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    Published on: February 14, 2020

    by Kevin Coupe

    It's been a long week as we've introduced the new, rebooted MNB to the world … and once we got past Monday, most everything seems to have gone pretty smoothly.

    And so, I thought we could use a little comic relief in the Friday Eye Opener.  A member of the MNB community sent me this video earlier this week, and I thought I would share it with you.  It does paint gender roles in somewhat stereotypical fashion, but I still think it is pretty funny … and to be fair, the men are portrayed as being dolts.  (Not unfairly, I would add.)

    So enjoy.

    One more thing… 

    One of the real pleasures of the week was hearing from so many of you, and finding out the degree to which you view MNB as your own.  That is enormously gratifying, and I will continue to work hard to make sure people continue to feel that way.

    One of my goals over the next few days is to again go through all of the emails you sent me, and compile a list of where you think we can improve the MNB experience.  And then, to quote the great Jean Luc Picard, we will do our best to "make it so."

    Published on: February 14, 2020

    Walmart said yesterday that it is shutting down its Jetblack concierge shopping service, which it launched in New York City in 2018 but never was able to scale up in terms of market penetration or profitability.

    It had been reported that Walmart was looking to either sell or find a partner to share the pain, but it was unable to do so.  The service will shut down on February 21.

    Jetblack's value proposition was that it would deliver anything - not just Walmart products - to anyone in the city for $50 a month.

    According to the Journal, "Some members of Jetblack’s technology and design team will become part of Walmart’s wider customer organization, continuing to work out of New York."  Walmart plans to lay off 293 of Jetblack’s 350 employees.

    Some context from the Journal:

    "Jetblack was launched publicly in 2018 as part of an innovation arm at Walmart dubbed Store No. 8, where the company intends to build technology and business units that aren’t immediately profitable but could be integrated into the larger company in the future.

    Walmart executives have talked about Jetblack as a potential avenue of growth and research, not as a profit center. As of last summer, Jetblack was losing about $15,000 per member annually … Walmart aimed to use Jetblack’s human agents to train an artificial-intelligence system that someday would power an automated personal-shopping service, preparing Walmart for a time when web-browser search bars disappear and more shopping is done through voice-activated devices."

    From the Tech Crunch coverage:

    •  "The retailer is trying to spin the shutdown as a learning experience, noting that part of the initiative was to test and build technology that could eventually be applied to other parts of Walmart’s business. In Jet black’s case, Walmart learned about conversational commerce and how customers could use text messages to shop."

    •  "To be fair, a high-end shopping service was largely an experimental concept for Walmart to dabble in, and it’s not surprising that it didn’t take off. After all, the Walmart brand today is aligned with cost savings and mainstream America, not necessarily the well-to-do, time-strapped urban parents to whom Jet black aimed to cater. It also overlapped with Walmart’s own home delivery options, including its successful Walmart Grocery service, which could deliver the fresh food Jet black could not."

    KC's View:

    Walmart has made a series of big splashes over the past few years with big and small investments in technology and e-commerce companies, with the perception being that it was in the process of transforming a legacy company into something better positioned to compete with Amazon, albeit with the advantage of a massive bricks-and-mortar footprint.

    Now, with divestitures and closings, it would appear that Walmart is backing off a bit, at least in part because a bunch of unprofitable businesses tend to have an impact on its stock price, of which it is highly aware.

    Just to be fair to Walmart, it would be hypocritical to suggest that this approach is bad business;  in many ways, this is what Amazon does - it tries lots of stuff, and when something doesn't work, it moves on.  But what remains to be seen is whether Walmart is as committed as it needs to be to the transformation of its business to a rebooted model … if, indeed, you think that such a transformation needs to take place.

    The other question it raises is about Marc Lore's future at Walmart.  He came over when Walmart bought Jet, and there seemed to be some empire building going on here.  But the empire is shrinking, and the betting here is that when Lore's contract ends, he'll go off to wait out his non-compete period and then start something else.

    Published on: February 14, 2020

    Bloomberg has a piece about what is believed to be the first in Amazon's chain of new grocery stores, which is the process of being built in the Woodland Hills neighborhood of Los Angeles.  No opening date yet has been announced, but Bloomberg got a peek inside, and here is what it reports:

    •  "Numbered aisles await staples like rice, beans, pasta and canned vegetables; waist-high coolers sit between some shelves.  In the back of the 33,000-square-foot space, which is about average size for a supermarket, a meat and seafood counter sits in one corner. In the other, there’s an area called “Fresh Kitchen” for prepared foods and soups. The new chain makes it possible for Amazon to stock and sell the high-volume products that the purists at Whole Foods won’t touch—things like Coca-Cola, Smucker’s jam and Tide detergent."

    •  "At the center of the store, long aisles of conventional-looking shelves appear to carry the digital tags that the company uses in its Amazon Books and 4-Star stores, which let the retailer quickly circulate inventory and change prices. But Amazon has said the new supermarket will not be equipped with the cashierless system from its Go convenience stores."

    •  "There is at least one quintessentially Amazonian touch, and a sign that the company may try to use the chain to stitch together physical and digital shopping. Near the entrance, underneath a bright orange wall and Amazon smile logo, is a window for order pickup and customer returns."

    •  "Plans show a staging area behind the window with what appears to be shelving, potentially for order pickups from both customers and delivery service providers, who will shuttle orders to people’s homes. A television display and whiteboard sit alongside the return counter, likely to help orchestrate the chaos of deliveries into and out of the store."

    The story notes that "other sites Amazon is said to have leased in the Los Angeles area suggest a preference for repurposing existing storefronts, rather than building new ones … The company has leased a former Ralph's supermarket in the Los Angeles neighborhood of Encino. In Irvine, Amazon is renovating a former Babies R Us and last month applied for a liquor license for the space under the name 'Amazon Fresh,' the same name as the company’s grocery delivery service."

    Bloomberg reported out the story here:

    KC's View:

    I am as anxious as anyone to see what this store looks like, but I'll be disappointed  a bit if Amazon doesn't do something in the store to change the nature of shopping.  It doesn't have to have Amazon Go checkout-free technology or anything so advanced, but I hope that they do something fundamentally unique in this new space.

    Otherwise, what's the point?  I expect more of Amazon than just another store.

    Published on: February 14, 2020

    It has been a tough week for e-commerce companies.

    Ahold Delhaize announced that it would close down the midwest operations of its Peapod e-commerce business - abandoning the market where it started more than two decades ago.

    Then online store Brandless, created less than three years ago to sell "simply branded household, personal care, baby, and pet products on the cheap," and in doing so compete effectively with Amazon, said it is going out of business.

    And now Axios reports that "Hollar, an e-commerce company that raised more than $75 million in VC funding, is expected to wind down soon."  Hollar launched in 2015, the story says, "to help users find dollar store-like bargains on branded consumables, ranging from kitchen goods to toys to beauty products."

    Sources tell Axios that the economics of the site never worked out, and the company started looking for a buyer last year.

    KC's View:

    Indeed, it may end up being a tough year for some of these companies.  We're at the end of a ten-year economic boom, and when gravity kicks in - as it inevitably must - a lot of companies may have to re-evaluate their ability to survive in far tougher times.  What we're seeing now may be early days of exactly this.

    Published on: February 14, 2020

    The Boston Globe reports that online home goods retailer Wayfair said yesterday that "it is laying off hundreds of employees, primarily in its Copley Square headquarters, in the midst of aggressive efforts to scale its business. In the last two years, Wayfair has doubled its size from around 8,000 workers to more than 17,000 worldwide. However, despite its growth, the company has also yet to turn a profit."

    The company says that the 500 layoffs "is just a fraction of its worldwide employees."

    Wayfair spokesperson Susan Frechette tells the Globe that the company is looking to “increase efficiencies while aligning our teams with the initiatives that drive the greatest impact for our customers … As part of that process, we have made some organizational changes that affect approximately three percent of our global workforce."

    KC's View:
     

    The word in Boston is that the tech folks losing their jobs will have lots of options - Boston is positively booming in this area.  

    When Ahold Delhaize eventually moves its Peapod Labs to Boston from Chicago - which I think it will, no matter what they say - there will be a lot of folks in the employment pool from which to choose.

    Published on: February 14, 2020

    From a column this week by Jane Brody in the New York Times:

    "A prestigious team of medical scientists has projected that by 2030, nearly one in two adults will be obese, and nearly one in four will be severely obese. The estimates are thought to be particularly reliable, as the team corrected for current underestimates of weight given by individuals in national surveys. In as many as 29 states, the prevalence of obesity will exceed 50 percent, with no state having less than 35 percent of residents who are obese, they predicted.

    "Likewise, the team projected, in 25 states the prevalence of severe obesity will be higher than one adult in four, and severe obesity will become the most common weight category among women, non-Hispanic black adults and low-income adults nationally.

    "Given the role obesity plays in fostering many chronic, disabling and often fatal diseases, these are dire predictions indeed. Yet, as with climate change, the powers that be in this country are doing very little to head off the potentially disastrous results of expanding obesity, obesity specialists say."

    It is a sobering analysis, with suggestions for some public policy fixes, and worth reading here.

    Published on: February 14, 2020

    From a column this week by Farhad Manjoo in the New York Times:

    "Amazon is a genie of consumerist wishes, and it keeps growing more irresistible. The company’s online store has always been convenient and plentiful, but in the last year, Amazon significantly increased the speed at which it delivers products, with many items delivered overnight to its Prime members … As a fervent Amazon customer, I love that its platform keeps getting more convenient. But as a professional worrier about tech’s future, I’m nervous. Amazon’s growth should scare the critics — including yours truly — who worry about the size and scope of gigantic tech firms."

