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    Published on: October 18, 2021

    Content Guy's Note:  You may remember that a couple of months ago, I spoke here about how impressed I was with an element of a new loyalty program developed by Price Chopper/Market 32 and powered by tcc Global, that allows shoppers to compile points that can be converted into dollars that then can be used to help pay off student debt.  This struck me as an ingenious idea - highly relevant, and the kind of thing that would encourage people to brings their friends and families into the program.

    I wanted to know how the program was going, but also wanted to assess how the notion of loyalty marketing has evolved over the years, and how retailers should change the ways in which they measure engagement.  And so I reached out to Sean Weiss, Director of Loyalty Marketing & Analytics at Price Chopper/Market 32, and Dan Dmochowski, President-North America, at tcc Global, for what I think was an engaging and extended conversation about a subject that I find to be fascinating.

    I hope you enjoy our talk.

    If you'd like to download and listen to our conversation as a podcast, click below.

    Published on: October 18, 2021

    In a blog posting late last week,  Dominique Essig, the retailer's VP of Conversational Commerce at its Store No8 incubator, said that " Store No8 and Walmart’s Global Tech team are currently testing a beta experience — Walmart Text to Shop — with customers in select areas. We’re learning a lot about when and how customers prefer a conversational experience, and we look forward to making this more widely available in the future."

    The idea, she says, is that when a customer needs something immediately, she'll be able to just say, "OK, Google, add (insert product name here)  to my Walmart cart.” And it'll be done.

    "In addition to helping our busy families with this simple solution, a key benefit of this new service is that it’s personalized just for them," Essig writes.  "By understanding our customers’ preferences, we also solve the paradox of choice and save them time by serving up what we know they love best. Most importantly, we offer Walmart customers the opportunity to shop no matter where they are, and to communicate naturally by simply asking for what they want, any way they want … The advantage of conversational commerce is that customers can communicate with Walmart the way they communicate with friends and family. Easy, convenient — no need to learn how to use a new platform."

    KC's View:

    Pretty soon, the way things are going, we're just going to have to think about a product, and the embedded electrodes in our brains will automatically order it from someone.

    Which could be a problem for me, because I think about Twizzlers and Tito's a lot.  (Not necessarily in that order.)

    Published on: October 18, 2021

    From Bloomberg:

    "Consumers in Europe and the U.S. aren’t rushing to spend more than $2.7 trillion in savings socked away during the pandemic, dashing hopes for a consumption-fueled boost to economic growth on both sides of the Atlantic.

    "In the wake of lockdown easing during the northern hemisphere’s summer holiday season, excess savings in euro-area bank balances declined only marginally in August, and Italy still recorded an increase, according to calculations by Bloomberg Economics. In the U.S. there has also been no drawdown, the figures show. 

    "The absence of a consumption surge that had been anticipated by some economists may speak against the prospect of a lasting inflation shock feared by central banks. While higher balances could help households cope with skyrocketing heating bills, tepid demand might temper businesses’ ability to push through permanent price increases."

    The Bloomberg story goes on:  "Among reasons people have held on to their money are anxiety about resurgent outbreaks, the pace of the recovery and job prospects. Demographics and consumption patterns may also play a part. 

    "Deutsche Bank AG analyst Olga Cotaga reckons that because people can’t recoup missed spending on services once a lockdown ends, that means they don’t consume enough to make a dent in their savings."

    KC's View:

    That said, there is some evidence that consumers are willing to spend, as Bloomberg reports that " US retail sales unexpectedly increased in September, reflecting a broad-based improvement, suggesting that demand for merchandise remained robust in the month.

    "The value of overall retail purchases increased 0.7 percent last month following an upwardly revised 0.9 percent increase in August, Commerce Department figures showed Friday. Excluding autos, sales increased 0.8 percent in September."

    It seems to me that in some ways we are talking about two different things here - people may be willing to spend, but that doesn't mean they are going to spend all the money they haven't spent over the past 18 months, especially because supply chain issues may put certain things out of reach.

    At some point, though, the dam will break … it isn't hard to imagine that once supply chain issues subside, if the rest of the economy is healthy (especially in terms of people having disposable income), there will be enormous demand.

    Published on: October 18, 2021

    The Washington Post writes that "all told, there have been strikes against 178 employers this year, according to a tracker by Cornell University’s School of Industrial Labor Relations. The Bureau of Labor Statistics, which records only large work stoppages, has documented 12 strikes involving 1,000 or more workers. That’s a significant jump from 2020, when the pandemic took hold, but in line with significant strike activity in 2019 and 2018, bureau data show.

    "The trend, union officials and economists say, is an offshoot of the phenomenon known as the Great Resignation, which has thinned the nation’s labor pool and slowed the economic recovery. Workers are harder to replace and many companies are scrambling to manage hobbled supply chains and meet pandemic-fueled demand for their products. That has given unions new leverage, and made striking less risky."

    The story notes that "the strike drives in 2021 run the gamut of American industry: Nurses and health workers in California and Oregon; oil workers in New York; cereal factory workers in Michigan, Nebraska, Pennsylvania and Tennessee; television and film production crews in Hollywood; and more."  Experts point out that not all of these strikes have been successful - in some cases workers got more vacation and benefits but no significant wage increases, and in others the strikes persist as management has refused to accede to labor's demands.

    KC's View:

    The power may rest with labor now, but the pendulum, inevitably, will swing back the other way.  Nobody ever seems to remember that when they're in power … that leverage often is temporary and sometimes even illusory.  Management-labor battles might play out a little differently if folks would keep that in mind.

    Published on: October 18, 2021

    The Washington Post writes that "news this week that U.S. inflation is running at a 13-year high of 5.4 percent confirmed what many Americans already know as they juggle their budgets: Food, energy and shelter costs are all rising rapidly, adding to the strain Americans were already dealing with from the higher costs of hard-to-find goods such as cars, dishwashers and washing machines.

    "While policymakers debate how long higher prices will last - what 'transitory' inflation means - the real question is how American families and businesses are going to react to this new era of uncomfortable inflation. What is the psychological impact of this jump in so many prices after years of low inflation? Are people’s behaviors going to shift?"

    The Post goes on:  "Already, there are signs of a psychological shift starting. Numerous polls and consumer sentiment surveys show inflation has become a top concern for many Americans. And people are predicting inflation will stay high … the New York Fed’s consumer survey showed Americans now predict 4 percent inflation for the next year and 3.4 percent for the next three years — the highest levels since the survey began in 2013.

    "Businesses large and small are now openly predicting higher inflation will stick around, signaling new assumptions about the future."

    The Point makes the point that the reality of higher costs, created both by higher wage levels and the supply chain issues that are creating shortages, means that in most cases, higher prices are going to be passed along to shoppers - there seems to be very little appetite for anyone to eat the increases as a way of differentiating a business and currying favor with consumers.

    The Post writes that there are divided opinions about how this all will play out:  "Some economists see these widespread price increases as a sign that the psychological dynamics are already shifting.

    "One clear sign that consumers are getting spooked by higher prices is Americans’ plans to buy houses and cars are at the lowest levels since the early 1980s, according to the University of Michigan Survey of Consumers. There’s concern about whether that pullback will also spill into other industries.

    "However, other economists argue that what is occurring now is still largely related to the pandemic, with a surge in demand for goods causing supply bottlenecks and the need to rehire workers much faster than anyone expected. They argue these pressures will subside in the coming months. They point to used cars and lumber prices, which, while still high, have come back down from their peaks a few months ago."

    None of this its expected to change soon.  The Wall Street Journal had a piece over the weekend about how economists it surveyed expect that "uncomfortably high inflation will grip the U.S. economy well into 2022, as constrained supply chains keep upward pressure on prices and, increasingly, curb output … The economists’ inflation projections are up dramatically from July, while short-term growth outlooks are lower.

    "Economists on average see inflation at 5.25% in December, just slightly less than the rate that has prevailed since June. Assuming a similar level in October and November, that would mark the longest inflation has been above 5% since early 1991."

    The Journal writes that "many economists cited unusually robust demand for goods throughout the pandemic as the chief source of strained supplies—and, as a result, a key source of inflationary pressure. Goods demand has remained high even as widespread vaccination allowed the economy to reopen and for consumers to resume spending on services. When supply-chain-induced pressure on prices subsides depends to some extent on when consumers rebalance their spending, said Constance Hunter, chief economist at KPMG."

    Published on: October 18, 2021

    From the Wall Street Journal:

    "Alibaba Group Holding Ltd., challenged by Beijing’s yearlong clampdown on private enterprise, is facing another problem: growing competition.

    "For more than 15 years, Alibaba was China’s unassailable e-commerce champion. The company founded by Jack Ma rose to become one of the world’s biggest and most valuable businesses, using hard-knuckle tactics to muscle out challengers."

    But, the story says, as competition has become more robust, consumer habits in china have begun to shift, as shoppers "have started to embrace new ways of shopping that favor browsing and interaction over targeted product searches. That trend has left Alibaba playing catch-up in some areas, and competitors have used the shift to gain a foothold in the world’s largest online retail market.

    "Alibaba remains the leading platform in online shopping, but its share of China’s retail e-commerce market has fallen to a projected 51% in 2021 from 78% in 2015, according to research firm eMarketer.

    Among the companies said to be making inroads against Alibaba are "Tencent Holdings Ltd., which is incorporating online stores into its ubiquitous WeChat social-messaging app … Pinduoduo Inc., a six-year-old e-commerce app that has injected gamelike elements into shopping and drawn in bargain hunters with lower-priced goods … and Douyin, TikTok’s sister app in China, which is selling products through short videos and live-streaming with the help of its algorithms."

    KC's View:

    I am struck by this phrase:  Shoppers have started to embrace new ways of shopping that favor browsing and interaction over targeted product searches.

    And it makes me wonder if what we are watching play out in China also could happen here, with companies focused on targeted product searches finding themselves disadvantaged by a consumer trend that has left them behind.

    Published on: October 18, 2021

    CNBC has an interview with Domino's Pizza CEO Ritch Allison in which he says that while profits were up, Q3 sales and same-store sales were off (the latter for the first time in a decade) - and he says that the entire restaurant industry is being hurt by a slowdown in immigration, which is making it hard to field an adequate workforce and bring on new franchisees.

    “It’s a challenge," he says. "In the U.S. with minimal population growth organically, we do — we need immigration in our industry to continue to have enough team members … Folks who want to work hard, want to stay with the business for a long period of time, can end up being owners and entrepreneurs.  As I travel around the country and talk to our franchisees, so many of whom followed that [immigration] path, it’s inspiring. ... It truly is.”

    CNBC's Jim Cramer then provided some context for the remarks:  "Ritch Allison started, I think, a conversation that we’re all going to have to talk about … We don’t have population growth in this country. ... But more importantly, he’s saying, we cut off immigration. We stopped it, but the great thing about our country is immigrants come in, they become drivers. Next thing you know they own a Domino’s, then they own several places. That’s ending.  We literally have to start thinking about an immigration policy that involves taking in people.”

    KC's View:

    It isn't just in the US that immigration restrictions seem to be creating a problem.

    The Washington Post reported the other day in a post-Brexit UK, the government "will issue up to 800 temporary visas to foreign butchers in an effort to alleviate a labor shortage in the pork industry that has already led to the culling of some 6,000 healthy pigs … The shortage of slaughterhouse workers has created what Britain’s pig lobby calls its biggest crisis in over two decades, with roughly 120,000 pigs waiting to be slaughtered. An estimated 15,000 extra pigs are added to farms across the country each week, putting greater strain on farmers struggling to find enough space and feed for their herd."

    The story explains that "slaughterhouse jobs tend to be tedious and physically demanding. In Britain, such work was largely carried out by migrant labor from Eastern Europe, who reportedly constituted up to 80 percent of the country’s slaughterhouse workforce. But many workers have returned home as a result of covid travel restrictions, while Britain’s departure from the European Union has curbed the ability for new E.U. migrants to easily take up jobs there."

    Is it a problem, do you think, that when I read about labor shortages at pizza parlors and pig farms, the first thing I wonder about is whether this will affect worldwide supplies of carbonara pizza?

    Published on: October 18, 2021

    There were a pair of stories this weekend that examined different aspects of Facebook's business model - one having to do with how it targets teens and the other focusing on its inability to filter out hate speech.  Both are worth reading, because as they offer a perspective on Facebook's corporate mentality, they also illustrate the degree to which the social media behemoth has a target on its back:

    •  From the New York Times:

    "When Instagram reached one billion users in 2018, Mark Zuckerberg, Facebook’s chief executive, called it 'an amazing success.'  The photo-sharing app, which Facebook owns, was widely hailed as a hit with young people and celebrated as a growth engine for the social network.

    "But even as Mr. Zuckerberg praised Instagram, the app was privately lamenting the loss of teenage users to other social media platforms as an 'existential threat,' according to a 2018 marketing presentation.

    "By last year, the issue had become more urgent, according to internal Instagram documents obtained by The New York Times. 'If we lose the teen foothold in the U.S. we lose the pipeline,' read a strategy memo, from last October, that laid out a marketing plan for this year.

    "In the face of that threat, Instagram left little to chance. Starting in 2018, it earmarked almost its entire global annual marketing budget - slated at $390 million this year - to targeting teenagers, largely through digital ads, according to planning documents and people directly involved in the process. Focusing so singularly on a narrow age group is highly unusual, marketers said, though the final spending went beyond teenagers and encompassed their parents and young adults.

    "The Instagram documents, which have not previously been reported, reveal the company’s angst and dread as it has wrestled behind the scenes with retaining, engaging and attracting young users. Even as Instagram was heralded as one of Facebook’s crown jewels, it turned to extraordinary spending measures to get the attention of teenagers. It particularly emphasized a category called 'early high school,' which it classified as 13- to 15-year-olds."

    You can read this story here.

    •  From the Wall Street Journal:

    "Facebook Inc. executives have long said that artificial intelligence would address the company’s chronic problems keeping what it deems hate speech and excessive violence as well as underage users off its platforms.

    "That future is farther away than those executives suggest, according to internal documents reviewed by the Wall Street Journal. Facebook’s AI can’t consistently identify first-person shooting videos, racist rants and even, in one notable episode that puzzled internal researchers for weeks, the difference between cockfighting and car crashes.

    "On hate speech, the documents show, Facebook employees have estimated the company removes only a sliver of the posts that violate its rules—a low-single-digit percent, they say. When Facebook’s algorithms aren’t certain enough that content violates the rules to delete it, the platform shows that material to users less often - but the accounts that posted the material go unpunished."

    The story goes on:  "The documents reviewed by the Journal also show that Facebook two years ago cut the time human reviewers focused on hate-speech complaints from users and made other tweaks that reduced the overall number of complaints. That made the company more dependent on AI enforcement of its rules and inflated the apparent success of the technology in its public statistics.

    "According to the documents, those responsible for keeping the platform free from content Facebook deems offensive or dangerous acknowledge that the company is nowhere close to being able to reliably screen it."

    This story can be read here.

    KC's View:

    It seems to me that at this point, Facebook is looking at problems coming from a number of directions - legislative, regulatory and from media analysis.  And they're feeding on each other - the media reports on investigations conducted by government officials, and government officials base additional probes based on media stories.

    Does Facebook have a target on its back?  Sure.  Does it deserve it?  There will be debate about this, but I'm inclined to think that it has made its own bed.  The tech journalist Kara Swisher says that the real problem with Facebook is that it thinks it has an optics problem when what it really has is a product problem.  That sounds about right to me.

    Sir Walter Scott wasn't thinking about Facebook when he wrote, "'Oh what a tangled web we weave/When first we practice to deceive'."  But the sentiment is still accurate, more than two centuries after "Marmion: A Tale of Flodden Field" was first published.

    Published on: October 18, 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:  45,792,532 cases … 744,546 deaths … and 35,374,595 reported recoveries.

    The global numbers:  241,475,527 total cases … 4,914,142 fatalities … and 218,718,136 reported recoveries.  (Source.)

    •  The Centers for Disease Control and Prevention (CDC) says that 77.1 percent of the US population has received at least one dose of vaccine, with 66.7 percent being fully vaccinated.

    In addition, the CDC says, 14.3 percent of the US population age 65 and older has received a vaccine booster shot.

    •  The Wall Street Journal reports that "advisers to the Food and Drug Administration voted unanimously Friday to recommend the agency authorize an extra dose of Johnson & Johnson’s Covid-19 vaccine, to shore up protection against the coronavirus.

    "The panel of outside doctors and experts voted 19-0 to recommend that all adults who received a first dose of the J&J vaccine should get the second dose at least two months later.

    "The FDA could decide on whether to clear a J&J booster within days."

    •  WOOD-TV News reports that SpartanNash has converted a closed Family Fare supermarket in south Grand Rapids into a Covid-19 vaccine booster shot clinic, and will run it as that until the end of October.

    “We know that earlier the year … there was a lot of people who were able to get vaccines at mass clinics who would now potentially be eligible for a Pfizer booster and so we wanted to make vaccines available for our communities in an easy way,” says Amy Ellis, the pharmacy services manager for SpartanNash.

    The company expects to have about 500 appointments available each week.

    The vaccine booster shots also will be available at any SpartanNash store with a pharmacy, the company says.

    Published on: October 18, 2021

    With brief, occasional, italicized and sometimes gratuitous commentary…

    •  The Wall Street Journal has a piece about the previously reported upon Walmart fintech startup, which it hopes will be a new and effective weapon in its war with Amazon.

    An excerpt:

    "The retail giant is helping launch a new company, helmed by two former Goldman Sachs Group Inc. executives, that aims to provide financial services for its millions of customers and workers. The firm is a joint venture with Ribbit Capital, known for investing in Robinhood Markets Inc. and other digital financial businesses.

    "Options under consideration include building a user base around mobile payments, as well as potentially buying a startup that offers consumer bank accounts through a mobile app, known as a neobank, according to people familiar with the situation.

    The venture doesn’t plan to seek a banking license, according to the people.

    "Walmart is the majority owner of the business, which has yet to be named publicly. The venture has hundreds of millions of dollars in commitments from its new backers, the people said, and it is likely to acquire other companies to jump-start the business, not build the bulk of the technology in-house."

    Published on: October 18, 2021

    •  CNBC reports that "activist investor Jana Partners has taken a stake in Macy’s and sent a letter to the department store chain’s board on Wednesday urging it to separate its e-commerce business."  Sources tell CNBC that "Macy’s online business has already drawn interest from firms that would invest in it, in conjunction with a spinoff … Such a separation would mimic a similar one from the high-end department store operator Saks Fifth Avenue, which earlier this year spilt off its digital business into a separate company. The deal valued at $2 billion, or about double its annual sales.'"

    The Wall Street Journal reports this morning that Saks' digital business "is interviewing potential underwriters this week for an initial public offering that could take place in the first half of 2022 and targets a valuation of around $6 billion, people familiar with the matter said. It was last valued at $2 billion in March."

    According to the CNBC piece, "Macy’s had told investors in August that it expected its e-commerce sales this year to be between $8.35 billion and $8.45 billion, after nearly doubling in the past four years."

    Published on: October 18, 2021

    •  In the National League Championship Series this weekend, the Atlanta Braves defeated the Los Angeles Dodgers 3-2 and then 5-4 to take a 2-0 game lead in their best-of-seven series.

    Meanwhile, on Friday night in the American League Championship Series, the Houston Astros beat the Boston Red Sox 5-4, and then the Sox came back on Saturday night with a 9-5 victory over the Astros.  The best-of-seven series is now tied at one game apiece.

    •  In the WNBA, the Chicago Sky defeated the Phoenix Mercury 80-74 to take game four of the finals and win the league championship 3-1 in the best of five series.

    •  In Week Six of the National Football League…

    Miami Dolphins 20, Jacksonville Jaguars 23

    Green Bay Packers 24, Chicago Bears 14

    Cincinnati Bengals 34, Detroit Lions 11

    Houston Texans 3, Indianapolis Colts 31

    Los Angeles Rams 38, NY Giants 11

    Kansas City Chiefs 31, Washington 13

    Minnesota Vikings 34, Carolina Panthers 28

    Los Angeles Chargers 6, Baltimore Ravens 34

    Arizona Cardinals 37, Cleveland Browns 14

    Las Vegas Raiders 34, Denver Broncos 24

    Dallas Cowboys 35, New England Patriots 29

    Seattle Seahawks 20, Pittsburgh Steelers 23