Published on: February 13, 2023
At Amazon, customer satisfaction seems like less of a priority than it used to be; too often, it is over-promising and under-delivering, rather than the other way around. So, I have a recommendation for CEO Andy Jassy (not that he needs or wants suggestions from the likes of me).
Published on: February 13, 2023
Business Insider reports that Walmart "appears to be abandoning" the pickup-and-delivery store model, with the closure of the two remaining test units - in Illinois and Arkansas - slated to be shuttered this week. A third version, in Louisiana, already has been closed.
According to the story, "The Bentonville location took up 15,000 square feet of space for produce, meats and frozen foods and other consumables … the Lincolnwood location was much larger, occupying roughly 42,000 square feet."
Business Insider writes that "Walmart's decision to close these stores, where customers placed orders on walmart.com or the Walmart app, comes as the company has seen ecommerce growth slow greatly."
To me, this represents an interesting conundrum. On the one hand, if e-commerce growth seems to be slowing down because of economic factors, maybe these units simply are not being as productive as necessary, and so deserve to be closed.
But, it seems to be that the current economic factors will not last forever, and that at some point it is likely that we'll see an e-commerce resurgence. Maybe its speed won't be to the degree that it was growing during the pandemic, but to expect that things will simply go back to the way they were strikes me as naïve.
To me, what is interesting is not the fact the Walmart is shutting down this test, but what it may have on the drawing board for a year or two from now. What's the next iteration?
In the same way that I thought it was critical for retailers in 2020 and 2021 to be planning for a post-pandemic existence, figuring out how they needed to be different when those circumstances ended, it is equally important for retailers now to be thinking about their post-inflation/recession/recessionary mindset existence. To think about the present only is to be focused on the tactical, which is a mistake.
Published on: February 13, 2023
Reuters reports that Kroger and Albertsons have begun the process of determining how many stores they will have to divest in order to gain the approbation of the Federal Trade Commission (FTC) and permission to proceed with their $24.6 billion merger.
The story notes that stores in all of the regions in which the two companies operate are being discussed, and that prospective buyers include competing chains. If a buyer cannot be found, the two companies have said that they would spin them off into a new company owned by Albertsons shareholders.
While the initial plan has been to sell between 250 and 300 stores, it has been conceded that the number could be as high as 650. A sale could bring in more than $1 billion, Reuters writes.
Maybe it is my memory of the Albertsons-Haggen fiasco that makes me skeptical, but I am just not persuaded that if there is a spinoff company - made up of the stores that a Kroger-Albertsons combo doesn't want - that it will have much chance of success. A piecemeal sale of select assets to either competing chains or financial entities seems more likely, but I'm not even sure that this will ensure the success of these orphan stores.
I'd also be curious about how an agreement with regulators would be structured. For example, Kroger has said it wants to move into the northeastern US with its pure-play e-grocery model, mimicking what it has done in Florida. If the combined company decided to sell off its Shaw's division, would it then be prohibited from coming back into the region as an e-grocery purveyor? Or would this is a loophole through which it could drive a large grocery delivery truck?
Published on: February 13, 2023
The New York Times has a piece about "making TikTok content for brands is the hot new gig. As the social media platform continues to explode in popularity, brands are hiring college students and other young people — sometimes with pay and sometimes with college credits — to help them navigate the app, which can confuse newcomers with its trending voice snippets and song clips, unique vernacular and endless videos. Job sites have recently been peppered with listings for “TikTok content creator interns,” who are being asked to make and appear in videos promoting tropical ice cream, sunflower seeds, bubble tea, malls and more.
"The hope is to connect with young people and even what some marketers call 'Generation Zalpha' — combining the generations born after the mid-90s with those born in 2010 and beyond — and ultimately drive sales.
"Whole Foods and the luggage company Travel Pro recently posted job ads for interns to help them build their presence on TikTok. A marketing agency in Dallas has been seeking a student to be its 'chief TikTok officer' during the summer to help its clients with the app. And the Rosedale Center, a mall in Roseville, Minn., just hired two TikTok creator interns after successfully introducing the role last year."
Smart moves, I think, though they may not constitute a long-term strategy. There continues to be a lot of conversation about whether TikTok, as constituted under its current Chinese ownership, perhaps out to be banned in the US.
While there has been a lot of talk over the past week or so about the Chinese using spy balloons to conduct surveillance in the US, it may well be that TikTok gives the Chinese government a lot more information and access to information about the US. I think a ban might be entirely legitimate, and I certainly think that the increased vigilance of the moment, inspired by a balloon, could lean to more decisive moves elsewhere.
Published on: February 13, 2023
The Wall Street Journal reports that the federal government "has started approving state requests to use Medicaid to pay for groceries and nutritional counseling as policy makers explore whether 'food as medicine' programs can lead to broad health benefits and trim costs.
"A growing body of research suggests that addressing food insecurity can improve health as well as deliver savings by reducing medical visits, the need for medication, or by helping control serious illness. The programs have also appealed to some GOP lawmakers who believe states should have more control over their Medicaid programs."
The story goes on:
"While there is no formal definition, the idea of using food as medicine often takes the form of programs that deliver meals customized for specific medical needs to recently hospitalized patients, for example, or vouchers that would enable certain people to obtain healthy items such as fruits and vegetables but not junk food.
"In November, the U.S. Centers for Medicare and Medicaid Services approved a test program allowing Arkansas to spend up to $85 million in federal and state funds on health-related social needs, which include nutrition counseling and healthy-meal preparation. The agency approved similar demonstrations for Oregon and Massachusetts earlier last year.
"The nutrition supports are part of a push by lawmakers in both parties, the federal government, and health providers who say providing lower-income people with better food, stable homes and adequate transportation can improve their health and avoid costly medical treatment."
It actually is hard to understand why it has taken this long to get to this point. Food as medicine hardly is a new concept, and enabling people on public support to be able to use it to feed themselves and their families more responsibly strikes me as a sensible extension. There have to be strict limits on what they can buy with the funds, but it seems like a smart move.
Published on: February 13, 2023
Axios reports on a new Coresight Research study saying that retailers plan to open three times as many physical stores in 2023 as they did in 2022.
And a big driver of that bricks-and-mortar growth - price-driven formats: "The top six retailers opening stores in 2022 were dollar chains and discounters, including Dollar General, Family Dollar, Dollar Tree, Five Below, TJX Cos. and Aldi, in that order."
Some context:
"Online shopping helped stores navigate the pandemic — but retailers and shoppers have both realized the limitations of doing business entirely online.
"As the world opened back up, shoppers returned to stores in hordes.
"A big driver of store openings: shoppers seeking bargains, especially at dollar stores with a limited or nonexistent online presence."
Published on: February 13, 2023
The Wall Street Journal has a story about how Amazon "is slowly dismantling Tony Hsieh’s version of Zappos, more than two years after the famed entrepreneur’s death.
"Zappos laid off more than 300 employees last month, or about 20% of the Las Vegas-based company’s workforce, according to people familiar with the layoffs and a Zappos memo viewed by the Wall Street Journal.
"The Zappos cuts came as part of broader layoffs at Amazon that are expected to eliminate more than 18,000 employees, which the Journal reported will affect roughly 5% of its corporate ranks. They are also the latest in a series of moves by Zappos’s longtime parent company that have largely unraveled Mr. Hsieh’s legacy, people familiar with the companies said."
The Journal writes that the changes at Zappos have included the departure of people who were long-term members of company leadership, as well as layoffs in the customer service division, which was a high priority during Hsieh’s tenure.
Some context from the Journal story:
"Mr. Hsieh agreed to sell Zappos to Amazon on the condition that the company operate independently. He worried over the years about what Zappos employees referred to as 'Amazon creep,' a reference to Amazon executives getting more involved and imposing their more traditional management style, according to former Zappos employees.
"Mr. Hsieh’s core values included 'Create fun and a little weirdness.' He treated employees like family, throwing lavish parties and happy hours. He embarked on a much-watched management experiment called 'holacracy' that advocated a decentralized management structure: essentially no bosses. The system ended up producing its own kinds of bureaucracy, and some units stopped using it.
"By 2019, Amazon was pressuring Mr. Hsieh and his team to meet certain growth targets, according to the former employees.
"At the same time, Mr. Hsieh was struggling with a worsening drug and alcohol problem, the Journal has reported. His mental health also suffered. By the summer of 2020, he was increasingly abandoning his Zappos duties and, facing pressure from Amazon to improve, he abruptly resigned in the summer of 2020, according to the former employees.
"Family and friends … attempted to get him help before his 2020 death, which came from complications from smoke inhalation following a house fire in Connecticut."
Some of this is inevitable, especially since Hsieh isn't there to resist. (Though even he might've found that difficult - once you cash the check, the deal is done.)
That said, Amazon bought Zappos because it offered a unique take on the e-commerce experience. At a time when Amazon's customer experience arguably is less impressive than it once was, dumbing down the Zappos' experience may be the wrong way to go.
Some of this is optics - like replacing the iconic white Zappos boxes with Amazon's brown boxes. But some of it is tangible and operational, as the Journal writes that "in general, Amazon is much more involved in Zappos and its business decisions than when Mr. Hsieh ran the company."
History books are filled with stories of acquiring companies that have screwed up the cultures and operations of entities for which they spent a lot of money. It is the result of hubris, and there is plenty of that at Amazon to go around.
There is one line from the Journal story that made me chuckle:
"…a reference to Amazon executives getting more involved and imposing their more traditional management style."
From its inception, Jeff Bezos kept a Today-Is-Day-One ethos at Amazon by not being traditional. That line, which is kind of a throwaway in the story, kind of adds to the sense that at Amazon now, Today-Is-Day-Two.
Published on: February 13, 2023
• People reports that Giada De Laurentiis is leaving the Food Network, and has signed a multi-year deal with Amazon Studios.
Amazon said that it is "looking forward to developing an exciting slate of projects with Giada, as she expands into new areas and we broaden our crave-worthy slate of cooking and lifestyle content."
Published on: February 13, 2023
With brief, occasional, italicized and sometimes gratuitous commentary…
• Lancaster Online reports that "Mars Wrigley is facing nearly $15,000 in fines after a federal investigation into how workers became trapped in a chocolate tank at the Elizabethtown facility last June.
"Those workers were not authorized to work in the tanks and were not trained on the proper safety procedures for the equipment, Occupational Safety and Health Administration investigators found."
When I first saw this story, I thought it was a joke, and actually was part of what I thought ultimately was a stupid debate about whether M&M's are woke or not, which was turned into a silly and generally much-ado-about-nothing ad campaign.
Published on: February 13, 2023
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• Checkout-free technology company Zippin announced that Alan Flohr, most recently the Chief Revenue Officer at spatial intelligence technology provider Pathr.ai, has been named its new SVP of Revenue & Growth.
Happy to say that Alan Flohr will be joining us onstage during the technology track at the National Grocers Association (NGA) Show in Las Vegas, which will take place from 10 am to 1 pm on Sunday, February 26. Hope we'll see you there, too.
Published on: February 13, 2023
…will return.
Published on: February 13, 2023
In Super Bowl LVII, the Kansas City Chiefs came back from a 10-point first half deficit to dominate the second half and defeat the Philadelphia Eagles 38-35.
