Published on: February 10, 2022
Can a startup turn the act of processing returns into a subscription business? Hard to know ... though KC suggests that anything that reduces friction, especially for people who are spending billions of dollars shopping online, would seem to have a shot at success.
Published on: February 10, 2022
GeekWire notes that "Amazon has surpassed 1 million direct employees in the United States for the first time, a new milestone that reflects the rapid expansion of its distribution network across the nation — and yet doesn’t come close to capturing the full scope of the workforce that revolves around the e-commerce giant in states around the country."
The story goes on:
"Amazon employs a total of 1.1 million people in the U.S, up 18% from 935,000 a year earlier, according to GeekWire’s calculations, using new and past data from the site.
"Globally, Amazon topped 1.6 million employees as of the end of 2021, up 24% year-over-year, according to the company’s fourth quarter earnings report.
"The numbers do not include people who work for Amazon indirectly, such as the drivers who deliver packages as employees of independent companies in Amazon’s Delivery Service Partners (DSP) program. Worldwide, the company says there are more than 260,000 drivers working for 3,000 DSP companies.
"Amazon’s overall growth is all the more remarkable given the broader U.S. labor shortage. Amazon said costs were about $4 billion higher than normal in the fourth quarter due to labor expenses, supply chain constraints and inflation.
"Much of the expense comes from higher wages and other costs in company’s logistics and distribution network, but Amazon this week said it’s also more than doubling base pay for tech and corporate workers."
One of the repercussions of this growth, especially because it comes at a time when a lot of people are struggling with staffing issues, is that Amazon is having to spend more in terms of wages and benefits to attract and keep people. (Not nearly enough, according to some. But that's a different story.)
This means that enormous pressure is being placed on smaller businesses in order to keep up with the Amazonians … they have to increase their labor spending as well, but are not as well-resourced, and so it puts pressure on them from an entirely different angle.
I'm not sure what you can do about this, but one has to acknowledge that it is a reality at the moment, increasing competitive pressures even in unexpected ways.
Published on: February 10, 2022
In Canada, the Globe and Mail reports that the Weston Family Foundation, named for the family behind the Loblaws grocery chain and Weston Foods, has announced ther spending of more than $25 million (US) on an "innovation hub" designed to bolster the country's food security through the use of "new technologies to grow fruits and vegetables year-round in Canada."
According to the story, "More than 80 per cent of Canada’s fruits and vegetables are imported. Much of that comes from the U.S. – a reality that has been on full display throughout the pandemic. The threat of border closings in the spring of 2020 and the recent implementation of a vaccine mandate for truckers crossing the border have raised concerns about access to fresh produce.
"Canada’s reliance on the U.S. for so much of its fresh food – and the long, fragile supply chains that facilitate it – has long been criticized by researchers and experts. Still, harsh climates, a limited growing season and the high cost of production have left Canadians with few affordable options.
"The money from the Weston Family Foundation will be used to create a six-year 'challenge,' in which teams will compete to come up with the best plan to grow berries in Canada – year-round and at scale."
This is part of a broader movement looking to address fresh food supply chains that can be long and ultimately unsustainable, and I think it'll be interesting to see if other retailers get into the game and support innovations that will benefit them and their shoppers.
Published on: February 10, 2022
IAC/InterActiveCorp, the media group owned by Barry Diller, announced that it will end the print publication of six magazines that it gained control of last year with its acquisition of Meredith Corp.
Several of the six magazines are familiar to people who spend time at supermarket front ends: Entertainment Weekly, InStyle, EatingWell, Health, Parents and People en Español.
April 2022 will be the last time the six magazines are published in print form.
In an internal memo, Dotdash Meredith CEO Neil Vogel said that "we have said from the beginning, buying Meredith was about buying brands, not magazines or websites … It is not news to anyone that there has been a pronounced shift in readership and advertising from print to digital, and as a result, for a few important brands, print is no longer serving the brand’s core purpose."
And, Vogel said, "Naysayers will interpret this as another nail in print’s coffin. They couldn’t be more wrong.”
The Journal quotes Vogel's memo as saying that "the company plans on investing in its 19 remaining print magazines - which include People, Better Homes & Gardens and Southern Living - by enhancing paper quality and trimming sizes. Dotdash Meredith also plans to invest $80 million in 2022 in content across all brands."
I'm not sure it will just be naysayers who will see this is as a nail in print's coffin.
The thing is, just spending more money on the remaining print properties doesn't strike me as a compelling narrative for how they will survive in a market that seems to be all headwinds. That's not to say they can't - the argument that Diller's company was buying lifestyle brands, not magazines, is a compelling one. (And there's a metaphor here for bricks-and-mortar food retailers, who maybe ought to think of themselves as lifestyle brands, not just as the repository for other people's brands.)
But somebody has to explain the narrative - explain to me how the content disseminated by People, Better Homes & Gardens and Southern Living is best absorbed through better paper quality as opposed to a vibrant website.
I started out as a daily newspaper reporter. I love print. I'm open to the argument. I just don't hear anyone making it in a compelling way.
Published on: February 10, 2022
From the New York Times this morning, a cautionary piece from wine writer Eric Asimov:
"The American wine industry believes it has a problem: millennials.
"More specifically, it’s the fact that aging baby boomers — currently the prime market for wine — are nearing retirement age, the time of life when consumerism typically declines.
Millennials, the generation that began to come of age after the turn of the century, have given no indication that they are poised to step in. They buy much less wine than boomers, and the wine industry has not done enough to entice them to become regular consumers.
"In his annual State of the U.S. Wine Industry report, presented last month, Rob McMillan, an executive vice president of Silicon Valley Bank in Santa Clara, Calif., and a longtime analyst of the American wine market, issued a forceful warning that a day of reckoning was coming. 'In prior reports, we noted that the falling interest in wine among younger consumers, coupled with the encroaching retirement and decreasing wine consumption of baby boomers, poses a primary threat to the business,' Mr. McMillan said. 'That issue has yet to be addressed or solved, and the negative consequences are increasingly evident.'
"Sales of American wine could plummet by 20 percent in the next decade, he said."
There are some economic issues at work, Asimov writes, lack the fact that really good wine can be a lot more expensive than it was 20 years ago, and millennials tend to have less disposable income at the moment. There also is a perceived lack of diversity and social consciousness in the wine business that some millennials find to be off-putting.
Asimov goes on:
"Mr. McMillan also asserted that millennial consumers are more concerned with social justice and with health and environmental issues, including climate change. 'A brand’s social values are increasingly connected to a consumer’s decision to purchase particular products, including wine,' he said.
"Among his recommendations, he suggests that producers list their ingredients and offer nutritional data, like calories per serving, and that they be clear about their social values, their efforts to address environmental concerns and their strategies for lowering their carbon footprints.
"'The strange reality is that it would be easy to start talking about wine in an evolved way and to reference the many things that are already a part of what we do to produce wine, and that would resonate with younger consumers,' Mr. McMillan said. 'Yet as an industry we are not doing it'."
Asimov argues that while some are calling for a "got milk' style marketing program to raise wine's profile, the industry actually needs something more:
"In my little corner of the wine world, I see younger people drawn to natural wines and to traditional styles. These sorts of wines meet many of the concerns that Mr. McMillan expressed, and have demonstrated their appeal.
"The winemakers do that by showing their concern with the environment by farming conscientiously, sticking with traditional ingredients and processes and, increasingly, I hope, by addressing social justice and equity issues that are as apparent in natural wine as anywhere else.
"It’s not just a question of perception, it’s a matter of action, of demonstrating a commitment to change and to making the effort. Slogans will not paper over a failure to do that."
Published on: February 10, 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 78,824,393 total cases of the Covid-19 coronavirus, resulting in 935,922 deaths and 49,217,354 reported recoveries.
Globally, there have been 404,430,275 total cases, with 5,798,611 resultant fatalities and 324,411,750 reported 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 42.5 percent has received a vaccine booster dose.
• From the Wall Street Journal this morning:
"Hospitalizations continued tracking downward in the U.S., with the seven-day average of patients with confirmed or suspected Covid-19 falling to about 111,000, down 30% from a peak in January, according to data from the Department of Health and Human Services … U.S. deaths are holding steady, with the seven-day average standing at 2,531 on Monday, according to data from Johns Hopkins University.
"Though there is growing evidence that the Omicron variant is less likely to cause severe illness than earlier strains of the virus, particularly among people who have been fully vaccinated, the number of infections means that deaths - a lagging indicator - remain high, public-health experts say. Omicron’s rapid spread means it is reaching people with other illnesses, and Covid-19 wasn’t the cause of death in some of these cases."
• From the New York Times this morning:
"The White House has been meeting with outside health experts to plan a pandemic exit strategy and a transition to a “new normal,” but the behind-the-scenes effort is crashing into a very public reality: A string of blue-state governors have gotten ahead of President Biden by suddenly abandoning their mask mandates.
"Two of the administration’s top doctors — Dr. Anthony S. Fauci, the president’s chief medical adviser for the pandemic, and Dr. Rochelle P. Walensky, the director of the Centers for Disease Control and Prevention, both expressed qualified optimism on Wednesday about the direction of the pandemic. If cases continue to fall and no new variants arise, the country 'could be heading toward what we would consider more normality,' Dr. Fauci said in an interview.
"But Dr. Fauci cautioned that the situation 'is still unpredictable,' and said any transition out of the current crisis would be gradual. And Dr. Walensky said pointedly that while her agency is working on new guidance for the states, it is too soon for all Americans to take off their masks in indoor public places.
"'Our hospitalizations are still high, our death rates are still high,' she said during a news briefing by the White House Covid response team. 'So, as we work toward that and as we are encouraged by the current trends, we are not there yet'."
• The coronavirus has claimed another victim, according to Food & Wine - Ye Olde Fighting Cocks, a British pub that first opened in 793 and claims to be the UK's oldest watering hole.
The story says that "the current operator of the pub in St. Albans announced on Friday that they have filed for bankruptcy, blaming 'a sustained period of extremely challenging trading conditions' — a similar refrain to a number of historic British pubs that have closed during the pandemic."
The property owners say they are hoping to find a way to reopen the pub down the road.
Published on: February 10, 2022
With brief, occasional, italicized and sometimes gratuitous commentary…
• The Financial Times reports that in the UK, the Competition and Markets Authority "has designated Amazon as a grocer and placed it under new rules governing the way supermarkets treat their suppliers in the latest regulatory assault on the tech giant’s dominance … The groceries supply code of practice applies to retailers who generate more than £1bn from UK grocery sales. This includes prohibitions on companies making last-minute changes to supply contracts and ending agreements with no notice."
FT writes that "it is the latest blow to Amazon as the company battles antitrust probes worldwide and prepares for the imposition of new rules governing big tech currently being drafted by regulators in Brussels and the UK.
"In a regulatory notice, the CMA said Amazon’s entry into the UK grocery market through its acquisition of Whole Foods in 2017 and its Amazon Fresh delivery service and physical stores brought it in scope of its rules."
• When reporting its first fiscal quarter numbers yesterday, Walt Disney Co. said yesterday that it added more than 10 million subscribers to its paid streaming service, Disney+, growing it from 118.1 million subscribers in the prior quarter to 129.8 million subscribers in Q1.
The Wall Street Journal writes that Disney also "posted $21.82 billion in revenue for the quarter, compared with $16.25 billion a year earlier … Sales at its theme parks and consumer products division - which includes Walt Disney World and Disneyland resorts - were $7.23 billion, buoyed by increasing strength in outdoor travel. Analysts expected $6.36 billion. The company said its domestic parks and resorts reported record revenue and operating income."
I mention this here because it is more evidence than when given a reason to do so, people will continue to adopt to new forms of content consumption - people go to Disney+ to watch things like "Hawkeye" and "The Book of Boba Fett," part of the company's successful strategy of using existing intellectual property to expand and engage with audiences. And, when the time and content are right, Disney also is getting people to go back to theaters, to see things like "Spider-Man: No Way Home."
It is all about being customer-centric, not product-centric, in a customer-centric world.
Published on: February 10, 2022
With brief, occasional, italicized and sometimes gratuitous commentary…
• From the Wall Street Journal this morning:
"U.S. inflation accelerated to a 7.5% annual rate in January, reaching a new four-decade high as strong consumer demand and pandemic-related supply constraints kept pushing up prices.
"The Labor Department on Thursday said the consumer-price index—which measures what consumers pay for goods and services—was last month at its highest level since February 1982, when compared with January a year ago, and higher than December’s 7% annual rate. Inflation has been above 5% for the past eight months.
"The so-called core price index, which excludes the often-volatile categories of food and energy, climbed 6% in January from a year earlier. That was a sharper rise than December’s 5.5% rise, and the highest rate in nearly 40 years."
• The Seattle Times reports that the Seattle City Council has passed 6-0 a resolution that expresses support for Starbucks employees trying to unionize.
The story notes that the resolution "prompted debate among council members over the purpose of symbolic resolutions and stoked old debates among the council’s liberal faction." Two members of the Council declined to vote on the matter, while still expressing support for organized labor, because they questioned whether the lawmakers should be weighing in on the matter in this way.
• CNBC reports that Apple, which has 270 bricks-and-mortar stores in the US, "is increasing benefits for U.S. retail workers, including doubling sick days for full-time and part-time employees … full-time retail workers will get 12 paid sick days per year, twice as many as before. Retail employees will also receive more vacation days if eligible, and part-time employees will get up to six vacation days. Retail employees are also now eligible for paid parental leave and can access discounted emergency child care."
The story notes that "the move indicates that Apple is making changes to attract and retain hourly workers for its retail stores in a tight labor market. The increase in sick days also addresses complaints from retail workers about potentially losing out on pay because of policies stemming from the pandemic and the CDC-recommended isolation period for close contacts or positive tests."
More pressure on other retailers to improve their wage and benefits packages … at least if they want to attract and keep employees.
Published on: February 10, 2022
• The National Grocers Association (NGA) yesterday announced what it called a series of "staff promotions and title updates for 2022."
Maggie White, director of the NGA Foundation, now is senior director of the NGA Foundation … Robert Yeakel has been promoted to senior director of government relations … Mary Whitehead is now senior manager of marketing … LaKesha Gathers-Flowers will now serve as senior manager, executive office and board liaison … Marvelle Wright, previously specialist, accounts receivable and payable, will now have the new role of manager, accounting transactions and member support … and Jonathan Downey now will have the title of senior vice president of membership and industry relations.
Published on: February 10, 2022
Syl Johnson, a widely respected Chicago blue and soul singer known for being an enormous influence on the hip-hop community, has passed away. He was 85.
NPR writes bout one of his best-known songs, "As one of the most widely sampled songs in hip-hop, 'Different Strokes' has been borrowed by dozens of artists, including Wu-Tang Clan, Public Enemy, De La Soul, Ice Cube, and Kanye West and Jay-Z."
In all honesty, I'd never heard of Syl Johnson before he passed away.
But I was reading an appreciation written by the great Ace Atkins in "Garden & Gun," in which he wrote:
"How did the entire world not know about Johnson? Over the years, his music has provided comfort, pure pleasure, and inspiration. Just last fall, I started outlining a new novel while listening to his debut album, 'Hi, Back for a Taste of Your Love.'
"Grittier, edgier, and more blues-inspired than Al Green, Johnson’s music had a transcendent quality that I couldn’t get enough of. Sadly, unlike a lot of those other soul heroes, I never got to hear the man perform.
"But what a life. What a legacy."
I'd never heard of him. But I went to iTunes … and started playing his albums, "Dresses Too Short." "Back For A Taste Of Your Love." And "Complete Mythology." And "The Best of Syl Johnson: The Hi Records years."
Wow.
Published on: February 10, 2022
Earlier this week we reported on BrandSpark Internationals' special edition of its BrandSpark Most Trusted Awards (BMTAs), "highlighting the most trusted grocery stores as voted by American shoppers."
I raised some questions about the rankings, which were seconded by a number of MNB readers.
One MNB reader wrote:
I would have Hannaford in the Northeast ahead of Stop and Shop.
Hannaford didn't make the northeast regional top five. Stop & Shop came in fourth … and Wegmans came in fifth (which I found to be astounding).
Another MNB reader drilled down in the category awards and wrote:
3200 American shoppers and not one Independent Natural Food Retailer was an award winner? Best Produce; Walmart?
I don't get that one, either.
And another MNB reader noted a company that didn't make the western regional rankings:
What has happened to Raley’s?
I think Raley's not being on the list is more about how the questions were asked and who was asked the questions.
The thing is, I almost never put much stock in these kinds of surveys - they're generally done in order to generate publicity for the company doing the rankings (mission accomplished!), and for a variety of reasons I don't think they adequately measure the degree of loyalty felt by many shoppers for the stores they patronize. No Stew Leonard's? No Dorothy Lane Market? No Metropolitan Market? No PCC? I could go on…
MNB reader Steven Litt had a thought about the FaceTime piece I did the other day about how people (like, family members) don't always appreciate the evolution of other peoples' eating habits.
Thanks for this! IMO, your examples highlight how Observation Research (even with AI) isn’t always enough. Observation data records past recorded behaviours. Some of that info is the same TYPE of info a survey (as an alternative form of Descriptive Research) may provide, HOWEVER surveys also leave a door open to ask about attitudes & future preferences ie Observation Data just looks backwards –and at past behaviours- that data may mislead us. Just as siblings wrongfully think our past meal habits (visible to them) signal ‘preferences’.
Surveys, of course, only report what people say they will do … not what they actually do.
On the subject of Starbucks firing employees trying to unionize, claiming they were violating company policies, I suggested that if nothing else, the optics ain't great.
MNB reader Steve Anvik responded:
Indeed the “optics ain’t great”. However if specific allegations of wrongdoing are accurate & documented (and they better be), when it goes to arbitration for UI, or wrongful termination – things are far worse than optics. If they are accurate / documented – any company has the right to protect itself. The writ large alternative? See CA example of decriminalizing retail theft up to $950 – and the results widely reported here recently. If SBUX is all in, knowing the details and optics – then I’m withholding judgement, until this plays out and the guilty are adjudicated. This “contretemps” may be more smoke than fire.
Regarding Amazon's expanding telehealth business, one MNB reader wrote:
Am I the only one completely creeped out by this? No thanks. As with most anything as technology advances - we are the product. If they would like me to partake of these services, they can pay me for the knowledge they’ll mine. Not the other way around.
On an other subject, from MNB reader Lisa Malmarowski:
I’m rather dumbfounded that mega-grocery stores don’t have banks of charging stations in their mile-wide parking lots - most of which sit half empty all the time. Our stores, our small stores, feature 2 stations in our tiny lots. People really like it and folks have discovered our stores because of them.
And hey, while they’re at it, why not include decent bike parking, green swales planted with native plants to manage water runoff from the asphalt, and permeable pavement to help as well?
Seems like a no-brainer.
Businesses, all businesses, need to step up fast and do what they can with resources and space they have.
Trust me, it’s good for business.
And finally, responding to a story about inflation that we ran yesterday, MNB reader Dale Tillotson wrote:
I sense a conspiracy here. Oreo cookies rising in price as well as Colgate.It costs more to blacken the teeth and it costs more to clean the teeth. Investigation by Congress needed. Maybe Nancy Pelosi bought stock in both companies.
Why stop at Pelosi? I'd blame the entire Democratic Party conspiracy …and I'd look especially hard at Barack Obama's recent stock trades.
