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    Published on: February 9, 2022

    The continuing goal of "The Innovation Conversation" is to explore some facet of the fast-changing, technology-driven retail landscape and how it affects businesses and consumers. It is, we think, fertile territory ... and one that Tom Furphy - a former Amazon executive, the originator of Amazon Fresh, and currently CEO and Managing Director of Consumer Equity Partners (CEP), a venture capital and venture development firm in Seattle, WA, that works with many top retailers and manufacturers - is uniquely positioned to address.

    This week, Tom and KC take a second look at Amazon's financial reporting from last week, focusing on what the numbers tell us about the company's diminishing dependence on retail for both revenue and profit;  what the impact of an increase in Prime membership fees is likely to be;  and where the challenges and opportunities are for competitive retailers going forward.

    If you'd like to listen to The Innovation Conversation as an audio podcast, click below.

    Published on: February 9, 2022

    Amazon said yesterday that it is rolling out its Amazon Care telehealth service nationally this year, working with other employers to expand its footprint and growing an in-person care element from eight to 20 cities.

    Amazon Care started as a pilot program for Seattle area Amazon employees.

    CNBC writes that "Amazon said it’s capitalizing on the surge in demand for in-home care, both virtually and in person, generated by the coronavirus pandemic. It’s hoping that Amazon Care’s blend of virtual care and 'a new approach to in-person care' will be able to attract employers away from other providers."

    From the CNet story:

    "Amazon Care provides immediate access to a wide range of urgent and primary care services, including COVID-19 and flu testing, vaccinations, treatment of illnesses and injuries, preventive care, sexual health and prescription requests and refills, the company said. The service combines virtual health attention with in-person services. If additional in-person care is needed, Amazon Care dispatches a nurse practitioner to the patient's home."

    The CNBC story says that Amazon has "started providing services for Whole Foods, the upscale grocer it acquired in 2017, as well as chipmaker Silicon Labs and TrueBlue, a staffing and recruiting company … In addition, the e-commerce giant is expanding in-person care to more cities across the U.S. Later this year, it plans to launch that side of the business in 20 cities, including New York City, San Francisco, Miami and Chicago. Amazon Care’s in-person services are currently available in eight cities."

    CNBC notes, however, that getting insurance company approbation will be key to breaking the healthcare logjam:

    "One key to building a virtual primary care service is gaining health insurance-network coverage, particularly when it comes to employer plans which pay the bills for workers to access care.  Health insurers already work with established providers like Teladoc and Dr. on Demand to provide the telehealth platform, but when it comes to virtual primary care plans, they are increasingly launching their own programs.

    "Anthem also announced Tuesday it will be offering new virtual primary care services in Georgia, Kentucky, Ohio and Connecticut later this year. UnitedHealthcare, CVS Health’s Aetna division and Cigna, through its recently acquired telehealth unit MDLive, all now offer employers virtual primary care plans which they tout as a programs to help employees manage chronic conditions and save costs."

    CNet also points out that "Amazon Care is not the technology giant's only foray into care services. Alexa Care Hub, which launched at the end of 2020, allows caretakers to monitor activity and receive alerts about their aging loved ones without having to constantly bother them with anxiety-driven 'check-ins'."

    KC's View:

    Yet another example of something that Tom Furphy and I discussed in this morning's Innovation Conversation (which we recorded before the Amazon Care announcement was made) - Amazon continuing to move beyond its retailing roots as it embraces a business model that endeavors to make Amazon and its various enterprises/tentacles inextricably intertwined in our lives.

    The description of Amazon Care makes it sound, to my ears, like something that still has a lot of runway in front of it … though experience suggests that the company is likely to gather speed faster than any of us might expect.

    Published on: February 9, 2022

    Louisiana -based Roses Supermarkets said yesterday that it "has partnered with eGrowcery to go to market with their own eCommerce solution for curbside pickup. The eGrowcery platform includes a Rouses Market Shopping App, which customers can download on the App Store or on Google Play.

    "With eGrowcery technology, customers can shop, place an order and choose a curbside pickup time through the app or on the Rouses Markets website. There is no curbside pickup fee on orders over $35, and customers pay the same price for groceries that they pay in Rouses Markets stores."

    KC's View:

    Here's the money paragraph from the announcement, as far as I am concerned:

    "eGrowcery, which operates both in the United States and abroad, is seeing a growing number of retailers seeking to establish their own branded eCommerce experience. Whereas marketplaces own the shopper data and allow for products and promotions from competing retailers, this solution puts control and data ownership back in the hands of the retailer."

    Exactly.  The more alternatives to Instacart emphasize to retailer clients that they want to serve the retailer's brand, not their own, the more impactful they should be.

    Published on: February 9, 2022

    From Reuters:

    "From Hershey to Clorox and Kleenex maker Kimberly-Clark, major consumer-products companies have announced plans to boost U.S. prices further or more broadly than previously proposed this year, signaling that the fastest inflation rate in a generation may not ebb soon.

    "Product makers generally hold conversations with U.S. retailers at year-end about price hikes planned for the following year. But company executives disclosed during recent quarterly results that they are taking a more aggressive approach this year to protect margins.

    "Clorox … said it plans to raise prices on 85% of its products by the end of June, up from a previously planned 70%, with some of the company's brands set for multiple rounds of price hikes … Chocolate maker Hershey said it would raise prices further in the first half of 2022 in the United States on top of price increases that will go into effect in the first quarter ended March 31, 2022 … Kimberly-Clark said last week it would undertake more price increases -- following four rounds of price hikes in 2021 -- as pulp, labor and transportation costs continue to bite.

    "Consumer packaged goods companies also have pulled back on some of the discounts they are offering consumers, adding to the effect of price hikes."

    The story notes that "Cadbury Chocolate and Oreo cookies maker Mondelez International last month disclosed that there could be 'multiple pricing waves' this year to keep up with inflation. Colgate said it was fast tracking a round of price hikes to the first half instead of the second half of the year."

    It isn't just CPG companies, of course.  The Wall Street Journal reports this morning that "Chipotle Mexican Grill Inc. said it increased menu prices again and is likely to raise them further this year, as its chief executive officer said higher costs are unlikely to abate.  Higher menu prices helped the burrito chain boost sales in recent months as it pursues a plan to build hundreds more stores in the coming year, the company said."

    Published on: February 9, 2022

    The New York Times this morning reports that "Starbucks on Tuesday fired seven employees in Memphis who were seeking to unionize their store, one of several dozen nationwide where workers have filed for union elections since December.

    "A Starbucks spokesman said the employees had violated company safety and security policies. The union seeking to organize the store accused Starbucks of retaliating against the workers for their labor activities.

    "The firings relate at least in part to an interview that workers conducted at the store with a local media outlet."

    Reggie Borges, a company spokesman, tells the Times that among the violations were "opening a locked door at their store; remaining inside the store without authorization after it had closed; allowing other unauthorized individuals inside the store after it had closed; and allowing unauthorized individuals in parts of the store where access is typically restricted."  Borges also said that "one employee had opened a store safe when the employee was not authorized to do so and that another employee had failed to step in to prevent this violation."

    The employees said that some of the actions cited by Starbucks actually were common, and "Starbucks Workers United, the union that represents workers at two stores in Buffalo and that is helping to unionize Starbucks workers across the country, filed unfair labor practice charges over the firings and said in a statement that 'Starbucks chose to selectively enforce policies that have not previously been consistently enforced as a pretext to fire union leaders'."

    KC's View:

    The optics ain't great, but I suspect that at some level the folks at Starbucks are beginning to worry that the unionization movement may be gaining unstoppable momentum.

    Published on: February 9, 2022

    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…

    •  In the United States, there now have been 78,556,193 total cases of the Covid-19 coronavirus, resulting in 932,443 deaths and 48,828,328 reported recoveries.

    Globally, there have been 401,853,062 cases, with 5,785,153 resultant fatalities and 321,590,920 recoveries.   (Source.)



    •  The Centers for Disease Control and Prevention (CDC) says that 75.7 percent of the total US population has received at least one dose of vaccine … 64.2 percent is fully vaccinated … and 42.4 percent has received a vaccine booster dose.



    •  The New York Times this morning reports that New York Governor Gov. Kathy Hochul "will drop New York’s stringent indoor mask mandate on Wednesday, ending a requirement that businesses ask customers for proof of full vaccination or require mask wearing at all times, and marking a turning point in the state’s coronavirus response, according to three people briefed on her decision.

    "The decision will eliminate a rule that prompted legal and interpersonal clashes over mask wearing, especially in conservative parts of New York. It was set to expire on Thursday and would have required renewing.

    "Ms. Hochul’s decision will let the mask mandate lapse just as a crushing winter surge in coronavirus cases is finally receding. But it was not yet clear whether the governor would renew or drop a separate mask mandate in New York schools that is set to expire in two weeks."

    I worry that perhaps we are spiking the ball too early, but hopefully not.  The thing is, thousands of people continue to die every day, though for the most part they seem to be people who have not been vaccinated.  I'll continue to be cautious in my personal and professional behavior even as embracing the idea that reality is getting more pleasant;  it is not an original observation to say that the people who are being the most cautious are the people least likely to get seriously ill and hospitalized because they've behaved in a way that public health officials would describe as responsible.



    •  The Wall Street Journal reports that "the pandemic has had a more muted impact on childbearing than expected," and that "the U.S. saw about 7,000 fewer births through the first nine months of 2021 compared with the same period the year prior, according to provisional data from the Centers for Disease Control and Prevention’s National Center for Health Statistics. The numbers reflect conceptions that occurred roughly from April through December 2020, a period that includes the first part of last winter’s Covid-19 case surge, which started in October 2020 and waned by February 2021.

    "Starting in June 2021, monthly births began to show consistent gains over their year-earlier levels, which reflect pre-pandemic conceptions, and that mostly offset declines in the first two months of 2021, the data show."

    The Journal goes on:  "Despite the small uptick in births starting in mid-2021, Americans continue to have babies at historically low rates. The number of babies born in the U.S. in 2020 was the lowest in four decades. The total fertility rate that year—a snapshot of the average number of babies a woman would have over her lifetime—fell to 1.64, the lowest rate on record since the government began tracking it in the 1930s.

    "Low fertility helped drive down U.S. population growth to 0.1%, the lowest rate on record, for the fiscal year ended July 1, according to Census Bureau figures. For the 12 months ending in September, births declined 1.7% from the same period a year prior."

    In other words, fewer customers.

    Published on: February 9, 2022

    •  Aldi said yesterday that it "plans to open approximately 150 new stores and remains on track to become the third-largest U.S. grocery retailer by store count by the end of this year … As ALDI expands in the Southeast, the company will count Louisiana as its 38th state of operation when it welcomes shoppers to its Lafayette store on Feb. 10. ALDI plans to open two more Gulf Coast stores in early March, along with 20 additional stores throughout the region by year-end."

    In addition to opening new stores, the company said, it "will increase access to convenient online shopping options. The company will expand its Curbside Grocery Pickup offering from 1,200 to 1,500 stores by the end of the year to make shopping quick and easy for customers."

    And, Aldi said, "to support its growth in the area," it will "open a new 564,000-square-foot regional distribution center in Loxley, Alabama later this year. The facility will eventually support as many as 100 new stores throughout Louisiana, Alabama, Mississippi and the Florida Panhandle."

    Published on: February 9, 2022

    •  Kroger announced that Mark Tuffin, senior vice president of retail divisions, will be retiring from ther company after more than 26 years, effective April 1. Tuffin will be succeeded by Kenny Kimball, currently president of the Smith's division.



    •  Wakefern Food Corp. announced that Jeff Mondelli, the company's vice president of pharmacy, health and beauty and general merchandise, has been named vice president of grocery.

    Mondelli will be succeeded by Pat Mooney, who most recently was VP of merchandising support.

    And, the company said, Seth Nieman, the company's director of marketing and sales planning, has been named VP of merchandising support.

    Wakefern also said that Harshil Patel, a pharmacy field service specialist with the company, has been named director of pharmacy.

    Francisco Alberto, manager of promotional marketing, has been promoted to the role of 

    director of marketing and sales planning.

    And, Michael Day, VP of strategic planning and transformation, has been named vice president of strategic planning, business development, and member services.



    •  Peapod Digital Labs, the digital, commercial and e-commerce arm of the Ahold Delhaize USA brands, announced that Ian Prisuta - most recently a senior advisor at Boston Consulting Group and before that a senior executive at Giant Eagle - has joined the company as Senior Vice President, Private Brands.