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: January 3, 2020

    by Kevin Coupe

    The next generation of shoppers may be considerably smaller than the last one.

    Axiosreports that "there are 1.1 million fewer children living in the U.S. today than at the start of the last decade … Even after a numerical decline in the 1970s, children still made up 28% of the total 1980 population. In 2019, kids only made up 22% of the total population."

    The story goes on: "While the child population decreased, the adult population grew by 8.8% in the 2010s, according to an analysis of Census data by Brookings’ William Frey. The child population had grown the previous three decades."

    Axios says that the states with the largest share of their populations under 18 ate Utah, Texas, Idaho, Nebraska, and Alaska, while those with the
    smallest share of their populations under 18 are Washington, DC, Vermont, Maine, New Hampshire and Rhode Island.

    Frey tells Axios, "This isn't the first decade of child population decline. But it ushers in a period when adult growth will continue to dwarf child growth as the population ages and proportionately fewer women are in their childbearing ages."

    Which means that retailers will have some adjusting to do … it already has been established that young people are getting married later, having fewer children, moving to more urban environments (or suburban settings designed to mimic urban neighborhoods), living in smaller homes with less storage space and maybe not even owning their own cars … raising questions about the long-term viability of stores designed to cater to a very different core demographic.

    These Eye-Opening stats suggest that certain categories - like baby diapers - may be less robust in the near future than others - like adult diapers.
    KC's View:

    Published on: January 3, 2020

    Re/code writes that Amazon has applied for a patent on technology that would use people's palms as identifiers. Which would mean, for example, that in an Amazon Go store where people need the mobile app to gain entry, they'd now just have to use the palms of their hands.

    According to the story, "The filing is a glimpse at Amazon’s ideas for putting its own tech-forward spin on how people shop in brick-and-mortar stores, now that it dominates many types of online shopping in the US. But a new potential method for identifying people using biometrics will also likely raise questions for a company that is already facing increased scrutiny over privacy concerns related to its products, ranging from its Alexa voice assistant to its Ring home security gadgets."

    While the filing for a patent does not mean that such a technology definitely will be implemented, there have been stories about Amazon wanting to use people's palms in biometric-based payment systems. And, Re/code writes, "Many of the inventors listed on the application are employees working on Amazon Go, including Dilip Kumar, who has been the head of technology for Amazon Go and is vice president for Amazon’s physical retail initiatives."
    KC's View:
    I'm guessing that this tech isn't quite ready for prime time, so we won't see it when Amazon opens its new chain of supermarkets later this year. But this totally makes sense … and there's no reason to think that our computers and cars and other possessions won't have palm readers. It may not happen tomorrow, but soon … and probably faster than we expect. (Though, to be fair, a lot of folks thought we'd already be living in an age of biometric payments … )

    Published on: January 3, 2020

    Interesting piece from Reuters about how - in a time when "about 10% of goods sold in the United States go back to retailers every year, resulting in roughly $369 billion in lost sales" - a "new crop of startups" is looking to make the process easier on everyone.

    For example, "Los Angeles-based Happy Returns promises to slash returns-related expenses up to 30% by reducing shipping costs and customer support calls. It has 700 'return bars' in U.S. retail stores and shopping malls, where customers drop off items and arrange refunds or exchanges. The company charges retailers a flat fee for every item it processes."

    At the same time, "UPS and home furnishing retailer IKEA are among the investors in Optoro Inc, which helps retailers sort, resell and dispose of returned merchandise more efficiently."

    Amazon, for its part, is partnering with Kohl's to take returns of its items, as well as opening Amazon Hubs around the country where products can be returned.
    KC's View:
    It only makes sense that a new industry would emerge to handle the detritus of a less new one. That's where a lot of entrepreneurs live … and thrive.

    Published on: January 3, 2020

    CNBC reports that Amazon is saying that automakers' demand for its Alexa-powered voice technology is "through the roof," and that the company is “essentially talking” with "all major automakers on partnering in some form."

    The story says that "Amazon wants to capitalize on a growing demand for connectivity in vehicles and create a seamless ecosystem for Alexa on the go and at home. Automakers are looking to improve current in-vehicle voice recognition systems after years of lackluster offerings that have harmed quality and reliability ratings.

