business news in context, analysis with attitude

MNB Archive Search

Please Note: Some MNB articles contain special formatting characters, and may cause your search to produce fewer results than expected.

    Published on: January 11, 2023

    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 who led the team that developed 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.

    Today, Tom and KC consider the proposition, advanced by some technology experts, that over the past decade, tech companies have offered less in the way of true innovation, but rather existed by feeding off existing business models.  They talk about how this might be affecting venture capital available to the space, and what metrics retailers ought to consider when considering new technologies and innovation initiatives for their companies.  Plus, Tom and KC chat about Amazon's current economic situation, and explore whether the much-discussed chatbot, ChatGPT, is a real and meaningful innovation or just a parlor trick.

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

    Published on: January 11, 2023

    by Kevin Coupe

    The Associated Press reports that there's actually some good news on the environmental front - "Earth’s protective ozone layer is slowly but noticeably healing at a pace that would fully mend the hole over Antarctica in about 43 years."

    The conclusions are contained in a new United Nations report.

    According to the story, "A once-every-four-years scientific assessment found recovery in progress, more than 35 years after every nation in the world agreed to stop producing chemicals that chomp on the layer of ozone in Earth’s atmosphere that shields the planet from harmful radiation linked to skin cancer, cataracts and crop damage … Scientists and environmental advocates across the world have long hailed the efforts to heal the ozone hole — springing out of a 1987 agreement called the Montreal Protocol that banned a class of chemicals often used in refrigerants and aerosols — as one of the biggest ecological victories for humanity."

    Decades ago, the AP points out, "people could go into a store and buy a can of refrigerants that eat away at the ozone, punch a hole in it and pollute the atmosphere … Now, not only are the substances banned but they are no longer much in people’s homes or cars, replaced by cleaner chemicals."

    In other words, sometimes regulation works.  Which all by itself ought to be an Eye-Opener.

    However, the New York Times points out that we probably should avoid patting ourselves on the back too much:

    "America’s greenhouse gas emissions from energy and industry rose last year, moving the nation in the opposite direction from its climate goals, according to preliminary estimates published Tuesday by the Rhodium Group, a nonpartisan research firm.

    Emissions ticked up 1.3 percent even as renewable energy surpassed coal power nationwide for the first time in over six decades, with wind, solar and hydropower generating 22 percent of the country’s electricity compared with 20 percent from coal."

    The Times goes on:

    "The emissions estimate reflects a continued rebound from 2020 pandemic lows. The initial outbreak of the coronavirus triggered widespread lockdowns and slashed U.S. energy use to its lowest level in decades, with emissions plummeting more than 10 percent. They rebounded 6.2 percent in 2021 as the economy began to bounce back, but ongoing supply chain disruptions and new coronavirus variants dampened the recovery. The smaller rise in 2022 emissions came amid Russia’s war in Ukraine, the resulting global energy crisis, and high inflation."

    So, the UN report on the ozone layer makes it clear that we can make progress.  But  the Rhodium Group study suggests that we aren't doing nearly enough.

    Dominus dat et dominus aufert.

    Published on: January 11, 2023

    Amazon announced that it is expanding its Buy With Prime program - which essentially allows third-party merchants to make Prime benefits, like "like fast, free shipping, a seamless checkout experience, and easy returns," available on their own online stores - to all eligible "Fulfillment by Amazon" retailers.

    The expansion takes place at the end of January.

    Buy With Prime was launched in April 2022 to merchants invited to participate.  Since then, Amazon says, "Buy with Prime has been shown to increase shopper conversion by 25% on average, according to internal Amazon data. This data point measures the average increase in shoppers who placed an order when Buy with Prime was an available purchase option versus when it was not, during the same time period."

    Amazon also said that it is "launching a new capability for Buy with Prime merchants: the ability to display customer reviews from within their own online stores. The ability to display ratings and reviews on their own ecommerce stores can help merchants increase shopper trust and conversion, and better inform shopper purchase decisions."

    In its analysis, Bloomberg writes that "Amazon, suffering slowing sales as the pandemic-era boom cools, is looking for new ways to leverage its sprawling logistics operation. The company has long known that many Prime subscribers shop on other websites. Extending Prime perks to those online stores lets Amazon collect more shipping fees. The service also gives Amazon a weapon in its fight with Canadian rival Shopify, which provides e-commerce software to millions of web stores and has been trying, with mixed success, to muscle into the logistics business."

    And CNBC writes that "Amazon’s third-party marketplace has become the centerpiece of its dominant e-commerce business, accounting for more than half of its retail sales. The company also makes money from charging sellers to ship and store their goods in its warehouses, collecting commissions and other add-on services. Revenue from third-party seller services surged 18% in the third quarter from a year earlier to $28.7 billion."

    KC's View:

    We talk a lot about Amazon's efforts to jump-start its business, which is in a cyclical decline at the moment, in today's Innovation Conversation.  There's a subtext to this - Consumer Intelligence Research Partners, which tracks Prime membership, says that the current membership stands at 172 million … about the same as six months ago.

    We can look at this move by Amazon as reflecting a continued desire at the company to be inextricably intertwined in customers' lives … even other people's customers.  Down, a bit, for the moment, but hardly out.

    Published on: January 11, 2023

    The Takeout reports that as Kroger prepares to navigate the legislative and regulatory landscape in its quest to acquire Albertsons, it also is "trying to take over another part of the food space: This grocery store might soon become your favorite takeout restaurant, too."

    This week, the story says, "Kroger will open Mix Food Halls at two Ohio locations. These are essentially in-store food courts with options from recognizable chains like Hardee’s, Nathan’s, Saladworks, and David Chang’s Fuku Fried Chicken … the food hall looks like a slightly classier version of the Costco food court, or a condensed version of airport dining. Customers can order either from their phones or from a touchscreen at the store, and all orders are prepared in the same kitchen."

    The food halls are slated to open in Kroger's Clintonville and Dublin stores.

    KC's View:

    Talk about being damned with faint praise.

    The shame of it, in my view, is that Kroger could use this strategy to be more aspirational and inspirational.  After all, central Ohio also is the place that gave birth to Dorothy Lane Market, which is both those things on steroids.  But I suppose the argument is that this simply is a way to compete with mainstream retailers and foodservice operators for share of stomach, and more about convenience and transactions, not reaching for higher level food appeal.

    Nothing wrong with that.  I just think it could've been better.

    Published on: January 11, 2023

    My Modern Met reports that in the Netherlands, the supermarket chain Jumbo has introduced something called Kletskassa, which translates into “chat checkout."  The idea is to create a slow-moving lane that will appeal to customers not in a hurry and who would like to be able to have a conversation with the checkout person.

    The story notes that the move reflects a recognition that "loneliness is one of the main issues that affects senior citizens around the world, especially in urban settings where everything is fast paced and increasingly digitized … The best part of the Kletskassa is that it's not exclusive for senior citizens, and anyone whose day could improve by taking it slow and having a little chat is welcome."

    The response to the Kletskassa since the first versions were unveiled has been "so positive that the company made plans to create 200 of these lanes across the country. On top of that, Jumbo stores also introduced a 'chat corner,' where local residents can gather for a cup of coffee and a little conversation."

    KC's View:

    I love this, and think that maybe other retailers could adapt it.  The chat checkout doesn't have to be a permanent fixture, just one that opens at the right time, providing a lovely service to people who will appreciate it.  It all goes back to being essential, a word and approach that can be defined in many ways.

    Published on: January 11, 2023

    National Public Radio reports that In-N-Out plans to open new locations in Tennessee, as well as an "eastern territory office" there - the farthest east the company ever has gone.   So far.

    At the moment, there are around 400 In-N-Outs operating in six states - California, Nevada, Arizona, Utah, Texas and Oregon.  The new office in Tennessee will be in Franklin, just south of Nashville.

    According to the story, "State officials, who cheered the announcement, said In-N-Out's planned administrative office in Tennessee is expected to be a $125.5 million investment that will create 277 new jobs in Williamson County."

    Locations in Tennessee are expected to start opening by 2026.

    KC's View:

    It isn't all that far from Dallas, the easternmost market where In-N-Out currently has locations, to Nashville - just 660 miles.  A little far to drive for a Double-Double animal-style, but certainly within reach for the company's distribution infrastructure.

    The most exciting part of this announcement is the implication that In-N-Out may decide to expand into additional markets in eastern territories.

    Hope springs eternal.

    Published on: January 11, 2023

    •  Weis Markets announced that it now will offer same-day delivery in partnership with Instacart, from 133 Weis locations in Pennsylvania, New York and Delaware. 

    “We are committed to offering our customers more convenient grocery options, from in-store shopping to online ordering with pick-up or delivery,” said Maria Rizzo, Weis Markets' Vice President of Marketing and Advertising.

    •  From the Financial Times:

    Amazon is closing three UK warehouses this year, a move that will affect 1,200 staff, as the internet retailing giant cuts costs following a squeeze in consumer spending.

    "The closures at fulfilment centres in Hemel Hempstead in Hertfordshire, Doncaster in South Yorkshire, and Gourock in Scotland were announced on Tuesday, a week after the tech group said it would cut more than 18,000 staff from its corporate workforce, largely from its ecommerce and human resources divisions."

    However, Amazon also said that "it also planned to open two new fulfilment centres in Peddimore, in the West Midlands, and Stockton-on-Tees, in County Durham, creating 2,500 jobs over the next three years. It added that closures of Amazon sites come as a part of regular evaluations of its network."

    Published on: January 11, 2023

    •  Kroger this week is celebrating the 10th anniversary of the introduction of its Simple Truth brand, which offers products "that are Free From unwanted ingredients, including more than 101 artificial colors, flavors, preservatives and sweeteners … The brand's products contain no artificial ingredients and offer minimally processed, naturally raised meats that are fed a 100% vegetarian diet, without antibiotics or added hormones. Simple Truth® Certified Organic products are produced by organic growers and handlers certified by agencies and organizations accredited by the USDA, free from synthetic fertilizers and genetic engineering."

    Since being introduced, Kroger says, Simple Truth has grown into a $3 billion+ brand.

    •  From Forbes:

    "The licensing and brand management firm that controls the Toys R Us brand is bringing back another member of the R Us family. It plans to open a Babies R Us flagship store at American Dream mall in New Jersey this summer.

    "The news comes as the survival of one of Babies R Us’ competitors, Buy Buy Baby, is in question, as parent company Bed Bath & Beyond hints bankruptcy could be in its future.

    "WHP Global, which acquired a controlling stake in the Toys R Us brand names and intellectual properties after the bankruptcy and liquidation of the giant toy retailer, today said it plans to return the brand, which has licensed stores in other countries, to United States shoppers.

    "The first reborn Babies R Us store in this country will be located in the same New Jersey mall where WHP Global relaunched the Toys R Us brand in this country, with its flagship Toys R Us store."

    According to the story, the first step "will be the opening of a 10,000 square-foot Babies R Us flagship at American Dream, near the Toys R Us flagship, followed by the announcement of a national retail partner, similar to the partnership Toys R Us has with Macy’s.

    "WHP Global initially partnered with Macy’s to sell toys on the Macy’s website, under the Toys R Us brand name. Last year Macy’s and Toys R Us opened Toys R Us branded toy shops in all Macy’s department stores in time for the holiday season.

    "WHP Global is not yet saying anything about who the Babies R Us retail partner will be."

    Published on: January 11, 2023

    •  Ahold Delhaize announced that Natalie Knight, the company's CFO since 2020, has given six months' notice that she will pursue another career opportunity in the United States of America, and will leave Ahold Delhaize.  

    Frans Muller, the company's president-CEO, said in a prepared statement, “Although her time at Ahold Delhaize has been short, I respect Natalie’s decision to move her family back to the United States after more than 25 years in Europe."