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    Published on: May 24, 2021

    Inc. has an interesting piece pointing out that yesterday - May 23 - was the 27th anniversary of two events … both of which had a role in Jeff Bezos' founding of a little enterprise called Amazon.  KC finds it all to be … well, logical.

    Published on: May 24, 2021

    by Kevin Coupe

    Seeing that MNB is largely focused on a business segment that depends on being able to sell more stuff to more people, the New York Times story this weekend about how there increasingly are fewer people caught my attention.

    Here's how the Times framed the story:

    "All over the world, countries are confronting population stagnation and a fertility bust, a dizzying reversal unmatched in recorded history that will make first-birthday parties a rarer sight than funerals, and empty homes a common eyesore.

    Maternity wards are already shutting down in Italy. Ghost cities are appearing in northeastern China. Universities in South Korea can’t find enough students, and in Germany, hundreds of thousands of properties have been razed, with the land turned into parks.

    "Like an avalanche, the demographic forces — pushing toward more deaths than births — seem to be expanding and accelerating. Though some countries continue to see their populations grow, especially in Africa, fertility rates are falling nearly everywhere else. Demographers now predict that by the latter half of the century or possibly earlier, the global population will enter a sustained decline for the first time.

    "A planet with fewer people could ease pressure on resources, slow the destructive impact of climate change and reduce household burdens for women. But the census announcements this month from China and the United States, which showed the slowest rates of population growth in decades for both countries, also point to hard-to-fathom adjustments.

    "The strain of longer lives and low fertility, leading to fewer workers and more retirees, threatens to upend how societies are organized — around the notion that a surplus of young people will drive economies and help pay for the old. It may also require a reconceptualization of family and nation. Imagine entire regions where everyone is 70 or older. Imagine governments laying out huge bonuses for immigrants and mothers with lots of children. Imagine a gig economy filled with grandparents and Super Bowl ads promoting procreation."

    According to the Times, "The 20th century presented a very different challenge. The global population saw its greatest increase in known history, from 1.6 billion in 1900 to 6 billion in 2000, as life spans lengthened and infant mortality declined. In some countries — representing about a third of the world’s people — those growth dynamics are still in play. By the end of the century, Nigeria could surpass China in population; across sub-Saharan Africa, families are still having four or five children.

    "But nearly everywhere else, the era of high fertility is ending. As women have gained more access to education and contraception, and as the anxieties associated with having children continue to intensify, more parents are delaying pregnancy and fewer babies are being born. Even in countries long associated with rapid growth, such as India and Mexico, birthrates are falling toward, or are already below, the replacement rate of 2.1 children per family.

    "The change may take decades, but once it starts, decline (just like growth) spirals exponentially. With fewer births, fewer girls grow up to have children, and if they have smaller families than their parents did — which is happening in dozens of countries — the drop starts to look like a rock thrown off a cliff."

    You can read the entire story here.

    It seems to me that while this is a trend that will play out across decades, not days or weeks, it is one of those things that ought to focus retailers' minds.

    If there are going to be fewer people out there - and more people who are in their seventies - a lot of retailers going forward have to think differently about building market share, share of stomach, and establishing enduring relationships with their customers.  And, by the way, with their employees … because fewer people also means a smaller labor pool (and, apparently, an older one).

    Their success will be depend on the degree to which they care for their customers and employees, as opposed to just selling stuff to one group and paying the lowest wages possible to the other.  ("Lowest possible wages" doesn't mean 'low' … it just means that companies may have rethink cultures that reward executives for driving down their labor factors.

    Their businesses, it seems to me, will have to be less transactional and more connectional.

    It was Mark Twain who wrote (paraphrasing Samuel Johnson), "Nothing so focuses the mind as the prospect of being hanged."  That's the Eye-Opening prospect that may be facing retailers in the years ahead.

    Published on: May 24, 2021

    The Wall Street Journal has a piece about how Amazon's penetration in the food business remains underwhelming:  "For the year ended March 31, Amazon.com and Whole Foods had 1.4% and 1.2% of the grocery spending in the U.S., respectively, according to data from Numerator. Industry stalwarts Walmart and Kroger had total market shares of 22% and 12%."

    At the same time, "Amazon’s sales through Whole Foods have been stagnant. Its physical- stores segment, which primarily reflects in-person sales at Whole Foods, has seen annual revenue decline since 2018, the first full year of integration after the grocery chain’s acquisition … Amazon would have a natural advantage in grocery delivery. Yet less than 3% of its domestic fulfillment centers are dedicated to fresh-food delivery, according to estimates from the logistics consulting firm MWPVL International."

    In other words, the Journal writes, not much for competitive food retailers to worry about.  Yet.

    "The real threats are probably the triggers that Amazon hasn’t pulled yet," the Journal writes.  "With margins higher than those of supermarkets, it has room to cut prices if it wants to. Amazon’s full-year overall operating margin for 2020 was 6%, above the 4% for Walmart and 2% for pure-play grocers such as Kroger and Albertsons. That could be a potent and timely tool with food inflation well under way this year and consumers becoming more aware of rising prices.

    "Amazon’s Prime membership program is another big advantage. Michael Lasser, equity analyst at UBS, said data from Prime can help Amazon determine optimal locations for its stores, as well as customizing products depending on the location because it knows shoppers’ spending habits … Amazon has a bigger budget to deploy on new stores or even faster delivery times if it wanted to. The company’s capital expenditures for last year were more than twice that of the four largest grocery chains by U.S. market share combined. It also has a much deeper well of expertise and funds to bring technological enhancements to shopping."

    KC's View:

    At the end of the day, it is important to keep the Scott Moses construct in mind - Amazon's ultimate advantage is the access it has to money, being able to borrow at lower rates than most countries.  Talk about a deeper well….

    Published on: May 24, 2021

    The Wall Street Journal reports that Google plans to open a new, permanent bricks-and-mortar store in New York City's Chelsea neighborhood in the next few weeks, selling Google merchandise, hosting workshops and providing repair services.

    Among the items that will be sold are "items such as Google’s Pixel phones, Nest smart thermostats and Fitbit wearable devices."

    The store will be located on what essentially a Google campus in the area, where it owns several buildings.  The company has operated pop-up stores before, but this is the first venture into permanent physical retailing.

    While Apple has continued to put a major emphasis on its bricks-and-mortar stores (though the pandemic affected their accessibility over the past year), Microsoft has gone in the opposite direction, essentially exiting physical retailing a decade after getting into the space.

    KC's View:

    Google has been talking about building out a physical fleet of stores for almost a decade, and so I guess they've finally figured out what they want these stores to be.

    The problem with the Microsoft stores was that they were Apple store lookalikes and wannabes … I remember thinking and saying that pretty much from the first time I saw them.  It always was remarkable to me that whenever I saw an Apple Store near a Microsoft Store, virtually every time the latter would be empty and Apple would be packed.

    Google is a different company, but it also has to carve out a different approach to physical retailing.  We'll see.

    By the way, I dug this FaceTime video on the subject out of the archives … from 2014.

    Published on: May 24, 2021

    The Seattle Times reports that while it may not exactly be cooking the books, Amazon has been able to make its management diversity numbers look better by broadening the number of people it counts as management.

    Here's how the Times frames the story:

    "In 2016, Amazon didn’t employ a single Black, Native American or multiracial executive and just one Hispanic or Latino executive among its 105 senior leaders in the United States, 78 of whom were white men.

    "One year later, it was a different picture. In federal government reporting, Amazon said it employed 22 Black executives, 51 Hispanic and Latino executives, 22 multiracial executives and 380 female executives, out of a total of 1,767 executives.

    "Amid a hiring spree that boosted Amazon’s total employee head count by 71%, the company in 2017 loosened its definition of executive to include every employee at the vice president and director level, which Amazon had formerly reported as midlevel managers. The change expanded Amazon’s executive ranks by 1,600% in one year."

    According to the story, "Amazon spokesperson Jaci Anderson said the company’s decision to reclassify executives was 'consistent with the EEOC’s job classifications and reporting by other large companies'."

    The Times also points out that the "data reported by some other large tech companies does show similar patterns, though the scale of Amazon’s one-year executive increase makes it an outlier."

    KC's View:

    So-called "title escalation" will only get you so far.  Coming at a time when the nation is dealing with deep and broad questions about diversity and inclusion and Amazon itself is being sued by several employees for race and gender bias, changing definitions rather than dealing with root issues and causes only puts off an inevitable reckoning.

    I'm not saying Amazon is guilty … just that if the commitment to diversity is shallow or illusory, the solution will only be short-term.

    Published on: May 24, 2021

    Random and illustrative stories about the global pandemic and how businesses and various business sectors are trying to recover from it, with brief, occasional, italicized and sometimes gratuitous commentary…

    •  Here are the US Covid-19 coronavirus numbers:  33,896,660 total cases … 604,087 deaths … and 27,502,255 reported recoveries.

    The global numbers:  167,579,949 total cases … 3,479,587 fatalities … and 148,623,665 reported recoveries.   (Source.)


    •  MarketWatch reports that "the number of global deaths caused by the coronavirus-borne illness COVID-19 is likely far higher than official numbers suggest, as all countries are struggling to provide accurate statistical models and counts, the World Health Organization said Friday.

    "The agency’s annual 'state of the world’s health' assessment presented in its World Health Statistics report for 2021, found that as of Dec. 31, 2020, the true number of global COVID deaths was at least 3 million, or 1.2 million more than the 1.8 million officially reported at the time.

    "The official number has since risen to 3.4 million, based on data aggregated by Johns Hopkins University, but that is also likely not accurate, said WHO."


    •  The Centers for Disease Control and Prevention (CDC) says that 61.3 percent of the US population age 18 and older has received at least one dose of vaccine, and 49.6 percent is fully vaccinated.


    •  The Wall Street Journal reports that it seems to be unvaccinated people, rather than vaccinated people, who are driving the country's economic resurgence.

    According to the story, "Vaccinated consumers were less likely to go out to restaurants, salons and entertainment venues than those who don’t plan to get the vaccine, April spending and survey data from market-research firm Cardify.ai show.

    "The vaccinated are 'proceeding with cautious optimism,' said Derrick Fung, chief executive of Cardify. 'They’re still not really comfortable doing live entertainment where there’s crowds of people.'

    "People who aren’t vaccinated, on the other hand, tend to be more risk tolerant and are already living a relatively normal life, Mr. Fung added.  'As places open up, they’re the ones leading the charge'.

    "Spending at entertainment venues was up 20% among consumers who don’t plan to get the vaccine in April compared with January 2020. It was up just 10% among vaccinated people during that same period, according to Cardify."


    •  Axios writes that, "Instead of mandating COVID-19 vaccination, more companies are offering employees cash, paid time off, and other financial incentives to get the shot …Employers are favoring 'carrots' over 'sticks' in the push to get more people vaccinated … Dollar General, Houston Methodist, Kroger, Petco, Target, Walmart, the Maryland state government, and numerous other companies have offered various-sized cash stipends to workers who get vaccinated. The bonuses usually don't exceed $500."

    The problem is that "those carrots could run afoul of federal law - if the rewards are too big … There is no clear standard for how large those rewards can be without violating federal disability, anti-discrimination, and privacy laws, as the U.S. Equal Employment Opportunity Commission continues to lag on issuing guidance."


    •  The Wall Street Journal writes that "supermarket workers are back in the middle of a national conversation about face masks … Masks have become a flashpoint at many supermarkets through the pandemic. Some customers refused to wear masks or to put them on properly, leaving store employees to apprehend shoppers and manage confrontations.

    "Workers said changing rules over masks are adding to that burden.

    "Robert Newell, president at the United Food Commercial Workers International Union’s New York chapter, said the union is encouraging supermarkets to keep mask requirements in place because there’s no easy way to tell whether someone is vaccinated."

    Published on: May 24, 2021

    •  Bloomberg reports that "Instacart Inc. is expanding its delivery partnership with 7-Eleven Inc. in a bid to capture share of a fast-growing convenience store market dominated by DoorDash Inc.

    "The San Francisco-based company is adding 4,000 7-Eleven locations, bringing the total to 6,000 stores in 33 states and Washington. D.C., and pledges to get deliveries to customers in as little as 30 minutes.

    "Instacart began working with 7-Eleven last year, delivering thousands of everyday items, including pantry staples, alcohol, snacks and over-the-counter medications. The companies plan to add alcohol delivery to more states and stores in the coming months, Instacart said in a statement Friday."

    Published on: May 24, 2021

    With brief, occasional, italicized and sometimes gratuitous commentary…

    •  The New York Times reports that "America is at an interesting crossroads: one where Big Candy, vilified in the wellness era as a primary source of refined sugar, has become an unlikely sheriff in the Wild West of recreational marijuana consumption roamed by pandemic-stressed adults."

    The problem is this - packaging created by edible cannabis companies that seems designed to deliberately mimic traditional candy packaging.  Think Zombie Skittles (with THC) vs. Skittles.

    Wm. Wrigley Jr. Company, owned by Mars Inc., has filed a suit "against five companies for selling cannabis-infused edibles that look like … Skittles, Starburst and Life Savers."

    In recent years, the story says, "lawsuits similar to the one filed by Wrigley have been brought by the Hershey Company (against TinctureBelle for products resembling Reese’s Peanut Butter Cups, Heath bars, Almond Joy bars and York peppermint patties), Mondelez International (against a company hawking Stoney Patch Kids) and Ferrara Candy Company (against a store selling Medicated Nerds Rope). These lawsuits have all been settled, with the smaller companies agreeing to halt production and sales of the offending products.

    "Many public health officials fret that without proper regulation, accidental ingestion cases will continue to rise among children as the availability of edibles grows. Some poison control centers have already observed this trend in their data."

    I think retailers have to do the right thing here and serve as shoppers' first ,line of defense against this nonsense.  Make clear to manufacturers that you won't carry packaging that appears to be deliberately deceptive.  Be the agent for the consumer, not the supplier.  Do the right thing.

    Published on: May 24, 2021

    Last Friday's FaceTime commentary pointed out that in a recent conversation with Social Security over screwed up Medicare benefits, I was told that I could only mail or fax them paperwork - no emails accepted.

    Beyond the fact that I'm not sure how someone as eternally youthful as I am to be going on Medicare, I thought this was reflective of an an institution out of touch with how people interact today … something that businesses need to avoid at all costs.

    One MNB reader responded:

    Kevin, you of all people should know about this. Its called fraud. Fishing. Etc.

    Believe me the SSA has email.  They just don't open it up to the public because of email fraud. You have little to no fraud faxing. Even the IRS states/claims they won't call you or email you.

    I, on behalf of my wife, got her on SSI and Medicare at 59 and 60. We met personally, and they were extremely helpful. And when they reached out to us, it was via the mail. That's how ( at least presently), it works and you know it's legit.

    To quote Bond, James Bond, sometimes the old ways work best.

    From another reader:

    The real reason the government still uses fax is actually even more ignorant.  Fax is considered secure, while email is not.  When you are transmitting SSN, or HIPAA covered information, email is considered too risky and vulnerable to hacking.  That’s why Pharmacies and Doctor’s offices still use faxes.  We are a security review away from being a more efficient society.  Unfortunately our government has other priorities right now.

    And another:

    As a small business owner during the pandemic, I have had to deal with the Illinois Department of Employment Security and they also don’t use email. When I had to terminate an employee for theft and she filed for unemployment I had to dispute her claim. During the dispute I had a few conversations with an IDES employee and when I mentioned that I had video of the theft I could email to him, he informed me that they do not use email for communication and I could fax my dispute. Of course I wouldn’t be able to fax a video but I was fortunate that the employee was eventually denied unemployment but the process could have been much easier  if we could have communicated with emails.

    And, a note from MNB reader Dr. Allen F. Wysocki:

    Kevin, I am like you. What is a FAX anymore? It would be easy for them to have the technology to allow you to upload a file.

    I have to believe that in 2021 there has to be a way to have secure email.  

    I don't know about you, but I sign contracts all the time online - for speaking gigs, to lease my computer, etc…  There's got to be a way to solve this problem.


    Responding to my Friday book review, MNB reader Ron Melton wrote:

    I couldn’t agree more about "Premonition," by Micheal Lewis. I was also struck with that comment about the failed state.

    His book prompted me to get John Barry’s book The Great Influenza. Another as you say,. eye opener. Barry’s book is bringing mixed feelings on the medical profession. Have always felt we were in the infancy of that profession and this just reinforces that opinion. We are experiencing so much change right now. I’m very optimistic about what is possible in the medical field. Even in a failing medical system.

    "Premonition" is a must-read, in the same way that "The Fifth Risk" was.  I have Lewis's "The Undoing Project" on my desk, but haven't gotten to it … yet.

    Published on: May 24, 2021

    Phil Mickelson won the 2021 PGA Championship at Kiawah Island Golf Resort with a 6-under performance - making him, at age 50, the oldest player ever to win a major championship.

    It was Mickelson’s sixth career major and second PGA Championship win.

    Published on: May 24, 2021

    Robert Allen Zimmerman is 80 years old today.

    Here's what probably is my favorite song of his.

    And here's probably my second favorite:

    The list could go on and on…

    Happy Birthday, Bob Dylan.