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    Published on: March 12, 2019

    by Michael Sansolo

    It’s probably the single worst discussion any of us can or want to have. A medical prognosis that you are seriously ailing and nothing can be done. In other words, you are likely to die soon. And yet, a hospital in Freemont, California, found a way to make it worse.

    The message was delivered by a robot.

    According to news reports about this sad incident, the story manages to get even worse. The elderly patient who was the subject of this news has difficulty hearing, so he needed his granddaughter, who was sitting nearby, to repeat the medical report to him a second time.

    Let’s be honest, there are countless ways to go with this story. First, these kinds of robots - featuring a video screen displaying messages from a doctor - might actually be enormously helpful to the future of medicine allowing any of us to consult remotely with world-class specialists no matter where they or we are located. It might free up doctors to spend their time on critical cases. And, as a medical expert explained to USA Today, many doctors struggle with having these difficult discussions person to person. In many cases, the robot is actually better, which speaks to a completely different discussion on the importance of training and empathy.

    But let’s think about that in context of the discussions we’ve had here in recent weeks about how robotics will likely be integrated into the customer experience in stores. Certainly there is no discussion in a supermarket that will rise to the emotional level of an end of life diagnosis, but still there’s a lesson to be learned in removing all humanity from customer interactions.

    The goal, in short, must be to use new technology to enhance the customer experience and to aid staffers in improving customer interactions wherever they occur. Not eliminate them completely.

    As we are seeing already, robots can be effectively used for inventory management, floor cleaning and certainly, in a sense, at self-scanning checkouts. In years to come, we are likely to see technology actively engage with customers in helping them find products, build recipes and possibly even provide cooking instructions. (Replace the doctor-in-the-hospital-robot with a Gordon Ramsay-in-the-supermarket-robot, and suddenly in-store discussions take on an entirely new slant.) What might be critical to store success in the future is redeploying staffers to further enhance the experience by guiding shoppers in many of the same ways, except with a distinctly with a human touch.

    While no discussion will come close to end-of-life, store staffers will still require training and an emphasis on solving customer problems. Done right, we may find the human touch is just what’s needed to keep stores relevant and profitable.

    Michael Sansolo can be reached via email at . His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available on Amazon by clicking here. And, his book "Business Rules!" is available from Amazon by clicking here.
    KC's View:

    Published on: March 12, 2019

    by Kevin Coupe

    It wasn’t that long ago that BlackBerry, which pretty much invented the smartphone category, achieved something momentous in its history - a zero percent market share. It still was selling some units, but the number was statistically irrelevant, and the precipitous decline could be seen as a reflection of the company’s inability to sustain any level of serious innovation, to see the marketplace as it was, and to get beyond corporate complacency.

    Which was remarkable since at one point, the term "Crackberry" was coined to illustrate how addicted some people were to their BlackBerry devices.

    Now, it seems, BlackBerry may be relevant again. And all it took was the ability to write a check for $1.4 billion.

    The Financial Post has a story about how BlackBerry spent that money to acquire a company called Cylance late last year, and how the acquisition “made a strong statement about where BlackBerry is at today.

    “BlackBerry bought a cybersecurity company because these days, BlackBerry is a cybersecurity company … Today, BlackBerry executives would have you believe the company is drawing on years of secure communications expertise to position itself as a global cybersecurity leader in a burgeoning new market.”

    The story talks about something called the BlackBerry QNX operating system, which, to be honest, I’d never heard of before - and it apparently “is in more than 120 million cars on the road now.” According to the Post, “QNX has been one of the bright lights for BlackBerry during its transition over the past few years. The QNX operating system, acquired by BlackBerry in 2010 as part of a failed strategy to reinvent the smartphone, has become a successful operating system for automotive infotainment systems.” The goal is to continue growing its footprint so that “it becomes a secure platform for future cars, with a wave of highly computerized, highly connected vehicles entering into the market — not to mention fully autonomous, computer-driven cars looming just over the horizon.”

    BlackBerry also has a new product called Spark, not yet on the market, which is “billed as a secure communications platform for connected devices, that is, the Internet of Things.” The company has said that it is working with Amazon to integrate Spark into its Alexa-centric voice activation system.

    These products are laying the foundation for BlackBerry’s future, the story says: “If QNX is the secure, solid operating system that will run on just about anything, and Spark is to be the secure communications system that will connect IoT devices, Cylance’s AI threat detection is what will make those secure systems smarter and more proactive in handling cyber attacks. Cylance was one of the pioneers in building artificial intelligence threat detection systems, using machine learning to find patterns of malicious behaviour and block attacks before they happen.”

    The point is this. Companies emerge because of great ideas and great implementation, but they are sustained by continued innovation and implementation. That seems to be the hard lesson learned at BlackBerry, where new leadership, brought in during the dark days of a zero market share, is carving out a new path that it believes will offer the company a viable future.

    “There are no second acts in American lives,” F. Scott Fitzgerald once wrote. But that was then, and this is now, and Eye-Opening modern realities may mean that companies need to have the ability to enjoy second ands third, and fourth acts.
    KC's View:

    Published on: March 12, 2019

    Bloomberg reports that Kroger “is talking to potential partners in the health-care industry about developing a new line of business.”

    The story quotes CEO Rodney McMullen as saying that Kroger is looking to “identify an area of health care that it could enter and benefit customers -- and perhaps lower their medical costs. Such a venture would also represent a fresh revenue stream for Kroger and complement the advertising and personal-finance businesses that it’s counting on to help generate $400 million in additional operating profit by next year.”

    Kroger, of course, is not alone in this line of thinking.

    Walmart, the story notes, “has stepped up its ambitions in the wellness space in recent years, offering free health screenings for shoppers and using its clout to buy health care for some of its workers directly from providers.” And Amazon has teamed up with Berkshire Hathaway and JPMorgan Chase for a new healthcare venture called Haven that has not yet laid out its business plan.
    KC's View:
    Kroger already has moved in this direction, creating an alliance with Walgreens that works on a number of levels.

    All of these various moves, by Kroger and its competitors, underlines the degree to which so many companies see healthcare as prime and fertile ground on which battles are going to be fought and won. So much of this is because we have an aging population for which wellness relevance is going to be extraordinarily important … and even the reason they make buying decisions.

    Published on: March 12, 2019

    Bloomberg reports that while Amazon’s “Echo-branded smart speakers have attracted millions of fans with their ability to play music and respond to queries spoken from across the room,” they have yet to offer the kind of breakthrough apps that have emerged from smartphone technologies.

    “Almost four years after inviting outside developers to write apps for Alexa,” the story says, “Amazon’s voice system has yet to offer a transformative new experience. Surveys show most people use their smart speakers to listen to tunes or make relatively simple requests - ‘Alexa, set a timer for 30 minutes’ - while more complicated tasks prompt them to give up and reach for their smartphone.”

    Part of the problem, the story says, is that the Alexa-driven system “poses problems for developers, who encounter a steep learning curve in building voice apps. Swapping visual cues for verbal ones forces them to unlearn old habits from building software for smartphones and the web. Even after creating an app, there’s no guarantee people will find it. While smartphone users can quickly eyeball a list of available apps on a screen, multiple options get lost easily on a voice-based service.”
    KC's View:
    This struck me as a little surprising until I thought about how I use our Alexa-based system, which is for a lot of mundane tasks, but not in any sort of transcendent way.

    I’ll buy the idea that it is harder to design breakthrough apps, but I also have another thought … that it isn’t necessarily a bad thing for a technology like this to be integrated slowly and smoothly into the more prosaic parts of our lives. It wasn’t very long ago that it wasn’t there at all, and now it is, and I’d miss it if it were gone.

    Sounds like a measure of success to me.

    Published on: March 12, 2019

    Fortune reports on how “Bumble Bee Foods is using blockchain technology to trace yellowfin tuna from the time it’s caught to the moment it hits store shelves. The San Diego-based seafood giant has been running the program for about a month on its ‘fair trade’-certified frozen tuna brand, Natural Blue by Anova. The tuna is sourced from small-scale fishing operations based on east Indonesian islands and it is set to go on sale in the U.S. in the coming weeks … consumers will be able to scan QR codes on the 12-ounce bags of ahi tuna steaks to learn more information about each product, including where it originated, which community caught it, the size of the catch, and how it came to be certified as fair trade.”

    The move is just the beginning for the company, which has plans “to start migrating all Bumble Bee branded products to a blockchain-based system.”

    The story notes that “Bumble Bee is not the first company to apply a blockchain to its supply chain. Walmart has mandated that its suppliers must use a blockchain to trace leafy greens, such as spinach and lettuce, this year. Meanwhile, in the financial world, JPMorgan Chase has developed a blockchain-based virtual currency, called JPM Coin, for institutions and clients to test.
    KC's View:
    I’m in favor of maximum transparency and traceability all the time. I may not use it, but it is reassuring and trust-inducing to know that it is there.

    Published on: March 12, 2019

    About a week ago, it was reported that Tesla had decided to move to an online-only sales model, and would close a number of its stores around the country, using just a few of them as showrooms.

    The goal of the move, the stories said, was to cut costs, which would allow the company to hold the line on the price of its new Model 3 electric sedan at $35,000.

    Then, it was reported that Tesla actually had as much as $1.6 billion in lease obligations, and mall landlords seemed to have little inclination to let Tesla off the hook.

    Now, the New York Times reports that Tesla has “decided to retain many of the locations it had shut down or was planning to close. And it said it would raise most of its vehicle prices about 3 percent worldwide, just weeks after cutting prices.”

    The Times notes that this is yet more evidence of how mercurial Tesla’s CEO, Elon Musk, can be. “Tesla has been in retreat in recent months, scrambling to shore up flagging investor confidence,” the Times writes. “Along with layoffs of 7 percent of its work force in January, the news of store closings appeared to underline the challenges for a newcomer breaking into an old-line manufacturing industry. The company has struggled to make a few thousand cars in a week — a feat that established automakers can do in a day.”
    KC's View:
    Kind of reminds me of a Jimmy Buffett lyric … Indecision may or may not be my problem.

    Published on: March 12, 2019

    • The Wall Street Journal reports that “Food-delivery companies are taking their race for market domination to the far reaches of the U.S. The challenges they face in smaller cities and suburbs include finding drivers new to the gig economy in a tight labor market, and the expense of carrying restaurant meals and groceries over greater distances at prices consumers are willing to pay.”

    It isn’t the easiest push - the feeling seems to be that folks in the hinterlands are less interested in delivery, and that the economics of delivery in sparsely populated areas could make it cost prohibitive. “Building a sustainable market in smaller cities will take time, and it isn’t clear whether delivery companies will make the profits they seek,” the story says.

    But delivery executives “say they expect food consumption at home to rise over time and need to build as wide a network as possible to stand out in a crowded field of competitors. There is also growing pressure - including from investors in delivery companies - to capture as much market share as possible.”
    KC's View:

    Published on: March 12, 2019

    CNBC reports that “more than 912,000 U.S. associates are receiving a share of nearly $207 million in cash bonuses for the retailer’s strong fourth-quarter performance. It said the bonuses, which works out to an average of about $225 per employee.” Those employees got the bonuses in checks that went out last week.

    The bonuses are part of an incentive plan designed to reward employees whose stores “achieve sales and customer service goals,” the company says.
    KC's View:

    Published on: March 12, 2019

    CNN reports that “Target said this week that it will open around 30 slimmed-down stores this year in cities like Los Angeles, New York and Washington, D.C. and on college campuses. These stores, which average about 40,000 square-feet, are one-third the size of Target's traditional sprawling stores.”

    It is, the story says, a reflection of a larger trend: “Big box retailers and department stores are going small … opening smaller stores or downsizing existing ones to bring in urban shoppers and save money as online shopping takes over in the suburbs.”

    • The New York Post reports that Trader Joe’s, which already has 11 stores in New York City, appears to be considering the opening of a store that would be much larger than its traditional format, and “is negotiating to open a giant (make that gigantic) store in the Park Imperial condo building at Broadway and West 55th Street … A sign in the corner of the former bank space says there are about 12,000 square feet available. But we understand that the new Trader Joe’s will be larger, swallowing up the seven-story former garage next door on West 55th Street.”

    Trader Joe’s has not commented on the report.
    KC's View:

    Published on: March 12, 2019

    We reported yesterday that Sen. Elizabeth Warren (D-Massachusetts), who is running for the 2020 Democratic presidential nomination, on Friday said that she is in favor of new regulations that would require the breakup of Amazon, as well as other giant technology companies such as Apple, Facebook, and Google.

    Warren’s proposal, if implemented, would mean that Amazon could no longer operate an online marketplace on which other companies could sell their products and also be a retailer on that same platform. The proposal “calls for the appointment of regulators who would “unwind tech mergers that illegally undermine competition,” as well as legislation that would prohibit platforms from both offering a marketplace for commerce and participating in that marketplace.

    I commented, in part:

    I am sympathetic to the notion that giant companies can be seen as stifling competition from smaller entities; they have have so many resources, so much brainpower, and so much access to capital that they make it difficult for a smaller company to compete. I get it.

    But I am not persuaded that Warren’s approach is the right one, and I’m certainly not convinced that it has much chance of becoming law, even if she were elected President, simply because there would be too much opposition to such a heavy-handed regulatory approach.

    Let’s take the case of Amazon. There was a time, actually not so long ago, when Amazon was a small company, facing off in one category - books - against giant retailers such as Barnes & Noble and Borders. It succeeded because it had a better, more progressive idea that resonated with consumers.

    Those same consumers, as it happens, tend to give Amazon very high marks for prices, customer service, etc … and the last time I checked (and to be sure, I am not a lawyer), I thought antitrust law primarily existed to protect consumers. Break up Amazon, and the result could be higher prices and less product availability, not to mention lower customer service standards.

    I do think - and have said here for a long time - and new definitions for what “unfair competition” means need to be drawn up for a 21st century business environment. I’m good with that. And when big companies - I’m looking at you, Facebook - can be shown to have ignored the best interests of their customers and even lied to them about how they use their data, for example, then I think the regulatory response needs to be tough, swift and customer-centric.

    One MNB reader responded:

    In typical fashion, whether ignorant or on purpose, the left leaning don’t explain all repercussions of their positions. For instance, if you participate in a 401K what could the tech breakup plan do to everyone’s 401K investment regardless of your income level? Many 401K plans include these tech behemoths because they are led by business savvy leaders, bring a great returns to ALL investors both personal and institutional. So in the end, they wreck a business for their means and it effects the wealthy (great) but especially the everyday person’s 401K investment’s. All this in the name of protecting the small people, of which no politician resembles.

    Here is the age old line, the US government is upside down $22 trillion, not one agency is running in the black…education, military and oh yes the post office to name a few. So they want to tell successful businesses how they should run companies.

    We live in the greatest country ever mostly due to Capitalism, so let’s follow the socialist model and wreck it! A quick note, if we move to socialism, we will not need a boarder wall, no one will want to come to America…problem solved!
    Ignorant or on purpose, I choice the former!

    So I can put you down as a ‘no’?

    MNB reader Gary Loehr wrote:

    I find it interesting that politicians find huge companies with excessive power to be evil, while seeing no problem with our overblown self righteous government.  One big difference.  Big tech companies got that way by being successful. Our government got big by legislating their own expansion.  Big tech is pretty good at what they do, government is not.

    Another ‘no’?

    MNB reader Tim Phillips wrote:

    Couldn’t agree more with your comments on Warren’s new position on tech. It’s interesting that Warren’s comments came just as Bernie jumped into the race closely followed by Joe Biden coming in likely sometime this week. How about taking an extreme position Elizabeth to position yourself differently???

    Relative to Amazon what she clearly misses is Amazon’s importance in the labor market. They now employee in excess of 600,000 people……more people than live in Baltimore or Milwaukee and consistently pay their people above the norm ( e.g. taking a stand on raising the minimum wage to $15). I have a relative who works for them and they compensate people fairly and objectively and give people equity in the company who deliver on their work goals (what could be a better promise than that!)

    Additionally as a consumer I cannot think of a better partner than Amazon in terms of providing my family with a terrific platform to acquire products and services with great pricing and even better customer service. As a Prime member they also provide incremental benefits ( Streaming Services) that other parties do not have.

    Elizabeth, you are barking up the wrong tree on Amazon………clearly you are not a Prime Member and appreciate what they provide to the economy. To group them with Google and Facebook is ridiculous….As a Massachusetts resident I have heard this all before from her…….many here are weary of her and her extreme positions.

    Maybe. But she did get more than 60 percent of the vote in her recent re-election.

    From another reader:

    The key issue with any antitrust act is “ where’s the harm ?”. And “ do consumers have reasonable and affordable alternatives ?” If there is harm, and no reasonable alternatives the government usually acts. For these tech companies, there doesn’t seem to be any harm. Facebook and Google are free… hard to see the harm there. Apple is not the share leader in smart phones. And they have a very effective competitor in Samsung. If Apple gets a higher price it’s because consumers think it’s worth it… not because they have no choice. As you said, Amazon has very high consumer satisfaction scores. Again they have formidable competitors in on line retail (Walmart), grocery (Kroger) and cloud (Microsoft) . As I recall, a while ago government wanted to break up Sears because of its retail dominance.

    I’m a little less sanguine about Facebook than you are; I think it has done a pretty good job of persuading me that it really isn’t free … not really. The cost of satisfying Mark Zuckerberg’s ambitions, in fact, may be really high.

    Another MNB reader wrote:

    This is nothing short of Government outreach to take away both business and personal freedoms. Government controlling business not only doesn’t work but is never a good thing in the long term. We the taxpayers seem to always have to pony up at some point. Interesting once these freedoms are taken away, you never get them back.

    First of all, I want to again be clear - I disagree with Warren’s proposal.

    But I do think that it is important to remember that the impetus for this proposal is Warren’s belief - which she has held for decades - that mainstream consumers are not always best served by a kind of capitalism in which small companies are unable to compete, and that sometimes government needs to preserve as level a playing field as possible. I think this is a legitimate subject for discussion, even if I disagree with her prescription to address it.

    I don’t think this is about her being a Socialist, or wanting to take away personal freedoms. I think she’s wrong, but I also think that political campaigns are where ideas and proposals get advanced and then discussed, analyzed and judged. In an ideal world, there is nuance and thought applied to these conversations, and when we come out on the other end, voters are able to make informed decisions about who makes sense and who does not.

    I’d pay money for a pay-per-view forum, for example, in which Warren sat down with Jeff Bezos to chat about her proposal. Not argue. Just talk. It’d be really interesting, and might raise the public consciousness.
    KC's View: