business news in context, analysis with attitude

Published on: June 25, 2019

by Michael Sansolo

While waiting to board a plane last week at Baltimore-Washington airport I encountered a completely new service that’s a perfect sign of the times.

A sign suggested I download the app for “Airport Sherpa,” which would enable me to order food from such exotic places as Subway or Quiznos and have it brought to me at the gate. Seemed like a silly idea to me, but only briefly.

The reality of airports these days is pretty grim. On virtually any day travelers are likely running to their gates late thanks to the seemingly endless security lines at TSA. Plus, as most of us are aware, the airlines have long since stopped providing any food on board. It was never any good, but its absence is especially noticeable on cross-country flights.

Just like that, I started thinking that airport Sherpa is a pretty good idea, enabling travelers stuck in a security line to think ahead and have a sub brought to them at the gate to sustain them in the horribly unfriendly skies. And it got me thinking … what’s next?

The truth is that we live in the age of ultra and not the villain from the Avengers movies. Rather it’s ultra in terms of what we expect and get from services these days. We want and get ultra convenience whether it’s groceries and clothing being selected and brought to us or simply sandwiches arriving at our gate at BWI airport.

Ultra comes in other forms as well. I’ve written here in the past about fast approaching 5G cell phones already promoted by the wireless carriers as Ultra wide broadband. Ultra everything seems increasingly possible and, in fact, likely.

Thanks to realities of summer holidays and vacations, today’s blog is the last I am writing for about a month. (No whining, you get MNB for free and Kevin is entitled to a break!) In most years, when Kevin and I go dark we discuss exactly which news events will likely bring us out of hibernation and our guess is one or two.

This year, I just don’t know. The odds are that over the next few weeks multiple such events are likely. It’s even more likely the world we’ll have in one month might be very different than what we have today, thanks to the ultra-fast pace of nearly everything. Who knows what apps, what services and what technologies will have us all buzzing 30 days from now that, like Airport Sherpa, make so much sense in retrospect.

Sadly none of us has the powers to foresee what we should be doing next month, year or even tomorrow. But the folks at Airport Sherpa provide a pretty solid template. Find an unmet problem or challenge for everyday consumers and figure out a way to solve or at least mitigate that problem.

That seems to be table stakes in the age of Ultra. Unless you know Iron Man.

Michael Sansolo can be reached via email at msansolo@mnb.grocerywebsite.com . 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.

Published on: June 25, 2019

by Kevin Coupe

There has been a confluence of stories in the New York Times that, I think, illustrates something about how to compete against Amazon.

The first story focused on the subject of counterfeiting, which, as has been pointed out here in the past, has become something of a hairball for Amazon.

Here’s what the Times writes:

“The company sells substantially more than half of the books in the United States, including new and used physical volumes as well as digital and audio formats. Amazon is also a platform for third-party sellers, a publisher, a printer, a self-publisher, a review hub, a textbook supplier and a distributor that now runs its own chain of brick-and-mortar stores.

“But Amazon takes a hands-off approach to what goes on in its bookstore, never checking the authenticity, much less the quality, of what it sells. It does not oversee the sellers who have flocked to its site in any organized way.

“That has resulted in a kind of lawlessness. Publishers, writers and groups such as the Authors Guild said counterfeiting of books on Amazon had surged. The company has been reactive rather than proactive in dealing with the issue, they said, often taking action only when a buyer complains. Many times, they added, there is nowhere to appeal and their only recourse is to integrate even more closely with Amazon.

“The scope of counterfeiting across Amazon goes far beyond books. E-commerce has taken counterfeit goods from flea markets to the mainstream, and Amazon is by far the e-commerce heavyweight. But books offer a way to see the depths of the issue.”

Among the pirated titles and books are ripoffs of “To Kill a Mockingbird,” “War and Peace” and “For Whom the Bell Tolls.” But there also is “The Sanford Guide to Antimicrobial Therapy” … which tells you about how deep the problem may be.

(FYI … nobody, best I can tell, has pirated “The Big Picture: Essential Business Lessons from the Movies” or “Retail Rules” or “Business Rules”. Yet. But you’d better get them while they’re real.)

Amazon says it does its best and tries to do better all the time when dealing with counterfeits, whether they are books or sneakers or whatever. But I don’t think that there would be much of an argument with the observation that counterfeiting continues to be a major problem; there is no doubt in my mind that Amazon would be well-served to have a better trackability/traceability system that would weed out the fakes more effectively and provide customers with better, more accessible information about the products they buy. (It isn’t just Amazon. The entire retail business can and should do better.)

Part of the problem is that while Amazon’s reputation may take a hit from counterfeits, its bottom line doesn’t, at least not in the short term - a sale, after all, is a sale.

The Times then had a different story focusing on “the continuing resurgence of independent bookstores,” writing that “the success of independent bookstores has offered a lesson for other brick-and-mortar merchants: Become part of the local fabric.”

There’s one line from the story that grabbed my attention, because it stood in stark relief compared to the counterfeiting story:

“Independent bookstores have become anchors of authenticity.”

Bingo.

Through highly curated selections, author events, sales of non-book merchandise and a deep commitment to their local communities, that’s exactly what many independent bookstores have done. In doing so, they can create community centers that can attract other retailers, which attract other customers.

Sure, they’re not “everything stores.” But they sure as hell know what is on their shelves, they can make recommendations to their shoppers, ands they’re not selling pirated copies of “For Whom the Bell Tolls.”

That’s an important lesson for retailers trying to compete in what admittedly is a tough, challenging, often cutthroat environment.

“Anchors of authenticity.”

That’s an Eye-Opener. I love it.

Published on: June 25, 2019

The US Supreme Court ruled 6-3 yesterday that the public does not have the right to know where more than $60 billion in taxpayer money that is part of the Supplemental Nutrition Assistance Program (SNAP) specifically is being spent.

The case was precipitated back in 2011 when the Sioux Falls Argus Leader sued the federal government to obtain, under the Freedom of Information Act (FOIA), data about how much money some 320,000 supermarkets were getting under SNAP, often referred to as food stamps; it was part of reporting projects on food stamp fraud and a look at the nation’s food deserts.

After the federal government lost the case, the Food Marketing Institute (FMI) stepped in and initiated appeals that eventually went to the Supreme Court. The FMI argument was that the release of the information would cause competitive harm to the supermarkets involved.

FOIA does allow the federal government to withhold information that has been gathered from businesses that includes trade secrets or data that the businesses consider to be confidential and that would cause competitive harm if released. The legal arguments were over whether the food stamp information falls into this category.

In his majority opinion, Associate Justice Neil Gorsuch wrote, "At least where commercial or financial information is both customarily and actually treated as private by its owner and provided to the government under an assurance of privacy, the information is 'confidential' under the meaning of (FOIA).”

But, in the dissenting opinion, Associate Justice Stephen Breyer wrote, “the whole point of FOIA is to give the public access to information it cannot otherwise obtain … Given the temptation, common across the private and public sectors, to regard as secret all information that need not be disclosed, I fear the majority's reading will deprive the public of information for reasons no better than convenience, skittishness, or bureaucratic inertia.”

Inn comments released after the court’s decision was handed down, Leslie Sarasin, FMI’s president/CEO, said, “We agree with the U.S. Supreme Court’s ruling today that a forty-five-year-old interpretation of what constitutes ‘confidential commercial and financial information’ required reexamination.

“Our industry’s commitment to the shopper remains constant amidst seismic marketplace shifts. The nation’s grocery stores have long kept confidential the amount consumers spend at individual stores whether through payment by cash, credit, debit or the Supplemental Nutrition Assistance Program, or SNAP. This store-level sales data undoubtedly must be considered confidential because its release would provide an unfair advantage to competitors. Legislative history tells us the Freedom of Information Act, or FOIA, was created to shine a light on actions by the government, not on that of private parties.”

The National Grocers Association (NGA) filed amici briefs supporting FMI in the various appeals, and Peter Larkin, NGA’s president/CEO, also had a comment: “NGA welcomes the Supreme Court’s decision that will protect store-level SNAP sales data from public disclosure. NGA has maintained that a retailer’s SNAP store data should remain private because its release would harm competition in the food retail industry. Knowing that their confidential business information will remain protected by the government, independent supermarkets will continue to be strong partners in the SNAP food delivery system, serving the millions of American families who rely on domestic food assistance.”

As would be expected, Argus Leader news director Cory Myers had a different take: "We’re disappointed in today’s outcome … This is a massive blow to the public’s right to know how its tax dollars are being spent, and who is benefiting. Regardless, we will continue to fight for government openness and transparency, as always.”

Published on: June 25, 2019

Reuters reports that JetBlue Airways is suing Walmart for trademark infringement in what the story says is “an effort to stop the world’s largest retailer from using the name Jetblack for its text-based personal shopping service.”

According to the story, “In a complaint filed on Friday night, JetBlue said Jetblack was a ‘transparent attempt’ by Walmart to capitalize on the carrier’s goodwill, and would likely cause ‘significant consumer confusion’ as the service expands across the United States.

“JetBlue also said Walmart intended further infringements by using other ‘Jet+color’ names such as Jetgold and Jetsilver, and moving closer to JetBlue’s core business by offering travel services, including dining and entertainment recommendations.”

Jetblack has been pitched by Walmart as a personal shopping service - for the moment only available in New York City - which for $50 a month offers next-day delivery of whatever customers want via couriers or expedited shipping. Walmart has said that two-thirds of its Jetblack customers engage with the service on a weekly basis, and spend an average of $1,500 per month on JetBlack purchases.

“We respect the intellectual property rights of others,” Walmart spokesman Randy Hargrove said in response to the filing. “We take this issue seriously, and once we are served with the complaint will respond appropriately with the court.”

Published on: June 25, 2019

Amazon this morning announced that its annual Prime Day promotion this year actually will last two days - starting at midnight Pacific Time on Monday, July 15 and running for 48 hours, the first time it has lasted that long.

According to the announcement, “Prime Day will offer more than one million deals globally, including new featured Lightning Deals. These deals will include jaw-dropping prices on top-tier brands. Due to the nature of these deals, many will have limited quantities and could sell out fast, so Prime members should come back frequently to view new deals launching throughout the 48-hour event.”

One Prime Day deal already has started, offering $120 savings on a Toshiba HD 43-Inch Fire TV Edition Smart TV, selling now for only $179.99. In addition, starting today Prime members can rent Us, the Jordan Peele thriller, for $2.99.

This year, the announcement says, “members can shop hundreds of thousands of Prime Day deals from small and medium-sized businesses around the globe and, for the first time, members will be able to shop a dedicated page of Prime Day deals from U.S.-based innovators, artisans, and entrepreneurs. Prime members can support small and medium-sized businesses this Prime Day by shopping deals from Amazon Storefronts, Amazon Handmade, Amazon Launchpad and more. Last Prime Day, small and medium-sized businesses selling in Amazon’s stores surpassed $1.5 billion in sales.”

Last year, Prime Day was said to have generated the sale of more than 100 million products during this year’s event, with analysts saying that sales hit $4.2 billion during the 36-hour promotion.

Published on: June 25, 2019

Wired reports that Alphabet’s Sidewalk Labs, a sister company to Google, has released detailed plans for its Toronto project, where the city has given the company access to an undeveloped section of the waterfront and, in essence, offered it the opportunity to create the neighborhood of the future.

According to the story, “The four-volume plan highlights ambitious and sometimes flashy innovations from Sidewalk Labs, which has pledged to spend $1.3 billion on the project if it goes forward. The company hopes to construct all the buildings with timber, which it says is better for the environment, and build an underground pneumatic tube system for garbage removal. It wants residents to lean on public transit, walking, and biking rather than personal vehicles, and plans to build streets with autonomous vehicles - perhaps from its sister company, Waymo - in mind.

“Delivery robots might trundle down its wide sidewalks. The strategic use of very large, umbrella-like coverings might make outdoor spaces comfortable all year round (no small feat in lakeshore Canada). Sidewalk wants to designate 20 percent of the apartments as ‘affordable’ and another 20 percent as ‘middle income,’ for those who don’t generally qualify for social programs.”

However, Wired notes that there is a very Google-like, data-centric sensibility at the core of this development: “Sensors would stud the Quayside development, tracking everything from which street furniture residents use to how quickly they cross the street.

“This data collection is the most controversial part of Sidewalk’s plan. The company says the data is essential to building a new kind of urban space, where traffic, pollution, and noise levels are calibrated to keep residents happy. In this, it follows a new strain of tech-influenced urban planners, who believe a more rigorous approach to city planning might create places more pleasant for all. But advocates in and outside of Canada have questioned how the private company - which generates the vast majority of its revenue selling advertising - intends to safeguard the personal data it collects.”

The story says that Sidewalk Labs has “pledged to create new methods of protecting data collected in public areas, where residents and visitors aren’t actively consenting to its collection. It said all information would be depersonalized and disaggregated, to shield identities and sensitive information. It said it would never sell data to third parties. And it promised to create a transparent process through which it might allow others access to its collected data.”

The plan needs to be approved by the Toronto City Council and Waterfront Toronto by late 2020 in order to move from concept to implementation.

Published on: June 25, 2019

• H-E-B has opened a new tech hub space in East Austin, which will serve as “an office space for the grocery chain's digital team and headquarters for Austin-based Favor, the delivery service app H-E-B acquired in February 2018.”

The converted warehouse is described as being a “81,000-square-foot, open-concept space, complete with more than 50 meeting rooms, state-of-the-art video and technology capabilities, events space, lounge area, and coffee bar.”

Because it is a tech hub, the new office also has all sorts of amenities designed to attract tech workers, like a “wellness center featuring a rock-climbing wall, curated fitness classes, bike parking, and showers.”

Published on: June 25, 2019

• MarketWatch reports that “Walmart Inc.'s Sam's Club is now delivering alcohol, including wine, beer and spirits, via Instacart in select markets across states, including Florida, California and Missouri … Consumers can get same-day delivery of alcohol alongside their groceries with plans to expand the service to additional locations in the coming months.”

Offering alcohol delivery? Good idea. Allowing Instacart to make those deliveries and access your sales data and co-opt your customers? Not so good. Even if you are Walmart.

Published on: June 25, 2019

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

• Business Insider reports that British plant-based meat company The Meatless Farm has “secured a deal to sell its burgers at Whole Foods stores in the US. The company will also establish an office in New York to manage its expansion into the US market.”

The announcement, the story says, caused shares in Beyond Meat - a highly touted US competitor - dropped 10 percent.

The Business Insider story says that “the impact The Meatless Farm's announcement is having on Beyond shows just how sensitive the stock has become to anything that could either boost or diminish demand for plant-based ‘meat.’ For example, the company's stock gained when a shortage of Impossible Burgers reportedly hit restaurants like White Castle and Red Robin.”


• Newsday reports that Stew Leonard’s is going to reward good grades.

The story says that “on Saturday, kids ages 5 to 12 who earned at least one "A" or equivalent grade can stop by Stew Leonard's in East Meadow (1897 Front St.) and Farmingdale (261 Airport Plaza) for one free, small ice cream cup or cone. If your child's school does not give letter grades, the highest mark at their school will be accepted.

“To redeem the free ice cream, kids must bring a copy of their 2018-2019 report card (digital or paper) to the store between noon and 5 p.m. Note: Toppings are not included.”

With all due respect to my friends at Stew Leonard’s, I think this is way too easy. Only one ‘A’ gets you free ice cream? What if the rest of your grades stink? I know I’m tough on this stuff, but I’d rather reward a little more consistent excellence … otherwise, we get into ‘everybody gets a trophy’ territory.

Published on: June 25, 2019

MNB readers know that I’m a big fan of subscription services … and a new piece of satire inn The New Yorker suggests that the concept gas gained considerable cultural traction.

The piece offers a look at some new subscriptions available to shoppers. Three examples:

• “Plates: From the creators of Plated comes Plates—it looks like a typo, but it’s not. Our subscription service delivers plates to your home for just $15.99 a week. They’re the plates we bought for the photoshoot of the food we offer via Plated, so, fair warning, there’s a lot of Fiestaware. Once you’ve used them, you can return them; no need to load the dishwasher. Just dump a bunch of dirty plates into our box (we will not accept any other boxes) and lug them to the post office.”

• “Just CVS Receipts: The best of the CVS experience, with none of the shopping.”

• “YourStuff: We take your stuff, and then we send it back in three shipments, for just sixty dollars per week. How do we take your stuff? Facebook sold us your data. We know your address and when you’re not home. We know your mom’s Social Security number. Just subscribe. Use the code blackmail to get ten dollars off your first box of stuff that’s already yours.”

There are lots more, and you can check them out here.

Published on: June 25, 2019

Got the following email from MNB reader Frank Squilla regarding the apparent return of Toys R Us to the bricks-and-mortar wars:

Ever since their demise, I have been an advocate of saving a portion of Toys, but they have to do this right. Retail, as you know is rapidly changing and in order to be successful in this environment, I believe a chain can succeed in drawing families and kids as an interactive store. It cannot be just a place to buy toys. I believe you are right with that comment.

However, if it’s interactive, Testing new Toy concepts, play areas, birthday Parties, manufacturer sponsored events to promote new launches, fun play dates for kids in a safe environment, strong web presence, I believe a scaled down version can be worth the effort. I wish them luck, but as you state, let’s see what they come to the table with.

One other add on. What about also having a cafe for the parents to have a coffee while the kids play, under staff and or parent supervision. It’s different, but you have to be different today.



Regarding the possibility that the Los Angeles market could see another supermarket strike, MNB reader Jeff Weidauer wrote:

I remember the 2003 strike very well. In my case, we had to go to Dallas to shoot a new TV commercial because the Teamsters wouldn’t work in Los Angeles. But I remember it more because of the friends who lost everything – cars, homes, and in many cases, friendships. If there is another strike, both sides will lose, and lose big. And if it goes on long enough, the SoCal market will never be the same. Let’s hope they can settle this, and soon.



Responding the contretemps over “Good Omens,” the new TV series on Amazon that a religious group would like to see taken down (though the petition it circulated mistakenly identified Netflix as the streaming service that carries it), MNB reader Eric Carlson wrote:

Kevin, I came across Good Omens a couple of weeks ago, and enjoy it very much it. It's tongue-in-cheek parody, and points out some of the incongruous stories in the Bible … The whole show reeks of George Carlin, Hitchhikers Guide to the Galaxy, and Monty Python rolled into a big ball.

It's not a slight on religion, it's a slight on people who don't think for themselves. And who can't take a joke.

Thanks. I’m now officially looking forward to watching it.



Finally, I made a movie reference yesterday in a commentary about the surveillance culture in which we live, prompting MNB reader Steve Panza to write:

My dad introduced me to The Conversation 30-odd years ago, and it is one of my favorite movies. In this day of movie reboots, I'm surprised no one has updated this one. Cameras are everywhere, and our electronic devices can listen in (when my dad and I talk on the phone, we always greet any listeners, partly in jest, partly because you never know who is listening in).

You dad is a man after my own heart.