retail news in context, analysis with attitude

Last week we reported here how Amazon has been sending an email to suppliers in which it offers them access to a program that is designed to help combat the presence of counterfeit goods on its site.

I commented, in part:

Counterfeit products have turned into a hairball for Amazon, which is why it is venturing into this arena. Consumers, with some justification, expect it to police the products it is selling on its site.

My reading of the memo suggests that it is a little softball for my tastes … I think that Amazon ought to be a little tougher on this issue - requiring, not suggesting, that companies be able to prove that what they are selling are real, not fake … I’m a firm believer in transparency, trackability and traceability - it is what consumers want and demand, and at some point retailers that do not have such systems at their disposal will end up at a competitive disadvantage.

MNB reader Joe Zink responded:

Great call.

Amazon needs to be tougher on requiring proof and help protect the brand. Great brands can be damaged by consumers having a bad experience with the product as know.

I purchased Gillette Fusion Razors that ended up being counterfeit. Amazon did refund my money and Gillette, no fault of theirs, sent me some high value coupons which I greatly appreciated. Gillette was terrific.

At the end of the day, it cost me time but it cost Gillette money unnecessarily.

We also last week referenced a Washington Post story about how Amazon’s stewardship of Whole Foods since it acquired the chain has been less surprising and innovative than some of us might’ve expected.

I commented:

This strikes me as an entirely fair assessment of the impact Amazon has had on Whole Foods - there have been some changes, but not to the extent that outsiders like me would’ve expected. Which gives me pause when thinking about the new chain of physical stores that Amazon is said to be opening later this year - if Amazon doesn’t include some of its secret sauces in the recipe, what’s the point? Isn’t it an opportunity squandered?

MNB reader Cindy Sherman reacted:

I just read your take on Whole Foods.  I could not agree more.  Somehow WFM feels like a slightly better value than before, but just a bit more blah (and I am a store experience junkie, given that my background is innovation).

Insider scoop from my Seattle days - Amazon does have some secret weapons here and it will depend on their ability to recognize and unleash that, amid corporate hierarchy, bureaucracy and the matrix.  Starbucks had a very innovative store concept team (that was largely overlooked).  One of these folks is extremely talented and is now one of the top folks for Amazon Go.  So, they could become more innovative in their store format expansion if they let him do his thing and know how to leverage it.  But that is a big if.


Last week we posted a link to a Wall Street Journal story concluding that it is not a simple matter to figure out whether Amazon is not paying any federal taxes. While the subject has become a matter of much political debate - politicians as disparate as President Donald Trump, and presidential contenders such as former Vice President Joe Biden and Sen. Elizabeth Warren (D-Massachusetts ) have argued that that Amazon is somehow not living up to its civic responsibilities - the Journal writes that Amazon says it pays every penny in taxes that it owes, and that it likely is simply taking advantage of a tax system that offers “deductions and incentives related to investment, research and employee compensation.”

This prompted MNB reader Rich Richardson to write:

It’s not just Amazon…

Rich sent me a link to The Center for Public Integrity website, which concluded that “about twice as many of the largest U.S. companies reported they didn’t owe taxes in 2018 compared with previous years, a partial result of the 2017 Trump tax law.”

The story says: “At least 60 companies reported that their 2018 federal tax rates amounted to effectively zero, or even less than zero, on income earned on U.S. operations, according to an analysis released today by the Washington, D.C.-based think tank, the Institute on Taxation and Economic Policy. The number is more than twice as many as ITEP found roughly, per year, on average in an earlier, multi-year analysis before the new tax law went into effect.”

Among the companies, in addition to Amazon, on the list are Delta Air Lines, Chevron, General Motors, Occidental Petroleum, Halliburton, Netflix, Whirlpool, IBM, Goodyear, and Penske.

Tax law is way above my pay grade, but what I understand about this story is fascinating. Thanks to Rich for bringing it to my attention.
KC's View: