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    Published on: November 30, 2021

    by Michael Sansolo

    Making predictions is always a dicey game because no matter how much we think we know there are always unexpected factors at work. (Best current example:  the Omicron variant.)  There are, however, rare times when the facts at hand paint a clear picture of the future.

    That, right now, is the picture for about 25 percent of the US population. For them and all the businesses serving them, a tidal wave is coming and it’s easy to see why.

    No matter how you feel politically about the recently passed infrastructure bill you have to accept that it is going to bring changes. Hopefully it will bring improvements to roads, rails, bridges and airports. But it also contains a rather important promise: to bring broadband Internet service to the entire country.

    If you, like me, live or work in a major city or one of its suburbs, this probably seems like no big deal. For example, I’ve had fiber optic service for nearly 15 years now, meaning my web service is lightning fast, incredibly reliable and, if I'm being honest, probably used way, way too much.

    So it surprised me to learn that one-quarter of the United States is still dependent on dial-up or DSL, services I have long since left behind. An interesting article from Reviews.org lays out the scope of this digital divide.

    Consider that the population without broadband is equal to everyone living in 13 states combined, basically everything west of Montana, Wyoming, Colorado and New Mexico. That includes California, the nation’s most populous state.

    In addition, there are pockets of underserved areas in nearly every state as broadband is most lacking in rural areas.

    Let’s consider the probable impact of broadband on that quarter of the population. For example, those folks are soon to discover Netflix, which based on experience will completely change their entertainment and sleep patterns. It’s likely that local news sources will be heavily impacted as rural residents gain easier access to national news sources.

    And let’s not kid ourselves; the impact on local retailers is going to be swift and significant. Suddenly, one quarter of the American population - or more than 27 million households - are going to discover Amazon.com.  It’s highly unlikely that Amazon or others will offer the same speedy deliver services promised in densely populated areas, but they will find ways to deliver.

    That in turn means that retailers serving those 27 million households must recognize that the rules of competition are very quickly going to change. It means improving websites and web-based services, quickly learning how to engage through social media and most importantly, recognizing that their competition is no longer the stores they can see down the block or across town. Welcome to the new world.

    Yesterday's MNB offered a stark example - a reader who recently moved to Montana wrote about the lack of retail near that new home. Broadband changes all of that.

    As the Review.org article makes clear, this isn’t a problem simply for small retailers serving these rural communities.  Even large chains and pretty much all wholesalers will need to analyze the regions they serve and consider how the infrastructure bill is going to impact them.

    The reality is simple: national broadband is coming and that means change and lots of new challenges. Consider yourself warned.

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

    His book, “THE BIG PICTURE:  Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available here.

    And, his book "Business Rules!" is available from Amazon here.

    Published on: November 30, 2021

    KC extracts some serious business lessons from the uplifting story of the Cubs, a football team from the California School for the Deaf Riverside, which this season went on an unlikely winning streak (12-0!) after 68 years of sports ignominy.  The reasons for their success can be applied to any business and practiced by any business leader.

    Published on: November 30, 2021

    The forces hoping that they can unionize Amazon warehouses now likely are hoping that love will be lovelier the second time around.

    Politico reports that the National Labor Relations Board (NLRB) has ruled that Amazon's "flagrant disregard for … typical mail-ballot procedure … made a free and fair election impossible" during this year's unionization vote at its Bessemer, Alabama, warehouse, and a new election must be held.

    “Amazon’s intimidation and interference prevented workers from having a fair say in whether they wanted a union in their workplace — and as the Regional Director has indicated, that is both unacceptable and illegal,” Stuart Appelbaum, president of the union, said in a statement. “Amazon workers deserve to have a voice at work, which can only come from a union.”

    According to the Politico story, "The new election is the latest turn in the union’s fight to form Amazon’s first-ever U.S. union.

    "Workers at the facility overwhelmingly voted - 1,798 to 738 - against joining the Retail, Wholesale and Department Store Union in April.

    "But, after the union filed dozens of objections to the election results and a multi-week hearing overseen by the NLRB’s Atlanta regional office, an NLRB hearing officer recommended in August that the board conduct a new election."

    Yesterday's ruling confirms that recommendation.  Amazon is expected to appeal.

    National Public Radio (NPR) reports that "Kelly Nantel, an Amazon spokesperson, noted that employees at the warehouse overwhelmingly chose not to the union in the previous vote. 'It's disappointing that the NLRB has now decided that those votes shouldn't count. As a company, we don't think unions are the best answer for our employees'."

    NPR also reports that while "unions are a prominent presence at Amazon in Europe … the company has so far fought off labor-organizing efforts in the United States. The election in Bessemer was the first union vote since 2014."

    However, the Alabama situation isn't taking place in a vacuum. NPR notes that "the Teamsters union has passed a resolution that would prioritize its Amazon unionization campaign."  And, "in October, workers from a Staten Island warehouse cluster in New York petitioned federal officials for a union election, but later withdrew the request."

    A date has not yet been set for the new election.

    KC's View:

    "We don't think unions are the best answer for our employees" can't just be a phrase crafted by public relations experts.  It actually can be a call-to-arms … and, as I've long argued here, if Amazon brought the same level of innovation and commitment to excellence to the creation of a positive working environment for everyone that it has brought to its business model, then it wouldn't be worrying about unionization.

    Published on: November 30, 2021

    The Federal Trade Commission (FTC) said yesterday that it is probing the reasons behind current supply chain issues and how they are creating "serious and ongoing hardships for consumers and harming competition in the U.S. economy."

    In doing so, USA Today reports, "The FTC said it is ordering Walmart, Amazon, Kroger, other large wholesalers and suppliers including Procter & Gamble Co., Tyson Foods and Kraft Heinz Co. 'to turn over information to help study causes of empty shelves and sky-high prices.'  Orders also are being sent to C&S Wholesale Grocers, Inc., Associated Wholesale Grocers, Inc. and McLane Co, Inc."

    Some context from the story:

    "The companies will have 45 days from the date they received the order to respond, the FTC said.

    "Along with understanding the reasons behind the supply chain disruptions, the FTC’s study will examine 'whether supply chain disruptions are leading to specific bottlenecks, shortages, anticompetitive practices, or contributing to rising consumer prices.'

    "The FTC said the companies are required to 'detail the primary factors disrupting their ability to obtain, transport and distribute their products; the impact these disruptions are having in terms of delayed and canceled orders, increased costs and prices; the products, suppliers and inputs most affected; and the steps the companies are taking to alleviate disruptions; and how they allocate products among their stores when they are in short supply.'

    "Companies also are required to provide the FTC with 'internal documents regarding the supply chain disruptions, including strategies related to supply chains; pricing; marketing and promotions; costs, profit margins and sales volumes; selection of suppliers and brands; and market shares'."

    KC's View:

    It would seem that the current leadership at the FTC is inclined to accept the possibility that industry could have some culpability for price increases because of the ways in which they do business.  Which mans that the FTC may be drilling deeper and longer than in the past, especially because this is such a major source of consumer/citizen/voter discontent.

    Published on: November 30, 2021

    Boxed, which is commonly referred to as a pure-play e-commerce version of Costco, said yesterday that it is acquiring MaxDelivery, described as "one of New York’s first on-demand grocery delivery services."

    Terms of the deal, expected to close in the next month, were not disclosed.

    The acquisition is expected to give Boxed the ability to "broaden its capabilities in micro dark-store fulfillment and rapid on-demand grocery delivery. Boxed customers in select markets will also enjoy a significantly expanded fresh assortment offering."

    MaxDelivery, in addition to being able to access Boxed’s Software & Services, "adopting its proprietary commerce technology to help enable scalability of its operations," now is expected to be able to expand into additional markets over time.

    MaxDelivery describes its business model this way:  "MaxDelivery provides New Yorkers with a fast, easy, and convenient way to have a broad assortment of groceries delivered directly to their door on-demand, through its one-hour delivery service in Manhattan. Since its inception in 2004, MaxDelivery has consistently delivered premium quality service to its customers, processing approximately 2 million orders to date. MaxDelivery differentiates itself from other ultrafast delivery businesses due to its high average order values of approximately $100, helping yield a history of strong unit economics."

    Chieh Huang, Co-founder and Chief Executive Officer of Boxed, said in a prepared statement that "this acquisition of MaxDelivery will mark our entry point into the rapidly growing fast-grocery delivery space, in addition to broadening our capabilities in micro dark-store fulfillment and fresh supply chain. Boxed customers have expressed how they value fresh groceries and we are excited to be able to deliver a more comprehensive product offering while benefiting from a complimentary business model with similarly high average order values as Boxed."

    Earlier this year, Boxed entered into an agreement with Seven Oaks Acquisition Corp. that will enable it to go public at some point, probably in the near future.

    KC's View:

    The betting here just a few years ago was that it seemed likely that Boxed would get acquired by someone, so it is something of a surprise that it is doing the buying, not selling.  

    I do know this:  Mrs. Content Guy is a huge Boxed fan, and for a lot of bulk items uses it more than she does Amazon.  I'll be curious to see the degree to which Boxed tries to engage with her and created expanded usage.

    Published on: November 30, 2021

    CNBC reports that Amazon is saying that it "is poised to become the largest U.S. package delivery service by early 2022, overtaking longstanding shipping rivals UPS and FedEx … Amazon has been steadily building up vast logistics and fulfillment operations since a 2013 holiday fiasco left its packages stranded in the hands of outside carriers.

    "Its goal has been to have greater control over how shoppers’ packages get to their doorsteps. The retail giant now oversees thousands of last-mile delivery companies that deliver packages exclusively for Amazon, as well as a budding in-house network of planes, trucks and ships. It has also dotted the country with warehouses and air hubs that can speed along packages."

    Published on: November 30, 2021

    Axios reports that "Twitter co-founder Jack Dorsey is exiting the company he helped build at a time when its future has never been so uncertain," saying that it's "severely limiting and a single point of failure" when founders lead tech firms.

    The story notes that "Twitter is in the midst of transforming from an ad-based social network, focused on text, to a subscription-based platform centered around smaller communities and multimedia."

    Axios writes that "the new CEO is Parag Agrawal, who long served as CTO.  Agrawal will be on the hook for plans to grow Twitter's most lucrative user base by roughly 50% and double its global annual revenue by the end of next year."

    Published on: November 30, 2021

    The New Yorker has a profile of Lina Khan, the new chair of the Federal Trade Commission (FTC), charged with implementing a more aggressive approach to antitrust enforcement that could have enormous impact on companies such as Amazon.

    An excerpt:

    "After years spent publishing research about how a more just world could be achieved through a sweeping reimagining of anti-monopoly laws, Khan now has a much more difficult task: testing her theories - in an arena of lobbyists, partisan division, and the federal court system - as one of the most powerful regulators of American business

    "'There’s no doubt that the latitude one has as a scholar, critiquing certain approaches, is very different from being in the position of actually executing,' Khan told me. But she added that she intends to steer the agency to choose consequential cases, with less emphasis on the outcomes, and to generally be more proactive. 'Even in cases where you’re not going to have a slam-dunk theory or a slam-dunk case, or there’s risk involved, what do you do?' she said. 'Do you turn away? Or do you think that these are moments when we need to stand strong and move forward? I think for those types of questions we’re certainly at a moment where we take the latter path.

    "'There’s a growing recognition that the way our economy has been structured has not always been to serve people,' Khan went on. 'Frankly, I think this is a generational issue as well.'  She noted that coming of age during the financial crisis had helped people understand that the way the economy functions is not just the result of metaphysical forces. 'It’s very concrete policy and legal choices that are made, that determine these outcomes,' she said. 'This is a really historic moment, and we’re trying to do everything we can to meet it'."

    You can read the entire story here.

    Published on: November 30, 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…

    •  The US now has had a total of 49,301,0709 Covid-19 coronavirus cases, resulting in 801,326 deaths and 39,032,255 reported recoveries.

    Globally, there have been 262,595,513 total cases, with 5,228,531 resultant fatalities and   237,158,557 reported recoveries.  (Source.)

    •  The Centers for Disease Control and prevention (CDC) says that 74.5 percent of the US population age five and older, and 70.1 percent of the total population, has received at least one dose of vaccine, while 63 percent of the five-and-older population and 59.3 percent of the total population has been fully vaccinated.

    About 20 percent of the total population, and 21.9 percent of the 18-and-older population, has received a vaccine booster dose.

    •  The Wall Street Journal this morning reports that "the Centers for Disease Control and Prevention strengthened its Covid-19 booster-shot recommendations, reflecting the potential threat the new Omicron variant poses to the pandemic response in the U.S. and world-wide.

    "The CDC on Monday recommended that everyone 18 and older get an additional shot after completing a first course of Covid-19 vaccination. The agency earlier this month encouraged boosters only for those 50 and above, adding that people ages 18 and above could get an additional dose."

    The Journal also reports that "the Food and Drug Administration could authorize Covid-19 boosters from Pfizer Inc. and BioNTech for use in 16- and 17-year olds as soon as next week as concerns rise over a new, possibly more transmissible variant, according to a person familiar with the planning.  The agency is planning to move rapidly to take action on a request by the companies to authorize boosters for 16- and-17 year olds, according to a person familiar with the matter. So far, only people 18 years and older are eligible for boosters."

    •  Also from the Wall Street Journal:

    "Preliminary tests indicate the Covid-19 antibody drug cocktail from Regeneron Pharmaceuticals Inc. loses effectiveness against Omicron, the company said Tuesday, a sign that some products in an important class of therapies might need modifying if the new strain becomes widespread.

    "Separate testing of another authorized Covid-19 antibody drug cocktail, from Eli Lilly & Co., indicates it also isn’t as effective against Omicron, outside scientists said. Lilly said it is testing the new variant against its antibody treatment and wouldn’t speculate on what the results will be.

    "The findings are the early results of researchers’ race to assess the impact of the new Omicron variant on Covid-19 treatments that patients, doctors and hospitals have been relying on, as well as pills in development that have promised to keep people out of the hospital.

    "Researchers say some antibody therapies are likely to be especially vulnerable to Omicron because it contains mutations to the spike protein that the Regeneron and Lilly drugs target, while other drugs should hold up well because they attack elements of the virus unchanged in the variant."

    Published on: November 30, 2021

    •  The Boston Globe has a story about Reef Technology, "a company that manages parking lots and has expanded into the last-mile delivery business. For the past three years, it has been trying to convince lot owners they can make more money by using the spaces for something other than parking cars … The trailers, which it dubs 'vessels,' serve as a central dispatch for delivering food to customers who order through apps such as Uber Eats, DoorDash, and Grubhub. A single trailer, such as the one in South Boston, could prepare food for more than half a dozen restaurants, which license menu items to Reef, similar to a franchise model. Reef handles preparation and packaging and typically pays a fee to lot owners to park its trailers."

    The story notes that "most of the brands Reef sells exist only online through ghost kitchens, such as Man vs. Fries, Sticky Wings, and Rebel Wings. But place an order for a Nathan’s Famous hot dog on Uber Eats from a Boston neighborhood, and it may also come from a Reef trailer, even though the chain has five brick-and-mortar locations in Massachusetts.

    "The food is delivered in branded packaging with no sign of its origin."

    •  In the UK, the Guardian reports that Sainsbury has opened to the public a new store using Amazon's Just Walk Out technology - here dubbed "Smartshop Pick & Go" - in the Holborn section of central London.

    The store previously had been open only to Sainsbury staffers.

    The unit uses Amazon Go-pioneered technology in which "cameras and special weight-sensitive shelves detect when an item has been removed so that shoppers can put their items in a bag or basket and walk out without having to pay at a till.  Customers can gain entry to the store in future by generating a QR code via Sainsbury’s SmartShop app, which is currently used to scan items with a mobile phone in its supermarkets."

    Published on: November 30, 2021

    •  The Wall Street Journal reports that Walmart "is searching for a new chief financial officer after Brett Biggs, a 22-year company veteran, said he plans to step down from the CFO post in early 2023.

    "Mr. Biggs, 53 years old, intends to leave Jan. 31, 2023, to pursue other opportunities in the for-profit and nonprofit sectors, Walmart said Monday. He will remain CFO until his successor is named and plans to assist with the transition until his departure, the retailer said. Mr. Biggs will remain a board member at Walmart’s fintech startup joint venture with Ribbit Capital, the retailer said.

    "The Bentonville, Ark.-based company said it would consider internal and external candidates for the CFO post."

    Published on: November 30, 2021

    •  CNBC has a piece about how it wasn't just the food industry that seems to have benefitted from consumer trends enabled by the pandemic - it also was food-adjacent businesses.

    Take, for example, Williams Sonoma, which "has been on a tear over the past year as stay-at-home orders turned many Americans into amateur chefs, inspiring them to pick up cooking and baking as hobbies and buy new furniture and decor … Shares of the company have more than doubled in value since January. The stock hit a 52-week high of $223.32 on Monday, but was recently trading Wednesday at around $210, giving it a market cap of about $15.6 billion. Yet the home retailer said Americans still have a big appetite for cooking, entertaining and sprucing up their homes. Those trends, it expects, will give it an opportunity that will last after the holidays are over.

    "In the coming years, Williams-Sonoma expects its annual revenue to grow at a mid-to-high single digit pace. It expects to hit $10 billion in revenue by 2024, as it benefits from its in-house design and investments in digital. Macro trends like a strong housing cycle will provide further support."

    Published on: November 30, 2021

    Regarding our piece about chain drug stores being held responsible for playing a role in the opioid crisis, MNB reader Mike Moon wrote:

    My half sister Jenny was addicted to opioid painkillers, and lost her life to an overdose a couple of years ago, leaving behind 2 beautiful teenage daughters. Jenny would do anything to get her hands on a 'script; Back pain, migraines, joint pain, tooth pain, all real or imagined, would all be reasons to try to get a prescription, using different clinics, doctors, dentists, and pharmacies. 

    I'm sure her behavior isn't unique among the addicted. How can you hold health professionals responsible when so many people are finding workarounds? (I do think the pharmaceutical companies bear some responsibility here. They knew from the beginning that their product could be addicting, yet they kept producing it, akin to tobacco companies and nicotine.)

    I did a FaceTime video yesterday about creating retail environments with energy, prompting MNB reader Rich Heiland to write:

    You are spot on about energy. Here in West Chester, PA the main drag, Gay Street, is shut down from early May until end of October. The restaurants and bars push out into the street for outdoor seating. It started two summers ago to allow them to better survive COVID. Many of us are hoping it continues.

    BUT! Although the few blocks involved tilt toward bars, restaurants, offices, there are quite a few retailers. I noticed most close at the traditional 5 p.m. The streets are crowded with diners and drinkers who walk past their darkened doors. I wondered why they didn’t just go to 11 a.m. to 7 or 7:30 p.m. That would take advantage of all that energy, keep hours the same for staff availability. What a lost opportunity!

    On an other subject, from another reader:

    Black Friday is now Black Friday and beyond.  Then we get cyber Monday.  I did all my BF and beyond shopping while sitting on the couch with my wife, wine and a fire.  Greater selection, less agita.  Recipe for success.

    Yesterday I had a piece about Canada dealing with a maple syrup shortage, and commented that I stick with Vermont syrup - specifically from Runamok, which for my money makes the best maple syrup around.

    My comments prompted MNB reader Bill Malloy to take action, and write:

    First, thank you for the excellent delivery of relevant information, you daily newsletter is a must read for me.

    I was particularly interested in the piece on Maple Syrup.  Intrigued by the Runamok link, and interested in potential gifts for friends and family I checked them out.  They have a great story and lots of fantastic products.  As I was looking for things that are from “local” sellers rather than any kind of big box or online behemoth operation, this hit the nail on the head!  I proceeded to put an order together and found it quick and easy.  A glitch in the check out lead me to an even better experience.  I simply went old school and called them.  The service on the phone was outstanding.  No issues at all, and for sure, it was not a call center.  They asked what had happened on line, so they could address it if need be, took my order and I was off the phone in about the same time it I was online. 

    Two lessons…  Products with a great story, ease of both information and ordering can win the day.  Second, great associates can make a difference.  Old school still works, I could have simply exited the browser and forgot all about it.  Well… I guess that was three…

    Now I am really looking forward to trying the products and enjoying the reaction from those on the receiving end of our gifts.

    Enjoy.  I think you'll be pleased.

    MNB reader Howard Schneider wrote:

     KC, I would suggest that anyone interested in maple syrup, Canada, or twisted true crime stories, check out the documentary, “Dirty Money: The Great Maple Syrup Heist.”

    Noted.  Thanks.

    Published on: November 30, 2021

    With brief, occasional, italicized and sometimes gratuitous commentary…

    •  Published reports say that the New York Mets have signed veteran pitcher Max Scherzer, a three-time winner of the Cy Young Award, to a three-year contract paying him $43.3 million a season - a record deal that shatters the per-season record set when the New York Yankees signed pitcher Gerrit Cole to a nine-year, $324 million contract.

    The deal is contingent on the 37-year-old Scherzer passing a physical.

    The New York Times notes that "despite his age, Scherzer has maintained not only his mid-90s velocity but also his performance. With the Washington Nationals and the Los Angeles Dodgers during the 2021 season, he went 15-4 with a 2.46 earned run average and 236 strikeouts over 179 ⅓ innings. In September, he became the 19th person to reach 3,000 career strikeouts … Scherzer is already considered a likely Hall of Famer."

    Scherzer joins a staff that already includes two-time Cy Young winner Jacob deGrom.

    The Mets' 2022 payroll, underwritten by billionaire owner Steven A. Cohen, already has reached a franchise record $266 million, which the Times points out is "the highest in Major League Baseball at the moment and far past the existing $210 million luxury tax threshold."

    However, as the Times also reports, the signing comes at a fraught moment in management-labor relations in Major League Baseball:  "Scherzer’s agreement was the latest in a flurry of activity around the sport before the collective bargaining agreement between the owners of the 30 M.L.B. clubs and players expires at midnight Eastern time on Dec. 1. Both sides have publicly expressed some tepid optimism that a deal will be reached by then. But given the many negotiating hurdles and fraught labor relations between M.L.B. and the players’ union, a lockout might be coming.

    "Baseball has not had a work stoppage since the strike that prematurely ended the 1994 season, canceled that year’s World Series and bled into the next season. But if no agreement is reached, M.L.B.’s owners could enact a lockout to freeze transactions."

    I find the labor stuff to be a little tiresome - billionaires fighting with millionaires.  (I generally root for the underdogs - the people on the front lines - in such battles.  But if these people cannot find their way to some sort of agreement that puts the fans first - after all, baseball is our sport - they're all fools.

    But … the Scherzer signing gives Mets fans hope for the 2022 season, and suggests that the Wilpon era now is well behind us.  It is particularly welcome here at MNB - Michael Sansolo, Tom Furphy and I all are Mets fans.

    •  And, in Monday Night Football action, Washington defeated the Seattle Seahawks 17-15.