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    Published on: September 20, 2022

    Paying attention to the foundations of one's business is of critical importance;  they support a retailer's value proposition and brand equity, as well as its operational and philosophical infrastructure.  I found a great metaphor for this recently in a Boston Globe story about the potential vulnerability of some of the city's most historic architecture.

    Published on: September 20, 2022

    The Information reports that "Shopify is now letting some employees decide how much of their compensation they receive in cash and equity, the e-commerce firm said in a blog post on Friday. Eligible employees can also decide what percentage of their equity consists of restricted stock units, shares a company awards on a fixed schedule, and options, which give the recipient the choice to buy shares at a designated price. Shopify has also removed the one-year waiting period before new employees begin receiving their equity awards, saying it will start granting the awards immediately."

    The story notes that the move is designed to improve employee recruitment and retention.  In the past, Shopify paid relatively low salaries but offered generous stock rewards - which worked when the company's stock was high-flying (its share price went up more than 900 percent between early 2019 and late 2021).  However, since November 2021 Shopify's stock price is down 77 percent, which makes the policy less enticing for both existing employees and those that Shopify is trying to attract.

    The Information notes that the option to allocate compensation between stock and cash won't be available to every employee.  Shopify says that some workers are ineligible due to “geographic location, performance, or employee status.“

    KC's View:

    I've always liked the idea that employees have skin in the game when it comes to pay packages linked at some level to company performance - it means they have skin in the big game.  This is especially important when it comes to establishing in the employee's mind the broader meaning of his or her job - it creates context and, if done right, encourages workers to think and act beyond themselves.

    Published on: September 20, 2022

    Instacart yesterday introduced a program it is calling Connected Stores, described as "a bundle of six new Instacart Platform technologies that layer on top of existing offerings, helping grocers bring together the best of online ordering and in-store shopping for consumers."  The goal, Instacart says, is to "create a unified, personalized experience for customers by enabling them to move seamlessly between a retailer’s app or website and its physical, in-store experience."

    As part of Connected Stores, Instacart announced "six new Instacart Platform offerings: the new Caper Cart, Scan & Pay, Lists, Carrot Tags, FoodStorm Department Orders and Out of Stock Insights – modular technologies that help retailers connect online and in-store experiences. These new technologies will connect directly with Instacart’s ecommerce solutions, including Storefront Pro."

    Instacart said that these components have been piloted to varying degrees at retailers that include Wakefern and Schnucks;  the first Instacart Platform-powered Connected Store is slated to be a Bristol Farms in Irvine, California.

    Fast Company writes that "Instacart executives say that because the technology can be purchased individually, and that the integrations support existing hardware solutions, retailers won’t have to shell out millions of dollars retrofitting their stores.

    “The way in which we are building all of these technologies is to avoid retailers having to make a big investment,” says CEO Fidji Simo.

    It needs to be pointed out that all these moves are coming as Instacart prepares for an initial public offering (IPO) in the near future, about which the Wall Street Journal offers some reporting:

    "Instacart Inc. doesn’t plan to raise much capital in its initial public offering and instead plans to have most of the listing come from the sale of employees’ shares, said people familiar with its thinking.

    "In meetings with prospective investors in recent weeks, Instacart executives said they didn’t plan to issue many new shares in their IPO, the people said. The sale of mostly employee shares would allow Instacart’s staff, including some of its earliest hires, to at last cash out of some of the shares they have been accumulating.

    "The move could help Instacart, which was founded in 2012, retain talent by allowing employees more ways to benefit from their shares. Listed shares could also make Instacart more attractive to new employees than startups that have decided to wait for a better market to list."

    KC's View:

    So much of what Instacart seems to be doing these days, from its acquisition of Rosie (which gives it access to smaller, independent retailers) to the development of these new tools appears to be keyed to responding to the Amazon threat.  I say this has a positive - so much of Instacart's growth over the past few years has been linked to retailers needing ways to compete more effectively with Amazon.

    Check out (pun intended) the Caper Cart, which was powered by its acquisition of Caper AI for $350 million and is described as being "similarly shaped to a regular shopping cart, but is equipped with a touchscreen, scales, and sensors so that shoppers don’t need to manually scan items. Users can simply drop items in the cart and check out right from the connected tablet. Retailers can stack the carts and use a single plug to charge them all, rather than plugging in each individual unit."

    Sound like something being used at Amazon Fresh?

    Instacart says that its various pilots have proven that stores equipped with these various technologies improve their sales;  the expectation, no doubt, is that when they all exist in concert, the math will work like this - 1+1+1+1+1+1=12.

    The only thing I would ask the retailers about this is if these accumulated technologies are building their brands, or Instacart's.  I note that the logo on the Caper Cart is Instacart's … my assumption is that this is just for press release purposes, and that this won't be the case when the carts are deployed in any given retailer.  To me, that's the key to making this all work … finding ways to use it to differentiate and enhance the retailer's brand equity and connection to the shopper.

    Fast Company raises the question this way:

    "Simo makes it clear that the company’s goal isn’t to launch its own grocery store. 'The goal of this strategy is rooted in empowering retailers, we will not be a retailer ourselves,' she says.  'Our job is to build these technologies to empower them.'

    "While it started out as a gig platform for users to get groceries delivered to their homes, Instacart has since started offering software services to retailers. Under the Instacart Platform umbrella (which now includes Connected Stores), the company offers software management for things like advertisements, e-commerce, insights, and other data for grocery stores. By moving past the gig-work model, which is traditionally a difficult place to make money, the company can likely create a larger revenue stream."

    I think this is a legitimate argument - if retailing is a game, Instacart is saying that it allows retailers, regardless of size, to match the likes of Amazon move for move.

    Published on: September 20, 2022

    CNBC reports that TJ Parker and Elliot Cohen, the co-founders of prescription drug startup PillPack who sold the company to Amazon for $750 million four years ago, will lave the company at the end of the month.

    The story notes that "after the acquisition, Parker and Cohen helped steer the launch of Amazon Pharmacy, the company’s online pharmacy for delivering prescription medications in the U.S. Both Parker and Cohen served as vice presidents of pharmacy up until recently, when they were shifted to consulting roles."

    CNBC writes that "Amazon has accelerated its push into health care in recent years, though not all of its efforts have been successful. The pharmacy business struggled to gain traction, and Amazon recently announced it would shutter its telehealth service Amazon Care after finding it wasn’t a 'complete enough offering' for customers."

    KC's View:

    I've actually been surprised that PillPack has not been more aggressively promoted/marketed by Amazon since its acquisition - I'm in an age group that you'd think would be the sweet spot for PillPack, I'm an inveterate Amazon user and Prime member, and yet at no point has Amazon ever made the case to me that I should be using its prescription services.

    Maybe that's because for all the money spent and acquisitions made, Amazon hasn't decided what it wants to be - in the healthcare space - when it grows up.

    Published on: September 20, 2022

    With brief, occasional, italicized and sometimes gratuitous commentary…

    •  GeekWire reports that an internal Amazon memo says that during last Thursday's NFL game - streamed exclusively on Amazon Prime Video for the first time - the company said that it saw the “biggest three hours for U.S. Prime signups ever."

    The game was part of Amazon’s $11 billion, 11-year exclusive streaming rights deal with the NFL - a gamble that the package of games would drive more people to become Prime members.  Research has shown that Prime members spend considerably more on Amazon than non-Prime members.

    Expect that we'll see more deals struck by streaming companies for exclusive sporting events and packages.  These events are differentiated content that require immediate attention;  unlike scripted shows, they can't just been anytime - there is a real advantage for viewers to see them in real time.  This is a great metaphor for what retailers need to do - provide differentiated products and services that can't be replicated by the competition down the street or online.

    Published on: September 20, 2022

    •  The National Association of Convenience Stores (NACS) said yesterday that it supports "bipartisan legislation introduced today in the U.S. House of Representatives that creates choice for the processing of credit card purchases.

    "The bill endorsed by NACS seeks to bring long-overdue competition to the credit card market and addresses the exorbitant swipe fees paid by Americans every year.

    "The Credit Card Competition Act, introduced by Rep. Peter Welch (D-VT) and Rep. Lance Gooden (R-TX), would require the largest U.S. banks that issue Visa or Mastercard credit cards to allow transactions to be processed over at least two unaffiliated card payment networks—the same process that has been used for debit card transactions for more than a decade.

    "The House bill complements the bipartisan Senate version of the bill, S. 4674, that was introduced in July by Sen. Richard Durbin (D-IL) and Sen. Roger Marshall."

    •  The Wall Street Journal reports this morning that "major U.S. companies pledged to hire more than 20,000 refugees over the next three years, a number that refugee advocates say will help integrate the wave of Afghans and Ukrainians who arrived over the last year.

    "The hiring commitments were announced Monday at an event in New York organized by the Tent Partnership for Refugees, which is pressing corporations to hire refugees. The group said that the pledges reflect a growing awareness by U.S. companies that hiring refugees benefits their business. It said research shows that consumers value ethical behavior and refugees make more loyal employees … More than 100 major U.S. companies have signed up to join the Tent Partnership network.

    "The hiring goal of 20,000 is just a fraction of the total of Afghan and Ukrainian arrivals over the past year. U.S. government data shows close to 80,000 Afghans have arrived in the U.S. since the collapse of the U.S.-backed government in Afghanistan."

    The Journal says that "Amazon made the largest pledge on Monday, committing to hire 5,000 refugees in the next three years. Hilton Worldwide Holdings and Marriott International Inc. each pledged to hire 1,500 refugees. Pfizer said it would hire 500 refugees."

    Published on: September 20, 2022

    •  Publix Super Markets announced the planned retirement, at the end of the year, of Gino DiGrazia, a 30-year company veteran who currently is Vice President of Finance.  With DiGrazia’s retirement, the company said, "his areas of responsibility will be divided between Chris Mesa and Doug Stalbaum, both promoted earlier this year and currently serving as vice president & controller."

    Publix also announced the retirement early next year of Linda Kane, the company's Vice President of Benefits Administration and Assistant Secretary, who has been with the company for 28 years.

    Published on: September 20, 2022

    …will return.

    Published on: September 20, 2022

    •  The New York Mets last night, with a 7-2 win over the Milwaukee Brewers, clinched a playoff slot for the first time since 2016.

    They are the third team in the major leagues to do so.  The Los Angeles Dodgers have won the National League West division championship, and the Houston Astros have won the American League West division championship.

    •  There were two Monday Night Football games this week…

    Minnesota Vikings 7, Philadelphia Eagles 24

    Tennessee Titans 7, Buffalo Bills 41