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    Published on: October 9, 2017

    by Kevin Coupe

    AOL Instant Messenger (AIM), which was released in 1997 and served as the progenitor for text messaging - as well as Google Chat, Facebook, Twitter, Instagram, and Snapchat - is being shut down on December 15, the company announced.

    While the service has “faded into obscurity,” the New York Times reports, at its height AIM “served as the social center for teenagers and young adults, the scene of deeply resonant memories and the place where people learned how to interact online.”

    The Times writes that “the news of its official demise was met with cries of nostalgia, especially from those who were coming of age as AIM rose to prominence. For many people now in their 20s and 30s, learning to talk online coincided with learning to communicate like an adult … The chat program was a workaround for the typical clumsiness and anxiety of adolescence. Too shy to talk to the boy at his locker? You could go home and chat with him for hours. Scared of inviting the girl to homecoming? You might find more courage on AIM.”

    But to everything, there is a season.

    Turn, turn, turn.

    Unless, of course, you do something to prevent fading into obscurity. It seems to me that irrelevance is not inevitable … unless, of course, you don’t pay attention to how consumers are changing, how technology is changing, and how the competition is changing.

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

    Published on: October 9, 2017

    There were multiple reports over the weekend about how analysts expect Amazon to move into the prescription drug business, with CNBC saying Amazon expects to make a decision as soon as Thanksgiving.

    If Amazon makes such a move, CNBC reports, “it will start expanding its senior team with drug supply chain experts. Amazon typically spends years researching opportunities before it telegraphs its intentions. The opportunity to sell drugs online is alluring given its market size -- analysts have estimated the U.S. prescription drug market at $560 billion per year. Amazon is well aware of the complexities, say sources familiar with the company's thinking.”

    Bloomberg writes that “Amazon could quickly grow in prescription drug sales and distribution, especially if it bought a mid-sized drug benefit manager and used it to create a more transparent pricing model, said Linda Cahn, a consultant at Pharmacy Benefit Consultants in Morristown, New Jersey.

    “Pharmacy benefit managers, or PBMs, administer drug benefits for employers and health plans, processing the prescriptions pharmacies dispense. Currently, final prices for many drugs are negotiated in secret deals between drugmakers and PBMs.” Amazon conceivably could make pricing transparency a core differential advantage if it were to get into the PBM business.

    The Bloomberg story notes that “Amazon has a long standing interest in prescription drugs, an industry with multiple middlemen, long supply chains and opaque pricing. In the 1990s, it invested in startup and Amazon Chief Executive Officer Jeff Bezos sat on the board. Walgreens eventually purchased the site and shuttered it last year to focus on its own branded website … Last November, Amazon began a partnership with Seattle-based pharmacy Bartell Drugs to deliver over-the-counter drugs from its stores to shoppers through Amazon’s delivery service Prime Now. The partnership helped Bartell create an online presence to rival Walgreens. It also gave Amazon access to convenience items close to customers through Bartell’s store locations.”

    Amazon has not commented on the reports.
    KC's View:
    My sources tell me the same thing … that it is a matter of “when,” not “if.”

    If Amazon does this, it won’t just affect the likes of CVS and Walgreen … it also will erode the pharmacy businesses built up by every food retailer. It won’t all happen at once, but in small nibbles that will add up to enormous bites.

    Published on: October 9, 2017

    The Financial Times reports that Walmart has announced that it “will streamline its returns process so that customers can be in and out of a store in about 30 seconds, compared to an average of five minutes earlier this year.”

    The move is a response to a simple reality - the growth of online shopping has meant a growth in the number of returns; while people may shop Walmart online, they choose to return products to a bricks-and-mortar store. “Between 15 and 30 per cent of purchases made over the internet end up being returned, analysts estimate, compared to less than 10 per cent of in-store purchases,” the story says.

    FT writes that Walmart says that it will “give customers refunds on certain household goods, including shampoo and make-up, without asking them to physically return the product at all, meaning Walmart will swallow the cost.”

    TechCrunch explains even further: “People who purchase items online and then need to return them can do so by logging them on the Walmart app, generating a QR code for the transaction, and then walking into a physical Walmart store to return or exchange the items quickly. In certain cases such as orders with bulky items, customers can simply keep them and still get a refund, a program it referred to as ‘keep it’ in an interview last week.

    “Mobile Express Returns is due to launch in November of this year and get rolled out to all of Walmart’s 4,700 stores in the U.S. The service will also expand in 2018 to cover third-party sellers on’s online marketplace.”

    At present, the story says, there are no plans to allow people who buy online from Walmart-owned Jet to return those items to a Walmart store.
    KC's View:
    I think the thing that surprises me the most about this is the exclusion of Jet from the returns model - this doesn’t make sense, and doesn’t take advantage of store proximity that should be to Jet’s, well, advantage.

    The returns issue is an important one, and does play to Walmart enormous fleet of stores … and it also points to why Amazon is likely to use Whole Foods’ fleet of stores as a tool to facilitate returns. Sometimes, it seems to me, it may not be the last mile to the customer that matters most to shoppers, but rather the first mile back to the retailer. It is important to have a presence on both stretches of road.

    Published on: October 9, 2017

    The Washington Post reports that when Costco announced two new delivery options last week - one in-house, of nonperishable food, and the other an expanded partnership with Instacart - it made the company more competitive with the options offered by rivals Amazon and Walmart.

    So what happened? “Shares of the company’s stock tumbled 6 percent Friday following the announcement,” the Post writes.

    The reason? According to the Post, “some analysts worried that Costco — which has been successful at getting people to make impulse purchases at stores — may lose its edge if fewer shoppers are roaming its aisles.”
    KC's View:
    The thing that Costco has proven over the years is that it is relatively unconcerned with the vagaries of analysts’ rationale. The company has long acted upon the firm conviction that if it takes care of its employees and customers, Wall Street will take care of itself.

    There is a legitimate argument that perhaps Costco has waited too long to get into the game, but I wouldn’t be worried about the whole impulse issue. I’ve long argued that Amazon is a strong engine for impulse purchases … not because I may happen to wander down a random aisle, but because they track my behavior so closely that they know what offers to which I am likely to respond.

    Impulses can be created via a lot of mechanisms. Costco is smart enough to know this, and respond appropriately.

    Published on: October 9, 2017

    The Wall Street Journal reports that while Lidl’s first US stores were successful at luring shoppers from other retailers, it “hasn’t been able to sustain that level of traffic, and grocers including Kroger Co. and Wal-Mart have recovered much of their lost market share.”

    Some context:

    “In June, Lidl was drawing 11% of consumer visits to traditional grocers in nine markets in Virginia, North Carolina and South Carolina, according to data that inMarket shared with The Wall Street Journal. By August, Lidl’s share of that traffic fell below 8% … Lidl’s share of grocery visits declined in that period even as it was opening more stores in those states. Lidl has opened 37 stores in five states and plans to operate as many as 100 in total, from New Jersey to Georgia, by next summer.

    “When more-diversified food sellers such as Wal-Mart and Target Corp. are included, inMarket says Lidl’s share of shopping trips in those states peaked at nearly 3% in June before falling in July and August. Lidl recovered some traffic in September, reaching 2% of the market.”

    However, Will Harwood, a Lidl spokesman, says, “This is designed for us to learn and adapt and be nimble. It’s not about whether our model works in a market, but what we do to adapt to that market.”
    KC's View:
    First of all, let’s be clear about something. This is early days, and Lidl has plenty of running room in which it can adjust its offer to make it more compelling to shoppers. They have to act nimbly, not just talk about being nimble, but it seems to me that this is not out of the realm of possibility. And, even if its market shares are not what some thought they would/should be, Lidl also can have an impact on the expectations game, affecting the competitive environment in a way that can impact margins and profits.

    Published on: October 9, 2017

    • The Wall Street Journal reports that Amazon has a problem with some luxury brands that are resisting the siren call of doing business with the e-commerce behemoth.

    “Amazon is courting companies across the retail spectrum, but one sector is still mostly holding out: the world’s club of luxury brands,” the story says. “Swatch and other high-end retailers say Amazon’s online marketplace undermines the strict control they say is key to maintaining a sense of exclusivity—and keeping prices high. While some makers of luxury products have decided to join Amazon, many of the industry’s biggest players—including Swatch, Gucci owner Kering, luxury-watch maker Cie. Financière Richemont SA and LVMH Moët Hennessy Louis Vuitton SE —are staying away for now.”

    According to the Journal, “The absence of high-end products has hampered Amazon’s push to be a force in the fashion industry, despite years of working to expand the merchandise it sells officially though its website. Adding luxury goods would help Amazon boost margins and build loyalty among customers of Amazon Prime, its premium service favored by higher-income shoppers that offers faster delivery and other perks, according to former executives familiar with the company’s shopper base.”
    KC's View:

    Published on: October 9, 2017

    The Chicago Tribune reports that as Amazon looks for a second headquarters location around the country, real estate developers are suggesting that there are a lot of places offering the kind of space that Amazon can use.

    Shopping malls. You know, the very places that Amazon has helped make irrelevant and, in some cases, obsolete.

    According to the paper, “Shopping malls can be massive, big enough on their own to meet the space requirements Amazon laid out for its second home. They also tend to be located within reach of the highways, population centers and airports that Amazon mentioned in its wish list of characteristics for what it calls HQ2.

    “Another advantage: easy availability. Increasingly, malls are vacant.”
    KC's View:
    Christopher Hitchens once wrote that his favorite virtue was “an appreciation for irony.”


    Published on: October 9, 2017

    • The Detroit Free Press reports that Kellogg “plans to buy protein-bar RXBAR for $600 million, a move aimed at adding a new product to appeal to younger customers and boost sales.”

    The move is said to be “no surprise as Kellogg tries to diversify its products, acquiring Pringles and other brands, and as millennials - the generation born sometime between the early 1980s and the early 2000s - seem to be losing their appetite for sugary cereal … In 2000, its portfolio was 70% cereal, 20% snacks and 10% frozen foods, according to the company. Now, Kellogg said, its business is about 40% cereal, with more than half of the company's sales in snack foods.”
    KC's View:

    Published on: October 9, 2017

    Last week, MNB reported on the fact that Dannon ended its endorsement deal with Carolina Panthers quarterback Cam Newton, after Newton in a press conference disparaged a female sports reporter who asked a question about the physicality with which wide receiver Devin Funchess runs his routes.

    I commented:

    The thing is, Newton has a mother, a significant female other, and a daughter … like a lot of men who behave in a sexist manner. When will these people realize that it is attitudes like theirs that contribute to the holding back of people that they presumably love?

    I drew a connection to the stories about Hollywood movie producer Harvey Weinstein; the New York Times wrote last week that he has engaged in almost three decades of sexual harassment of employees, reaching at least eight financial settlements during that time. Yesterday, Weinstein was fired by the production company he co-founded.

    And I wrote:

    It isn’t just football players and Hollywood producers. It is executives in all lines of work (even presidents), people who think that because they have some power, it gives them the right to exploit people who work for them or want to work for them.

    This kind of B.S. has to stop. And it is up to people who don’t engage or sanction this kind of crap to call out the people who do.

    Now, in the original version of this commentary, I had one more line, saying that men needed to “show some balls.:”

    Shortly after MNB was posted on Friday, I got a voice mail from an MNB reader who identified herself as a female executive who agreed with almost everything I’d written, but that my “show some balls” line crossed the line because it equated “balls” with the ability to lead … which in many ways is the root of the problem.

    I also got a number of emails along this line.

    MNB reader Jim Huey wrote:

    Kevin, I’m wondering if the females that are also disgusted by this behavior should  “…show some balls”. I find your comment to be on the same line as Cam’s, and one could argue it is worse as it contains a sexual reference.  Should your sponsors drop you?

    MNB reader Colin Lyons wrote:

    I agree with everything you said in response to this story. Except for the last sentence. "quite frankly, they should show some balls.”

    This is sort of vernacular gets closer to the root of sexism in the world. It lives in our words every day. The implication that you make here is that having "balls" is the position of power. It also implies that the people that are not calling sexism out in the workplace don't have any "balls", just like women. In the future I would suggest words like courage, valor, bravery. I know a lot of women that are much more courageous than I am. Despite their lack of “balls”.

    From another reader:

    really appreciate you giving airtime to the situations with Cam Newton and Harvey Weinstein – these are things that I hope we are moving farther and farther away from each day. Clearly, I am reminded that we still have a long way to go when these situations continue to arise. Talking about it in public spaces, such as your newsletter, are some of the best tools we have to educate the public and continue to make positive change, so again, thank you!

    I would like to provide one piece of advice, however. I understand it’s a common expression to say “grow/show some balls” in regards to standing up to something, gaining strength, etc. This phrase needs to go away. If I may be candid, which I plan to be, balls are weak and therefore a poor representation of strength. It suggests that to be strong, one must have balls – which is obviously impossible for women. Additionally, it continues this “expectation” for all men to manifest a “manly” demeanor, which simply isn’t the only demeanor held by men and the phrase unfairly puts all men in a box to be manly and strong. There is another reason I bring this phrase to your attention, and again, I apologize, but I will be very candid. As a woman, it is entirely infuriating to have the phrase of “grow/show some balls” refer to being strong and to have the phrase of “pussy” to describe someone weak. This is something very near and dear to my heart and at most opportunities I challenge anyone who uses these phrases because they contribute unfairly to the way men and women are represented.

    I thoroughly enjoy reading your articles every day, I think you have a clear-minded approach and you do a nice job at analyzing several angles of various issues. I just felt compelled to offer my opinions on this topic because as humans, we all have opportunities to better ourselves and to fight the inherent biases that we all hold. I completely agree that men (along with women) need to challenge sexist viewpoints, along with all other disparaging remarks, but I feel we need to do it without challenging someone to “show some balls.”

    MNB reader Barrie Berquist wrote:

    I agree with your statements about the need to end sexist remarks and for people to refuse to tolerate that kind of behavior.  However, your comment about the need for people to “show some balls” is exactly the kind of language that perpetuates the situation.  (Such) expressions … imply that being a man is superior and represents strength, confidence, courage, etc. while being female means the opposite.  Companies that seek to empower women and change the narrative have addressed these kinds of expressions such as the Always “Like a girl” campaign, which I first learned about from MNB.  Please do not use expressions that degrade women, even in jest.

    FYI, I enjoy your articles and think you do a great job navigating the political and controversial subjects.  I am politically conservative but think your assessments are usually fair even when I may disagree.  Please continue to keep the conversations going and continue to take the constructive criticism with grace.

    As noted above, the “balls” line was in the original version of the commentary. I didn’t have to get a lot of emails to convince me that I should go back in and take out the offending line.

    I don’t mind offending people. In some ways, I do it for a living.

    But in this case, my intentions misfired.

    My goal was to be ironic … the fact is, some guys think that because they’re guys, they can behave any way they want. My point was that this is untrue … that a real man knows that correct behavior has nothing to do with gender.

    But…I got enough blowback - all of it “constructive criticism” - on this that I removed the offending statement.

    I like to think I still have the capacity for personal growth.

    I did get other email about this subject, by the way.

    One MNB reader wrote:

    Now, I love football, but I gave up on the NFL when they put the dollar ahead of the sport.  I think Cam Newton AND Colin Kaepernick have a freedom of speech, but I also have the right  disagree with them.  Colin, I think was flat out wrong in his protest, but he has that freedom to be wrong.  I'm not sure Cam was wrong.  I don't know if there is a subtle underlying meaning to "routes", but I too would have thought it somewhat funny when most women don't know what inning half-time falls in.

    So my advice to Colin is, quit whining and just do your job.  Keep your politics for your time off.

    To Cam, I'd advise... "You have the right to remain silent, anything you say can and will be twisted by the women you come in contact with.”

    I'm afraid there will never be equality in this country.  Neither gender equality nor racial equality.  This doesn't mean we shouldn't strive for it, but just realize that there will always be someone somewhere that wants to twist the premise, so as to advance their own political conclusion.  What percentage of women really want to push for equality, what percent want to go beyond equality to "pay back time", and what percentage are sick and tired of the hoopla and just don't care.  I don't know, but I'm betting that the last group is the largest and the most silent.  I know blacks and hispanics in all 3 groups as well.

    I have no idea what demographic group this reader falls into. But it is funny how it generally is white males who argue that women and minorities are willing to twist the equality issue “to advance their own political conclusion.” Because white guys would never do that, of course.

    Give me a break.

    I really liked this email from MNB reader Dan Jones:

    Like so many I am disappointed by Cam Newton.  What he did was wrong.  But I am also disappointed that in an entire room full or reporters, not one spoke up and said a thing to defend their female colleague.  That is wrong too.

    I hadn’t thought about this, and wasn’t aware of how the other reporters reacted.

    I’m a firm believer that whenever any public figure tries to demonize or diminish the legitimate press, these reporters ought to stand together, hard and fast and firm.

    And then, I got a couple of emails from MNB reader Hy Louis. The first one:

    I can sort of see how the question caught Cam off guard.  Women reporters usually take a different approach than men.  Both genders do their jobs equally, yet normally using a different approach.  Cam just needed to be prepared.  I'm sure he was tired after the game and meant no harm. He's probably not used to being around accomplished women.

    If it was a male reporter talking to a professional female athlete, it would not even be newsworthy. There would be no whining about someone being held back due to sexist behavior.  Power always prevails.  Your president in the USA is perfect example.  His behavior was widely known, he bragged about, and won by a huge margin in election.  I believe that woman will always be considered sex objects and men will be considered success objects.

    To be clear, if Serena Williams had a similar exchange with a male reporter, it would be incredibly newsworthy.

    Also…get your facts straight. President Trump won the election because he won the electoral college, which is how the system works. But he did not win by a “huge margin.” Hillary Clinton won the popular vote by almost 2.9 million votes. (This is not to question the legitimacy of the election … just to keep track of the facts. It seems to me that both parties ought to realize that we have a divided electorate, that almost nobody has a mandate, and that tacking to the center is the best way to govern effectively.)

    Then, late yesterday, I got another email from the same reader:

    As I watch the game, I see the Panthers squarely beating the Lions.  "Cam Newton's three main sponsors stick by him after apology".   Just say you are sorry and send them a new dress.  Thats how we do it in Hong Kong.

    Mr Newton is turning the controversy into a Hall of Fame day.and proving to everyone who has the real power. He is making you look foolish.

    First of all, you’re right that Cam Newton had a good game yesterday. News reports suggest that he realized he’d opened a can of worms and was trying to get on the right side of the issue while staying focused on his job.

    But … the Panthers beat the Lions by a whopping three points. It was one 3-1 team playing another 3-1 team. Probably a good idea not to overstate the importance of 60 minutes of football.

    One other thing. I find your “just say you are sorry and send them a new dress” to be enormously offensive and condescending. That may be how you do things in Hong Kong, but I think that the number of US executives who think that way is shrinking. In fact, I’d hope that the number of such executives in Hong Kong isn’t nearly as big as you think it is.

    I have a daughter. If someone like you ever sent her a dress under such circumstances, I would hope that she is smart, confident, ethical and self-possessed enough to hand it back to you and tell you to stick it where the sun don’t shine.
    KC's View:

    Published on: October 9, 2017

    In the Major League Baseball American League Divisional series, the Cleveland Indians now have a 2-1 lead over the New York Yankees in the best-of-five game series, while the Houston Astros also hold a 2-1 advantage over the Boston Red Sox.

    In the National League Divisional Series, the Los Angeles Dodgers hold a 2-0 series lead over the Arizona Diamondbacks, while the Chicago Cubs and Washington Nationals are tied at a game apiece.

    In Week Five of the National Football League…

    San Francisco 23
    Indianapolis 26

    NY Jets 17
    Cleveland 14

    Jacksonville 30
    Pittsburgh 9

    LA Chargers 27
    NY Giants 22

    Buffalo 16
    Cincinnati 20

    Carolina 27
    Detroit 24

    Tennessee 10
    Miami 16

    Arizona 7
    Philadelphia 34

    Baltimore 30
    Oakland 17

    Seattle 16
    LA Rams 10

    Green Bay 35
    Dallas 31

    Kansas City 42
    Houston 34
    KC's View: