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    Published on: June 25, 2018

    by Kevin Coupe

    To start with, let me just stipulate that this morning’s Eye-Opener doesn’t really mean anything. I’m not trying to draw any sort of conclusion, to suggest any sort of equivalency.

    It’s just that I saw this story over the weekend, and it got me thinking. And when I start thinking, I tend to want to share it. (That’s where you come in.)

    So, the story was in USA Today, and it was about how the infidelity website, Ashely Madison - which only exists to help spouses cheat - had identified the 20 cities “had to most member signups per capita” last year. (Just a point of interest - last year also had the highest number of signups by women. Ever.)

    So here are the 20 cities, listed in order: Seattle, Denver, Dallas, Philadelphia, San Jose, Los Angeles, San Francisco, Houston, Charlotte, Austin, Columbus, Indianapolis, Chicago, San Diego, New York City, Jacksonville, San Antonio, Washington DC, Fort Worth, and Phoenix.

    Twenty cities. (You see where I’m going with this, right?)

    There is another story about 20 cities that’s gotten a lot of focus lately here on MNB and elsewhere. That’s right - the 20 cities that are the finalist for Amazon’s second headquarters, dubbed HQ2.

    Those 20 cities are: Atlanta, Austin, Boston, Chicago, Columbus, Dallas, Denver, Indianapolis, Los Angeles, Miami, Montgomery County (Maryland), Nashville, Newark, New York, Northern Virginia, Philadelphia, Pittsburgh, Raleigh, Toronto (Canada), and Washington, D.C.

    So how much crossover is there? As it ends up, there are exactly 10 cities that make both lists:

    Austin, Chicago, Columbus, Dallas, Denver, Indianapolis, Los Angeles, New York, Philadelphia, and Washington, DC. (I would argue that it may actually be as a high as 12 - since folks in Montgomery County (Maryland) and Northern Virginia may well work In Washington, DC, and could be doing their cheating from the office.)

    As I said, this doesn’t really mean anything. It is just a coincidence.

    I think.

    And by the way, what the hell is going on in Seattle? I thought all those technology types were working 18-20 hours a day. (This may also explain the skyrocketing prices of a decent Seattle hotel room.)

    Maybe the HQ in HQ1 and HQ2 stands for “Horny Quotient.”
    KC's View:

    Published on: June 25, 2018

    Amazon announced this morning that members of its Prime program will be able to take advantage of savings in every Whole Foods store in the US as of this Wednesday., extending the program beyond the limited of stores where it had been rolling out … To start saving, Amazon said, “customers can download the Whole Foods Market app, sign in with their Amazon account and then scan the app’s Prime Code at checkout. Or, customers can opt in to use their mobile phone number to save at checkout.”

    The company also said that “customers also receive these exclusive Prime member savings when they have their groceries delivered from Whole Foods Market stores via Prime Now. Prime Now grocery delivery, together with the special savings for Prime members, are available in Atlanta, Austin, Baltimore, Boston, Cincinnati, Dallas, Denver, Los Angeles, Philadelphia, Richmond, Sacramento, San Diego, San Francisco and Virginia Beach. Prime Now offers free two-hour delivery on orders over $35. Delivery from Whole Foods Market will continue expanding throughout 2018.”
    KC's View:
    This has been in the cards almost from the moment that Amazon announced its acquisition of Whole Foods.

    It seems to me that what will be interesting about this going forward will be watching the degree to which Whole Foods affects the continuing evolution of Amazon Fresh … there will be some sort of integration of these two business segments, and extending Whole Foods’ standards to the Amazon Fresh business can only improve the image of the latter. (Amazon has to be careful not to lower Whole Foods’ standards. That’d be a serious mistake.)

    There have been some stories lately about how some customers are dissatisfied with Amazon Fresh, with speculation that it will go away. I suspect that this is just wishful thinking on the part of some … it is just constantly in a state of self-correction and improvement.

    Published on: June 25, 2018

    Molson Coors reportedly is looking at Canada’s legalization of marijuana for recreational use as a potential profit opportunity.

    The Denver Post quotes the company’s CEO, Mark Hunter, as having recently told investors that Molson Coors has “assembled a team in Canada to actively explore the risks and opportunities of entering the cannabis space in that market, where it will be federally legal by this fall.”

    The story says that Molson Coors is said to have “held talks with several Canadian-based marijuana companies to invest and collaborate in cannabis-infused beverages in an attempt to halt declining beer sales … The speculation comes the same week as Canada gave the final approval for recreational sales to begin on Oct. 17. While edibles, including beverages, won’t be legal initially, companies are already jockeying for market share due to the potentially lucrative opportunity. There’s been an ‘explosion of interest’ in edibles and six out of 10 consumers will probably choose to consume edible products, according to a June 5 report from Deloitte.”

    The Post goes on to note that Constellation Brands, which markets Corona, bought a minority stake last year in Canada’s largest marijuana producer, and a number of rivals are planning “a product-testing and manufacturing center to explore using cannabis in everything from iced teas, juices and sports drinks.”
    KC's View:
    How about ice cream? Marijuana-infused ice cream would be a two-for-one deal, giving you the munchies and satisfying them all at the same time. (I’ve heard from reliable sources that marijuana gives one the munchies…)

    Even though I’m not sure how I feel about pot being made legal for recreational purposes (I have no doubt that it should be legal for medicinal applications), it seems to me that national legalization in the US probably inevitable. (Not in this administration, but down the road apiece. The current Attorney General is avowedly anti-pot, and the folks in the White House aren’t likely to look at Canada with a fond maybe-we-should-be-like-them attitude.)

    There was a story in the Los Angeles Times the other day about how, after recreational marijuana became legal in California, “he Desert Hot Springs Inn in the Coachella Valley began advertising itself as cannabis friendly — a place where guests can smoke by the pool or heat up a vaporizer in the rooms.” The result? Business improved by 50 percent, driven by upper-income baby boomers.

    The Times writes that “cannabis advocates and some hotel industry experts say that it is only a matter of time before vaping rooms and pot-smoking patios become as much a part of hotels as fully stocked mini fridges and cocktail bars.”

    This all probably is going to happen. With that in mind, it only makes sense for beer companies - and, when you think about it, every other packaged food/beverage manufacturer - to start looking at the opportunities.

    Just thought of another one: Marijuana-infused Oreos. I mean, they’ve tried about every other damned flavor.

    Published on: June 25, 2018

    The Washington Post reports that a group of Amazon employees have written a letter company founder/CEO Jeff Bezos objecting to the sale of the company’s facial recognition technology to law enforcement agencies, and specifically asking that Amazon “discontinue partnerships with companies that work with U.S. Immigration and Customs Enforcement (ICE).”

    The employee activism follows similar movements at Google and Microsoft. The Amazon letter is seen as a protest against the Trump administration’s recently suspended policy of separating migrant parents from children at the US-Mexico border.

    "We don’t have to wait to find out how these technologies will be used. We already know that in the midst of historic militarization of police, renewed targeting of Black activists, and the growth of a federal deportation force currently engaged in human rights abuses — this will be another powerful tool for the surveillance state, and ultimately serve to harm the most marginalized," the letter states.

    The Post notes that the move “follows employee-driven campaigns at Microsoft and Google, where workers have denounced projects that provide technology to ICE and to military operations. Earlier this week, Microsoft chief executive Satya Nadella told employees that the company's nearly $20 million contract with ICE was not tied to the Trump policy of separating children from their parents at the border. Google responded to a firestorm of employee resignations and public outcry surrounding a Defense Department deal. Executives said they would not renew an artificial intelligence contract for software that could help the Pentagon analyze drone video. Soon after, Google said it was banning the development of AI that can be used in weapons.”

    Amazon is said to have “been offering surveillance tech and consulting services to law enforcement agencies for only a fistful of dollars,” the Post writes. “The report prompted a coalition of civil rights groups to demand that Amazon ‘stop powering a government surveillance infrastructure.’ And the details of Amazon’s program highlighted the spread of powerful technologies into American life, often without public input or debate.”
    KC's View:
    First of all, where did they think this facial recognition was going to be used? Disneyland and nowhere else?

    We’re in a moment of severe polarization right now, and I do sort of wish people would take a deep breath. When we get to the point that a person of one political persuasion is asked to leave a restaurant because of those beliefs, I think we’ve crossed a line.

