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    Published on: July 21, 2022

    Amazon said this morning that it will spend $3.9 billion to acquire 1Life Healthcare Inc., which under the name One Medical provides membership-based primary healthcare services to employees for more than 8,000 companies in a dozen major US markets.

    Underlining the strategic  importance of the move for Amazon is the fact that it is its third largest acquisition, after only Whole Foods ($13.7 billion in 2017) and MGM ($8.5 billion earlier this year).

    StatNews reports that "The news comes just a few months after Amazon announced plans to grow its network of brick-and-mortar clinics in 20 U.S. cities, following the expansion of its virtual care services through Amazon Care … Primary care is just Amazon’s latest play in health care. The company acquired online pharmacy PillPack in 2018 for about $753 million and launched its own online prescription delivery service Amazon Pharmacy in 2020."

    One Medical describes itself as a "a human-centered, technology-powered U.S. primary care organization on a mission to make quality healthcare more affordable, accessible, and enjoyable through a seamless combination of in-person, digital, and virtual care services.  One Medical combines in-person care in inviting offices across the country with digital health and virtual care services, making it easier for patients to schedule appointments, renew prescriptions, access up-to-date health records, and advance health outcomes."

    "We see lots of opportunity to both improve the quality of the experience and give people back valuable time in their days,” said Neil Lindsay, SVP of Amazon Health Services, in a prepared statement.  “We love inventing to make what should be easy easier and we want to be one of the companies that helps dramatically improve the healthcare experience over the next several years … We believe we can and will help more people get better care, when and how they need it. We look forward to delivering on that long-term mission.”

    Individual memberships also are available at One medical for people whose companies do not have a relationship with One Medical.

    On its website, One Medical says, "This is no ordinary doctor’s office. Rather than do things the typical way, we’ve created a membership-based primary care practice truly designed around our patients’ needs.  We work with your insurance just like a regular doctor's office would, but we offer so much more. A One Medical membership makes it faster, easier, and more enjoyable to look after your health. All for just $199 a year."

    One Medical posted the following video on YouTube to highlight its approach to the traditional doctor's office visit:

    One Medical, according to its website, prides itself on "same-or-next-day appointments … appointments start on time … seamless care at 125_ offices nationwide … 24/7 virtual care … on-site lab services … (and) longer, non-rushed appointments."

    KC's View:

    Health care has long been a priority for Amazon, which has made a number of moves - some successful, some not so much - into the segment.

    It is interesting to me that when I read the announcement and go on One Medical's website, there is a lot of emphasis on the areas in which it seems to be trying to reduce friction in what can be a system that is loaded with it.

    It also is interesting that as part of that, One Medical seems to be creating what often is called a concierge approach to medicine, but making it more affordable - which strikes me as sensible and offering a lot of runway for future growth.

    As retailers with greater bricks-and-mortar presences - Walmart, CVS, Walgreens - develop stronger instore and insurance-centric health care offerings that look to take them beyond what retailers traditionally offer, it was inevitable that Amazon would make a move like this one, and we can expect the dominoes to continue to fall.

    Published on: July 21, 2022

    I have some thoughts this morning about the excessive heat that is bearing down on much of the country and how retailers ought to be thinking about it and dealing with the current reality.  And, I have a few words for people who characterize comments like these as "bitching and moaning" and "drinking the kool-aid."

    Published on: July 21, 2022

    by Kevin Coupe

    It was just a couple of weeks ago that I waxed rhapsodic here when the National Aeronautics and Space Administration (NASA), in concert with the ESA (European Space Agency) and CSA (Canadian Space Agency), delivered the first full-color images from the James Webb Space Telescope, giving us an unprecedented view of the distant universe.

    Now, the Boston Globe reports that "astronomers have detected an unusual radio signal from a far-off galaxy, according to MIT officials.

    "The signal is a fast radio burst, an intensely strong burst of radio waves, the Massachusetts Institute of Technology said in a statement. Usually, the mysterious signals last for a few milliseconds at most. But this one lasted up to three seconds and included bursts of radio waves every 0.2 seconds, in a clear periodic pattern … While the origin of FRBs is uncertain, astronomers suspect the signal could come from either a radio pulsar or a magnetar, two types of neutron stars, which are the collapsed cores of massive stars. The source is located in another galaxy, several billion light-years from earth."

    Or…?

    I mention this for one reason.

    It is a big universe.  Humanity, as we know it, is just one tiny element of the vast universe … and maybe we ought to have some humility about that.

    Any day can bring an Eye-Opening - or, in this case, Ear-Opening - scientific revelation that could change everything we think we understand about life.  Maybe we should keep our hubris in check.

    Published on: July 21, 2022

    The New York Times this morning has a piece about the just-reopened Tops Friendly Market in Buffalo where 10 people were murdered in a racist massacre on May 14, and where employees - and the community - have had "to grapple with the consequences of a mass shooting. Among the hardest questions is what becomes sacred ground after blood sullies familiar soil."

    The Times writes:  "Throughout the violence and the rebuilding, the market’s staff members have persisted, even as they mourned a co-worker, Aaron Salter Jr., who was killed in the massacre.

    "On May 14, dozens were working slow Saturday shifts when the gunfire began. As public attention has shifted from victims, to their families to the neighborhood, the workers have been in a unique position to consider every pole of the debate over the store’s future."

    Some have returned to the store, while others have transferred to other stores.  But their pain remains.

    You can read the entire story here.

    Published on: July 21, 2022

    The Washington Post reports that Robert Califf, commissioner of the Food and Drug Administration (FDA), told a Senate Appropriations Committee hearing yesterday that he has initiated a review of the agency's food safety program designed "to recommend changes in light of the expanding number of industries producing food, as well as the role of climate change and the war in Ukraine. Califf … spoke of an increasingly complicated food system that requires a new approach."

    The move comes just four months after a nationwide shortage of baby formula that experts say highlighted shortcomings in the FDA's approach to food safety.

    “We have to look at the whole picture: It’s the structure, it’s the function, it’s the leadership. We are doing a top-to-bottom evaluation. It’s hard to pick out one or two things, it’s a multidimensional industry,” Califf said. “There’s consensus that whatever was done in the past was not successful.”

    The external review will be conducted by the Reagan-Udall Foundation, and is expected to take two months.

    Some context from the Post story:

    "Critics have long complained that the FDA prioritizes drugs and medicine over food safety, despite a steady stream of high-profile outbreaks of food-borne illnesses in recent years, including romaine lettuce tainted with e-coli and salmonella in peanut butter. The Centers for Disease Control and Prevention estimates that 128,000 people in the United States are hospitalized with foodborne illnesses each year."

    The Post also writes that "at the hearing, Wednesday, Sarah Gallo, the vice president for product policy at the Consumer Brands Association, a grocery store industry group, urged the FDA immediately to unify its food programs under a single head. Her recommendation echoed that of consumer groups, which for months have been calling for a single 'food czar' within the agency. This appointee would have direct line authority over the Center for Food Safety and Applied Nutrition, the Center for Veterinary Medicine, and the food-related components and operations of the Office of Regulatory Affairs."

    KC's View:

    Almost as long as I've been doing MNB, there have been calls for the creation of one agency with responsibility for the whole food safety continuum. Greater regulation doesn’t have to mean greater complexity. In this case, it should mean precisely the opposite.  Tim Hammonds, the former CEO of the Food Marketing Institute (FMI), was calling for that in the last century.

    I agree that there needs to be an overhaul.  I think there needs to be streamlined bureaucracy and greater regulation and oversight.  But I'm dubious that anything substantive is going to happen.

    Published on: July 21, 2022

    Danny Westneat, a columnist for the Seattle Times has a good piece in which he uses the recent decision by Amazon to pause construction on five Bellevue, Washington, office towers, to consider the impact of remote work on urban and suburban infrastructures.

    "We’ve been casually debating when workers will finally return to their office cubicles after the dislocations of the pandemic," he writes.  "I think most people, me included, figured workers would dribble back eventually because … that’s the way we’ve always done it. And the offices with their Aeron chairs and coffee carts are all sitting there waiting for us!"

    But that may not be the case.  Amazon clearly is considering a future in which the traditional office construct does not exist.

    "Seems pretty smart to me," he writes.  "So shouldn’t cities be doing the same forward thinking?

    "Why are we continuing with the same transit planning — such as for Sound Transit’s future light-rail segments — without factoring that a third or more of the workforce may not be commuting to a downtown core, or commuting at all?

    "Cities maybe should also start preparing for a future in which the work areas of the city increasingly blur and overlap with the residential areas."

    Westneat writes about how Stephanie Stern, a professor at the Chicago-Kent College of Law, has "coined the provocative term 'untransit' to describe what she suspects is about to happen — a breakup of century-old work/life urban design patterns.

    "She dubbed Zoom, the remote meeting software, 'the modern equivalent of the streetcar — a technological advance that will profoundly alter land use.'

    "Some of the changes are likely to be godsends. Taking even 10% of daily commuters off the congested roads has long been a dream of traffic planners.

    "But some will be challenging. Stern predicts that telecommuting will promote sprawl into the hinterlands, along with larger houses to accommodate home offices. Inequality may rise. Meanwhile dense cities may decline (not that they will shrink, necessarily, but their growth rates may slow) … This sea change, if it continues, may cause cities over time to 'untransit' - to unwind their transit-oriented, spoke-and-hub development patterns, Stern predicts. Cities will stop concentrating on building dense housing near transit lines, she wrote, and shift to infrastructure to support remote work (such as municipal broadband, or small 'remote work' centers away from the old business core). Cities may adopt more mixed-use zoning everywhere to bring a taste of the old commercial downtown out to residential neighborhoods (where so many are now 'going' to work)."

    KC's View:

    Two things here.

    First, if the work-home patterns indeed are disrupted to any sort of sustained degree, then this could have an enormous impact on retail development, as businesses reconsider where they ought to be building stores, what size and configuration those stores ought to be, and what mixes of products ought to be featured in those stores.  Retailers would be wise to start considering the possibilities now.

    Second, this is an interesting column coming as it does as we've been having an extended conversation here on MNB about the role of communities in determining what kinds of retail ought to be built and, in some cases, discouraged or even banned.  While we don't know what the future looks like, there is some sense of how circumstances will reshape communities' and companies' needs and priorities.    The questions need to be asked so we can at least start pondering the answers, making decisions that make sense for the future.

    Published on: July 21, 2022

    •  The New York Times this morning reports that "workers who filed for a union election at a Chipotle in Augusta, Maine, are accusing the company of seeking to undermine their campaign by closing the restaurant.

    "The company notified employees of the closing on Tuesday morning, hours before the two sides were scheduled to take part in a hearing before the National Labor Relations Board about the possible election."

    The story notes that "the labor board will investigate the charge and issue a formal complaint if it finds merit in the accusation, at which point the case would go before an administrative law judge. The two sides could reach a settlement beforehand."

    The Times quotes Laurie Schalow, the company’s chief corporate affairs officer, as saying, "We have been unable to adequately staff this remote restaurant … because of these ongoing staffing challenges, there is no probability of reopening in the foreseeable future, so we’ve made the decision to permanently close the restaurant.”

    The story notes that "a handful of workers at the store walked off the job in mid-June to protest what they said were unsafe conditions that stemmed from understaffing and insufficient training," and that it was this action that precipitated the union movement.  Which strikes me as kind of ironic … the workers were complaining about understaffing, which made them think they needed union representation to help them with what they viewed as unresponsive management, and then management closes the store in part because of understaffing.  (If you believe Chipotle's management.  Which I'm not sure I do.)  You'd think that it would've been easier to deal with the issue at hand.

    Now, I'm sure that the understaffing problem is real - it is an issue facing almost every retail business.  But it isn't like Chipotle is shutting down every understaffed facility.  Plus, Schalow's comment about the store being "remote" doesn't exactly ring true … this restaurant is almost midway between a Chipotle an hour away in Bangor to the east, and an hour from a Chipotle in Portland due south.  It sounds to me like Chipotle is sending a message.



    •  The Washington Post reports that "workers have launched a union campaign at an Amazon warehouse near Albany, N.Y., in the latest bid to organize the anti-union tech giant.

    "Labor organizers at the warehouse are seeking a vote on joining the independent Amazon Labor Union, which has faced challenges making headway into new warehouses after securing an upset victory at a warehouse on Staten Island in April.

    Two workers involved in the campaign said they are moving to unionize to negotiate for higher pay, safer working conditions, longer breaks and a say in how the company tracks productivity."

    Amazon has not yet commented on this specific unionization move, but the Post notes that the company "has long opposed union drives among its warehouse workforce and has repeatedly been found by the NLRB to have violated labor laws protecting workers’ rights to organize by surveilling workers’ organizing efforts, firing union organizers, confiscating union literature and threatening workers who support unions."

    Published on: July 21, 2022

    With brief, occasional, italicized and sometimes gratuitous commentary…

    •  From MediaPost:

    "Consumers are fed up with poor targeting by brands, judging by a new study from Redpoint Global.

    "Of those polled, 70% say they receive mistargeted messages at least once a month, and 24% report they get them daily. These include emails with recommendations unrelated to prior purchases.   This sort of misdirected marketing reduces the quality of the experience for 51% of customers. 

    "Conversely, many consumers are willing to provide access to their data in exchange for a better experience. 

    "In exchange for this data, 52% want customer experiences with less transactional friction and an 30% desire discounts and future promotions. But it varies with age.  For instance, 41% of Millennials feel brands should be able to immediately adapt offers and interactions at the moment of new data ingestion. In contrast, only 26% of Baby Boomers say this is a priority."  

    "Less transactional friction" ought to be a mantra for every retailer.

    Published on: July 21, 2022

    Content Guy’s Note: Stories in this section are, in my estimation, important and relevant to business. However, they are relegated to this slot because some MNB readers have made clear that they prefer a politics-free MNB; I can't do that because sometimes the news calls out for coverage and commentary, but at least I can make it easy for folks to skip it if they so desire.

    •  Axios reports on a new survey from The Conference Board of some 300 public, private and nonprofit entities, asking them about stands taken on social issues.  The survey indicates that companies are far more willing to take a stand on certain issues (racial equality, LGBTQ+ rights, vaccinations) than more controversial issues such as abortion, immigration and gun regulation.  

    However, the story says, "The pressure on employers to speak about abortion is coming overwhelmingly from employees, the survey found."

    From Axios

    Published on: July 21, 2022

    Got the following email from MNB reader Bob Wheatley, responding to yesterday's FaceTime video about the importance of soul in a retail store:

    The requirement of soul – amen and amen.

    Food is an emotional category.

    Humans are emotional creatures always led by heart-over-head. Should that insight inform retail strategy?

    There are two kinds of food retailing platforms: the selling of boxes, cans and bags off shelves at velocity on razor-thin margins. Or, possibly, a four-walled food adventure that engages the soul of the shopper in all the magic great food experience can offer. I would argue this is an outcome, one way or the other, about how the leadership team sees the business. If you love food and wish to surprise and delight customers by inspiring them on their journey to culinary achievement or a healthier and more sustainable lifestyle -- that’s potentially more differentiating than the other. The other being a business sponsored by algorithms that inject efficiencies into a business model that benefits from less friction in the transaction.

    They coexist to be sure. But you’ve indicated Kevin many times that the future of food retail benefits from more engaging, differentiated shopping experiences. Perhaps this goal is better delivered by a management team that actually loves the products they sell and is dedicated to inspiring the food and culinary interests of those who shop their banner? I wonder.

    I don't.  I think that's the best way to compete - to actually be a category killer.



    We've been having a conversation here this week prompted by an Axios report on how "the number of gas stations has been in steady decline for decades," and the likelihood that a combination of factors - volatile prices, the growing popularity of electric vehicles -  "will squeeze them even further."

    The question came up about whether it is appropriate for communities to do things like ban the building of new gas stations, which some argued is wrong - that such investments ought to be dictated by market conditions and company priorities, not government regulators.

    But I disagreed:

    I think it is entirely legitimate for communities to make public policy decisions consistent with the kind of infrastructure leaders believe we are going to need for the future.  Communities buy properties and turn them into public parks and recreation areas because they deem them important to residents' future.  Planning and zoning boards are there to make sure that developers' plans are consistent with communities' strategic visions and to limit growth that could hurt a town or city.   Some communities mandate that a certain percentage of new housing units have to be put aside for people who might not be able to afford to live there otherwise - like local teachers and other public employees.

    Prompting one MNB reader to write:

    Communities also need to be aware of the revenue coming into their community, right?  So if communities begin converting retail space for what ever reason into green space, or affordable housing two things happen.  Jobs diminish and tax revenue from businesses diminish.  Where does the money therefore come from to keep the green spaces green?

    All true.  But the taxes generated by businesses can't be the only determining factor.  If a government believes that a business is not, in fact, sustainable, then it would be a mistake to depend on those tax dollars, which eventually will go away.  Then, there will be no business and no green space (or whatever, depending on what the alternative would've been).

    Nuance is important here.  Good public policy can't just be about taxes and private enterprise.

    Published on: July 21, 2022

    I'm going to take a long weekend, and so MNB will be on hiatus until Tuesday, July 26 … at which point we'll be back with relevant and resonant news, hand-crafted commentary, pithy business lessons, and probably some digressions that hopefully will appeal to you.  (And if they don't, there's always Wednesday…)

    Have a great weekend.  I'll see you Tuesday.

    Sláinte!!