business news in context, analysis with attitude

MNB Archive Search

Please Note: Some MNB articles contain special formatting characters, and may cause your search to produce fewer results than expected.

    Published on: June 7, 2019

    by Kevin Coupe

    Nice piece this morning in the Wall Street Journal about Shilpa Yarlagadda, who as a Harvard freshman envisioned starting a company that could fund other startups led by women. She fixed on the fine jewelry business because she read that it “is typically marked up several times the cost of production.” It was, the story says, “her light-bulb moment; if she went direct-to-consumer, she reasoned, she could take half the profits to fund other companies.”

    So that’s what she did. The Journal writes:

    “Today the company she launched, Shiffon, sells a single piece, the Duet Pinky Ring, in seven varieties and three price points: $90 for sterling silver, $375 for 14K gold, $640 for 18K gold. The Duet is a one-size adjustable ring that circles twice around the wearer’s littlest finger, topped off with a sapphire or diamond alongside a minuscule, barely visible diamond.

    “The two stones represent a ‘pinky promise’ for women to support one another. Half of the profits from each ring go to the company’s non-profit venture capital arm, the Startup Girl Foundation, which has provided funding to six young companies so far. Startup Girl Foundation holds equity in every company they invest in; the returns from these investments go back into the nonprofit, where they are used to fund more companies.”

    The story points out that “Yarlagadda is tapping into a popular new market … Minimalist, ‘everyday’ fine jewelry with relatively affordable price tags is being marketed to millennials and Gen-Z.” And she’s doing it consumer-direct - selling online, circumventing the traditional jewelry store business.

    The Shiffon story, of course, has been helped by the fact that its profile has been raised by a number of celebrities - people like Michelle Obama, Serena Williams, Nicole Kidman, Emma Watson and Shailene Woodley all have been seen wearing it. (Yarlagadda emphasizes that she’s never paid anyone to wear the ring, and that these ‘endorsements’ have come about because these folks support her women-centric mission.)

    Great story, I think … about innovative thinking, ambitious implementation, and looking for holes in existing markets that allow for an entrepreneur to make a move.

    Oh, and here’s the real Eye-Opener.

    Yarlagadda started the business, in essence, from her Harvard dorm room. She’s still in school - next year, she’ll be a senior.
    KC's View:

    Published on: June 7, 2019

    The Wall Street Journal this morning reports that Walmart will launch a three-city test this fall that will have its employees delivering groceries directly to shoppers’ kitchens and refrigerators.

    The program, called Walmart InHome, starts this fall in Kansas City, Pittsburgh, and Vero Beach, Florida. Actual Walmart employees will be making the deliveries; the company says to be able to do deliveries, workers will have to have been employed by Walmart for at least a year.

    According to the story, “The workers will wear body cameras clipped to their chests, allowing customers to watch live streams of deliveries being made while they aren’t home. Workers will enter residences equipped with smartlocks, internet-connect devices that can be controlled remotely to unlock a door.”

    The Journal makes the point that this is yet another retailer attempt to deliver greater value on the last mile to the consumer. It actually leapfrogs, in some ways, a similar Amazon program: “Amazon offers a similar in-home delivery service for Prime members in 50 cities, called Key by Amazon. But drivers don’t deliver fresh groceries, and they leave items just inside a door, garage or the trunk of a car, not a refrigerator. Its Prime Now service also drops orders, including fresh groceries from Whole Foods, on doorsteps within hours.”

    This isn’t Walmart’s only delivery initiative; it also works, in other markets with Instacart and Door Dash, and also has click-and-collect services available in a fast-expanding number of markets.
    KC's View:
    This isn’t a new concept. A number of companies, over the years, have been playing with the idea. It was a long time ago, I think, that there were companies installing appliances in garages that would give delivery people access from the outside without actually allowing them in the house; the resident could then access the groceries - fresh, chilled, frozen - from inside the garage.

    That ended up being cumbersome, and then smart home technology evolved to the point where retailers/delivery people now can actually go into the house, though I do think that it is going to take some time for this to gain broad acceptance. It strikes me as inevitable, though a little problematic in the short term.

    One thing that is important here is that Walmart is taking ownership - if people are going to go into customers’ homes, they have to be Walmart’s people, not people working for some outsourcing company.

    The battle over the “last mile,” it seems, is becoming a battle for the last few feet or yards.

    Published on: June 7, 2019

    Two interesting stories about brands asking whether a rose by any other name would smell as sweet … and coming up with different answers.

    First, there is Jamba Juice … which the company says is changing its name to Jamba.

    Business Insider writes that the rebranding is “all part of a brand relaunch that caters to current health food trends and will emphasize convenience, accessibility, and an expanded menu … Jamba's new aesthetic, store design, and menu will emphasize convenience, accessibility, and on-trend menu items.”

    Under the name “Jamba,” in a smaller font, it will say “Smoothies, Juices and Bowls.”

    "The reality is that most of our guests call the brand 'Jamba' anyways. So it's kind of almost expected now by our guests," says Jamba president Geoff Henry.

    The Business Insider story says that “while Jamba's classic smoothies will still be available, the brand's new menu will emphasize juices and smoothies formulated with plant-based milks and sweeteners over dairy products and sugar. New ingredients will include spirulina, coconut milk, and pea protein. Additionally, Jamba's new store design will feature displays that explain the nutritional benefits of each ingredient to consumers.”

    On the other hand, the Hollywood Reporter reports that Entertainment Weekly magazine, which was launched by Time Warner back in 1990, will become a monthly starting in July.

    Meredith Publishing, which acquired the title in 2017, will not change the name of the magazine, however; it says it will “double down on digital, social, video and experiential platforms.”

    In a prepared statement, Meredith said that “with the transition to a new monthly frequency, readers can expect more of what they love: more access, more memorable features, more in-depth conversation about Hollywood and its brightest talent.”
    KC's View:
    Let’s be clear … it isn’t that a monthly frequency will help EW provide more coverage and depth, but rather that the magazine almost certainly will be putting a lot more focus on its digital offerings. The dead-tree edition, inevitably, is becoming less important to the brand.

    I can understand why EW doesn’t want to lose that brand identity, but I just think it is going to look silly when the cover says “weekly” but the product only shows up monthly.

    As for Jamba … this shift seems a lot more sensible and in touch with its core value proposition.

    Published on: June 7, 2019

    The New York Times this morning has an op-ed piece by Dan Barber - best known as chef and co-owner of the Blue Hill and Blue Hill at Stone Barns restaurants - in which he writes the seed business, and how “just 50 years ago, some 1,000 small and family-owned seed companies were producing and distributing seeds in the United States; by 2009, there were fewer than 100. Thanks to a series of mergers and acquisitions over the last few years, four multinational agrochemical firms — Corteva, ChemChina, Bayer and BASF — now control over 60 percent of global seed sales."

    Barber argues that this is alarming, with the potential to have an enormous impact on the food we grow and eat. “Big Seed,” he writes, “keeps getting bigger, doubling down on a system of monocultures and mass distribution. The problem is not that these seed corporations are too big to fail. It’s that they are failing to deliver what growers need to grow and what we want to eat.”

    Barber writes that “today’s food culture is experiencing a tectonic shift as the rebellious stakeholders of our modern food movement — farmers, independent retailers, nutritionists, educators, chefs and ever-more-informed eaters — upend the marketplace. Their work is like those points in a Seurat painting, dizzyingly complex, but coordinated in impact.

    “The more that I’ve come to understand its intricacies, the more I appreciate that lasting change in our food system has to begin with seeds.” The problem, he suggests, is that the architecture of the seed business is working against diversity, innovation, and even flavor.

    You can read the piece here.
    KC's View:

    Published on: June 7, 2019

    CNN reports that Amazon’s Alexa-powered voice assistant system will within months be able to allow users to make restaurant reservations, call an Uber, or order movie tickets.

    The idea is that inn addition to being able to provide basic information - time or weather - and access to music and podcasts, Alexa will be able to “arrange a whole evening out for you — something Google's Assistant and Apple's Siri can't yet do.”

    Some context: “Alexa is already somewhat proactive with features like Alexa Guard, which lets Amazon Echo devices listen for suspicious sounds such as breaking glass. And you can say things like "Alexa, turn on the lights and play Rihanna" to get the assistant to do two things at once. But it's a lot trickier to create the kinds of dinner-and-a-movie (plus an Uber ride) scenarios that Amazon envisions.

    “Making this kind of complicated interaction work requires a lot of AI effort — Alexa needs to not only understand and respond to human queries, but also come up with smart suggestions that could add to the conversation.”

    Reuters reports that Amazon founder-CEO Jeff Bezos said this week at a company technology conference that “there will be commercial robots in the next 10 years that can grasp items as reliably as humans, a development that could lead to the automation of warehouse jobs around the world.”
    “I think grasping is going to be a solved problem in the next 10 years,” he said. “It’s turned out to be an incredibly difficult problem, probably in part because we’re starting to solve it with machine vision, so (that means) machine vision did have to come first.”

    The story notes that the comment “underscored how companies and university researchers are rapidly developing technology to perform human tasks, whether for elder care in the home or for the picking and stowing of goods in retail warehouses.”
    KC's View:

    Published on: June 7, 2019

    • Walmart announced that a deal with Electrify America has resulted in “more than 120 plus ultra-fast electric vehicle (EV) charging stations (that) are now operational and open to the public at Walmart stores across the U.S.

    “Building upon the original commitment set forth in April 2018, the companies are planning to expand the relationship in the coming years with additional Electrify America charging stations located at Walmart stores across the country.” The collaboration, according to the announcement, “is expected to make the retailer one of the largest retail hosts of electric vehicle charging stations across the  United States, and reinforces Walmart's broader mission to spark collective action – alongside key partners – to drive environmental sustainability and provide customers access to sustainable options.”
    KC's View:

    Published on: June 7, 2019

    CNBC writes that there is one statistic that “could explain why Walmart, Target and America’s dollar stores are thriving, while department stores and specialty apparel chains aren’t … Bank of America Merrill Lynch in a new research report said purchases made by low-income consumers (U.S. households making less than $50,000 per year) grew 6% this past April from a year ago, outpacing both middle- and upper-income consumers’ spending growth across the country.”

    Consumer confidence is ascendant, the story says, and this means that “many low-income shoppers have been encouraged at the start of the year to spend a little more. But they’re not going to Tiffany or Nordstrom to do that. They’re just spending more at places like Walmart and Dollar Tree.”
    KC's View:

    Published on: June 7, 2019

    …will return next week.
    KC's View:

    Published on: June 7, 2019

    In game five of the NHL Stanley Cup finals, the St. Louis Blues defeated the Boston Bruins 2-1 to take a 3-2 lead in the best-of-seven series.
    KC's View:

    Published on: June 7, 2019

    One of the things about the current state of entertainment is that it comes in all shapes and sizes … and nice surprises abound.

    For example: “State of the Union,” on the Sundance Channel, which manages to be innovative in both form and content.

    The premise is simple. A couple, played by Rosamund Pike and Chris O’Dowd, has hit a rough patch in their marriage and are going for counseling. They meet in a pub each week before their session, have a drink, and talk for about 10 minutes about their relationship, their marriage, and the outside influences that brought them together and pushed them apart.

    And that’s it. Each episode lasts 10 minutes, and plays out in real time. There are 10 episodes in all, each one taking place in a week apart.

    The thing is, the writing (by Nick Hornby) and direction (by Stephen Frears) is terrific, working within tight parameters and yet managing to be emotionally expansive. The performances are sparkling … Pike and O’Dowd seem both made for each other and made for making each other crazy, and they communicate a lovely sense of intimacy, love and, occasionally, pain. (Married couples will recognize all of it.)

    There probably are all sorts of ways this story could’ve been done on stage or in a film, but this method - 10 minute bites - plays perfectly.

    I think there are a couple of business lessons to be taken from “State of the Union.” One is the notion of not always thinking within traditional parameters … just because TV series tend to play out in 30 and 60 minute segments doesn’t mean they have to. Innovation and creativity, if you take advantage of them, allow you to give things a different form, an unusual shape, and can end up being absolutely appropriate.

    Another has to do with the conversations that make up “State of the Union.” I’m pretty sure that the talks that happen in the pub before the formal counseling sessions are actually more honest and revelatory than those that take place inside the office. Sure, meetings are important … but that’s not always where the good stuff happens. I think that more companies would be better served to encourage the non-formal encounters, and trust that this is where the magic can happen.

    That’s something Steve Jobs certainly believed. He was heavily involved in the design of Pixar’s headquarters building in Northern California, and he wanted to have just one set of bathrooms, just off the central atrium. If everybody had to go to the same bathrooms, he figured, it would encourage conversation and interaction. (They talked him out of the idea, by the way .. probably because there were too many middle aged men in the building to maker the concept workable.)

    I highly recommend “State of the Union,” that rare marriage of form, content and terrific execution.

    Back Monday. Have a great weekend.

    KC's View: