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    Published on: May 20, 2019

    by Kevin Coupe

    In California, the Whittier Daily News has the story of last Friday’s graduation ceremony at Biola University, described as a private evangelical Christian institution, where Lynsi Snyder-Ellingson, the owner and president of In-N-Out Burger, gave the commencement address.

    It wasn’t just words of wisdom that were given to the graduates, however. More than 600 Biola undergraduate students and 300 graduate students also received gift cards to In-N-Out with their diplomas.

    It was a “rare public appearance” for Snyder-Ellingson, the granddaughter of In-N-Out’s founder, according to the Daily News. In her speech, “Snyder spoke about her struggles with alcohol and cannabis and the abuse she endured in a past relationship. She urged Biola’s students to not let pride prevent them from being open and honest about their struggles. ‘I’m here to tell you that if you think you are too good for any sin out there, beware,’ she said. ‘Because every one of us is capable of just about anything if we’ve been through the right things, put in the right conditions, hurt in the right way’.”

    The story points out that “as sole heir of the In-N-Out fortune, Snyder’s net worth is about $3 billion as of this month. She directs the In-N-Out Foundation, an organization which fights child abuse and runs an organization called Slave 2 Nothing, which helps victims of human trafficking and people suffering from addictions.”

    I’ve always found that this time of year to be Eye-Opening, because it is when all sorts of interesting people end up giving commencement speeches that can prove to be enlightening, illuminating, entertaining and provocative - and sometimes all of these things.

    Perhaps the best of the breed was the talk that Steve Jobs gave at Stanford’s commencement ceremony in 2005, in which he told just three stores .. and yet, spoke about so much more. (You can watch it here.)

    Overt the next month or so, we’re going to see all sorts of videos and stories about commencement addresses, and I urge you to take a moment to watch or read them. It often is worth it. (I do it in part because I am hoping I will one day get the chance to deliver one, though I’m realistic enough to know that if it happens, it will be a high school graduation, not a college commencement. I’ve done two weddings, and I’d love the opportunity to do a graduation.)

    Another example: Over the weekend, the 396 young men who were graduating from Morehouse College, a historically black institution, were informed by their commencement speaker - Robert F. Smith, a billionaire investor who founded Vista Equity Partners and is the richest black man in America - that he and his family would be paying off all their college loans.

    “We’re going to put a little fuel in your bus,” he told them … and the implication was that, freed from this particular financial burden, he expected them to do great things and give back to their communities.

    The gesture came at a time when student loan debt is growing as a financial, cultural and political issue.

    “Let’s make sure every class has the same opportunity going forward, because we are enough to take care of our own community,” Smith said. “We are enough to ensure we have all of the opportunities of the American dream, and we will show it to each other through our actions and through our words and through our deeds.”

    An Eye-Opener indeed.
    KC's View:

    Published on: May 20, 2019

    Business Insider reports that Amazon-owned Whole Foods is changing up its receipts so they more clearly identify the advantages of being an Amazon Prime member.

    According to the story, Whole Foods “is planning to display new details on receipts and point-of-sale screens related to sale items, Prime member deals, and savings amounts … The changes will take effect at Whole Foods stores in at least nine states starting Thursday.”

    The Insider points out that “the changes follow Amazon's April announcement that it would slash prices at Whole Foods and double its Prime member deals, as some customers complained about meager Prime member savings.”
    KC's View:
    I guess I’m just a little surprised that it took this long … but sometimes I probably overestimate Amazon’s ability to connect dots that most people and companies do not see.

    I suspect there are all sorts of other opportunities to integrate Amazon’s and Whole Foods’ operations in ways that compound their strengths while not diluting their specific brand appeals and value propositions.

    I’ve been wondering lately if there would be any advantage for Amazon to go beyond Prime as it currently exists and have tiers of membership based on annual spend … would having “Prime Gold” somehow alienate just regular ‘Prime” members? Or would transparency about benefits actually prompt members to buy more so they could garner greater advantages?

    Published on: May 20, 2019

    The Street has a piece suggesting that while Walmart again “has reported strong quarterly sales growth for its U.S. e-commerce operations,” which in turn has raised questions “about the implications of this growth for Amazon,” it probably makes sense to take the alarm bells “with a grain of salt.”

    The reason? “Walmart still isn't sharing actual revenue numbers for its e-commerce units -- nor is it sharing what percentage of their sales involve Walmart's increasingly popular grocery pickup services,” the story says. “Consequently, it's quite likely that a significant portion of Walmart's grocery pickup sales, as well as some portion of its standard e-commerce sales that involve groceries and other household goods, would have taken place at physical Walmart stores if online ordering wasn't an option.

    While both Amazon and Walmart are in the process of launching competing one-day shipping services, The Street writes, “given the scale and efficiency of Amazon's giant fulfillment and logistics infrastructure -- an infrastructure that unlike Walmart's was built solely with e-commerce in mind -- as well as its ability to subsidize shipping costs via Prime membership fees, Amazon looks better-positioned to profitably support one-day shipping on a large scale.”

    In the end, while the battle is joined, “given the scale and efficiency of Amazon's giant fulfillment and logistics infrastructure -- an infrastructure that unlike Walmart's was built solely with e-commerce in mind -- as well as its ability to subsidize shipping costs via Prime membership fees, Amazon looks better-positioned to profitably support one-day shipping on a large scale.” And The Street argues that with a lot of room left for growth in e-commerce, “while Amazon can't ignore Walmart's recent e-commerce traction, there's little need for Jeff Bezos' firm to panic over it at this point either.
    KC's View:
    There’s no question that there’s plenty of room, but it will be interesting how it all will play out as e-commerce continues to grow, especially in the grocery sector. I know companies worry about the leading edge turning into the bleeding edge, but they also have to worry about giving these two giants too much of a head start.

    Published on: May 20, 2019

    Business Insider reports that fast food chain Taco Bell is opening The Bell: A Taco Bell Hotel and Resort, in Palm Springs, California, on August 9.

    The story says the facility will be “fully Taco Bell-themed, with new menu items, a gift shop, and a nail-art, fades, and braid bar inspired by the chain.”

    Business Insider says that “executives want to be clear: This isn't a stunt, but part of Taco Bell's wider strategy of moving the brand beyond the traditional fast-food experience.”

    Taco Bell's chief global brand officer, Marisa Thalberg, says that “Taco Bell's experience with hosting weddings in Taco Bell's Las Vegas Cantina instructed the chain's thinking around the hotel. Since Taco Bell began hosting weddings there in 2017, more than 165 couples have gotten married at the festive location.”

    The story says that the Taco Bell-themed hotel only will operate for a limited period of time, but could be extended if customer demand suggests it.
    KC's View:
    I just hope that they have a chihuahua in the lobby, and triple ply in the guest rooms.

    Published on: May 20, 2019

    Bloomberg has a story about the “ghost kitchen” business model, which allows entrepreneurs to grow their businesses online with fewer financial impediments. Example:

    “Thomas Pham, a franchisee with 10 Halal Guys kebab restaurants in Southern California, is giving it a try. He turned to the newish “ghost kitchen” business model earlier this year as he builds out his company.

    “Rather than paying as much as $500,000 upfront for a new restaurant, he opened a location in a shared-space kitchen in Pasadena that makes food for to-go and delivery customers. The cost: $20,000, plus a $5,000 monthly fee, which is half the rent for a brick-and-mortar restaurant, he says. With delivery orders booming across the restaurant industry, these new-style cookhouses may be just the ticket for growth.”

    The story says that “the shared space is operated by Kitchen United Inc., a startup backed by the company formerly known as Google Ventures that plans to have as many as 15 locations across the country by the end of the year, including in Atlanta and Columbus, Ohio. They are ghost kitchens, or delivery-centric cooking spaces without the added hassle of in-person dining that a traditional restaurant brings.”

    Bloomberg writes that Kitchen United CEO Jim Collins says the company “plans to grow to 300 to 400 spaces in four years.”
    KC's View:
    As online food purchases grow, creating business segments that only serve the take-out sector makes a lot of sense.

    Two things occur to me.

    One is that this points out what other businesses can do. If there is a retailer (let’s say, Kroger) that does not serve a particular geographic area (let’s say, New England), are there ways that the retailer can create ghost stores that can build an online business as a way of seeding the land for either an entry or an acquisition? I think so …

    Second, should food stores get into this business, creating ghost kitchens in which they’ll have a piece of the action, from which they’ll have the ability to learn, and with which they could work to expand their own culinary offerings?

    Just wondering.

    Published on: May 20, 2019

    Internet Retailer reports that Amazon “is close to an agreement to buy the ad-serving technology of bankrupt company Sizmek Inc. in a deal that would give the ecommerce giant another weapon against Google’s dominant online ad business … Sizmek’s Ad Server, which helps advertisers place spots around the internet and measure their effectiveness, competes directly with Google’s Marketing Platform, formerly known as DoubleClick. Scooping up ad-serving technology would bolster the pitch Seattle-based Amazon is making to advertisers to persuade them to shift money to its platform.”

    The story notes that “Amazon’s digital advertising business is still small compared with Google’s and Facebook Inc.’s, but it’s growing faster.”

    Skift reports that Amazon has begun offering airline ticketing for domestic flights in India, working through an online travel agency there called Cleartrip.

    According to the story, “Airlines such as Vistara UK, GoAir, SpiceJet, and Indigo were among the carriers offering flights through the service, which offered up to 2,000 rupees ($28.50) cash back on bookings. Amazon customers would see the rebate in their Amazon Pay balance within 48 hours.”

    Skift writes that “Amazon is obviously testing ways to get back into the travel industry with the burgeoning effort with India domestic flights. It is doing so through the partnership route rather than building an Amazon flights offering from scratch.”

    • The Washington Business Journal has a story suggesting that as Amazon builds its new HQ2 campus in Arlington, Virginia, it is likely to serve as a home for companies and people yet to be acquired by Amazon.

    This observation comes from Holly Sullivan, Amazon's head of worldwide economic development, who made the comment at the CRE Connect Summit in Washington, DC.

    The Journal writes that “her point was that HQ2 could be a home for acquisitions and new industries that Amazon looks to grow into … One point, made by other Amazon executives that Sullivan repeated, was that the company did not make a ‘predisposed decision on what teams would grow’ at HQ2.”
    KC's View:

    Published on: May 20, 2019

    Marketing Daily reports that “LeBron James and Walmart are teaming up for a cause challenge almost as big as King James: By purchasing any of his favorite food items at Walmart, people can help the charity Feeding America serve its one billionth meal … The partnership is intended to raise awareness of hunger and food insecurity, with 41 million Americans -- 13 million of them children -- who struggle with keeping nutrition basics on the table.”

    Walmart has had a long association with Feeding America, but the LeBron James association is seen as a way of drawing new attention to the cause.

    “The collaboration, “Marketing Daily writes, “also includes Walmart stocking the pantry in The I Promise School James opened in Akron this year, a public school designed to help some of Akron’s at-risk kids. The school pantry is open 24/7, making sure families always have access to food and toiletries.”
    KC's View:

    Published on: May 20, 2019

    Bloomberg reports that Target is making a major effort to appeal to men with a new range of grooming products. According to the story, Target “is taking its Goodfellow & Co apparel brand into the $9 billion U.S. men’s grooming market on May 19 with more than 30 products. The items include face scrubs, beard oil and even tattoo salve, all priced under $17. Target aims to broaden Goodfellow’s reach and boost its sales, which grew more than 10% last year while the overall U.S. men’s apparel sector declined, according to data tracker NPD Group.”

    The goal is to expand the retailer’s appeal beyond moms and kids as well as grow its private label penetration.
    KC's View:

    Published on: May 20, 2019

    • Kroger announced that Josh Harpole, District Manager within the retailer’s King Soopers Division, has been named Vice President of Merchandising for the company’s Louisville Division.

    • The Nashville Business Journal reports that Jack Stoddard, the second-inn-command at the healthcare startup called Haven that is being launched by Amazon, Berkshire Hathaway and JPMorgan Chase, is resigning from the company. Stoddard reportedly has cited the “exhausting” commute between his home in Philadelphia and haven’s Boston offices as the reason for stepping down.

    A search process and timeline for the naming of a successor has not been established, the story says.

    The Journal writes that “Haven has named several top executives over the past few months, but has not detailed its business plans other than to bring down health care costs for employees at the three companies.”
    KC's View:

    Published on: May 20, 2019

    Herman Wouk, the best-selling novelist whose books include “The Caine Mutiny,” The Winds of War,” “War and Remembrance,” “Marjorie Morningstar,” “Youngblood Hawke” and “Don’t Stop the Carnival,” has passed away just 10 days before his 104th birthday.

    His last book was a memoir, “Sailor and Fiddler: Reflections of a 100-Year-old Author,” published in 2016, though he reportedly was at work on a new book at the time of his death. Many of his works were turned into movies, TV series and Broadway shows, with “The Caine Mutiny” perhaps the most auspicious example.
    KC's View:
    My favorite Wouk line comes from the New York Times obituary … “Imaginative writing is a wonderful way of life, and no man who can live by it should ask for more.”

    Published on: May 20, 2019

    …will return.
    KC's View: