted to Amazon in 2016, and reflects these two competitors’ desire - or need - to “lower the costs of fulfilling online orders, particularly the so-called ‘last mile’ to a customer’s house, which is usually handled by a local or national logistics company.” The Walmart application is said to be likely to be approved, if only because it goes into greater specificity than the Amazon application.

    CNBC quotes that Walmart application as saying: "In a modern retail environment, there is a need to improve the customer service and/or convenience for the customer. One aspect of customer service is the availability of products. The availability of products is dependent in part on the distribution of products. There are numerous ways to distribute and deliver products. Getting the product to a delivery location, however, can cause undesirable delays, can add cost and reduce revenue.”

    It also, Bloomberg writes, “the latest volley in a clash between Wal-Mart and Amazon to grab shoppers’ attention, loyalty and dollars. In the process, the companies are increasingly treading on the other’s turf: Amazon is opening physical stores and agreed to pay $13.7 billion for upscale grocer Whole Foods Market Inc. Wal-Mart, meanwhile, has beefed up its e-commerce business through acquisitions and offers like free two-day shipping.”
    KC's View:
    I wonder of the ghost of Sam Walton is looking around and saying, “I’m sorry. You invested in what?”

    Patenting a floating warehouse seems like such an Amazon thing to do that it seemed funny to read this story over the weekend. But I guess it is a symbol of how many different battlefields there are in this titanic struggle between Walmart and Amazon.

    I would expect that there will be a pitched battle between these two companies for people, ideas, and every possible competitive advantage. It would be foolish - maybe even malpractice - for retailers not realize this and factor it into their competitive strategies. It doesn’t mean they have to mimic Walmart or Amazon, but it does mean that they have to figure out how to be a compelling alternative.

    They can’t settle for being in the middle. Because it is the middle of the road where you find roadkill.

    Published on: August 21, 2017

    Quartz has a story about one-click technology, which Amazon built and then patented back in 1999, using it as a significant growth engine with its ability to allow people to make quick purchases using previously entered shipping an d building information.

    Since then, it is likely that any site not named Amazon offering the option probably has licensed the technology from Amazon; when Barnes & Noble tried to copy it in 1999, Amazon successfully sued for copyright infringement.

    Writing about such patents in 2000, Amazon founder/CEO Jeff Bezos wrote that it was his belief that the company’s “competitive advantage will continue to come not from patents, but from raising the bar on things like service, price, and selection - and we will continue to raise that bar.”

    That’s a good thing … because Quartz notes that Amazon’s patent on one-click technology expires on September 11, 2017.
    KC's View:
    I think Bezos is right about this - that Amazon’s advantages usually come from its ability to execute - quickly - on its strategic visions and innovations. That’s something that few companies can replicate.

    That said, I have to wonder if Amazon has something up its sleeve for the coming month, some sort of ordering innovation that will supplement its one-click advantage.

    I wouldn’t be surprised.

    Published on: August 21, 2017

    The Wall Street Journal has a report about how Amazon and other online retailers are disrupting yet another business sector - industrial supplies.

    According to the story, “As part of its business-to-business marketplace offering, Inc. now sells everything from light switches to hydraulic valves, and last month boasted it had one million customers across fields that also included health-care and office supplies. Amazon is joining a host of online sellers shaking up the roughly $130 billion U.S. market for items that keep factories humming and the plumbing working. They threaten a business largely still conducted via salespeople working out of local shops and national distributors that cater to large businesses, as customers are lured away with instant comparison shopping and free delivery.”

    The story goes on:

    “While parts accounted for a sliver of Amazon’s $136 billion in sales last year, the company is a proven disrupter of industries ranging from apparel to video to cloud-data services. Like retailers before them, industrial suppliers risk getting caught in a race to the bottom on prices, where online-only sellers have an advantage because they don’t maintain costly networks of branch offices and salespeople … Amazon is shaking up the traditional format for selling industrial parts by allowing distributors and manufacturers to sell products directly to businesses on its marketplace, eliminating middlemen and often undercutting traditional local suppliers. It also offers one-click ordering and transparent pricing, features that are the norm in online retail but less common in the industrial world.”

    But it may not be that easy, and distributors have no intention of going quietly:

    “Some distributors have a head start compared with Amazon. Many have offered next-day delivery for essential parts for decades and are experts in fulfilling orders fast, from warehouses around the country. Even smaller firms like United Electric Supply, a regional distributor based in New Castle, Del., are adding services like order tracking and same-day delivery … Distributors also offer extra services, which would require significant investment from Amazon to match. For example, United Electric Supply will work off a customer’s blueprints to determine the parts needed to build a $10 million electrical system …. Grainger embeds employees in manufacturing plants to manage inventory … (and) MSC cuts or dyes metal to meet customer specifications.”
    KC's View:
    The lesson here is simple.

    Nobody is safe. Nobody.

    But there’s another lesson, and that comes from how these industrial supply companies are competing - with better service, and with processes that take them beyond traditional operations and stress relevance. That’s a great start when it comes to being really competitive.

    Published on: August 21, 2017

    The Seattle Times this morning has a story about how the US restaurant business is “getting increasingly aggressive about technology, enlisting Facebook and in their race to make it easier for customers to order and pay for their food … The stakes are high to make restaurant technology as effortless — and fun — as possible. Customers, especially millennials, are no longer content to call up a pizza place and dictate an order over their phone. And they don’t want to wait in line at the Starbucks register.”

    Some examples: TGI Friday is letting customers pay their bills using their Amazon accounts. Papa John’s is accepting orders placed on Facebook. And, “Domino’s and Pizza Hut … have been experimenting with chat bots since last year. These platforms let users make orders via Facebook Messenger and Twitter’s service. Through conversation, the bot finds out whether you want to order one of your favorites or see the latest deals. Shake Shack unveiled a similar chat-bot program in August as part of a push for more online orders.”

    Indeed, Papa John’s recently made the argument that it is an “e-commerce company” that is much more like Amazon than like a bricks-and-mortar restaurant.
    KC's View:
    Probably also more like a tech company than an actual pizza maker.

    But I digress.

    This all plays right into the broader strategy of companies like Facebook and Amazon … to make make themselves as entwined with every part of people’s lives as possible.

    Published on: August 21, 2017

    Business Insider has a story by a reporter who went to one of its stores to use its new giant pickup kiosk/tower, and found it “easy and quick” to use, especially when compared to the manned pickup counters that often were inconvenient and inefficient.

    According to the story, “To test out the tower, we ordered several items on and selected in-store pickup. A couple of days later, we got an email from Walmart saying our order was ready.

    “When we arrived at the store, we found the pickup tower a few steps from the entrance. Its sheer size made it easy to spot — it's staggeringly large, standing more than 16 feet tall and 8 feet wide. When we approached the machine, we were prompted to scan a barcode or enter an order number. We chose to scan the barcode that was included in our email from Walmart. 

    “Within five seconds of scanning the barcode, a previously hidden compartment above the screen lit up, revealing a conveyer belt and a cardboard box that was seemingly produced out of thin air. Then a glass door retracted, giving us access to the box.

    “That was all there was to it.”

    The reporter said she was in and out of the store in about a minute.

    The story goes on to say that “it's easy to see why the company is ramping up the rollout of these towers to more stores, but the tower does have its limitations. It can only hold small- to medium-sized boxes, and it doesn't have any refrigeration capabilities for items like groceries. For groceries, Walmart is testing a much larger machine with internal freezers and refrigerators. If that machine is as easy to use as the pickup towers, it will be a game changer for Walmart's grocery business.”
    KC's View:
    The thing that sticks out to me about this story is how it took a couple of days from the time the order was placed to when it was available in store. Wasn’t it just last week that Amazon announced its expansion of Instant Pickup program, trying to shorten the wait from hours to minutes.

    Which ought to give you an idea of how this competition is going to play out.

    Published on: August 21, 2017

    The New York Times had a long piece over the weekend about how in a time of divisive political and cultural debate, America’s CEOs are testing their moral voices “more forcefully than ever.”

    An excerpt:

    “After Nazi-saluting white supremacists rioted in Charlottesville, Va., and President Trump dithered in his response, a chorus of business leaders rose up this past week to condemn hate groups and espouse tolerance and inclusion. And as lawmakers in Texas tried to restrict the rights of transgender people to use public bathrooms, corporate executives joined activists to kill the bill.

    “These and other actions are part of a broad recasting of the voice of business in the nation’s political and social dialogue, a transformation that has gained momentum in recent years as the country has engaged in fraught debates over everything from climate change to health care.”

    This transformation, the story suggests, “didn’t happen overnight. Chief executives face a constellation of pressures, and speaking up can create considerable uncertainty. Customers can be offended, colleagues can feel isolated and relations with lawmakers can suffer. Words and actions can backfire, resulting in public relations disasters. All this as a chief executive is expected to constantly grow sales.”

    In the end, these CEOs decided that while their companies “are naturally designed to be moneymaking enterprises,” events required them to adapt “to meet new social and political expectations in sometimes startling ways.”

    You can read the entire story here.
    KC's View:
    I know that some folks found the events of last week, especially as it related to how CEOs reacted to the events in Charlottesville, to be profoundly annoying. And there will be some folks who will continue to argue that Target’s recent decline began the moment it took what was seen as a “liberal position” on the bathroom and gender identification issue.

    But I would argue that while CEOs were making decisions that they believed had moral and ethical considerations, these decisions also had long-term business implications. I think they see a world in which their customer bases are becoming incredibly diverse, in which young people are more tolerant than ever, and in which they need to position their companies (and probably even themselves) for where they see the long-range curve line headed.

    Published on: August 21, 2017

    • In a story about Amazon’s new Instant Pickup initiative, The Street writes:

    “By offering a way to quickly pick up items that consumers want ASAP while providing the convenience of online ordering, Instant Pickup takes aim at convenience store chains that typically sell such items at decent markups … With Instant Pickup, Amazon is also undoubtedly hoping to drive additional Prime sign-ups -- especially for its Prime Student service, which gives college kids a free six-moth trial of Prime and a 50% discount on membership fees afterwards. Jeff Bezos' firm, believed to have over 50 million U.S. Prime subs and tens of millions overseas, has already stepped up its efforts to grow Prime's U.S. base this year by offering discounts to consumers using food stamps or other government-assistance programs.”
    KC's View:

    Published on: August 21, 2017

    • The Dallas Morning News reports that “Wal-Mart is stirring the pot and defending its fast-growing online grocery business in the Dallas area by partnering with Uber to make home deliveries. The test with Uber started last year in Phoenix and expanded Monday to Dallas and two Florida markets, Orlando and Tampa … The announcement comes as discount grocery rival Aldi said last week that its customers can chose to order online through Instacart later this month. All of a sudden, local customers have more than half a dozen options for completing the family's grocery shopping without leaving the house.”

    According to the story, “The fee is a flat $9.95 and charged by Wal-Mart, who pays Uber. Same-day orders must be made by 1 p.m., and customers choose one-hour delivery time slots.”
    KC's View:

    Published on: August 21, 2017

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

    • The Wall Street Journal reports that B&G Foods will buy SnackWell cookies and Back to Nature granola for $162.5 million, acquiring the two brands from a joint venture between Mondelez International and private-equity firm Brynwood Partners. The goal is for B&G to develop a more relevant portfolio to complement longtime brands such as Cream of What and Green Giant vegetables.

    WTOP News reports that Capital One Financial “is opening its first two Washington Capital One Cafe locations — one in Georgetown and the other in Chinatown — next year, and they combine banking with places to hang out, get some work done, tap into free Wi-Fi, and grab a coffee or something to eat.

    “The concept is like a Starbucks that is also a bank, with baristas working alongside financial planners doling out free advice. The locations will also be open to the public, not just Capital One customers.”

    The story notes that “the cafes will be staffed by ‘Cafe Ambassadors’ that can talk to people about their money habits and goals. And they offer free financial planning services such as money coaching and money workshops. They also include free meeting rooms for entrepreneurs, students, retirees and nonprofits to use.”

    Michael Sansolo wrote about this concept a few years ago, and was very impressed. You can read his piece here.
    KC's View:

    Published on: August 21, 2017

    • Jerry Lewis, one of the more enduring comedians of the 20th century, polarizing in much of America while beloved in France, died yesterday of natural causes. He was 91.

    Lewis first found fame as the hyperactive partner to crooner Dean Martin; Martin & Lewis was one of the most successful nightclub acts of the 1950s. After their acrimonious breakup, Lewis went on to make (and direct) movies, perform in Las Vegas and on television, and become a highly visible spokesman for the Muscular Dystrophy Association through a series of telethons that ran over four decades.

    Later in his career, after having seen his popularity significantly decline, Lewis played more dramatic roles, both on television and, most notably opposite Robert De Niro in Martin Scorsese’s The King of Comedy,

    • Dick Gregory, the pioneering black comedian who once said that his goal was to “be a colored funny man, not a funny colored man,” passed away over the weekend. He was 84.

    Gregory was a breakthrough performer in his willingness to address the civil rights and racial issues of the sixties, and often was compared to the most trenchant satirists of the period, Mort Sahl and Lenny Bruce. With jokes like, “Segregation is not all bad. Have you ever heard of a collision where the people in the back of the bus got hurt?,” Gregory managed to get laughs while often missing club dates to participate in a wide variety of social protests.
    KC's View:

    Published on: August 21, 2017

    Got the following email, following up on our story about a new business that wants to sell $9.99 monthly passes that would allow people to go to one movie a day, from an MNB reader:

    Last week you had a reader email in about the MoviePass idea, where they alluded to being able to watch any movie they wanted online as opposed to going to the movie theaters. You correctly identified that he was talking about watching pirated content and you said you weren't cool with that.

    So I ask what's really wrong with "illegally" watching media online for free?

    I get that it's illegal because media companies that produce and own this content have the explicit right to release it to the public in whatever fashion they choose. I also get that by stealing this work you are also taking money out of the pockets of the people that create it. If enough people watched these TV Shows and movies online that it could potentially put a lot of people out of work.

    However, isn't this the same issue the music industry experienced years ago with Napster. Yes, Napster was eventually shut down but it gave birth to the idea of iTunes and eventually the subscription based model we are seeing now. The music industry was never the same after that point and some industry types might say for the worst. While music listeners might say it was for the better as now we have access to nearly any song we want whenever and wherever we want it.

    We also see this issue in the medical field when people don't have access to certain life saving drugs so they go overseas to get riskier versions. Obviously, the consequences of getting risky medical procedures are much more dire here than having to wait to see the latest episode of “Game of Thrones” the day it airs but the similarities are still there.

    All I'm trying to say is that with the advent of the internet and the ability to share media anywhere and everywhere, isn't it time that the movie and TV industry caught up? The industry is ripe for some innovation that makes sharing media across borders easier and better than it is now.

    I’m reminded of the line from The Big Chill in which Jeff Goldblum’s character says rationalizations are more important than sex: “Ever gone a week without a rationalization?”

    Here’s the deal. If people only steal “Game of Thrones,” it’ll mean that HBO won’t have the money to produce “Game of Thrones.” So there will be no “Game of Thrones.”

    I think your comparison to going abroad to get medical procedures is specious. After all, I’m guessing that most people are still paying for those operations … just not in the US.

    I also think you might take a different position if folks were stealing from you.

    MNB reader John Rand wrote:

    Am I the only one who finds it interesting that Walmart seems to be positioning Jet as an alternative for a certain class or type of shopper, while having spent many years failing to fully commit to do the same for Sam’s Club?

    In so many ways, the devotion to the Supercenter as the primary format and the standard for performance has made it more difficult for Walmart to nurture alternatives. Either Walmart has finally realized they need to diversify for real this time in order to appeal to different shoppers with a different proposition – or else this will revert in time, and such labels as Bonobos, Modcloth and even Jet itself will struggle with the moral equivalent of being stuck in the same parking lot as a conventional supercenter.

    Also got the following email, and my reference to a Baseballism t-shirt that says “6+4+3=2.”

    Enjoyed the article about Baseballism, but not being a fan, had to go to my husband for the solution to the equation, for which he immediately emailed  the explanation back.  But when I said “Thanks—Like Tinker to Evers to Chance?”—he didn’t have a clue to the reference.

    Is that too far back for you, too?  I can see that emblazoned on one of those tees, it seems so much a part of the culture.

    I’m not quite old enough to have seen them play - Joe Tinker, Johnny Evers and Frank Chance were a double-play combination for the Chicago Cubs from 1902-1912.

    From another reader:

    How is it that I have lived in Portland for many years and have never heard of the Baseballism store! My husband is a huge baseball fan and now I know where to go for an Xmas gift.  You do know Portland isn’t a baseball town?  It is all about college football and soccer.  How will you survive when you eventually move here?  You can go see the Seattle Mariners in a great ballpark but they don’t play “real” baseball like they do in the National League.  We survive by planning vacations around the SF Giants schedule.  This summer we went to Detroit (lots of sightseeing here, who knew?) and Toronto (ranks toward the bottom of my ballparks list).

    Have you ever seen the documentary The Battered Bastards of Baseball, about minor league baseball in Portland? It’s terrific … available on Netflix … and I reviewed it here.

    Finally, MNB reader Peter Talbott wrote:

    We always stop at Baseballism and then at the Sugar Bowl for ice cream after attending SF Giants Spring Training games in Scottsdale AZ.  Despite the lack of the Mets presence, you should try the Cactus League!

    I’ve been to spring training games in Arizona. In 2014, my brothers and I took our dad, then 87, to a bunch of games there. While he had dementia, he was still pretty mobile and with it, and we had an amazing time … it is one of my best memories.
    KC's View: