business news in context, analysis with attitude

Published on: December 20, 2018

This commentary is available as both text and video; enjoy both or either ... they are similar, but not exactly the same. To see past FaceTime commentaries, go to the MNB Channel on YouTube.

Hi, Kevin Coupe here and this is FaceTime with the Content Guy.

It seems appropriate, since this is the last FaceTime of 2018 - in the last MNB of 2018, because after this morning, I’m going to be off until January 2 (assuming that Apple gets my damaged laptop back to me by then, as promised) - that I am coming to you from a new coffee shop that has just opened in my Connecticut town.

It’s called Cafe Nero, and I’m mildly familiar with the company because they have 26 stores in Boston - this is the 27th in the US, and an expansion elsewhere in the US is planned. (There are some 900 around the world - this privately held company ain’t exactly Starbucks, but it is clearly a company with ambition.)

Speaking of Starbucks … there is one, about a half-mile from here. There’s also a local independent just a block and a half away. So these guys aren;’t avoiding a fight - in fact, they seem to be spoiling for one.

I like that. I like the idea that this store is different from the other two in town - it is nicer, with the coffee served in ceramic mugs, with leather chairs, a small fireplace, and a sense that this is a place that you can relax and hang. Even the food seems fresher. You know, like Starbucks says it is, but sometimes doesn’t execute on because, quite frankly, sometimes they get too busy. Which isn’t the worst problem to have.

But if we’re going to end the year with one business lesson, it is this - if you are going to compete, it has to be with something different. In fact, that’s also a pretty good lesson with which to start 2019 … if you are going to compete, your offering has to be relevant and resonant and differentiated and compelling. Otherwise, why bother?

Other than that … i just want to wish you the best of times in the coming days - whether your holidays are about to begin, whether they’ve just concluded, or even if you don’t celebrate the holidays at all.

I want to thank the entire MNB community for your loyalty over the past year … it only makes me want to work harder to deserve it. I want to thank Michael Sansolo, Kate McMahon and Tom Furphy - each of whom makes the conversation richer and deeper, teaching me much as we go along.

And, thanks to all the terrific sponsors that make it possible for MNB to come to you each morning; if you get the chance, check them out, because they all have much to share in terms of ideas, products and services.

The MNB archives, of course, remain open … and I’ll be back on Wednesday, January 2 with fresh, hand-crafted news in context and analysis with attitude.

If my laptop comes back in time.

That’s what is on my mind this morning. As always, I want to hear what is on your mind.

Published on: December 20, 2018

by Kevin Coupe

While Amazon Prime has become an enormous factor in the shopping lives of many consumers - there are close to 100 million of us in the US alone - there was an Eye-Opening story this week suggesting that Amazon may have lost a little off its fast ball … or maybe has taken its eye off the ball completely. To be honest, I found the scenarios it laid out to be familiar.

Fast Company has a story by a reporter who says he has been “shocked” during this holiday season by “how many items won’t arrive in time for the holiday, let alone in the promised 48-hour window. That little Prime logo used to mean something. Now it feels like a ruse that lulls shoppers into a false sense of security, until they go to checkout and see a shipping arrival date far later than anticipated.

“This cuts through the greatest promise of Prime. It’s not just the free, two-day shipping. It’s that it’s so reliable, you never have to think for more than a second about buying something. In this sense, Prime was constructed to be great for the consumer (so efficient) and great for businesses (mindless impulse shopping!) … It doesn’t help that we’ve seen a slow dilution of Prime itself over time, with the rise of Prime Pantry and Add-on Items. They force you to buy a minimum number of items to get the best deal, adding back the very psychic burden Prime had eliminated from the equation of online shopping in the first place. As a result, it can be hard to find true, two-day Prime items that aren’t marked up to insane prices by third-party sellers.”

You can read the entire Fast Company story here.

It isn’t just shoppers encountering a less than friendly online climate; The Verge has a story in which it details the behind-the-scenes chaos that takes place in Amazon’s Marketplace. An excerpt:

“For most sellers and a growing number of traditional businesses, Amazon is so big, so much the default place people go to shop, that they find ways to tolerate constant sabotage as just another cost of doing business. In a sense, the chaos of the platform fuels its own growth. The only way to get the tools to police your brand on Amazon is to join, as Nike did last year, after years of resistance.

When sellers get in trouble for customer complaints or attacks from counterfeiters, the solution is often to more fully meld with Amazon — to enroll in its fulfillment program, to purchase Amazon’s labels to make sure product isn’t being diverted, or even make their brand exclusive to Amazon, which brings special protections. Many sellers come to Amazon looking for a new distribution channel for their retail business or a way to jump-start their company, but they find that Amazon has become their advertising firm and their storefront, their warehouse and their shipper. For some, it’s their bank and the intermediary that collects their sales taxes. It makes the rules and enforces them.

“It’s an arrangement that suits Amazon, which is able to outsource the costs of managing inventory and vendor relationships.”

Amazon may be more than two-decades old as a business, but its expansion in terms of business segments and growth as a company - not to mention its admirable and relentless focus on a “today is day one” philosophy - may also mean that it has become increasingly difficult to live up to its value proposition to customers who come to its site.

It’s not that the customer experience doesn’t matter to Amazon. Far from it. But it may be that the company has bitten off more than it can chew.

I certainly have to wonder. To be honest, there have been a number of Christmas present purchases that I planned to make on Amazon that I ended up making on Walmart/Jet. Products simply were more available on Walmart/Jet, with delivery guaranteed before Christmas - and often at a lower price. (Also more available with faster delivery and lower prices than Target, just FYI.)

I’m not ready to give up on Amazon. Far from it. I remain a devoted Amazon consumer who utilizes its Prime advantages, enjoys the ease of Subscribe & Save, and think many of its Prime Video offerings are terrific. Walmart/Jet, to be fair, doesn’t really compete in these three segments … even though I was shopping their site, it felt transactional, not like any sort of relationship was being formed.

But Amazon can’t count on this always being the case. I suspect it doesn’t.

This holiday season, if Amazon views it correctly, may provide the company with a gift - an Eye-Opening moment in which it comes face-to-face with the reality of disaffected customers … which should give it the impetus and motivation to redouble its efforts to build, as promised, “earth's most customer-centric company.”

Happy New Year.

Published on: December 20, 2018

A Note From The Content Guy…

I want to take a moment to thank all the MNB sponsors who, with their generous support, have kept the lights on at MNB - not just this year, but for all the 17+ years that I’ve been doing this.

These companies include MyWebGrocer, ReposiTrak, Samuel J. Associates, Export Solutions, Webstop, City of Hope, Cloud Union, the National Grocers Association (NGA), the Western Association of Food Chains (WAFC), and Portland State University, among others.

I couldn’t do it without you. I’m grateful, and I know that MNB’s readers are grateful, too.

Published on: December 20, 2018

Marc Lore, president and CEO of Walmart’s U.S. e-commerce business, told CNBC this week that the company foresees a day when, as part of its suite of delivery services, it will provide “delivery right into the fridge.”

Lore said that it would work this way: Delivery personnel would have a camera on their chest, which would enable consumers to watch them on mobile devices as they go into the house and put the food away.

“Imagine going out to work, coming home, and there it is. The stuff’s in your fridge already,” Lore said.

CNBC writes that “the next step beyond that would be ‘not even having to order’ the food you’re getting, said Lore.”

Published on: December 20, 2018

GeekWire reports that the Washington Post has launched a new promotion - “readers who sign up for an annual digital subscription to the Post will receive a free Echo Dot. It’s called a $50 value, which is normally the price of the latest Alexa-enabled device.”

The Post, of course, is owned by Amazon founder-CEO Jeff Bezos in a personal investment. But this is more than just cross-merchandising.

“The hook for news and newspaper lovers is that Post content such as headlines, breaking news alerts and a variety of podcasts can be accessed by simply speaking to Alexa.” The Post, like other major newspapers, is investing more and more in alternative media, featuring videos and podcasts that go beyond traditional news reporting. And this isn’t the first time that there has been cross-pollination between Amazon and the Post, which has made subscriptions available on Amazon’s Kindle, for example.

GeekWire notes that “it does seem like a bit of squishy relationship since the Post newsroom no doubt tries to objectively cover Amazon and the wide variety of news the company makes — most recently with the announcement of Amazon’s nearby Northern Virginia outpost.”

Published on: December 20, 2018

Bloomberg Businessweek has an excellent story about a new tension at the heart of the vegetarian and vegan movements.

“The vegan revolution is here,” the story says, “and there are fortunes to be made … So-called alternative proteins are the fastest-growing segment of the food industry, and overall sales of vegan items in the U.S. rose 20 percent from 2017 to the middle of this year, reaching $3.3 billion, according to Nielsen.”

But, Bloomberg points out, “for decades, veganism has been rooted in the counterculture and in rejection of the animal-derived, heavily processed, sodium-laden pathologies of the modern food system. Yet for the diet to enter the mainstream, it will almost certainly have to be companies in that same food system, using many of the same practices, that bring it to mass-market scale. To go truly global, in other words, vegan foods must be financialized and industrialized.”

Good piece, and you can read it here.

Published on: December 20, 2018

The Wall Street Journal reports that the world’s biggest brewer, Anheuser-Busch InBev, “is making its first foray into the cannabis market, striking a partnership with a Canadian marijuana grower to research nonalcoholic beverages laced with weed.”

A-B and grower Tilray have each agreed to invest up to $50 million in the new enterprise; A-B said that it is making the investment through its Canadian subsidiary, Labatt Breweries.

A-B isn’t alone among brewers interested in the cannabis business: “Corona brewer Constellation Brands Inc. in August announced a $4 billion investment in Canadian marijuana grower Canopy Growth Corp. , with plans to develop a range of medical and recreational products for Canada and other markets. And Molson Coors this year formed a joint venture with Canada’s Hydropothecary Corp. to develop nonalcoholic, cannabis-infused beverages for the Canadian market.”

The Journal story notes that “AB InBev has been watching the cannabis market for some time but moved more cautiously than its competitors because of concerns over whether a move into marijuana could hurt its reputation, according to people familiar with the matter.”

Published on: December 20, 2018

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

• The Toronto Star reports that “Amazon plans to create 600 new tech jobs in Toronto, the company announced Tuesday as it expanded its footprint in the city's downtown core.

“The online retail behemoth said the jobs should be filled in the next five years, and noted that 800 so-called ‘Amazonians’ already work in Ontario's provincial capital … The new jobs will be in fields including software development, machine learning and cloud computing.”

Toronto is one of my favorite cities in North America, and I suspect that if not for the political blowback it would have gotten, Amazon would’ve chosen it for HQ2 - Toronto is truly a city embracing the future through both public and private investment.


• The New York Times has a story about how the wedding dress business - long a category in which there was limited competition (department stores, independent boutiques and some chains) for women who felt compelled to spend a small fortune on a garment they’d only wear once - is being disrupted.

Part of it is generational resistance to tradition. Not only are some couples more practical about this particular expense (they’re getting married later in life, and have different priorities), but they also “don’t want to shop the way their mothers do.

“Enter the entrepreneurs, often driven by their own experiences as brides or bridesmaids. These founders are creating disruption in the apparel industry by using technology to upend the shopping experience and the ability to customize a dress.”

Now, there are companies like Brideside, which focuses on bridesmaids and “started in 2014 as an online-only resource for those dresses that are notoriously hard to find in styles that satisfy groups of women of differing tastes and sizes.” Or online retailer Anomalie, “a start-up that was selling custom-made wedding gowns for a fraction of their comparable boutique cost.”

I have one word for my kids: Elope. When the time comes, I’ll help with the plane tickets, and we’ll throw you a party afterwards.


• The Puget Sound Business Journal reports that “one of the two cargo aircraft companies that lease Boeing 767 freighters to Amazon.com has signed a deal to acquire 20 more 767s jets.

“Air Transport Services Group Inc. will buy the 767 passenger jets from Texas-based Jetran LLC and gradually convert almost all of them into freighters to ‘meet strong e-commerce-driven demand for mid-size freighters’.” The company “declined to answer questions about whether it would lease more jets to Amazon, which has grown its Amazon Air cargo jet fleet to more than 40 jets in just a few years.”

Published on: December 20, 2018

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

• The Washington Post reports that “for the first time, National Returns Day -- the faux-holiday you didn’t even know you were a part of -- has arrived days before Christmas. UPS is expecting to ship and process a record 1.5 million returned packages on Wednesday alone. A second wave isn’t expected until Jan. 3, when UPS anticipates 1.3 million returned packages.”

The Post notes that there are several reasons that presents are being returned before the holiday even has happened: “Retailers rolled out steep holiday discounts before Black Friday, pushing some shoppers to get an even earlier jump on their gifting. Companies are amping up the competition for fast and easy shipping options. And merchants know that easy return options make for happy customers who will keep coming back themselves.”

I’m old-fashioned. I like it when Christmas presents are handed out on Christmas morning. I’m not even a Christmas Eve guy. So the idea that presents are being returned six days before Christmas seems sort of weird to me. But these days, I’ve concluded, being old-fashioned is roughly the same thing as being out of fashion.

Published on: December 20, 2018

• Raley’s announced that Deirdre Zimmermann, the company’s senior vice president of marketing and e-commerce, has been promoted to the role of Chief Customer Officer.


• Kings Food Markets and Balducci’s Food Lover’s Market announced four promotions:

- Joseph Parisi, the company’s senior vice president of Operations, has been named Chief Operating Officer.

- Allen Merken, the company’s senior director, engineering, maintenance and construction, was appointed Vice President, Engineering

- Kathe Benjamin, Director of Human Resources and Labor Relations, was named Vice President, Human Resources and Labor Relations.

- Sharon Bastianelli, Senior Director, Information Technology Services, has been named Vice President, Information Technology.

Published on: December 20, 2018

…will return. Next year.

Published on: December 20, 2018

One of the things that I’m most excited about in the new year is the fact that I’m going to be attend the Consumer Electronics Show (CES) in Las Vegas for the first time - I’m going to be there to start a new series of “Retail Tomorrow” podcasts.

This podcast series is an outgrowth of the Retail Tomorrow initiative created by the Global Market Development Center (GMDC), creating a community of innovators to promote collaboration among retailers, brands, technology leaders, and universities. GMDC has done “immersion” conferences in Silicon Valley, Toronto, Seattle and New York, with upcoming events scheduled for Los Angeles and Boston - at which people can do a deep dive into not just best practices, but next practices … developing an ecosystem that will drive the retail industry into the realities and possibilities of tomorrow. And these podcasts are designed to push the conversation forward.

So, I’ll be at CES doing the podcast, and if you’re also going to be there, I hope you’ll drop me a note. It’s a humongous show, but maybe we can find a way to meet for a drink at some point … to celebrate the new year and new business adventures.

Published on: December 20, 2018