    "Automakers started partnering with Amazon for rudimentary tasks such as starting the vehicle remotely through Alexa in-home devices in 2016. The sides have since expanded those collaborations to embed Alexa into vehicles, allowing Alexa to control some vehicle functions. The tech giant also earlier this year released Echo Auto, an aftermarket in-vehicle device with Alexa.
    Amazon has announced partnerships with 10 automakers. Additional tie-ups, expanded relationships and increased functionality with current vehicles are expected next year and beyond."

    Among the car companies said to be in various stages of development and discussion with Amazon are General Motors, Audi, BMW, Volkswagen and Ford.
    KC's View:
    I happen to have an Echo Auto, and whatever problems I have with it can be traced to the antiquated technology in my five-year old Mustang. (My car doesn't even have a rear-view camera, which wouldn't seem like such a big deal except that every other car I drive does … and it is amazing how dependent one becomes on it.)

    This trend has huge implications for retailers, especially as voice technology becomes more intuitive and connected. The ability to compile a shopping list both at home and on the road and then place an order from the car that can be picked up at the store - all in a frictionless fashion - will be a game-changer, giving retailers that are part of the continuum a real advantage.

    Published on: January 3, 2020

    CNN reports that the Ninth Circuit Court of Appeals has ruled that if a company makes a diet soda that doesn't make people lose weight, it does not mean that the company has engaged in false advertising.

    So there.

    According to the story, "The Ninth Circuit Court of Appeals' three judge panel has upheld a lower court's dismissal of a California woman's lawsuit against Dr Pepper/Seven Up Inc. for alleged false or misleading advertising. Shana Becerra of Santa Rosa, California claimed the Diet Dr Pepper's beverage branding and marketing implied it would help people lose weight, according to court documents filed Monday."

    The original complaint argued that "due to the prominent use of the term 'diet' in the product's name, Diet Dr Pepper consumers reasonably believe that the product will assist in weight loss, or at least healthy weight management, for example, by not causing weight gain."

    But the Ninth Circuit maintained that "no reasonable consumer would believe that the word 'diet' in a soft drink's brand name promises weight loss or healthy weight management."

    The original suit was against Dr Pepper/Seven Up Inc., but a similar suit had been filed against Coca-Cola Inc. The plaintiff had been hoping to expand the suit to class action status.
    KC's View:
    I feel bad for the plaintiff, only because we all wish there were magic pills or potions that would cure our maladies and conditions. But there aren't … and that can be a hard lesson.

    I've said it here before, and I'll say it again.

    I’ve always told my kids that life essentially boils down to a simple equation:

    Responsibility + Discipline = Autonomy

    Not pills and potions.

    And autonomy, I’ve always told them, is the Holy Grail when it comes to living your life.

    Published on: January 3, 2020

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

    CNBC reports that Amazon has threatened to fire two employees, saying that they have spoken out publicly against the company's environmental policies while identifying themselves as employees.

    According to the story, "In a statement posted to Twitter on Thursday, Amazon Employees for Climate Justice said that several employees were contacted by legal and human resources representatives, who said they were in violation of the company’s external communications policy … Two employees were told their roles would be terminated if they continued to speak out about Amazon’s business, a spokesperson for the group told CNBC."

    The story goes on: "In the statement, the employee group claimed that Amazon changed its policy in September and that the updated policy 'requires employees to seek prior approval to speak about Amazon in any public forum while identified as an employee.'

    "However, Jaci Anderson, an Amazon spokesperson, said the company’s communications policy isn’t new. In September, Amazon actually tried to make it easier for employees to speak out by adding a form on an internal website where employees could seek approval; prior to that, they had to get direct approval from a senior vice president. She added that employees are 'encouraged to work within their teams' and can suggest 'improvements to how we operate through those internal channels'."

