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    Published on: April 11, 2023

    This morning, I want to offer three more business (and life!) lessons from Aaron Sorkin's new book for Lerner & Loewe's "Camelot," on the subjects of leadership and dealing with change.  The production may be flawed, but the lessons are invaluable.

    Published on: April 11, 2023

    The Information reports that "Amazon has started charging fees to make some returns at UPS Stores, marking the latest effort by the e-commerce giant to cut down on costs associated with customers sending back items."

    According to the story, "While Amazon shoppers used to be able to return any product by dropping it off at a UPS Store without charge, the company began charging a $1 fee for some returns earlier this year. Amazon adds the fee if customers have another free return option, such as a Whole Foods or Kohl’s or an Amazon Fresh store, that is within equal distance to or closer than a UPS Store"

    Returns to Whole Foods, Amazon Fresh and Kohl's stores remain free, the story says.

    The Information writes that "the new UPS fee appears to be aimed at deterring customers from using UPS when they have lots of other choices, presumably as a way of reducing the cost of returns for Amazon. Amazon relied on outside delivery companies during its early days, but the company has increasingly spurned partners like UPS and FedEx as it has built up its own sprawling logistics network that’s increasingly capable of handling both deliveries and returns in major U.S. markets."

    Amazon recently decided to start labeling certain products on its site, when appropriate, as "frequently returned," hoping that this will dissuade some customers from making purchases that will end up being returned.

    KC's View:

    Ease of shipping, and free shipping, have generally been a core part of Amazon's value proposition.  While I understand that the company would like to shift returns into lanes where it can exert greater control, it is hard to take something away from customers who have grown used to it.

    Amazon is smart only to apply these fees in markets where customers have the option of returning items to a Whole Foods, Amazon Fresh and Kohl's store.  If it were to start applying fees to those returns, the company would take an enormous hit in terms of shopper relationships.  I have to admit, though, that I'm reasonably sure that somewhere at Amazon, they're making calculations about how severe such a hit would be, and if the company can afford to impose such fees.  That just seems to be the culture at the moment.

    Published on: April 11, 2023

    Fast Company has a piece about how Target has become a ubiquitous presence on social media, propelled to a dominant position by customers - sometimes compensated, sometimes not - who sing its praises.

    Social media statistics tells the story:  "When compared alongside YouTube (the top brand in a Morning Consult poll) and Walmart (the top pick in a National Retail Federation poll), Target is leading the follower count race by over a million on TikTok. What’s more, data from C+R research shows that Target is the most popular retailer among college students; the brand reinforced that relationship by opening over two dozen locations on or near college campuses prior to the pandemic."

    And those college students are primed to become longtime Target customers, as the retailer nurtures the relationships as the customers age and evolve.

    You can read the story here.

    Published on: April 11, 2023

    From The Information:

    "As TikTok tries to win over U.S. politicians, it may have kneecapped its shopping service, TikTok Shop.

    "Relatively few U.S. merchants are showing interest in signing up for the nascent service, both because they’re more focused on expanding in bricks and mortar and because they’re concerned the app could be banned, merchants say.

    "Overseas sellers, in contrast, are eager for a new way to tap into the world’s second-largest e-commerce market. But TikTok has blocked foreign merchants from selling on the U.S. version of the service.

    "TikTok Shop, which started inviting U.S. merchants to sign up in November, initially had several hundred registered merchants, according to a person briefed on the matter, and has been trying to get more sellers to sign up. But as of last month, the number of U.S. merchants actually selling their goods directly on TikTok Shop was less than 100, the person said."

    KC's View:

    I don't blame marketers from shying away from a tech platform that they fear could be banned in the US.  Unless TikTok's US business is spun off from the larger conglomerate that essentially controlled by the Chinese government, creating a credible US security threat, I think it is a pretty fair bet that a bipartisan movement in Congress will lead to such a ban.

    If a spinoff takes place, though, I'd expect to see an explosion in merchant participation on TikTok Shop - the user base is almost too big to ignore.

    Published on: April 11, 2023

    From CNBC, a story about how "Alibaba Cloud, the cloud computing unit of Chinese tech giant Alibaba, announced Tuesday it will be rolling out its own ChatGPT-style product Tongyi Qianwen.

    Initially, the AI Chatbot software will be "deployed on DingTalk, Alibaba’s workplace communication software, and Tmall Genie, a provider of smart home appliances," but the company said it will be rolled out across all its platforms - including e-commerce - in “the near future.”

    “We are at a technological watershed moment driven by generative AI and cloud computing, and businesses across all sectors have started to embrace intelligence transformation to stay ahead of the game,” said Daniel Zhang, chairman and CEO of Alibaba Group and CEO of Alibaba Cloud Intelligence, in a prepared statement.

    KC's View:

    This plays into yesterday's Washington Post piece about how Amazon seems to be lagging behind in "the mounting AI wars," even though it has been a p[layer with its Alexa-powered technology for years.  Amazon says it has "a lot happening in the space," but the Alibaba announcement makes clear that Amazon is going to have to get specific soon.  Or, it will start losing its leadership position in a segment where it always seemed to be one or two steps ahead of everybody else.

    Published on: April 11, 2023

    •  The Seattle Times reports that Amazon has confirmed its plan "to reduce stock awards for employees as of 2025, paring down one of the compensation benefits that made the Seattle-based company an attractive sell for employees.

    "Amazon will reduce RSU, or restricted stock unit, awards by a 'small amount' in the 'final outlook year,' according to a note sent to managers last week … A spokesperson for the Seattle-based e-commerce company said the final outlook year is 2025.

    "The change comes as the company continues to reduce its head count and prepares for its latest round of job cuts to hit workers this month. Since November, Amazon has announced plans to eliminate 27,000 jobs in a bid to streamline costs 'given the uncertain economy,' CEO Andy Jassy told employees in March.

    "That uncertainty also factored into the decision to reduce stock awards, according to the note Amazon sent to managers. The decision was based on the combination of 'an uncertain economy,' Amazon’s overall compensation budget and the possibility that the company could adjust its compensation model in the future, the note read."

    •  Amazon-owned Whole Foods announced that its 11 Denver-area stores now will offer its Amazon One biometric payment service, allowing customers to pay for their purchases by waving their palms - linked to a credit or debit card - over the Amazon One scanner.  In addition, one of the stores, in SouthGlen, now offers customers the use of Amazon Dash Carts, featuring technology that allows shoppers to scan items as they are placed in the cart and skip checkout lines completely.

    The SouthGlen store is just the fourth Whole Foods Market store in the country to adopt this new technology.

    Published on: April 11, 2023

    •  Fox Business reports that Walmart has pulled a t-shirt from its stores "after customers spotted a swear word hidden in its text."

    The shirt callas for people "to 'recycle,' 'reuse,' 'renew,' and 'rethink' — using a single capitalized 'RE' and spacing the remainder of the words, 'cycle,' 'use,' 'new,' and 'think' off to the right."

    The problem was that the design lined up the words 'cycle,' 'use,' 'new,' and 'think' one above the other, creating an unpleasant vulgarity.

    Walmart said it was unintentional as it pulled the shirt, but not before the design went viral, with people clamoring to get the shirt while it was still available.

    Published on: April 11, 2023

    •  The California Assembly Health Committee is scheduled to consider a bill today that would ban five food additives that already have been banned by the European Union.

    AB 418 would ban Red No. 3, a dye linked to cancer and behavioral problems;   brominated vegetable oil, an additive which has been linked to several health harms, including to the nervous system;  potassium bromate, an additive that’s been linked to cancer;  propyl paraben, an additive that’s been linked to harm to the hormone and reproductive systems;  and titanium dioxide, a colorant linked to damage to DNA and harm to the immune system.

    CNet writes that "the proposed legislation, which was introduced last month by California State Assembly member Jesse Gabriel, a Democrat from the San Fernando Valley, would make California the first US state to prohibit the chemicals from being used in food production and packaging.

    "In a press conference last Thursday on Zoom, Gabriel noted that many food brands including Coke and Pepsi, as well as national food retail and restaurant chains such as Dunkin', Kroger and Panera Bread, have moved away from the use of the chemicals in question. Other popular products, however, still use these EU-banned additives, including Skittles and several Hostess desserts."

    Published on: April 11, 2023

    Executive Suite is sponsored by Robin Russell Executive Search.

    •  Berkshire Hathaway, which recently acquired a controlling interest in c-store chain Pilot, announced that it has named Adam Wright as the company's new CEO, succeeding Shameek Konar, who has been in the role for a little more than two years.  Wright most recently Chief Operating Officer & EVP of Operations at Pacific Gas and Electric Company, a wholly owned Berkshire Hathaway subsidiary;  he also was a running back for the New York Giants from 2001-2003.

    The company also announced that longtime Berkshire executive Joe Lillo will become Pilot's CFO, replacing Kevin Wills.