    While there seems to be a growing appetite among lawmakers and activists for regulation and perhaps even forced breakups of these companies, Manjoo writes, Amazon could be the exception, precisely because so many consumers are intimate with its value proposition:  "The trouble isn’t that it’s hard to make the case that Amazon is extremely big and powerful; the trouble is that even as Amazon gets bigger, it still faces relentless competition in the retail business, and is therefore not slowing in any obvious way to act like a lumbering monopoly of yore. The company keeps innovating — and as it does, the possible harms critics have long warned about may look increasingly distant to its customers."

    It is a really interesting piece for its insights into consumer behavior and Amazon's ability to tap into it … and you can read it here.

    Published on: February 14, 2020

    •  Mashable reports that Amazon is "taking precautions" as "the coronavirus outbreak in China continues to plague local manufacturing businesses."

    Last week, the story says, "Amazon placed off-cycle orders with some of its suppliers last week to increase inventory of Chinese-made products as it 'prepare[s] for possible supply chain disruptions due to recent global events originating in China,' according to an internal email."

    Mashable points out that "at least 40 percent of sellers on Amazon's U.S. marketplace are based in China. But many Chinese factories have been unable to resume production after the Lunar New Year holidays, as workers across China have been unable or unwilling to return to work due to travel restrictions and local law enforcement practices.   Manufacturers, too, have struggled to reach suppliers and provide face masks for workers according to national mandates."

    Published on: February 14, 2020

    •  KARE-TV News  reports that Minnesota-based grocery chain Kowalski's "plans to build stores in two metro-area malls, Southdale Center and Rosedale Center."  They are, the story notes, malls that happen to be "thriving" - in part because they're not just about retail anymore.  They're putting in apartments, a library, a fitness center - things that make it "hard not to think that they really want you to live there full time."

    Published on: February 14, 2020

    •  FMI – The Food Industry Association announced the appointment of Dan Ratner, most recently membership and business development strategist for Next Steps LLC,  as senior director of member services. 

    •  Starbucks announced that Brady Brewer, the company's Senior Vice President, Digital Customer Experience, has been promoted to the role of Chief Marketing Officer.

    Brewer, who has been with Starbucks in a variety of roles - including COO of Starbucks Japan - since 2003, will report to COO Roz Brewer (to whom he is not related).

    KC's View:
     

     Is it just coincidence that two of the top people at a coffee company are named "Brewer?"

    Published on: February 14, 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.

    •  The Seattle Times reports that the Court of Federal Claims has ordered the US Department of Defense to stop working with Microsoft on what is called the Joint Enterprise Defense Infrastructure (JEDI) cloud-computing network, siding at least for the moment with Amazon, which charged that President Donald Trump meddled in the bid process and put his finger on the scale to make sure Amazon would not get the contract.

    According to the story, Amazon "alleges the Defense Department made numerous errors as it weighed bids from Amazon and Microsoft," as well as charges that Trump influenced the decision because of personal animus against Jeff Bezos, who owns the Washington Post in a private investment.  (The Post has been aggressive in its coverage of the Trump administration.)  It is generally conceded that Amazon is the market-leader in the cloud computing business, but Microsoft is among several companies infesting in the segment and trying to make inroads on Amazon's business.

    If Trump didn't like Bezos before, he may really hate him now:  As part of its lawsuit, Amazon wants to depose both Trump and Secretary of Defense Mark Esper.

    Published on: February 14, 2020

    Regarding The Body Shop's new employment policy - hiring the first person who walks through the door - MNB reader Bob Overstreet wrote:

    They are being picky without having to do the interviews.  It’s the early bird gets the worm approach to hiring.  If you want a job and are willing to get in line early for the job, chances are you have the work ethic to hang on. 

    Might be more problematic for customer facing employees, but for warehouse, good idea. 




    From another reader:

    I applaud this retailer for providing opportunity to those that might not find it elsewhere and am happy the policy is working out for them.  Kudos to them.

    However, when I read this story I immediately thought of EEOC numbers.  It’s sad, but I think most hiring managers and HR folks’ first thought is about diversity in hiring policies.  it’s been shown that a diverse management team makes better decisions and customer facing employees who mirror the customer base grow that base and build customer loyalty.    While I applaud Body Shop’s policy and think it will actually increase their diversity, what if they begin to find that the first applicants through the door begin to decrease diversity?  The policy definitely wouldn’t fly in some of the more segregated parts of the nation or with some employers that are already weak on diversity. 

    A retailer I once worked for adopted a hiring policy designed to improve their dismal EEOC numbers.  They put every qualified candidate, even those that barely met minimal qualifications into a pool then hired the candidate from that pool that would best improve the company’s  diversity.  It worked great.  Candidates that might not have previously been given a chance were hired and most succeeded and went on to future advancement. 

    And from another:

    I would like to see a good university try something like this as an admissions policy. Yes there may have to be some financial question, possibly the willingness to work while in the school to pay for tuition or something. But it would be fascinating to see what would happen with students that may not otherwise get the opportunity to go to a good school.



    Responding to my piece yesterday about Amazon not selling certain books - like those by Nazis, white supremacists and anti-semites - and my suggestion that it ought to publish essays about these issues in the spots where those books ordinarily might be, MNB reader Marianne Gibb wrote:

    I really appreciate your thoughtful, heart centered approach to this.  I agree, transparency about why Amazon is not selling certain titles is important and your suggestion of adding essays is great way to do this.  Thank you for helping move all of us forward in a landscape where so many are floundering or moving backwards.



    There was a story yesterday about how Unilever has decided to advertise ice cream directly to kids 12 and under, prompting one MNB reader to write:

    I have to say, that is a sad state. It is not advertising to children that makes them obese.  Ice cream is like a rite of passage as a child – being so excited to hear the ice cream truck on the block, running to gather enough change for a treat. That probably doesn’t even happen anymore. I remember many family trips to DQ – centered around getting ice cream, clearly, but, looking back, cemented some great memories of family times.

    That said, not a big loss either – I don’t think kids really care!  And I’m sure the parents won’t either.

    Published on: February 14, 2020

    One of the great pleasures of Amazon's Prime Video offerings has been "The Marvelous Mrs. Maisel," which dropped its eight-episode third season some time back … and it is every bit as good as the first two.

    For those who never have seen "Mrs. Maisel," it takes place in the late 1950s, as Midge Maisel - who has lived a charmed and sheltered life on New York City's Upper West Side - explores a burgeoning career as a stand-up comic.  What the show has done so well is capture the tenor and look of the times, with sparkling dialogue largely written by series creators Amy Sherman-Palladino and Daniel Palladino (who gave us "Gilmore Girls").

    "Mrs. Maisel" has consistently worked to challenge its premise by consistently putting Midge (played with verve by Rachel Brosnahan) in different situations - in season three, as her career takes off, she finds herself on tour and developing a friendship with pop singer Shy Baldwin, which has the effect of throwing her off balance and then watching as she finds it again.  And it is very, very funny.

    The supporting cast - led by Alex Borstein as her manager, Tony Shaloub and Marin Hinkle as her parents, Michael Zegen as the ex-husband she can't quite get over - sparkles.  Luke Kirby is especially good as Lenny Bruce, who is mentoring Midge;  anyone who knows the Lenny Bruce story will find the moments he enters the story to be compelling and tinged with future tragedy.

    If you haven't caught up with "The Marvelous Mrs. Maisel," I urge you to find the time.  It is a terrific piece of work.

    Also from Amazon Prime Video yesterday came the announcement that "Bosch," the series based on the Michael Connelly novels that is scheduled to begin its sixth season in a few months, already has been renewed for a seventh season.  That's the good news.  The bad news was that the seventh is scheduled to be the final season of "Bosch" produced by Amazon.

    We have a way to go before one of the best detective series ever made comes to an end.  But I kind of miss it already.

    I confess to being completely unfamiliar with the Billie Eilsh oeuvre.  I know she won a bunch of Grammys this year, and did "Yesterday" on the Academy Awards.  But other than that, I'm ignorant.

    But that may change, since it has been announced that she is doing the theme for the new James Bond movie, No Time To Die, which will be in theatres on April 10.

    The song itself was released yesterday, and it sounds very much in the Bond tradition, and perfect for the final film in which Daniel Craig plays the iconic spy.

    I have two wines to recommend to you this week.

    The 2017 Omen Pinot Noir, from Oregon's Rogue Valley, is a lovely and smooth pinot that goes pretty much with everything - the winery suggests pizza, but I think that pizza goes with everything, so there's that.  What I can tell you is that it is really, really good.

    And then, there is the the 2017 Halem Heights Chardonnay from Oregon's Willamette Valley, a small production wine from a small family-owned vineyard - it is, to my palate, a little more delicate than many chardonnays, but quite good.  I just wish they'd make more.

    Published on: February 14, 2020

    Monday, February 17, is celebrated as Presidents Day here in the US - we consider the historical achievements of people like George Washington, Thomas Jefferson and Abraham Lincoln, and are thankful for the fact that they give the business community an excuse to have sales on cars, mattresses and large appliances.

    MNB will be off on Monday, but will be back Tuesday with all-new hand-crafted news and commentary.

    Have a great weekend.

    Slàinte!