    I understand why Amazon would prefer to keep its internal disagreements internal. But there is a certain irony in the fact that its CEO, Jeff Bezos, also owns a newspaper, the Washington Post, which has as its slogan, "Democracy dies in darkness." It would be my position that when employees feel strongly enough to engage in these sorts of public debates, it is because they feel strongly about the company for which they work - they are not just employees, but stakeholders, and that connection should be respected.
    KC's View:

    Published on: January 3, 2020

    • The National Association of Convenience Stores (NACS) said yesterday that
    "convenience retailers overwhelmingly say their sales increased in 2019," and that "three in four retailers (74%) said that in-store sales increased in 2019, compared to only 7% who said that sales slumped. And 62% say that their fuel gallons sold increased, compared to 25% who said that their fuel sales decreased.

    "A strong contributor to in-store sales growth was better-for-you items that include fruit, vegetables, nuts, health bars and yogurt. Two in three (67%) retailers surveyed said that their better-for-you products enjoyed increased sales in 2019 … Strong industry sales in 2019 also pushed retailer optimism to record-high levels: 89% of retailers said they are optimistic about their economic prospects for the first quarter of 2020, which is 4 points higher than the same time last year."
    KC's View:

    Published on: January 3, 2020

    Content Guy’s Note: Stories in this section are, in my estimation, important and relevant to business. However, they are relegated to this slot because some MNB readers have made clear that they prefer a politics-free MNB; I can't do that because sometimes the news calls out for coverage and commentary, but at least I can make it easy for folks to skip it if they so desire.

    Newsweek reports that "in the fourth and final fundraising quarter of 2019, employees of Amazon were among the largest donors to the presidential campaign of Senator Bernie Sanders of Vermont, according to a press release from the campaign."

    Which is sort of interesting, since Sanders has been a vocal critic of the company: "Sanders is a self-described socialist, and his platform calls for improved working conditions, labor unions and fair wages for all workers could strike a chord with some of them. Amazon does not allow its workers to unionize, and has faced criticism in the past for the working conditions in its facilities, particularly in its warehouses."

    (However, the story also notes that "despite all this criticism, the Sanders campaign has used Amazon to purchase items like office supplies. On Sunday, The Washington Post reported that the Sanders campaign had spent more than $233,000 in Amazon purchases as of September 2019.")

    According to the story, "The campaign stated that Sanders raised $34.5 million in the last three months of 2019. 'Teacher' was the most common occupation among donors, and the most common employers of donors were 'Amazon, Starbucks, Walmart, the United States Postal Service and Target'."
    KC's View:

    Published on: January 3, 2020

    Got the following email from MNB reader Mike Moon:

    I've been thinking recently about the growth of self checkouts. The Walmart and Home Depot in my area have seriously expanded this option in local stores.

    I remember when self checkout was first introduced nearly 20 years ago. The investment was extremely expensive, much more than a standard checkout, and as Retailers, we figured that the customers would steal us into bankruptcy. Adaptation was slow.

    Fast forward to today. My local Walmart, that used to have 24 lanes of traditional checkouts and what seemed like only 4 cashiers with some very long lines, now has 16 or so self checkout stations, maybe 8 traditional checkouts, and the same 4 cashiers. But guess what?, The lines are gone. There is sometimes a wait for the self checkout station (!), but the long customer lines in my local store have vanished.

    I'm curious to know what the data looks like in these stores. Cashier labor has obviously been held steady or possibly reduced, but so has cashier related shrink: cash errors are now 0, cashier theft is 0, cashier related scan errors are 0. I'm sure there is shrink at the self checkouts, and I'm sure there is theft, but I would wager that it is far less than when cashiers handles all the transactions. Do you know if anyone is sharing or has discussed this type of information?

    Not off the top of my head. But now we've put the question out there … crowd-sourcing it, if you will.

    Regarding Sears' decision to sell off its DieHard brand, MNB reader Jeff Weidauer wrote:

    I think you have to be of a certain age to even remember DieHard, much less care about it. The DieHard brand is just one more thing that Sears has neglected and allowed to die easily (sorry). Unfortunately, few will mourn its passing.

    And, responding to our story about revised nutrition labeling on packaging, MNB reader Bob McGehee wrote:

    Good progress BUT  . . . .

    When will the FDA/USDA/CDC/etc. require some consistency in dating of products?  Sell by, eat by, best flavor by, use or freeze by, remove from your house or it will explode by, eat after this date and someone will tell your mother that you’re eating stale stuff.  Wasn’t there an initiative about this a long time ago.  Just wondering.

    KC's View:

    Published on: January 3, 2020

    From Axios Sports:

    "100 years ago today, the Yankees purchased Babe Ruth from the Red Sox for $100,000.

    "Why it mattered: The sale changed the course of history, as Ruth became the face of baseball over the next decade, helped save the sport's popularity in the wake of the Black Sox Scandal and finished his career as the G.O.A.T.

    "By the numbers: In his first season in New York, Ruth hit 54 HR, which was more than any other team except the Phillies, who hit 64. And in 1923, he led the Yankees to their first of 27 World Series titles.

    "Meanwhile, in Boston: The Red Sox were cursed by his departure for nearly a century before finally breaking through in 2004 and winning their first World Series in 86 years."
    KC's View:

    Published on: January 3, 2020

    If there were two movies I did not expect to like during the Christmas break, they were Uncut Gems and My Name is Dolemite, largely because they feature lead actors whose recent work has been largely uninspired. In both cases, though, I was enormously surprised and entertained by the films, though they are very different in tone and subject matter.

    Uncut Gems stars Adam Sandler, a film actor I dislike so much that I will go out of my way to avoid his movies. (Save for 50 First Dates and The Wedding Singer, in which his rough edges are tempered, even sweetened by Drew Barrymore's presence.)

    Sandler has plenty of rough edges in Uncut Gems, but rather than being in the service of a stupid comedy, they are in an independent crime thriller co-written (with Ronald Brownstein) and directed by brothers Josh and Benny Safdie. Sandler plays Howard Ratner, who owns a business in New York City's jewelry district, and is counting on the sale of a rare black opal that he has obtained surreptitiously to help him retire hundreds of thousands of dollars in gambling debts.

    Ratner is a compulsive gambler, however, and things are never that easy, as he continues to make large bets on sporting events - and small bets on people's behavior and willingness to indulge him - putting him in a position that is consistently and increasingly precarious. Every move he makes is more and more desperate, and you can practically feel the tension radiating from his body and spirit … he has the gambler's belief that it always is the next bet that will turn things around, but as the box he's in gets smaller and smaller, the gambles get larger and larger, and I found myself on the edge of my seat as the events unfolded and spun out of control.

    Sandler is, in a word, marvelous as Ratner. He is in almost every scene, and he owns the movie, completely invested in the character's neuroses and decisions … understated (a word not often associated with Sandler performances) when necessary and theatrical when it is called for. It is an extraordinary performance in which one can feel the degrees of desperation growing with every minute. He is supported by a terrific cast - Idina Menzel as his long-suffering wife, Eric Bogosian as a loan shark, Judd Hirsch as his father-in-law, Lakeith Stanfield as his assistant, and basketball star Kevin Garnett playing a version of himself.

    In many ways, Uncut Gems reminded me of a 2974 film called The Gambler, starring James Caan in the title role, written by James Toback and directed by Karel Reisz. But it is far more gritty and earthy - one count has Uncut Gems featuring 408 f-bombs, or three-per-minute. (As a matter of interest, Martin Scorsese's Wolf of Wall Street holds the record with 569 in 180 minutes. In case you were wondering.)

    The business lesson of Uncut Gems is all about decision-making, and how good decisions rarely happen when the people making them also are making up their putative business plans as they go along. Things almost never go right.

    Except in Dolemite Is My Name, the new Eddie Murphy comedy that is a return to form by one of the greatest movie comedians of the 80s and early 90s, in a based-on-a-true-story film that is as unlikely as it is winning.

    (F-bomb note: It has about 169. Just sayin'.)

    The movie is based on the real life of Rudy Ray Moore, a down-on-his-luck comic who invented the character of Dolemite for his stand-up routine, and then turned his onstage success into a movie character to be featured in what he sees as a kung fi-themed film. Moore doesn't really know anything about movies, though, and he puts together the financing by going to friends and relatives and small businessmen, being utterly persuasive despite his naïveté. When he can't get anyone to distribute the film, he ends up doing it himself by renting a theater, doing all the publicity, even practically going door to door to create an audience.

    Dolemite Is My Name is a lesson in self-belief … Moore is completely convinced, even desperately so, that he is capable of more than people give him credit for. (When we first meet him, he is managing a music store, and his comedy - which at that point isn't all that funny - is a side hustle.) And Murphy totally sells it, believing that momentum is everything (perhaps because Murphy's own career lost it at a certain point). The unwillingness to accept the status quo is an important quality in any business venture; if you're just going to do what other people are doing, where's your differential advantage?

    There is a terrific scene that sums up the movie's business lesson. Dolemite Is My Name takes place during the seventies, and at one point Moore takes his friends - all African-Americans - to see the Jack Lemmon-Walter Matthau version of The Front Page; it is, after all, a film comedy, and they hope to learn from it.

    But as the audience - all white - laughs at the film, Moore and his friends look around, mystified. They don't find it funny, they don't find it current, and there is nobody else in the theater that looks like them. That's where desperation meets inspiration, and Murphy's Moore becomes utterly convinced that his comic creation can find a target audience that nobody else is targeting.

    I have no idea how much of the film is strictly accurate, but Dolemite Is My Name has the feel of being artistically truthful, with a core performance by Eddie Murphy that, shed of the easy arrogance of his early roles, taps into something a lot more human and recognizable.

    It is great fun, and something more.

    I found myself, in the end, highly satisfied with "The Mandalorian," an eight-episode original series on the new Disney+ streaming service that offers a fresh view of the Star Wars universe five years after the events portrayed in Return of the Jedi.

    Mandalorians are gunfighters/bounty hunters who, once they put the traditional helmet on, never take it off in front of a living being. The title character is played by Pedro Pascal, who does an excellent job of communicating through body movement and voice; he finds himself a fugitive because of a fateful decision he makes early in the season, and is forced to become less of a loner - and even a parent figure - as he fights to survive.

    I thought from the beginning that "The Mandalorian" was engaging and worth sticking with, and as the season built to its climax, it only got better and better … in its own way, better than The Rise of Skywalker, which looks ever more disappointing the rear view mirror than I thought it was while watching it.

    I still like "Firefly" better, but I'm looking forward to season two of "The Mandalorian" - if for no other reason than at the moment, it is the only thing worth watching on Disney+.

    It may be winter, but that doesn't mean one cannot enjoy a rich, satisfying rosé … which is exactly what the 2018 Romana Sancerre Rosé is. A little deeper and color than the average rosé, this is a good one, drinkable at any time of year, and affordable at around $14 a bottle.

    That's it for this week … have a great weekend, and I'll see you Monday.

    KC's View:

    Published on: January 3, 2020

    A Note From The Content Guy:

    As we post the fourth part of my extended conversation with Randy Fields, chairman/CEO of Park City Group, about the Out of Stocks issue, there is some news to share…

    FMI-The Food Industry Association has announced that it is endorsing ReposiTrak’s OOS Management Solution to address the grocery industry’s long-term and growing problem of out-of-stocks.

    “The FMI 2019 Supply Chain Benchmarking Study showed that most grocery retailers are now missing internal store service-level targets, as reflected by lower on-shelf product availability,” said Mark Baum, FMI’s Senior Vice President Of Industry Relations and Chief Collaboration Officer. “Given that grocers need more actionable information to maintain product shelf availability, we’re pleased to support the ReposiTrak solution and work together as it will help our members take steps to improve on-shelf performance.”

    This announcement underlines the point of this series of podcasts - that the age-old problem of out-of-stocks has become more acute for the grocery industry - Randy Fields call it an "existential threat" - as food retailers struggle to find the right tradeoff between inventory and service levels.

    Park City Group has crafted an effective response to the problem - the ReposiTrak OOS Management Solution - for which there is definitive and provable ROI in terms of sales, profits, and customer retention.

    You can find out more about the ReposiTrak OOS Management Solution by clicking here.

    KC's View: