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    Published on: April 21, 2022

    I reported yesterday about Netflix's first decrease in subscribers in more than a decade, and suggested some retail lessons that could be gleaned from the shift in the company's fortunes.  Well, it got worse - yesterday, Netflix's stock dropped 35 percent, instantly reducing its market cap by $50 billion.


    I think there are some additional lessons to be learned from Netflix's current and future prospects, about having what it takes to survive and playing competitive musical chairs.

    One additional note:  After I recorded this FaceTime video, the news broke in Variety that "worldwide, HBO Max and HBO added 3.0 million subscribers sequentially (and 12.8 million subscribers year over year) to end Q1 with 76.8 million total. That included 48.6 million domestic HBO Max and HBO subscribers, up 1.8 million from the prior quarter. The 3 million quarterly net gain for HBO Max/HBO matched that in the year-earlier period.

    "The growth for HBO Max/HBO stands in contrast to Netflix’s Q1 results reported earlier this week — whose subscriber growth slammed into a wall, missing expectations with a surprise loss of 200,000 subs."

    So the Netflix issue may, in fact, be Netflix … though the issue is one that can affect any streaming service and, in fact, any retailer.

    Published on: April 21, 2022

    Kroger said yesterday that it is "hiring more than 200 associates as it prepares to bring Kroger Delivery to the South Florida market this summer, providing fresh food and the convenient, exceptional service to area residents."

    Kroger currently operates the pure-play, e-grocery service in three Florida markets.

    "We are thrilled about the opportunity to provide fresh food and convenient services to customers throughout South Florida," said Andrea Colby, eCommerce corporate affairs and communications manager, in a prepared statement.  "The service combines the efficiency of technology with the experience of our associates to deliver fresh, affordable groceries directly to customers' homes."

    KC's View:

    More than ever, it seems to me, competition does not know borders, nor inherent limitations.  Market share and trade area analyses may become obsolete constructs.

    I was in Orlando, Florida, for a speaking engagement last week.  (Yes!  So happy that live events have returned!)  As I was driving around, I saw four different Kroger Delivery trucks … or maybe the same truck four different times, though that seems unlikely.  Kroger is out there with a recognizable brand, challenging bricks-and-mortar stores with a 21st century model.

    I suspect that Kroger will have to be patient;  this is not a play that, I suspect, is likely to create ROI overnight.  But it is a long-term play that has the potential to reshape an industry often mired in "we've always done it that way" thinking.

    Published on: April 21, 2022

    Amazon announced this morning that it is rolling out Buy with Prime, described as "a new benefit for Prime members that will extend the convenience of Prime shopping to online stores beyond Buy with Prime will initially be available by invitation only for merchants using Fulfillment by Amazon (FBA) and will roll out through 2022 as merchants are invited to participate, including those not selling on Amazon or using FBA."

    The announcement elaborates this way:

    "Buy with Prime will allow millions of U.S.-based Prime members to shop directly from merchants’ online stores with the trusted experience they expect from Amazon—including fast, free delivery, a seamless checkout experience, and free returns on eligible orders. Prime members will see the Prime logo and delivery promise on eligible products in merchants’ online stores, which signals the item is available for free delivery, as fast as next day, with free returns. When shopping with Buy with Prime, checkout is simple and convenient. Prime members will use the payment and shipping information stored in their Amazon account and receive timely shipping and delivery notifications after an order is placed."

    It goes on:  

    "For merchants already using FBA, Buy with Prime can be added to their online store within minutes because their inventory is already stored in Amazon fulfillment centers. To get started, merchants sign up for Buy with Prime, link an Amazon Seller Central account, use Multi-Channel Fulfillment to offer one pool of inventory for multiple channels, and link an Amazon Pay account to offer a seamless checkout experience for Prime members. Then, by installing a JavaScript widget in their online store, merchants can easily add Buy with Prime to one or more products. With Buy with Prime, merchants will receive shopper order information, including email addresses for customer orders, which they can use to provide customer service and build direct relationships with shoppers.

    "Using Buy with Prime, merchants simply pay for what they use. Pricing is based on a service fee, a payment processing fee, and fulfillment and storage fees that are calculated per unit. With no fixed subscription fee or long-term contract required, merchants can expand selection or cancel at any time."

    KC's View:


    How many times do people go on a site other than Amazon, only to wish that it offered the same convenience available with Prime?  Often, I suspect … and this will allow Amazon to offer it … potentially build out its delivery infrastructure in a way that competes with FedEx and UPS … and dip its beak on sales that previously it had nothing to do with.

    This latter part is the danger, of course … because suddenly Amazon will have access to customer and transaction information beyond what is happening on its own site.  This will worry some retailers, I suspect, and also could be a flashing red light to regulators and lawmakers already looking askance at Amazon's market penetration.

    Published on: April 21, 2022

    Albertsons yesterday launched what it called "long-term goals and strategies focused on maximizing the company’s positive impact across four pillars: Planet, People, Product, and Community. The company’s new Environmental, Social and Governance (ESG) framework, called 'Recipe for Change,' further solidifies Albertsons Cos.’ commitment to using its national presence and resources to drive meaningful, proactive change."

    “As a long-standing neighborhood grocer, we have an ongoing commitment to leverage our resources and expertise to support the communities we serve and the planet we share,” said Vivek Sankaran, CEO of Albertsons Cos. “Today, we are unveiling ambitious and measurable goals that will challenge us to be even more deliberate and creative about how we lead positive change.”

    According to the announcement, Chief Sustainability and Transformation Officer, Suzanne Long, will oversee execution of Albertsons Cos.’ ESG strategy and sustainability agenda.

    Among the company's priorities and goals:

    •  "Albertsons Cos. is committed to fighting climate change by reducing carbon emissions through science-based targets … Achieve Science Based Targets initiative approved carbon emissions reduction goals by 2030 … Reduce carbon emissions from company operations by 47% … Reduce downstream carbon emissions from the use of sold goods by approximately 27% … Engage top suppliers to set science-based carbon reduction targets by 2026 … (and) Achieve Net Zero emissions in company operations by 2040."

    •  "Albertsons Cos. is committed to cultivating a diverse workforce and providing equal opportunity for all associates … Increase diverse representation within our management to reflect the rich diversity of the communities we serve … Foster an inclusive culture that embraces differences and drives innovation to accelerate growth … (and) Ensure all associates have equal access to opportunities and resources."

    •  "Albertsons Cos. is committed to eliminating food waste, reducing the use of plastic, and accelerating our transition to a more circular economy … Zero food waste going to landfill by 2030 … (and) Leverage global partnerships and platforms to report on and achieve the company’s Plastics & Packaging Pledge goals."

    •  "Albertsons Cos. is committed to reducing food insecurity at a local level, so all its neighbors thrive … Enable the donation of one billion meals by 2030 … (and) Champion innovative programs and partnerships to help break the cycle of hunger in the communities we serve."

    Published on: April 21, 2022

    The Boston Globe reports that Instacart has introduced a new "tabletop checkout system" called Caper Counter to three food venues in Boston's iconic Fenway Park, which "allows customers to purchase items — Coke, peanuts, and candy, for example — that are identified by cameras, rather than cashiers."  

    According to the story, "In theory, the system demands only 15 seconds of a customer’s time. In testing, Fenway food service vendor Aramark found that Caper Counter decreased individual checkout times by 70 percent. And in practice, it seems to work. Fans place products on a black surface, with five cameras positioned to identify their purchase — no matter how they’re positioned or how many items there are … The items — and their prices — then load onto a large tablet to the right of the Counter, where fans can pay with a credit card or an eligible Red Sox loyalty program. At least one employee is stationed next to the Counter to troubleshoot, prevent stealing, and guide customers in line."

    The Globe reports that "Caper Counter was founded in 2015 and first unveiled its checkout system last fall at the Pittsburgh Steelers’ Heinz Park, where it operates eight machines. The San Francisco startup was acquired by Instacart in October."

    KC's View:

    This story suggests an unexpected detour by Instacart, though one that probably makes sense if they want to have a broad presence in various forms of payment and e-commerce.  Be interesting to see if they bring this technology to self-checkout lanes in traditional supermarkets.

    One thing, though.

    The Globe story notes that "the Worcester Red Sox installed similar technology at their Polar Park last year. There, Standard AI created a marketplace that sells snacks and WooSox memorabilia using AI and ceiling cameras. The system tracks customers’ chosen products in a 'digital cart' and completes the transaction in a phone application.

    "But Lindon Gao, Instacart’s vice president of engineering, said requiring fans to download an app creates an unnecessary barrier. Plus, he said, cameras scattered around the ceiling at Polar Park require more calibration and maintenance than five stationery cameras on a Caper Counter box."

    Two quibbles here.  First the technologies don't strike me as similar at all.  The intentions are the same - reducing friction - but in operation, the Standard AI process actually eliminates the step that is core to the Caper Counter experience.

    I'd also be careful, if I were Instacart, about demeaning the checkout-free concept.  After all, it may end up offering its own version of it at some point, or could acquire or be acquired by a company that makes that tech.

    Published on: April 21, 2022

    Inc. reports that Amazon appears to be trying to build up its credibility as being supportive of small businesses - as opposed to be=ing a destroyer of same - by testing the addition of a "small business" badge to some products on its site.

    The badge is designed to identify for shoppers the third-party sellers that Amazon would define as a small business.

    While Amazon maintains that "products from small and medium-sized businesses account for more than half of everything sold in Amazon's store," the retailer says that "customers often don't realize they're supporting one of nearly two million independent businesses when shopping on Amazon."

    Inc. writes that "for now, it's just a test, meaning Amazon might change its mind altogether. Or, you might see badges on different items at different times. Right now, Amazon is deciding which items to show the badge, and small businesses can't request it be added. Amazon does say it plans to add additional discoverability features in the future. Like, for example, the ability to search specifically for those sellers."

    KC's View:

    Very smart, and overdue.

    I've always wondered why Amazon doesn't make it easier for shoppers to use various characteristics to sift through its massive SKU count.  (We know it is possible.  Sifter does it.)

    Amazon could do this in so many ways.  Some could be diet and health related.  It could sift by country of origin.  (An easy way to find products made in the USA?)

    Sifting by business size could be just the beginning.

    Published on: April 21, 2022

    The Information reports that Amsterdam-based food delivery company Just Eat Takeaway is considering the sale of Grubhub, the US food delivery company that it acquired in 2020.

    The move - which technically is being positioned as "actively exploring the introduction of a strategic partner into and/or the partial or full sale of Grubhub" - because of sluggish results related to a post-pandemic slowdown in take-out orders.  Just Eat Takeaway also is said to be more focused on growing its European business, seeing the US as a distraction.

    KC's View:

    One interesting note that shows how the worm has turned.  Just Eat Takeaway acquired Grubhub two years ago for $7.3 billion.  Just Eat Takeaway's current total market valuation is $6.8 billion.

    There are, of course, going to be ebbs and flows in how these companies fare.  But I think it would be foolish for folks to think that the category is a sinking ship that they should abandon.

    Published on: April 21, 2022

    With brief, occasional, italicized and sometimes gratuitous commentary…

    •  The Verge reports that Amazon CEO Andy Jassy, "in an all-hands meeting with employees," made the following comment about unionization:

    "“One of the things that’s unique about Amazon is that we have unusual empowerment for our employees.  If they see something they can do better for customers — or just for themselves — to get together, get in a room, decide to change it, and change it, and do it quickly. We encourage that type of speed. You know, you’re part of the union it’s much slower and much more bureaucratic, much harder to do that … (When) you’re part of the union it’s much slower and much more bureaucratic, much harder to do that."

    Jassy added:  "We think there’s real value in having a connection between teammates and managers where you build a different type of connectivity, a different type of bond, as opposed to having all of your voice filtered through one person."

    I wonder if people working in Amazon's behemoth distribution centers feel that same empowerment, or if it is more available to people further up the food chain at the company.  I actually don't doubt Jassy's sincerity or intentions;  I'm just not sure it accurately reflects reality everywhere in the company.

    Jassy also is a little less than credible when he says, "the decision to join a union is employees’ decision. It always has been, and always will be.”

    Really?  Because I'm thinking, not so much.

    •  From the New York Times this morning:

    "Employees at an Apple store in Atlanta filed a petition on Wednesday to hold a union election. If successful, the workers could form the first union at an Apple retail store in the United States.

    "The move continues a recent trend of service-sector unionization in which unions have won elections at Starbucks, Amazon and REI locations.

    "The workers are hoping to join the Communications Workers of America, which represents workers at companies like AT&T Mobility and Verizon, and has made a concerted push into the tech sector in recent years.  The union says that about 100 workers at the store — at Cumberland Mall, in northwest Atlanta — are eligible to vote, including salespeople and repair technicians, and that over 70 percent of them have signed authorization cards indicating their support."

    The union, according to the Times, says that "Apple, like other tech employers, had effectively created a tiered work force that denied retail workers the pay, benefits and respect that workers earned at its corporate offices.  Workers said they loved working at Apple but sometimes felt they were treated like second-class employees."

    I wonder how many other retail companies have, without meaning to, have created cultures in which store employees feel like second-class citizens, which belies the reality that they are on the front lines where all the action happens.

    Published on: April 21, 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…

    •  The United States now has had a total of 82,488,517 total cases of the Covid-19 coronavirus, resulting in 1,017,093 deaths and 80,309,804 reported recoveries.

    Globally, there have been 507,117,374 total cases, with 6,232,808 resultant fatalities and 459,522,579 reported recoveries.   (Source.)

    •  The Centers for Disease Control and Prevention (CDC) says that 77.4 percent of the total US population has received at least one dose of vaccine … 66 percent are fully vaccinated … and 45.5 percent of fully vaccinated people have received a vaccine booster dose.  The CDC also says that 49.6 percent of booster-eligible US residents have actually received a vaccine booster dose.

    •  The US Department of Justice, at the behest of the Centers for Disease Control and Prevention (CDC), has filed an appeal of a Florida federal court judge's ruling that overturned the government's pandemic-related mask mandate for airports, airlines and other forms of mass transportation.

    The Justice Department, however, has not asked for a stay of the judge's ruling.  The CDC's mask mandate was scheduled to end in early May anyway, and the appeal on its own wouldn't add to current confusion but would seek to preserve the CDC's lawful authority to protect public health through such measures.

    The right thing to do, and the right way to do it, I think.  The CDC exists to protect the public health and create effective and timely public policy that deals with such issues.  Its prerogatives ought to be protected, and I hope that as this case makes its way through the courts, that will be the eventual outcome.  I remain astounded when I get the occasional email from readers suggesting that the CDC has gotten everything wrong, that masks are not helpful, etc…. My feeling is that the CDC has gotten more right than wrong, that it seems to have done its best under tough circumstances, and that it is far more credible on matters of science than politicians and partisans.  If the CDC had not taken the actions it took, there would be a lot more dead people and the healthcare system would be in far worse shape.  That much seems incontrovertible.

    Published on: April 21, 2022

    •  From Bloomberg:

    " Inc. struck deals to boost its access to renewable energy by almost a third as the company looks to get all of its power from green sources within a few years.

    "The retail giant will buy power from 3.5 gigawatts of new projects -- mostly solar farms in the U.S. -- to supply its offices, warehouses and data centers, it said in a statement. Amazon is seeking to bolster its standing as the world’s largest corporate green energy buyer as investors and consumers pressure big businesses to go greener, and has signed a number of deals in recent years.

    "Power purchase agreements are a key way to scale up green energy. Buyers can use them to reach corporate sustainability goals, while developers benefit by having stable demand for electricity that can help underpin financing agreements to build new projects."

    •  From the Financial Times:

    "Amazon plans to expand a scheme to send injured US warehouse staff to non-profit groups, such as homeless shelters, kitchens and charity shops, in what workers’ rights advocates argue is an effort to mask a safety crisis at the company.

    "The programme, which covers at least 250 Amazon locations in 33 US states, enables Amazon to send fewer workers home sick — despite them potentially not being fit enough to work in an available job at one of its own facilities.

    "Workers involved in the Amazon Community Together scheme are considered to be on 'light duty' and remain on full pay. Staff have been sent to groups such as the Salvation Army, Habitat for Humanity and the homelessness charity Help of Southern Nevada.

    "However, the effort also allows the $1.6tn company to reduce its Lost Time Incident Rate (LTIR) — a politically-sensitive measure that highlights the number of more severe incidents at its facilities. The most common injuries, according to Amazon, are musculoskeletal disorders, such as carpal tunnel syndrome, tendinitis, muscle strains and lower back injuries."

    Published on: April 21, 2022

    •  The National Association of Convenience Stores (NACS) is out with a new survey saying that "most U.S. drivers (52%) say they have positive impressions of electric vehicles, compared to only 18% who have negative opinions. And nearly half (48%) say they have a more favorable opinion of EVs over the past few months."

    The survey goes on to say that "most Americans (54%) say they don’t have the ability to charge at work or home, and only 42% said they lived in a house or apartment that had a garage suitable for charging."

    One interesting note from the survey is the degree to which survey respondents had very little grasp of EV realities:  "They believe that 20% of all new cars sold in 2021 were EVs—only 3% of all cars sold were EVs—and that 15% of vehicles on the road are EVs, while less than 1% are. Younger consumers ages 18-34 are far more likely to overstate EV growth, saying that 25% of car sales are EVs and that 20% of vehicles on the road are EVs."

    Published on: April 21, 2022

    •  SpartanNash announced that it has hired Peter Anjorin, most recently head of product strategy for Whirlpool's North American refrigeration business, to be its new Vice President, Strategy and Business Development.

    Published on: April 21, 2022

    On Tuesday, Michael Sansolo dedicated his "Sansolo Speaks" column to a 60 Minutes interview in which Herbert Diess, the CEO of Volkswagen, talked about major changes taking place at the automaker.  "'Historically, there aren’t many cases where successful companies in the old world can demonstrate they are successful in the new world,' he says in the interview. For Volkswagen that means also accepting the changed reality of competition."

    One MNB reader took exception to the treatment:

    The timing of Sansolo’s laudatory piece ignores the part of the 60 Minutes story that talks about how VW cheated emissions regulations (and their customers). It also ignored how 60 Minutes highlighted their factories in Russia (which they seemed reluctant to close because they have “loyal” employees) and in China (suspiciously close to the Uyghur detention camps in Xinjiang).

    Additionally- this piece comes on the same day that the New York Times published a piece on how the VW heirs are unapologetic about the Nazi ties to their original success.

    To liken the VW electric pivot to the retail grocery landscape seems at best unfortunate and at worst, a conscious look in the opposite direction of their hideous corporate history. This company had had more malfeasances than laudable success and, sadly, Sansolo minimized this by saying simply, “the company doesn’t have a perfect track record.” 

    Please consider illuminating more of the VW story. You know as well as anyone, it’s not just the product that matters, but the company culture. 

    I asked Michael to respond:

    This note is completely correct. In trying to make a point about re-invention (which I do think is incredibly important) I far too quickly slid past some less than positive points in the Volkswagen story.

    First, part of the impetus for the company's move to electric vehicles was a scandal surrounding VW's diesel cars, for which smog and economy numbers were falsified. And secondly, the company does have a very questionable manufacturing situation in China.

    Lastly, let's not forget that VW's origin story - as a creation of Hitler's Germany - is pretty awful too. However, the current CEO was not part of the recent scandals and his insight on the challenge of changing a successful company was the essence of my article.

    But context always matters and I thank this MNB reader for making her point.

    To quote the Content Guy … Mea culpa, mea culpa, mea maxima culpa.