    That said … however you feel about these employees’ beliefs, I do think that employers have to respect the fact that these business stakeholders want their concerns to be taken seriously. I don’t think that these concerns can and should be dismissed out of hand; a lot of people want their workplaces to reflect their values, and if they don’t, they’ll find someplace else to work.

    I suspect that these scenarios are going to continue to break out, for at least another two years. After that, who knows?

    Published on: June 25, 2018

    The New York Times has a story about how smart home technologies, which allow for the use of the internet to remotely control lights, locks, air conditioning and even cameras inside a house, also are being used by domestic abusers “as a means for harassment, monitoring, revenge and control.”

    An excerpt:

    “In more than 30 interviews with The New York Times, domestic abuse victims, their lawyers, shelter workers and emergency responders described how the technology was becoming an alarming new tool. Abusers — using apps on their smartphones, which are connected to the internet-enabled devices — would remotely control everyday objects in the home, sometimes to watch and listen, other times to scare or show power. Even after a partner had left the home, the devices often stayed and continued to be used to intimidate and confuse.

    “For victims and emergency responders, the experiences were often aggravated by a lack of knowledge about how smart technology works, how much power the other person had over the devices, how to legally deal with the behavior and how to make it stop … Connected home devices have increasingly cropped up in domestic abuse cases over the past year, according to those working with victims of domestic violence. Those at help lines said more people were calling in the last 12 months about losing control of Wi-Fi-enabled doors, speakers, thermostats, lights and cameras.

    “Lawyers also said they were wrangling with how to add language to restraining orders to cover smart home technology.”

    The Times goes on to note that “no groups or individuals appear to be tracking the use of internet-connected devices in domestic abuse, because the technology is relatively new, though it is rapidly catching on. In 2017, 29 million homes in the United States had some smart technology, according to a report by McKinsey, which estimated that the number was growing by 31 percent a year.”
    KC's View:
    This is an extraordinary story, focusing on unexpected and collateral damage that is just heartbreaking. It seems clear that a lot of re-education has to happen - of judges and lawyers and police and emergency responders, all of whom have to understand that the neanderthals who abuse their spouses have to have restrictions placed on them that never were considered before.

    Published on: June 25, 2018

    Business Insider has a piece in which its reporter decided to test out Amazon’s “free, two-hour delivery of Whole Foods groceries to members of its paid Prime program,” and “was shocked to find that it wasn't technically free.”

    The cost involved was a calculated tip that the Amazon app added to the bill.

    “I had assumed — perhaps naively — that there were no extra costs associated with the service, given all the marketing around it as being free,” the reporter writes. “I had also used other services, including delivery through Kroger Clicklist, that don't solicit tips for couriers.

    On Amazon Prime Now, the tip for the couriers is optional, and shoppers can choose to change the amount paid up to 48 hours after the delivery.

    “I accepted the charge for the tip and finished the order.”

    The reporter then went on:

    “One of the biggest downsides to ordering groceries online is not being able to pick out your own produce, and sometimes ending up with bruised or damaged items. Everything in this order was in great shape. However, I was disappointed that I couldn't provide instructions for specific items through the app, which would have avoided some minor issues.

    “Kroger ClickList and Instacart allow shoppers to make specifications, such as ‘large butternut squash’ or ‘ripe avocado.’ I wanted skinless salmon fillets, but didn't have the option to request that. I needed a large tomato, and ended up getting a small one. These are pretty minor problems, but when you are paying a lot for your groceries and working with recipes that call for specific amounts of ingredients, it can be a frustrating experience not to get what you need.

    “I later found out, however, that customers can communicate specifications to their Amazon shopper as soon as they get an alert that the order is in the process of being picked.”
    KC's View:
    I do think that Amazon might be well advised to not just assign a tip - that strikes me as presumptuous. Maybe they could so what Starbucks or Lyft do … provide the mechanism and the opportunity, but let it be up to the shopper.

    Published on: June 25, 2018

    There’s a terrific piece in the New York Times about “ like-minded contemporaries and women in their 70s and 80s, who are taking on matters of aging with an audacity — and riveting style — their mothers might have envied.

    “Married or single, working or not, and most often grandmothers, they are asserting their presence on Instagram, intent, in the process, on subverting shopworn notions of what ‘old’ looks and feels like. They are, to hear some tell it, ‘100 percent slaying’.”

    They are governed not by age, but by values. One woman puts it this way: “When I was young, we were burning our bras and promoting free love. We were getting high. Why would accept the aging image of our mothers?”

    It is a good question … and one that challenges marketers who may have slotted such women into neat silos based on old assumptions. That’s not an option anymore, and you can read why here.
    KC's View:

    Published on: June 25, 2018

    • The Wall Street Journal reports that Kroger’s deal with Ocado, which will bring the latter company’s robotics and software to Kroger’s supply chain, is likely to prompt a response from both Amazon and Walmart, injecting “a new urgency into traditional supermarkets’ efforts to sell goods online.”

    Here’s the challenge: “The likely race among supermarkets into grocery tech will require additional capital. Brokerage Bernstein estimates that Kroger’s new Ocado-designed warehouses will cost roughly $400 million to build. Another problem for investors is that e-commerce is still hard to make profitable, so any growth in online sales at the expense of store sales will hit margins. Both pressures are manageable for the largest players, but will make it harder for them to grow cash flows.

    “If this doesn’t sound appealing, neither does the status quo. For a reminder of what can happen when retail giants are late to e-commerce, investors need look no further than clothing chain H&M , whose shares have more than halved over three years, or Toys ‘R’ Us, which went bust. Groceries look set to follow books, electronics and clothes online. Big supermarkets have no choice but to invest.”


    • The New York Times has a piece about Amazon’s fast growing private label business, which has grown to more than 100 own-label brands currently for sale on its site.

    It started about a decade ago, when “Amazon quietly entered the private label business by offering a handful of items under a new brand called AmazonBasics. Early offerings were the kinds of unglamorous products that consumers typically bought at their local hardware store: power cords and cables for electronics and, in particular, batteries — with prices roughly 30 percent lower than that of national brands like Energizer and Duracell.

    “The results were stunning. In just a few years, AmazonBasics had grabbed nearly a third of the online market for batteries, outselling both Energizer and Duracell on its site.”

    The Times writes that “the move into the private label business (in which goods are sold under the retailer’s name rather than that of an outside vendor) appears to be a deft move by Amazon. Analysts predict that nearly half of all online shopping in the United States will be conducted on Amazon’s platform in the next couple of years. That creates a massive opportunity for Amazon to more than double revenue from its in-house brands to $25 billion in the next four years.” Plus, when Amazon makes the availability of desired private label brands contingent on being a Prime member, it allows the company to increase the number of people in what has become a highly profitable segment of its user population.

    Of course, “the emerging private label threat from Amazon presents a quandary for small vendors and big, national brands alike. Even as Amazon takes away market share and eats into their profit margins, they have little choice but to continue to sell on Amazon’s platform in order to get themselves in front of millions of potential customers.”

    And, there are legal questions - as Amazon gains share in the private label business, is it becoming monopolistic? Amazon’s answer to this question is to point out that it is just “a small fraction of a very large and vibrant global retail industry, and the competition and invention happening across retail is great for customers.”
    KC's View:

    Published on: June 25, 2018

    • The Verge reports that DC Comics “will begin releasing an exclusive, monthly anthology comic series in Walmarts across the United States next month. The comics will be more than your typical single-issue comic: these will be 100-page books, featuring a mix of new and reprinted material, priced at $4.99 an issue … The series will include four titles: Superman Giant, Justice League of America Giant, Batman Giant, and Teen Titans Giant.”

    The story notes that “DC’s partnership with Walmart unlocks a potentially huge audience for the publisher. More than 3000 Walmart stores across the US will carry the books — more than there are dedicated comic book stores in the US, and it harkens back to the days when most supermarkets carried comic books and science fiction magazines on their shelves. Walmart isn’t the only major retailer that’s getting in on the comic game: Bleeding Cool reported earlier this month that Game Stop would trial selling comics in some of its stores beginning on June 15th.”
    KC's View:

    Published on: June 25, 2018

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

    CBS News reports that “Kroger is doing what they can to help alleviate the cost for teachers by giving away free school supplies during events at four Georgia locations. Events are happening at four locations throughout the month of July and educators can pick up everything thing from copy paper, construction paper, Scotch tape, disinfectant wipes, sandwich bags, markers and much more … Teachers with a valid school ID will be allowed to fill one reusable bag that they can fill with school supplies.”

    Good for Kroger. There was a story in Education Week the other day about a new report saying that in more than half the US states, public school teachers do not make a living wage. For the record, Georgia is one of those states. Furthermore, “the report found that despite a relatively steady rise in per-pupil funding, real teacher salaries rose just 7 percent since 1970, and have been largely flat since 1990.” It is a small but important thing when businesses do things like this to support teachers.


    USA Today reports that “all Toys R Us and Babies R Us stores will close on or before Friday, the iconic toy retailer announced … Many stores nationwide won't make it until Friday with some closing Tuesday, Wednesday or Thursday.”
    KC's View:

    Published on: June 25, 2018

    Last week, MNB took note of a CNBC reports that Sears is testing a new retail idea - putting a “pint-sized Kmart convenience shop … inside a larger Sears store.”

    I commented:

    Really? A Kmart inside a Sears is seen as an advantage? Or even an improvement?

    This isn’t a turducken. This is more like a small turd being found inside a big turd. And trust me, there’s no pony to be found.


    MNB reader Alan Finta wrote:

    “Turducken”…great analogy!  Wish I would have thought of it…it’s dead on…



    On another subject, from an MNB reader:

    It was great to see you recognize the life of Charles Krauthammer. A voice that will certainly be missed in the discussions of the life of our nation. His voice was one of civility, humor, sarcasm, and great intellect that he shared succinctly.

    The final sentence he shared in the letter he wrote to all of us completes the quote you shared. Ironically, while posed as a statement and the completeness of his life, I'd like to believe it was leaving us all a question. It read; "I am sad to leave, but I leave with the knowledge that I lived the life that I intended”.

    A question worth asking ourselves and maybe a good business question as well.

    I highly recommend 'Things That Matter' if you haven't already read it. It is a treasure that he leaves us - a collection of his writing. Moreover, it is truly a journey through his life and his evolving thought shaped by events, knowledge, and wisdom, as well as, extraordinary observationalism.

    And, yes to Charles, baseball mattered. It mattered to the extent that the Washington Nationals paused last night to recognize his life and devotion to the game.

    Thanks for sharing his notable life ... 




    And, from an MNB reader responding to last Friday’s OffBeat:

    Great recap on the Paul Simon concert. I was there too.

    I’ve been lucky enough to see him 5 times solo, and also saw him with Sting And saw him in the Old Friends tour with Art Garfunkel in 2005 (That was the favorite concert of my life.)

    You nailed it when you mentioned how he lets his very talented band shine and have their moments. Very good “team” and I’m sure they feel very appreciated especially when he has tweaked the arrangements In many instances to make the song better and fresher.

    It’s amazing that at the age of 76 he is still near the top of his game.


    MNB reader Alison Petersen wrote:

    Thanks for letting me re-live the Paul Simon experience through you, we saw him two weeks ago in Minneapolis.  He was a favorite of my Mom’s, and the Graceland album were the songs of my childhood, and still one of my favorite albums today. My husband and I got to go to the show with my brother and his wife, and though my Mom is no longer with us, I could hear her clapping along (off-beat) all night.  I had never seen him live before, but it was such a humbling experience to see how appreciative he is of everything he’s been able to do.  He had so much talent on that stage with him, I loved that the show was about the music, and not about the fanfare.  I felt like he was so ahead of his time in bringing so many different cultures into his music, it was really something to embrace.  Always good checking something off the bucket list!

    Agreed. Mrs. Content Guy and I have been trying to see a number of performers are closer to the end of their concert careers than the beginning … folks like Paul McCartney, the Eagles, Billy Joel, James Taylor and Carole King. We’ve seen Bruce Springsteen, and in the fall we’ve got tickets for Elton John’s farewell tour.

    By the way … if you’ve not seen the “Carpool Karaoke” segment with Paul McCartney, watch it now here. I can practically guarantee that it will make you happy.
    KC's View: