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Chasing Amazon, Retailers Are in a Never-Ending Arms Race
Nov. 25, 2019 | New York Times | By Sapna Maheshwari and Michael Corkery

Especially hard hit are the big sellers of apparel and accessories like Nordstrom, which are grappling with the dual costs of running fast and efficient e-commerce operations, while also keeping their stores inviting and relevant........While retailers are coming through with a “very, very competitive digital shopping experience,” said Kimberly Greenberger, a retail analyst at Morgan Stanley, they are pouring money into their e-commerce operations at the same time their stores are bringing in fewer sales. Just when they seem caught up, Amazon raises the bar again.
“It just continues this vicious cycle that retailers find themselves in,” .........And then, there are the dozens of buzzy e-commerce start-ups, built through savvy marketing on Instagram and Facebook, that have also been putting pressure on department stores. Often, these companies are built around one product, ship directly to consumers and have only a few stores, if any. They include Away for suitcases, Allbirds for shoes, Lively for bras, Everlane for clothing and Brooklinen for bedsheets.
Many of these companies, backed by venture capital, are focused on growth and not concerned with making money in the short term.
Amazon  Amazon_Prime  apparel  arms_race  contra-Amazon   department_stores  e-commerce  Kohl’s  Macy’s  Nordstrom  product_returns  retailers     same-day  start_ups  supply_chain_squeeze 
19 days ago by jerryking
A ‘Grass Roots’ Campaign to Take Down Amazon Is Funded by Amazon’s Biggest Rivals - WSJ
Sept. 20, 2019 | WSJ | By James V. Grimaldi.

Walmart, Oracle and mall owner Simon Property Group are secret funders behind a nonprofit that has been highly critical of the e-commerce giant

About 18 months ago a new nonprofit group called Free and Fair Markets Initiative launched a national campaign criticizing the business practices of one powerful company: Amazon.com Inc. AMZN -1.50%

Free and Fair Markets accused Amazon of stifling competition and innovation, inhibiting consumer choice, gorging on government subsidies, endangering its warehouse workers and exposing consumer data to privacy breaches. It claimed to have grass-roots support from average citizens across the U.S, citing a labor union, a Boston management professor and a California businessman.

What the group did not say is that it received backing from some of Amazon’s chief corporate rivals. They include shopping mall owner Simon Property Group Inc., SPG 0.27% retailer Walmart Inc. WMT -0.11% and software giant Oracle Corp. ORCL 0.19% , according to people involved with and briefed on the project. Simon Property is fighting to keep shoppers who now prefer to buy what they need on Amazon; Walmart is competing with Amazon over retail sales; and Oracle is battling Amazon over a $10 billion Pentagon cloud-computing contract.

The grass-roots support cited by the group was also not what it appeared to be. The labor union says it was listed as a member of the group without permission and says a document purporting to show that it gave permission has a forged signature. The Boston professor says the group, with his permission, ghost-wrote an op-ed for him about Amazon but that he didn’t know he would be named as a member. The California businessman was dead for months before his name was removed from the group’s website this year.

Free and Fair Markets, or FFMI, declined to reveal its funders or disclose if it has directors or a chief executive.

“The bottom line is that FFMI is focusing on the substantive issues and putting a spotlight on the way companies like Amazon undermine the public good—something that media outlets, activists, and politicians in both parties are also doing with increasing frequency,” it said in a statement in response to questions from The Wall Street Journal. “If Amazon can not take the heat then it should stay out of the kitchen.”

The creation of a group aimed solely at Amazon is an indication of the degree to which competing companies have coalesced to counter the growing and accumulated power of Amazon and how far competitors are increasingly willing to go to counter-strike. Lobbyists that exaggerate the extent of their grass-roots support—a practice known as “AstroTurf lobbying”—are common in Washington, but it is rare for a nonprofit group to be created for the sole purpose of going after a single firm.

Amazon is facing additional opaque opposition as well, with websites and articles popping up portraying the software giant as the Evil Empire. The website Monopolyamazon.com, which does not disclose who is behind it and registered its web address anonymously, includes a handful of articles calling on the Defense Department to reject Amazon’s bid for a $10 billion cloud-computing contract. For months last year, an anti-Amazon dossier circulated in Washington alleging conflicts of interest in the Pentagon procurement process and a chart from the document later reached President Trump before he asked for a review of the Amazon bid.

Free and Fair Markets is run by a strategic communications firm, Marathon Strategies, that works for large corporations, including Amazon rivals. Marathon founder Phil Singer is a veteran political operative who has worked as a top aide to prominent Democrats, including Sen. Chuck Schumer of New York and on Hillary Clinton ’s 2008 presidential campaign.

In a statement, Mr. Singer defended the group. “FFMI is not obligated to disclose its donors and it does not,” Mr. Singer said.

Marathon initially asked for a fee of $250,000 per company to fund the anti-Amazon group, according to a person at one of the companies approached. Among those invited to fund the group but declined were a trade association that includes members who compete with Amazon, and International Business Machines Corp. , according to people familiar with the contacts. IBM, which declined to comment, previously was a client of Marathon.

In a statement, Amazon said, “The Free & Fair Markets Initiative appears to be little more than a well-oiled front group run by a high-priced public affairs firm and funded by self-interested parties with the sole objective of spreading misinformation about Amazon.”

Simon Property, the world’s largest mall landlord, declined to comment. Simon does not have any brick-and-mortar Amazon stores in its roughly 200 malls, outlets and open-air centers in the U.S., whereas its peers with smaller portfolios count multiple Amazon stores in theirs. The Indianapolis-based landlord recently launched its own online shopping platform, Shoppremiumoutlets.com.

Walmart funds the organization indirectly by paying an intermediary that pays for Free and Fair Markets, according to sources familiar with the arrangement. Walmart is a client of Marathon.

Walmart spokesman Randy Hargrove said, “We are not financial supporters of the FFMI but we share concerns about issues they have raised.” Mr. Hargrove declined to comment further.

The group’s aim is to sully Amazon’s image on competition, data-security and workplace issues, while creating a sense of grass-roots support for increased government regulatory and antitrust enforcement, according to people familiar with the campaign.

Free and Fair Markets has lobbied the government for legislation and investigations of Amazon, sent dozens of letters and reports to Congress and staff, according to congressional staffers, published scores of op-eds in local and online media and tweeted hundreds of social media posts blasting Amazon.

Over the past year, many of the actions advocated by the group have gained traction. Amazon has come under increasing antitrust scrutiny from the Department of Justice, Federal Trade Commission, states attorneys general and the European Union. In New York, Amazon backed out of plans to open a second headquarters in Long Island City after facing political opposition. Free and Fair Markets campaigned against government subsidies to support the site and tweeted more than 300 times on the topic.

Oracle provided financial support as part of an all-out strategy to stop Amazon from getting a $10 billion mega-contract to handle cloud computing for the Defense Department. The Pentagon eliminated Oracle as a bidder in the first round. Kenneth Glueck, who runs Oracle’s office in Washington, confirmed that the computer technology firm has contributed to the effort.

A goal of the organization was achieved in July when President Trump said he wanted to conduct a review of the contract. In August, the secretary of defense said he was investigating conflict-of-interest allegations surrounding the $10 billion contract known as Joint Enterprise Defense Infrastructure, or JEDI. At the urging of President Trump, the bid award has been put on hold during the review.

Mr. Trump, a frequent critic of Amazon, cited complaints about the project from several of Amazon’s competitors, which in addition to Oracle included IBM and Microsoft Corp. , saying he had heard the contract “wasn’t competitively bid.” The contract has not been awarded and Microsoft remains one of the two remaining bidders.

Though Free and Fair Markets has contacted members of Congress and the administration, it has not registered as a lobbying organization. Such groups are required to file with Congress if more than 20% of their work involves lobbying. Marathon said it complies with lobby disclosure rules.

None of the articles notes that Mr. Engel’s group is funded by rivals of Amazon.

A spokeswoman for The Hill said the publication was unaware of the funding sources and failure to disclose such payments violates a standard written agreement all op-ed writers are required to sign.

Sandy Shea, managing editor of opinion for the Inquirer’s parent company, the Philadelphia Media Network, said, “We aren’t equipped to investigate the makeup or structure of a nonprofit that submits a piece.”

Bill Zeiser, RealClearPolicy editor, said RealClearMedia publishes “commentary on politics and public policy from a wide array of sources. These submissions are assessed on their editorial merits.”

Representatives of the Post-Gazette and Chronicle did not respond to emails.

In an interview earlier this year, Mr. Engel said the motive of the group was not to promote the views of Amazon’s rivals. He said Amazon has been the only target because its business tactics run counter to the group’s goal of free and fair markets. “The one organization that feels it stands above that is Amazon,” Mr. Engel said.

Marathon did not make Mr. Engel available for comment a second time after the Journal determined that rivals were funding the group.

Mr. Engel and his group have been quoted in publications, including once each in The Wall Street Journal and The New York Times. None said who funded the group.

One article about Free and Fair Markets was commissioned by Marathon.

Last October, an Iowa writer and consultant, Jeff Patch, published an article on RealClearPolicy.com, a news website known for political coverage, about a report by Free and Fair Markets critical of Amazon’s record of hiring and firing women. “Many [women] were fired after Amazon concocted pretexts for their terminations,” Mr. Patch wrote.

Mr. Patch, who has worked as a journalist and a staffer for a Republican congressman and conservative think tanks, did not disclose in his article at the time that he was a paid contractor for Marathon.

Bank statements and invoices reviewed by the Journal show that Mr. Patch billed Marathon, and was paid thousands of dollars… [more]
Amazon  clandestine  contra-Amazon  countermeasures  counternarratives  dark_side  e-commerce  grass-roots  lobbying  lobbyists  nonprofit  Oracle  Simon_Properties  sophisticated  Wal-Mart 
12 weeks ago by jerryking
Goldman taps Amazon executive as new tech boss
September 12, 2019 | Financial Times | Laura Noonan in New York.

Goldman Sachs has hired a senior executive from Amazon Web Services (AWS) to replace departing technology boss Elisha Wiesel, in a move that could accelerate the bank’s migration to cloud services.

Goldman announced the appointment of Marco Argenti, erstwhile vice-president of technology at cloud-technology provider AWS. He will be co-chief information officer, replacing Mr Wiesel, a Goldman veteran who was last week reported to be in talks to leave the bank.

The Wall Street giant, which likes to describe itself as more of a tech company than a bank, has also hired a senior Verizon executive, Atte Lahtiranta, as its new chief technology officer, replacing John Madsen who is leaving the partnership but will continue as chief architect of technology.....Goldman Sachs was an early convert to cloud computing — where processing capability is accessed online rather than through physical machines — and has used it to strip out costs over the past few years.
Amazon  appointments  AWS  C-suite  CIO  cloud_computing  digital_savvy  digital_strategies  Goldman_Sachs 
september 2019 by jerryking
Now bigger than eBay, Shopify sets its sights on Amazon
August 20, 2019 | Financial Times | by Tim Bradshaw, Global Technology Correspondent.

.....ecommerce via social media platforms such as Instagram and Pinterest, which have become vital to growing online retail outside Amazon, and increasingly important to Shopify.

“Instagram has been the most phenomenal growth vector for small businesses,” said Mr Lütke. “It's a great way to tell stories about products that Amazon, with its static pictures and very sanitised listings, doesn't offer people.” 
Amazon  e-commerce  fulfillment  logistics  retailers  Shopify  Tobias_Lütke 
august 2019 by jerryking
Amazon Wants to Rule the Grocery Aisles, and Not Just at Whole Foods
July 28, 2019 | The New York Times | By Karen Weise.

In early 2017, a memo, “Grocery Shopping for Everyone," circulated inside Amazon that imagined an ambitious new grocery chain........The new stores, the document envisioned, would have robust sections for produce, fresh food and prepared meals. Nonperishable products, like paper towels or canned beans, would be stored on a separate floor, away from customers. Shoppers could order those items with an app, and while they shopped for fresh food, the other products would be brought down in time for check out. There would also be an area to pick up groceries ordered online and to manage packages for delivery drivers......A few months later, in June 2017, Amazon barged into the grocery business in a different way, by announcing a blockbuster deal to buy Whole Foods for $13.4 billion.......The memo and other big grocery proposals stopped circulating inside Amazon, as Whole Foods demanded everyone’s attention.....now, two years later, instead of Whole Foods being the answer to Amazon’s grocery ambitions, it seems to have only whetted executives’ appetites.

The marriage has made clear the difficulties of selling fresh food inexpensively, either in a physical store or through delivery. Bananas are not the same as books....But the combination has also shown glimmers of success, particularly in delivery. And that has provided some fuel to Amazon executives pushing to add another food-selling option — one built from the ground up that would change how people buy groceries.....Amazon is now quietly exploring an ambitious new chain, probably separate from Whole Foods, that is not far removed from the one outlined in the old memo. It would be built for in-store shopping as well as pickup and delivery.....“People really need to understand — Whole Foods is the beginning, it’s not the end,” ......“It’s not everything.”......In an effort to shed Whole Foods’ “whole paycheck” reputation, Amazon bought more from national food distributors and cut back on the local farms......Other price-cutting efforts failed. The former head of a major produce company said Amazon told him it wanted to sell marquee fresh items at low prices every day. The executive said he had to explain that certain products, like berries or lettuce, may be available all year thanks to global supply chains, but that they cost more in the off-season. Forcing flat, low prices would put too much risk on growers.

Amazon executives, the person said, were caught off guard by the response. It didn’t seem as if they had fully appreciated how seasonality made predictable pricing far harder than selling cereal or paper towels.......Amazon has also run into some trouble integrating Whole Foods into its delivery machine.

Amazon never saw delivering cold milk and fragile fruit to doorsteps as something for the masses, according to former employees. Instead, executives thought of it as an option for people who wanted high-quality foods and could afford a premium price to have fragile and fresh items arrive at their doorstep......In theory, that was a good fit for Whole Foods and its affluent shoppers. Within six months, Amazon began making two-hour deliveries from Whole Foods in four cities for Prime members. Six months later, that had expanded to more than two dozen cities. It’s now available in 90.

But Whole Foods stores are not like Amazon’s delivery warehouses. Because Whole Foods sells so many fresh items, its stores have smaller back-of-house areas than a standard supermarket. That means employees who pick products for online orders must gather more items from the same shelves as shoppers. They roam aisles with scanners in hand, asking associates on the floor when they can’t find something......deliveries have shown big potential, making up almost all of Whole Foods’ growth......The promise of serving customers, but doing so more efficiently, has Amazon thinking again about aggressive investment in groceries.

Rather than dramatically substantially expand Whole Foods, .....Amazon is considering designing stores specifically with pickup and delivery in mind, and with a smaller area dedicated to fresh shopping — as the old memo imagined.....Amazon is interested in “creating multiple customer experiences under one roof.”.......Amazon has been looking for spaces close to Whole Foods locations, indicating a hub-and-spoke approach where one store serves as the warehouse and commissary for others.....To be a major grocery player, Amazon would need a little more than 2,000 stores, the old memo estimated. That’s far fewer than the 5,000 run by Walmart, the country’s top grocery seller, but more than the roughly 1,200 operated by Publix. Whole Foods got Amazon about a quarter of the way there.

A store designed with different shopping options......would be “highly scalable.”
Amazon  back-office  BOPIS  grocery  home_delivery  hub-and-spoke  in-store  Kroger  perishables  price-cutting  seasonality  supermarkets  Whole_Foods 
july 2019 by jerryking
For Sephora, the store is core to its beauty
July 24 2019 | | Financial Times | by Harriet Agnew and Hannah Copeland in Paris.

**Sephora stores focus on experience, allowing consumers to test products digitally on a virtual mirror for instance or personalise products **

Like its stores in New York’s Times Square and Dubai Mall in the Middle East, Sephora in La Défense has recently reopened after an extensive refurbishment. The investment reflects how bricks and mortar and experiential retail are key to Sephora’s growth. The LVMH-owned group, which stocks about 300 brands alongside its own label, has increased sales fourfold in the past eight years, fuelled by a booming beauty market........“A lot of people are scared of the retail apocalypse so they’re not investing in stores, and that becomes a self-fulfilling prophecy,” said chief executive Chris de Lapuente in an interview on the shop floor. “We’re investing in our stores, taking our top 100 stores in the world and renovating them to the best possible standard.”....Mr de Lapuente says one attraction of Sephora is that consumers “discover brands they can’t find anywhere else”, noting that about a third of its offerings are exclusive to Sephora, and it acts as an incubator for upcoming or niche brands....Exclusivity might be with Huda, which began selling false eyelashes in Dubai and subsequently developed a collaboration with Sephora; pop star Rihanna’s cosmetics brand Fenty, which is on track for €500m sales this year; or an exclusive collaboration with Dior for the Dior Backstage range of make-up.

Pointing to the beauty bar where customers can get a free makeover, Mr de Lapuente added: “Experiential retail is crucial to our success. Sephora is a place where people come for advice, they come to listen. We teach, inspire and play . . . You’re not going to get this online. Online you can do your research . . . here you can come and experiment.”

Mr Fujimori agrees, saying Sephora “successfully combines experiential retail with a leading ecommerce presence, leveraging digital technology to enhance the shopping experience in-store and online”......
Please use the sharing tools found via the share button at the top or side of articles. The challenge now for Sephora is to stay ahead in a world where there are more make-up and beauty brands than ever, and social media has lowered barriers to entry and boosted the speed to market. Meanwhile, Amazon last month announced the launch of its professional beauty stores, aimed at the mass market.

“Amazon is just another one of the many choices out there,” said Mr de Lapuente. “They have a strong e-commerce offering. They don’t have stores. We love that consumers love to shop online and in store.” He says that customers who buy both on- and offline tend to purchase three times more than those who buy using just one channel. Ecommerce represents an average of 20 per cent of sales in each country for Sephora, which uses influencers to build its community. “Amazon just forces us to raise our game.”....

The pressure is on to keep on innovating. “Beauty is so fast-moving, you can’t cruise,” said Mr de Lapuente. He says innovation will come both from new products (citing untapped potential in haircare and wellness), and from the way in which brands reach consumers. He sees opportunities in areas like voice-activated ordering through home assistants such as Amazon’s Alexa, and social commerce through platforms like China’s WeChat.

But despite such technological developments, for Mr de Lapuente, the store has a robust future.

At La Défense, customers are returning to work with Sephora’s distinctive striped bags modelled on the black and white stripes of Italy’s Siena Cathedral. “Is physical retail alive or dead?” mused Mr de Lapuente among the throng of shoppers. “It looks pretty alive to me. The store is where the magic happens.”
Amazon  beauty  brands  bricks-and-mortar  customer_experience  cosmetics  digital_influencers  e-commerce  experimentation  experiential_marketing  high-end  in-store  incubators  innovation  LVMH  makeup  millennials  omnichannel  refurbished  renovations  Sephora  women 
july 2019 by jerryking
Walmart Hires Global Tech Chief to Compete With Amazon
May 28, 2019 | WSJ | By Sarah Nassauer.

Walmart is working to becoming an increasingly tech-focused company, buying up e-commerce startups and investing heavily to boost online sales. ...... Walmart is working to becoming an increasingly tech-focused company, buying up e-commerce startups, investing heavily to boost online sales, adding more grocery-delivery options and working to ramp up its digital ad revenue. The bulk of Walmart’s revenues and profits came from around 4,600 U.S. stores as of the most recent quarter......Walmart’s current chief information officer, Clay Johson, and all unit CTOs will report to Mr. Kumar. Marc Lore, Walmart’s head of U.S. e-commerce, will continue to report to Mr. McMillon directly,
Amazon  appointments  C-suite  CTOs  digital_strategies  e-commerce  hiring  retailers  start_ups  technology  Wal-Mart 
may 2019 by jerryking
Technology platforms are losing control
MAY 22, 2019 | | Financial Times | John Gapper.
Amazon  competition  platforms 
may 2019 by jerryking
Black Folk's Guide to Making Big Money in America
A primer on personal finance, business and real estate. It is truly comprehensive and a must read for anyone serious about improving their financial situation.
++++++++++++++++++++++++++++++++++++++++++++++++
First, Trower-Subira emphasizes the central importance of home ownership as a source of equity capital. He decried the usage of earned income and accumulated home equity to fuel (conspicuous) consumption binges. Trower-Subira got it right when he said that real estate should be the base asset for African Americans from which to build wealth. As long as you borrow against your home to acquire other, income producing assets, you are doing yourself a favor by pursuing homeownership.

Second, he stressed the importance of financial assets in building wealth. Trower-Subira puts forth a brilliant explanation of the types of assets that produce income and that African Americans in particular should endeavor to pursue (real estate is just one of several).

Third, Trower-Subira emphasizes the importance of continuing education combined with an asset-based approach to wealth building. Trower-Subira wrote in the context of his day, but now the game has shifted somewhat. That is not to say that the problems of his day are no more; indeed, many of the problems of his day still relentlessly follow the African American community, and in too many instances, the problem have actually gotten worse. Although we are presented with new opportunities, we also face new challenges- on top of the same old challenges that we have yet to vanquish.
'80s  advice  African-Americans  Amazon  books  business  home_ownership  mindsets  personal_finance  primers  real_estate  self-help  wealth_creation 
april 2019 by jerryking
America’s Biggest Supermarket Company Struggles With Online Grocery Upheaval
April 21, 2019 | WSJ | By Heather Haddon.

Kroger adjusts operations and invests in technology to hang on to customers who avoid stores; ‘we’ve got to get our butts in gear
Amazon  bricks-and-mortar  BOPIS  CDO  cultural_clash  delivery_services  digital_strategies  disruption  e-commerce  e-grocery  grocery  IBM  Instacart  Jet  Kroger  Microsoft  millennials  Ocado  Oracle  pilot_programs  post-deal_integration  retailers  same-day  Shipt  start_ups  supermarkets  Vitacost  Wal-Mart  Whole_Foods 
april 2019 by jerryking
Bezos on why failure is not failure
April 11, 2019 | By | FT Alphaville : Izabella Kaminska

According to Bezos no customer was asking for Echo before it was launched, thus Amazon's foray into listening tech was definitely them wandering. And yet, if they'd listened to market research (a firm no thank you!) they'd have lost out on more than 100 million sales of Alexa-enabled devices. So there.
Alexa  Amazon  Amazon_Echo  AWS  big_bets  experimentation  failure  Jeff_Bezos  large_companies  market_research  scaling 
april 2019 by jerryking
Lina Khan: ‘This isn’t just about antitrust. It’s about values’
March 29, 2019 | Financial Times | by Rana Foroohar.

Lina Khan is the legal wunderkind reshaping the global debate over competition and corporate power......While still a student at Yale Law School, she wrote a paper, “Amazon’s Antitrust Paradox”, which was published in the school’s influential journal..... hit a nerve at a time when the overweening power of the Big Tech companies, from Facebook to Google to Amazon, is rising up the agenda......For roughly four decades, antitrust scholars — taking their lead from Robert Bork’s 1978 book The Antitrust Paradox — have pegged their definitions of monopoly power to short-term price effects; so if Amazon is making prices lower for consumers, the market must be working effectively.....Khan made the case that this interpretation of US antitrust law, meant to regulate competition and curb monopolistic practices, is utterly unsuited to the architecture of the modern economy.....Khan's counterargument: that it doesn’t matter if companies such as Amazon are making things cheaper in dollars if they are using predatory pricing strategies to dominate multiple industries and choke off competition and choice.....Speaking to hedge funds and banks during her research, Khan found that they were valuing Amazon and its growth potential in a way that signified monopoly power..." I’m interested in imbalances in market power and how they manifest. That’s something you can see not just in tech but across many industries,” says Khan, who has written sharp pieces on monopoly power in areas as diverse as airlines and agriculture. " Khan, like many in her cohort, believes otherwise. “If markets are leading us in directions that we, as a democratic society, decide are not compatible with our vision of liberty or democracy, it is incumbent upon government to do something.” Lina Khan has had a stint as a legal fellow at the Federal Trade Commission, consulted with EU officials, influenced competition policy in India, brainstormed ideas with presidential hopeful Elizabeth Warren and — recently joined the House Subcommittee on Antitrust, Commercial and Administrative Law. The 2008 financial crisis she thinks “about markets, and the government’s response to them, and certain forms of intervention that they do take, and that they don’t take”.....Khan, Lynn and others including the Columbia academic Tim Wu have developed and popularised the “new Brandeis” school of antitrust regulation, hearkening back to the era in which Louis Brandeis, the “people’s lawyer”, took on oligarchs such as John D Rockefeller and JP Morgan.....Lina sees Amazon as not just a discount retailer but as a marketing platform, delivery and logistics network, a payment service, a credit lender, auction house, publisher and so on, and to understand just how ill-equipped current antitrust law was to deal with such a multi-faceted entity......a Columbia Law Review paper out in May 2019 will explores the case for separating the ownership of technology platforms from the commercial activity they host, so that Big Tech firms cannot both run a dominant marketplace and compete on it. via a host of old cases — from railroad antitrust suits to the separation of merchant banking and the ownership of commodities — to argue that “if you are a form of infrastructure, then you shouldn’t be able to compete with all the businesses dependent on your infrastructure”....“The new Brandeis movement isn’t just about antitrust,” .... Rather, it is about values. “Laws reflect values,” she says. “Antitrust laws used to reflect one set of values, and then there was a change in values that led us to a very different place.”

.
21st._century  Amazon  antitrust  Big_Tech  digital_economy  financial_crises  FTC  lawyers  Lina_Khan  monopolies  multifaceted  paradoxes  platforms  policymakers  predatory_practices  Rana_Foroohar  regulators  Robert_Bork  Tim_Wu  wunderkind  Yale  values  value_judgements 
march 2019 by jerryking
Amazon to Launch New Grocery-Store Business
March 1, 2019 | WSJ | By Esther Fung and Heather Haddon.

Amazon is planning to open dozens of grocery stores in several major U.S. cities....as the retail giant looks to broaden its reach in the food business and touch more aspects of consumers’ lives......The new stores would be distinct from the company’s upscale Whole Foods Market chain. It isn’t clear whether the new stores would carry the Amazon name......Amazon in recent years has become increasingly focused on physical retail, posing a threat to traditional grocers. The new chain would help Amazon in fulfilling a yearslong initiative to build out a physical grocery presence, which was at one point potentially envisioned to reach more than 2,000 brick-and mortar stores in a variety of sizes and formats......Amazon is also exploring purchasing regional grocery chains with about a dozen stores under operation, one person said, that could bolster the new chain......Amazon’s further push into physical retail is its latest move far beyond its origins selling books and music on the web. Over the years it has become a cloud-computing giant, a major player in Hollywood entertainment and a burgeoning provider of logistics services. More recently it has emerged as a major competitor in digital advertising and launched forays in finance and health care......The new stores aren’t intended to compete directly with the more upscale Whole Foods stores and will offer a different variety of products, at a lower price point, these people said. Whole Foods doesn’t sell products with artificial flavors, colors, preservatives and sweeteners, among other quality standards.

Suppliers with big brands have hoped to have inroads into Whole Foods since Amazon bought the chain nearly two years ago. While Whole Foods has gradually expanded the big brands it carries—such as Honey-Nut Cheerios and Michelob beer—a conventional grocer can carry a much larger assortment of items. Amazon has had mixed results with its food-delivery business, and it wants to better understand how it can cater to grocery shoppers....Supermarket operators Walmart Inc., Kroger Co. and others are also trying to find ways to offer delivery and pickup to customers in a more cost-efficient manner...Amazon’s new grocery brand also comes as the retailer rolls out its cashierless Amazon Go stores in urban areas. It is testing that checkout technology for bigger retail stores. Meanwhile, Whole Foods is expanding its national footprint....For its new stores, Amazon is targeting new developments and occupied stores with leases ending soon.....Amazon doesn’t want restrictions on the type of goods it may sell at its stores and wants the ability to change the store and sell health and beauty products for instance......It is unclear whether these new stores will be cashierless, but they will be heavily tilted to customer service and pickup capabilities......a strategy where big retailers combine e-commerce with physical stores is the direction the industry is heading.
Amazon  BOPIS  bricks-and-mortar  cashierless  e-commerce  food  grocery  home-delivery  in-store  Kroger  new_businesses  physical_retail  rollouts  supermarkets  Wal-Mart  Whole_Foods 
march 2019 by jerryking
Store wars: short sellers expect more pain in US retail
February 26, 2019 | Financial Times | by Alistair Gray in New York.

Short sellers who made big bets against US retailers a couple of years ago had hoped for carnage across the board. No one could compete with the rise and rise of Amazon...which would make life hard for every mall tenant across America.

But after a period in which internet shopping seemed to hit almost every brick-and-mortar retailer, the industry seems to be dividing into winners and losers. Casualties are still piling up: bankruptcies since the turn of the year....Payless Shoes ....Sears, the once dominant department store chain, narrowly avoided outright liquidation.

However, some of the biggest companies e.g. Walmart & Best Buy are reporting their healthiest metrics in years......For short sellers trying to profit from falling share prices, it makes for a perilous environment.

“It’s a slow death by a thousand paper cuts, and not the kind of ‘mall-mageddon’ originally anticipated by that trade,”.....“Retail has been much more volatile than many would have expected. It hasn’t been decidedly one way down.”....an over-reaction in 2017 and that led to pretty nice opportunities [for longs] in 2018,”.....Investors who put money on the demise of retail that summer have lost out in many cases......It was almost as if they [shorts] were acting like no retail real estate space can work,” ....overcapacity doesn’t mean retail real estate is dead.”...Shares in the sector have been volatile in part because investors have had to consider a series of seemingly contradictory data points about the health of both the US consumer and the retail business.....Traditional chains are also trying to take on Amazon by improving their online offerings and making their stores more enticing. Both require hefty investment, although successful examples include Lululemon, which offers yoga lessons in its stores. Shares in the company have tripled since a 2017 low.

“Those who are innovating and investing in ecommerce, marketing and social media tend to be doing well...“The US is still over-stored,” ...Ecommerce meant “more of the store base is not economic. That’s going be a secular pressure for years to come. For those retailers that don’t have a digital strategy, it’s just a matter of time before they fall.”
Amazon  apocalypses  bankruptcies  barbell_effect  bear_markets  bricks-and-mortar  commercial_real_estate  death_by_a_thousand_cuts  department_stores  digital_strategies  e-commerce  innovation  investors  investment_thesis  Lululemon  pain_points  overcapacity  retailers  shopping_malls  short_selling  structural_decline  Wal-Mart 
february 2019 by jerryking
Ikea looks to launch sales platform that would include rival products
February 12, 2019 | Financial Times | Richard Milne in Almhult.

Ikea is exploring the launch of an online sales platform offering furniture not just from the famous flat-pack retailer but also from rivals as part of its big transformation...........

Torbjorn Loof, chief executive of Inter Ikea, added: “It is also about how you connect. If you take home furnishings, for instance — how you connect communities, how you connect knowledge, how you connect the home. It’s not only furniture, it’s paintings, it’s the do-it-yourself part. There are many different constellations that can and will evolve over the years to come.”
Alibaba  Amazon  brands  clothing  e-commerce  experimentation  fashion  furniture  home-assembly  Ikea  leasing  opportunities  platforms  retailers  third-party  Zalando  rivalries  digital_strategies  Torbjörn_Lööf  coopetition 
february 2019 by jerryking
Brands Invent New Lines for Only Amazon to Sell WSJ
Jan. 25, 2019 | WSJ | By Annie Gasparro and Laura Stevens.

Amazon gets exclusive products, while brands receive faster customer feedback, marketing support and increased sales.......To build a big line of exclusive products on its site, Amazon.com Inc. AMZN 0.95% is pushing other brand manufacturers to do most of the work.

The online retail giant is asking consumer-goods companies to create brands exclusively for Amazon after finding that developing them on its own is too costly and time-consuming.....Amazon’s initiative is the latest example of the e-commerce giant flexing its muscles in order to offer the lowest prices and widest selection, as it seeks to cut into the market share of big-brand manufacturers.....Manufacturers generally benefit from selling their products through a range of retailers. Also, they risk cannibalizing higher-margin sales of their main brands by offering comparable products under different labels. But those entering deals with Amazon view the arrangement as a golden opportunity.

In exchange for creating exclusive products, the brands get help launching their products on Amazon.com, faster customer feedback when testing new products, marketing support, and, of course, revenue from the sales. They also can appear at the top of search results—a big draw given that Amazon’s platform lists an estimated 550 million items......Speed was paramount. “We had to take what would normally be 12 to 24 months of development to 90 days,”....Amazon, on its own, has been quietly adding to its in-house brands in recent years. Analysts estimate the site now offers more than 100. ....Amazon sometimes promotes its own brands higher in search results on its site, like “Amazon’s Choice” and sponsored items, or as default results in voice searches using Amazon’s Alexa virtual assistant.

In-house brands often generate a higher profit margin for retailers, including Amazon, and can draw in customers because they can’t find those brands elsewhere. But developing a new brand and formulating products takes time..... the program offers manufacturers a way to “launch brands and products directly to Amazon customers.”

Amazon is increasingly important for consumer-product manufacturers. It now accounts for roughly half of all sales online,.....Amazon’s program also can be used for “orphan brands” that manufacturers have stopped selling or that never made it to market.....Amazon has no issue going full-court press on private label, and pursuing all these brands. If the quality and pricing architecture don’t fit and they have to pivot, they’ll do so,” said Todd Mitchell, president of Compass Marketing Inc., which works with Amazon. “They’re not limited to the constructs of shelf space.”
accelerated_lifecycles  Amazon  brands  cannibalization  CPG  e-commerce  exclusivity  fast-paced  in-house  manufacturers  new_products  orphan_brands  private_labels  product_development  product_launches  shelf_space  speed 
january 2019 by jerryking
Amazon offers cautionary tale of AI-assisted hiring
January 23, 2019 | Financial Times | by Andrew Hill.

the task of working out how to get the right people on the bus has got harder since 2001 when Jim Collins first framed it, as it has become clearer — and more research has underlined — that diverse teams are better at innovation. For good reasons of equity and fairness, the quest for greater balance in business has focused on gender, race and background. But these are merely proxies for a more useful measure of difference that is much harder to assess, let alone hire for: cognitive diversity. Might this knotty problem be solved with the help of AI and machine learning? Ming is sceptical. As she points out, most problems with technology are not technology problems, but human problems. Since humans inevitably inherit cultural biases, it is impossible to build an “unbiased AI” for hiring. “You simply have to recognise that the biases exist and put in the effort to do more than those default systems point you towards,” she says...........What Amazon’s experience suggests is that instead of sending bots to crawl over candidates’ past achievements, companies should be exploring ways in which computers can help them to assess and develop the long term potential of the people they invite to board the bus. Recruiters should ask, in Ming’s words, “Who will [these prospective candidates] be three years from now when they’re at their peak productivity inside the company? And that might be a very different story than who will deliver peak productivity the moment they walk in the door.”
heterogeneity  Amazon  artificial_intelligence  hiring  Jim_Collins  machine_learning  recruiting  teams  Vivienne_Ming  cautionary_tales  biases  diversity  intellectual_diversity  algorithms  questions  the_right_people 
january 2019 by jerryking
Can tech save bricks and mortar retail? | Financial Times
Alistair Gray in New York

Stores turn to augmented reality, robots and smart mirrors in battle against Amazon
Amazon  augmented_reality  retailers  shopping_malls  robotics 
january 2019 by jerryking
Big Tech in hiring spree for looming antitrust battles | Financial Times
Kiran Stacey in Washington DECEMBER 23, 2018 Print this page6
Big technology and telecoms companies have embarked on a hiring spree of former antitrust officials as their industries gear up for what experts warn could be an “existential” battle over whether they should be broken up.

In the last few months, Facebook, Amazon and AT&T have all hired senior antitrust officials from the US Department of Justice as they confront a new generation of regulators who are interested in preventing concentrations of economic power......Many of the biggest US technology companies have endured a difficult year, facing allegations of not protecting customer data, failing to prevent Russian interference in American democracy and showing political bias.

In response, several have beefed up their lobbying operations in Washington as they look to engage more with politicians, having previously preferred to operate under the radar. .....Experts say the hirings reflect a growing belief that competition policy could become the next significant political battleground....The European Commission has investigated US technology companies for alleged anti-competitive behaviour. Margrethe Vestager, the European Commissioner for Competition, is bringing cases against Google and is looking into Amazon.

Such cases have been more difficult to pursue in the US, where the law is focused more on whether anti-competitive behaviour is keeping prices artificially high.

A group of younger progressive regulators and politicians have argued in recent years, however, that technology companies that give their services away for free but dominate their markets should come in for as much attention.....Rohit Chopra, a Federal Trade Commissioner in his mid-30s, for example, recently hired Lina Khan, a 29-year-old policy thinker who has argued that large technology companies can both bring prices down and be harmful to society in general.
Amazon  antitrust  AT&T  Big_Tech  competition_policy  corporate_concentration  Department_of_Justice  FAANG  Facebook  FTC  hiring  Lina_Khan  lawyers  lobbying  market_power  market_concentration  monopolies  platforms  regulation  regulators  revolving_door  under_the_radar 
december 2018 by jerryking
Every Company Is Now a Tech Company
Dec. 4, 2018 | WSJ | By Christopher Mims.

There was a time when the primary role of leaders at most companies was management. The technology required to do the work of a company could be bought or siloed in an “IT department,” treated more as a cost center than a source of competitive advantage.

But now we’ve entered a period of upheaval, driven by connectivity, artificial intelligence and automation. The changes affect the world of business so profoundly that every company is now a tech company. But now companies born before the first internet bubble also must realize they can no longer function as non-tech businesses......The question is, how does a non-tech company become a tech company quickly? Increasingly, the answer is bringing tech talent into the highest executive ranks, adding deeply knowledgeable and indispensable “technical co-founders” long after the company was founded......To put it another way: When faced with a competitor like Amazon, do you do as Walmart did, and invest heavily in tech firms and technical knowledge? Or do you go the way of Sears…into bankruptcy court?

In August 2016, Walmart announced it would acquire e-commerce startup Jet.com for $3.3 billion, the largest ever deal of an old-line bricks-and-mortar company buying an e-commerce company. The acquisition was about a transfusion of new minds as much as Jet’s technology, which was far ahead of Walmart’s online operation at the time....Mr. Lore is now chief of e-commerce at Walmart......Walmart’s e-commerce business revenue grew 43% in the last quarter alone....Wal-Mart is successfully pursuing a “second-mover strategy” against Amazon....Things don’t always go this smoothly. In fact, when well-established companies acquire tech-savvy startups in order to bring aboard engineers and executives--acqui-hires-- it’s usually a disaster.....Within the first three years after an acquisition, 60% of employees at a startup leave......That rate of turnover is twice that of employees hired the old-fashioned way. What’s worse, the employees who leave tend to be the most aggressive and entrepreneurial—and more likely to launch a competing startup.....For large companies stuck between the rock of disruption and the hard place of acquiring startups that can’t hold on to key employees, what’s to be done?[sounds like a cultural clash] John Chambers, who was chief executive at Cisco for more than 20 years, where he oversaw 180 acquisitions, has some answers. In his new book, “Connecting the Dots,” Mr. Chambers outlines some rules. For one, corporate cultures should align. Also, it helps if the company you’re buying already has significant traction in the market..... it’s essential to promote the leaders of acquired companies into your own ranks. Mr. Chamber’s rule at Cisco was that a third of the company’s leaders should be promoted from within, a third should be recruited from outside, and a third should come from acquisitions. .......As the competitive landscape continues to change and technology becomes ever more essential to how business is done, investments that might have seemed too risky a few years ago now may sometimes turn out to be the best path to survival.
acquihires  artificial_intelligence  automation  Amazon  books  Christopher_Mims  connecting_the_dots  CTOs  Cisco  cultural_clash  digital_savvy  e-commerce  Jet  John_Chambers  large_companies  post-deal_integration  reinvention  silo_mentality  technology  Wal-Mart 
december 2018 by jerryking
Walmart and Amazon in acquisition shopping spree | Financial Times
The move reflects the realities of the grocery business, analysts say. “In no sector is physical footprint more important than food,” says Charlie O’Shea from Moody’s. “Dairy has to be delivered quickly. Just like what Walmart did last year in buying Jet.com, Amazon recognises that it’s more effective to buy it than build it.” 

Amazon may use Whole Foods’ stores to beef up its offerings in ordering, pick-up and delivery, or use its distribution centres to deliver products for AmazonFresh trucks, says Mr Huang. “Building a cold supply chain with refrigerated trucks is not easy or cheap to do,” he says. 
Wal-Mart  Amazon  grocery  supermarkets  cold_storage 
november 2018 by jerryking
Lowe’s to close 27 stores in Canada as housing markets slow - The Globe and Mail
MARINA STRAUSS
NICOLAS VAN PRAET QUEBEC BUSINESS REPORTER
TORONTO AND MONTREAL
PUBLISHED NOVEMBER 5, 2018

Lowe’s Cos. Inc. is shutting 27 stores in Canada, mostly under the Rona banner, as well as offices and plants as the U.S. home-improvement retailer grapples with an overcrowded market and a cooling housing sector......In an increasingly tight home-improvement retail landscape, Lowe’s faces tougher competition from incumbents and emerging e-commerce players such as Amazon.com Inc. as well as reduced home sales.......While the home-improvement industry has enjoyed sales lifts over past years, that growth is moderating as the housing market loses steam, Mr. McLarney said. Many young consumers cannot afford to buy homes, while baby boomers are downsizing, resulting in fewer purchases for home improvements, industry observers say.

Home-improvement retail sales climbed 5 per cent last year to $48.2-billion, but are expected to pick up by only about 4 per cent in each of 2018 and 2019, according to Hardlines......Alex Arifuzzaman, founder of retail real estate adviser InterStratics Consultants, said consumers increasingly can buy many of the items home-improvement stores carry more conveniently online. At the same time, more people are moving into condominiums that don’t need as many renovations or repairs. “The profit model in the future is going to be different," he said.

Lowe’s said on Monday that of the 27 under-performing stores in Canada it will close by the end of January, nine are in each of Quebec and Ontario, while six are in Newfoundland and Labrador, two are in Alberta and one is in British Columbia.
Amazon  home-center_industry  home-improvement  Lowes  Marina_Strauss  Quebec  retailers  Rona  store_closings 
november 2018 by jerryking
Walmart tells investors to expect more risk-taking
October 16, 2018 | Financial Times | Alistair Gray and Pan Kwan Yuk in New York.

Doug McMillon said at an investor meeting on Tuesday that the Arkansas-based company was experimenting with technology ranging from floor-cleaning robots to augmented reality and biometrics as he urged Wall Street to “challenge your thinking about Walmart”.

Walmart superstores have transformed shopping habits and became a dominant force in American retail. The bricks-and-mortar model, however, has been upended in by the rise of ecommerce.

“Looking back, we had a proven model, and we naturally focused on execution. As the numbers grew, we . . . unintentionally became risk averse,” Mr McMillon said at a meeting for investors.

“But today we’re getting to reimagine retail and our business. To do that we take risk — try quite a few things and learn from our failures. That type of behaviour’s in our DNA, and we’re waking up that part of our culture.”.....Online sales, in which Walmart has been investing aggressively as part of its response to Amazon, are expected to increase around 35 per cent for the fiscal 2020 year, compared to the expected 40 per cent for 2019.

Walmart also on Tuesday struck a partnership with Advance Auto Parts, allowing it increase its presence in the car parts business. Under the tie-up the companies will offer home delivery, same-day pick up at each other’s stores and installation of some parts.
Amazon  e-commerce  experimentation  failure  innovation  retailers  risk-taking  Wall_Street  Wal-Mart  augmented_reality  auto_parts  biometrics  bricks-and-mortar  home-delivery  same-day  shopping_habits 
october 2018 by jerryking
Want to See What’s Up Amazon’s Sleeve? Take a Tour of Seattle
Sept. 23, 2018 | The New York Times | By Karen Weise.

Amazon uses Seattle as a living laboratory, trying out new retail and logistics models.

Some trials never leave the city. But others, like the use of independent contractors to deliver packages, have found their ways to the rest of the country and abroad. The pilots point to a company, with ambitions that at times can seem boundless, investing deeply in figuring out its physical footprint and how to provide convenience at a lower cost.....In 2015 when Amazon first tested the Treasure Truck, a decorated vehicle that drives around and sells a daily deal like smart watches or plant-based burger patties, it delayed the public debut at least twice before finally going live. .....
Amazon  Amazon_Books  AmazonFresh  Amazon_Go  bookstores  business_models  cashierless  experimentation  new_businesses  Seattle  pilot_programs  product_returns  delivery_services 
september 2018 by jerryking
Why Jeff Bezos Should Push for Nobody to Get as Rich as Jeff Bezos
Sept. 19, 2018 | The New York Times | By Farhad Manjoo.

Why does Jeff Bezos have so much money in the first place? What does his fortune tell us about the economic structure and impact of the tech industry, the engine behind his billions? And, most important, what responsibility comes with his wealth — and is it any business of ours what he does with it?.........Bezos’ extreme wealth is not only a product of his own ingenuity. It is also a function of several grand forces shaping the global economy...the unequal impact of digital technology..... direct economic benefits have accrued to a small number of superstar companies and their largest shareholders.....the most important thing Bezos can do with his money is to become a traitor to his class,” said Anand Giridharadas, author of a new book, “Winners Take All.”.....Giridharadas argues that the efforts of the super-wealthy to change the world through philanthropy are often a distraction from the planet’s actual problems. To truly fix the world, Mr. Bezos ought to push for policy changes that would create a more equal distribution of the winnings ......there are fans of Amazon who will dispute the notion that Bezos’ wealth represents a problem or a responsibility....He acquired his wealth legally and in the most quintessentially American way: He had a wacky idea, took a stab at it, stuck with it through thick and thin, and, through patient, deliberate, farsighted risk-taking,.......Tech-powered businesses are often driven by an economic concept known as network effects, in which the very popularity of a service sparks even greater popularity. Amazon, for instance, keeps attracting more third-party businesses to sell goods in its store — which in turn makes it a better store for customers, which attracts more suppliers, improving the customer experience, and so on in an endless virtuous cycle........Mr. Bezos’ most attractive quality, as a businessman, is his capacity for patience and surprise. “This is guy who was willing to buck what everyone else thought for so long,” Mr. Giridharadas said. “If he brings that same irreverence to the question of how to give, he has the potential to interrogate himself about why it is that we need so many billionaires to save us in the first place
Amazon  Anand_Giridharadas  books  economic_policy  economies_of_scale  Erik_Brynjolfsson  Farhad_Manjoo  Jeff_Bezos  third-party  high_net_worth  human_ingenuity  ingenuity  moguls  network_effects  philanthropy  superstars  virtuous_cycles  winner-take-all 
september 2018 by jerryking
The Prime Effect: How Amazon’s Two-Day Shipping Is Disrupting Retail
Sept. 20, 2018 | WSJ | By Christopher Mims.

Amazon.com Inc. has made its Prime program the gold standard for all other online retailers... The $119-a-year Prime program—which now includes more than 100 million members world-wide—has triggered an arms race among the largest retailers, and turned many smaller sellers into remoras who cling for life to the bigger fish.

In the past year, Target Corp. , Walmart Inc. and many vendors on Google Express have all started offering “free” two-day delivery. (Different vendors have different requirements for no-fee shipping, whether it’s order size or loyalty-club membership.)

Amazon and its competitors are often blamed for the death of bricks-and-mortar retail, but the irony is that these online retailers generally achieve fast shipping by investing in real estate—in the form of warehouses rather than stores. To compete on cost, the vendors must typically ship goods via ground transportation, not faster-but-pricier air. The latest to offer free two-day delivery is Overstock.com , which claims it can reach over 99% of the U.S. in that time frame from a single distribution center in Kansas City, Kan.

But the biggest online retailers aren’t the only ones building massive fulfillment centers and similar operations. Fulfillment startups and large companies from other sectors are hoping to scale up by luring smaller sellers who want alternatives to Amazon’s warehousing and delivery operations.
Amazon  Amazon_Prime  arms_race  delivery_times  disruption  e-commerce  free  fulfillment  retailers  same-day  shipping  third-party  warehouses 
september 2018 by jerryking
Amazon’s Antitrust Antagonist Has a Breakthrough Idea - The New York Times
By David Streitfeld
Sept. 7, 2018

....... Ms. Khan wrote, that once-robust monopoly laws have been marginalized, Amazon is consequently able to amass so much structural power that let it exert increasing control over many parts of the economy. Amazon has so much data on so many customers, it is so willing to forgo profits, it is so aggressive and has so many advantages from its shipping and warehouse infrastructure that it exerts an influence much broader than its market share. It resembles the all-powerful railroads of the Progressive Era, .......The F.T.C. is holding a series of hearings this fall, the first of their type since 1995, on whether a changing economy requires changing enforcement attitudes.

The hearings will begin on Sept. 13 at Georgetown University Law Center. Two panels will debate whether antitrust should keep its narrow focus or, as Ms. Khan urges, expand its range.

“Ideas and assumptions that it was heretical to question are now openly being contested,” she said. “We’re finally beginning to examine how antitrust laws, which were rooted in deep suspicion of concentrated private power, now often promote it.”........Her Yale Law Journal paper argued that monopoly regulators who focus on consumer prices are thinking too short-term. In Ms. Khan’s view, a company like Amazon — one that sells things, competes against others selling things, and owns the platform where the deals are done — has an inherent advantage that undermines fair competition. “The long-term interests of consumers include product quality, variety and innovation — factors best promoted through both a robust competitive process and open markets,” she wrote.

The issue Ms. Khan’s article really brought to the fore is this: Do we trust Amazon, or any large company, to create our future?........ “It’s so much easier to teach public policy to people who already know how to write than teach writing to public policy experts,” said Mr. Lynn, a former journalist.

Ms. Khan wrote about industry consolidation and monopolistic practices for Washington publications that specialize in policy, went to Yale Law School, published her Amazon paper and then came back to Washington last year, just as interest was starting to swell in her work.... the F.T.C. needs to bring back a tool buried in its toolbox: its ability to make rules......“Amazon is not the problem — the state of the law is the problem, and Amazon depicts that in an elegant way,” she said......“could make sense” to treat Amazon’s e-commerce operation like a bridge, highway, port, power grid or telephone network — all of which are required to allow access to their infrastructure on a nondiscriminatory basis.
Amazon  antitrust  breakthroughs  FTC  ideas  lawyers  Lina_Khan  monopolies  platforms  retailers  regulators  reframing  Yale 
september 2018 by jerryking
Hard Lessons (Thanks, Amazon) Breathe New Life Into Retail Stores
Sept. 3, 2018 | The New York Times | By Michael Corkery.

Barbara Kahn, a marketing professor and former director of the retailing center at the Wharton School, has written “The Shopping Revolution” describing the disruption in the retail industry.

It may be too early to declare the death of retail. Americans have started shopping more — in stores. From the garden section at Walmart to the diamond counters at Tiffany & Company, old-school retailers are experiencing some of their best sales growth in years....Stores that have learned how to match the ease and instant gratification of e-commerce shopping are flourishing, while those that have failed to evolve are in bankruptcy or on the brink....Amazon has forever changed consumer behavior....Many successful stores are now a cross between a fast-food drive-through and a hotel concierge......Doomsayers have predicted that online shopping, led by Amazon, would one day conquer all of retail, rendering brick and mortar obsolete....But the pace of closings has slowed, as the most unprofitable stores have been culled and the weakest companies have collapsed....Far from retrenching, many retailers are expanding their physical presence or spending billions to overhaul existing stores......Many of the new stores are supposed to be all things to all shoppers — what the industry calls an “omni-channel” experience.

Customers can order online and pick up at the store. They can order online and have their purchases delivered home, in some cases, on the same day. Or they can visit the store
Amazon  BOPIS  bricks-and-mortar  consumer_behavior  e-commerce  home-delivery  instant_gratification  lessons_learned  omnichannel  retailers  revitalization  same-day  store_closings  Target  Tiffany  books  Wharton 
september 2018 by jerryking
Amazon’s Ripple Effect on Grocery Industry: Rivals Stock Up on Start-Ups
Aug. 21, 2018 | The New York Times | By Erin Griffith.

When Amazon bought Whole Foods Market. The $13.4 billion deal shook the grocery world, setting off a frenzy of deals and partnerships that continues to intensify. Traditional retailers pursued digital technology, and online companies reconsidered their relationship with brick-and-mortar retail......“Are technology folks like us going to figure out retail faster than the retailers figure out technology?” [the Great Game] ..... “In some ways we’re all kind of fighting the same fight against the gigantic folks online.”

Food shopping is one of the last major holdouts to online retail. Groceries are unique in that their inventory is perishable, fragile and heavy. Grocery customers often shop at the last minute, like to see the food they are about to eat and don’t want to pay high delivery fees.

Even Amazon, with its Amazon Fresh online grocery service, has struggled to gain ground in the business. The company’s Whole Foods deal, paired with Walmart’s 2016 acquisition of Jet.com, underscored that the future of selling food and household items requires cooperation between the digital natives and the old-school retailers.....Grocery companies “are realizing that with Walmart and Amazon moving at their pace, you need to pick yours up, too,” .... “I wouldn’t call it fear. I would call it a wake-up call.”....... Market research conducted by Morgan Stanley in July found that 56 % of consumers who were likely to order groceries online said they would most likely order from Amazon, compared with 14 % who would go to a mass merchandiser and 10 % who would use their local supermarket. Phil Lempert, a grocery industry analyst, predicted store closings for chains that do not evolve to meet the changing needs of customers. Stores offering curated selections, specialty items, cooking classes and the option to buy online and pick up in person will thrive,......Josh Hix, chief executive of Plated, a meal kit start-up, said the Amazon-Whole Foods deal had immediately changed his discussions with grocery chains. Meal kit companies have a checkered record. But the grocery companies saw an opportunity to use Plated’s data and research on recipes and taste preferences......Most of the big grocers “have wanted to kill us, partner with us, invest in us or buy us — all probably in the course of the same conversation,”......The ownership structure allows Boxed to license its technology to its retail competitors in the United States as they try to become more digital. The company is in talks with 10 or so potential partners for various pieces of its technology. They include mobile app technology, personalization software, a packing algorithm that maximizes space in shipping boxes, software that tracks item expiration dates, order management software and warehouse robotics automation........Grocery delivery is difficult to do affordably, but tech-driven efficiencies like those developed by Boxed, Amazon and others have forced change on the industry.

“Consumers want convenience and will pay more for it,
Amazon  AmazonFresh  bricks-and-mortar  e-commerce  home-delivery  partnerships  retailers  same-day  start_ups  the_Great_Game  Whole_Foods  fulfillment  grocery  supermarkets  ripple_effects  e-grocery 
august 2018 by jerryking
Inside FreshDirect’s Big Bet to Win the Home-Delivery Fight - WSJ
By Jennifer Smith
July 18, 2018 5:30 a.m

Designed to keep food fresh longer and move it faster, FreshDirect’s 400,000 square-foot distribution centre is the online grocer’s multimillion-dollar bet on the fastest-growing sector in the grocery business, home-delivery. FreshDirect pioneered the e-commerce home-delivery market, and now with Amazon and big grocery chains like Kroger Co. piling on investments, companies are jockeying for position in a business that some believe is the future of supermarket sales.....FreshDirect's trucks now provide next-day delivery to customers across the New York-New Jersey, Philadelphia and Washington, D.C., metropolitan areas, with plans to expand into Boston next. The private company says it generated between $600 million and $700 million in annual revenue in 2017.

It declined to disclose the cost of the new facility, which was financed with the help of a $189 million investment round in 2016 led by J.P. Morgan Asset Management, direct funding and incentives from state and local governments......Amazon, Target Corp. and other large companies have invested hundreds of millions of dollars to expand food delivery and build out their grocery e-commerce operations. Supermarket chain owner Koninklijke Ahold Delhaize NV’s Peapod unit, the longest-running online grocery service in the U.S., has expanded to 24 markets and is investing in technology to cut its handling and delivery costs.

Walmart Inc. said this month that Jet.com, the online retailer it bought two years ago, will open a fulfillment center in the Bronx this fall to help roll out same- and next-day grocery deliveries in New York City.

The grocers are trying to solve one of the toughest problems in home delivery: Getting food to doorsteps in the same condition consumers would expect if they went to the store themselves. Delivering perishables is trickier than dropping off paper towels or dogfood. Fruit bruises, meat spoils, eggs break. ........FreshDirect’s logistic hurdles start well before delivery. It must get products from its suppliers to the building, process the food, then pick, pack and ship orders before the quality degrades.

That is why the new distribution centre has 15 different temperature zones. Tomatoes do best at about 55 degrees, but “chicken and meat like it to be just at 32 degrees... it gives more of shelf life to it,"....Software determines the most efficient route for each order, and tells workers which items to pick.....A big part of the facility [distribution centre] is ripping out tons and tons of operating costs out of the business.....The stakes in getting the technology right are high. FreshDirect is competing with grocery chains that often fill online orders through their stores, using a mix of staff and third-party services like Instacart Inc. So-called click-and-collect services, where consumers swing by to pick up their own orders, tend to have better margins because the retailer isn’t paying for last-mile delivery.....Online-only operations with centralized warehouses tend to be more efficient than logistics run out of stores, because they use fewer workers and can position goods for faster fulfillment.
algorithms  Amazon  big_bets  cold_storage  distribution_centres  distribution  e-commerce  food  FreshDirect  grocery  home-delivery  infrastructure  Kroger  logistics  perishables  retailers  software  supermarkets  Target  Wal-Mart  warehouses  fulfillment  same-day  piling_on  last_mile 
july 2018 by jerryking
Amazon set for Prime Day ad revenue bonanza | Financial Times
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Amazon  Amazon_Prime  brands  advertising  e-commerce 
july 2018 by jerryking
Amazon encourages entrepreneurs to build logistics network | Financial Times
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Amazon  Amazon_Prime  last_mile  Fedex  UPS  USPS  entrepreneur  logistics  shippers  speed  small_business  e-commerce  delivery  delivery_networks  delivery_times  delivery_services 
june 2018 by jerryking
A Year After Amazon Devoured Whole Foods, Rivals Are Pursuing Countermoves - WSJ
By Heather Haddon
June 10, 2018

Amazon.com Inc.’s AMZN +0.30% year-old acquisition of Whole Foods is prompting the food industry to retool how it sells fresh food to consumers....The deal has been “shaking up the food industry from top to bottom,” said Angela Spivey, a food-and-beverage attorney at McGuireWoods LLP, who is advising clients on how to quickly change their packaging and marketing to sell at Amazon and Whole Foods. “Don’t be surprised if the milk and cereal just shows up at your door based on your usual eating habits.”

Food retailers, manufacturers and other suppliers have begun to make fundamental changes to their selling strategies, driven partly by stronger sales and delivery from Whole Foods stores since the acquisition.....Grocery chains have accelerated planned investments in online delivery and pickup services, in some cases bumping plans ahead to two- to three-year timelines instead of five to seven years, .......Dozens of supermarkets have struck deals with Instacart Inc., an online grocery-delivery service that has expanded to more than 200 retailers from 30 before Amazon’s deal. .......After Amazon extended discounts at Whole Foods to Prime members—which will help it gather data about shoppers’ preferences—analysts said competitors might need to update their own shopper-loyalty programs. Amazon now offers free, two-hour delivery and additional 10% discounts on several hundred items for Prime members in select areas.

Many food makers are redesigning their packaging and formulas to better sell through Amazon and Whole Foods, placing an emphasis on online repeat purchases instead of impulse buys, industry consultants said......Whole Foods has focused on getting competitive on staples, said Guillaume Bacuvier, chief executive of Dunnhumby, an international retail consulting and technology firm that Whole Foods hired to help improve consumer analytics.
Amazon  Amazon_Prime  BOPIS  contra-Amazon  Dunnhumby  food  grocery  Instacart  perishables  supermarkets  Whole_Foods 
june 2018 by jerryking
‘You’re Stupid If You Don’t Get Scared’: When Amazon Goes From Partner to Rival - WSJ
By Jay Greene and Laura Stevens
June 1, 2018

The data weapon
One Amazon weapon is data. In retail, Amazon gathered consumer data to learn what sold well, which helped it create its own branded goods while making tailored sales pitches with its familiar “you may also like” offer. Data helped Amazon know where to start its own delivery services to cut costs, an alternative to using United Parcel Service Inc. and FedEx Corp.

“In many ways, Amazon is nothing except a data company,” said James Thomson, a former Amazon manager who advises brands that work with the company. “And they use that data to inform all the decisions they make.”

In web services, data across the broader platform, along with customer requests, inform the company’s decisions to move into new businesses, said former Amazon executives.

That gives Amazon a valuable window into changes in how corporations in the 21st century are using cloud computing to replace their own data centers. Today’s corporations frequently want a one-stop shop for services rather than trying to stitch them together. A food-services firm, say, might want to better track data it collects from its restaurants, so it would rent computing space from Amazon and use a data service offered by a software company on Amazon’s platform to better analyze what customers order. A small business might use an Amazon partner’s online services for password and sign-on functions, along with other business-management programs.
21st._century  Amazon  AWS  brands  cloud_computing  contra-Amazon  coopetition  data  data_centers  data_collection  data_driven  delivery_services  fear  new_businesses  one-stop_shop  partnerships  platforms  private_labels  rivalries  small_business  strengths  tools  unfair_advantages 
june 2018 by jerryking
India’s Biggest Competitors to Walmart and Amazon? Mom and Pop - WSJ
By Eric Bellman and Vibhuti Agarwal | Photographs by Smita Sharma for The Wall Street Journal
May 28, 2018 9:00 a.m. ET
Amazon  bricks-and-mortar  convenience_stores  e-commerce  family_business  India  local  mom-and-pop  retailers  Wal-Mart  small_business 
may 2018 by jerryking
Apple sceptics are looking at the wrong metrics
Tien Tzuo APRIL 30, 2018.

.....When Apple reports its earnings on Tuesday, analysts will be watching closely to see what it says about smartphone sales. The big tech group’s shares are down more than 7 per cent in the past 10 days amid concerns about soft demand for the latest iPhones.

But investors are focusing on the wrong numbers. Apple may be the world’s most valuable company, but its future depends on more than product sales. It must adapt to a profound shift that is changing consumer behaviour. We are witnessing the end of ownership as we know it.
.......With every day that passes Apple cares less about how many iPhones it sells, and more about how many Apple IDs its customers create and how it can make money from those IDs.
.....The end of ownership is disrupting nearly every industry: from retail and entertainment to heavy equipment and healthcare. It is a fundamental shift not just in the way we work and live and accumulate things, but in the way we value ourselves and each other.......Knowing the customers, their preferences, buying habits and how much they are willing to spend are the price of entry in this new economy. Once those relationships are forged and cemented, the data collected, the insights drawn, the real work starts — to anticipate the products and services customers will want next.
.....Volvo understands this. Its latest advertising encourages customers not to buy cars but to subscribe to them instead. The Chinese-owned company is rethinking everything from payment structure and auto design to sales centers and partnerships. Other big automakers including Ford and Porsche are also preparing for the shift away from ownership.....Amazon continues to school all of its rivals in the power of subscriber relationships. A case in point: it recently raised the price of its US Prime membership service by nearly 20 per cent, and its customers didn’t even blink.

That said, many investors are still evaluating companies based on the outdated idea that the number of products they produce will make or break them. But change is coming. The end of ownership is happening whether Wall Street wakes up or not.
Apple  Caterpillar  customer_insights  disruption  end_of_ownership  metrics  shifting_tastes  services  Shazam  subscriptions  Texture  Amazon  Amazon_Prime  Apple_IDs 
may 2018 by jerryking
Amazon Prime Has More Than 100 Million Members - WSJ
By Austen Hufford and Georgia Wells
Updated April 18, 2018
Amazon_Prime  Jeff_Bezos  Amazon 
april 2018 by jerryking
Technology has upended the world’s advertising giants - Mad men adrift
March 31st, 2018 | The Economist |

The world’s advertising giants are struggling to adapt to a landscape suddenly dominated by the duopoly of Google and Facebook. Some of their biggest clients, such as Procter & Gamble (P&G) and Unilever, are also being disrupted, in their case by smaller online brands and by Amazon. They are cutting spending on advertising services, and also building more capabilities in-house. Consultancies with digital expertise such as Deloitte and Accenture are competing with agencies, arguing that they know how to connect with consumers better, and more cheaply, using data, machine learning and app design.......This month Marc Pritchard, chief brand officer of P&G, criticised their (i.e. the ad giants) model as a “Mad Men” operation that is “archaic” and overly complex in an era when campaigns and ads need to be designed and refined quickly across lots of platforms.

Technological forces are buffeting this model.

(1) The first big challenge is disintermediation. Despite the growing backlash against the tech giants, Google and Facebook make it easy for firms big and small to advertise on their platforms and across the internet via their powerful ad networks.
(2) The second headache is the rise of ad-free content for consumers, especially on Netflix, and the corresponding disruption of ad-supported television, which has declining viewership globally.
(3) Third, Amazon’s e-commerce might, and the growing clout of internet-era direct-to-consumer upstarts, have weakened the distribution muscle and pricing power of the advertising giants’ biggest clients.....cost discipline among clients is driven partly by the influence of thrifty private-equity investors like 3G, the Brazilian owner of AB InBev, the world’s largest brewer......Sir Martin argues that the budgetary pressures that have forced his clients to cut back on advertising are a cyclical problem, not like the structural challenges posed by technological disruption.

In private, however, a senior executive at a rival ad-holding firm rejects much of this optimism. Technological disruption and disintermediation, he says, will only deepen. The efficiency of targeted digital ads means companies can spend less for the same outcome in branding. ....The advertising firms are responding by hiring away talent, acquiring businesses (in 2015 Publicis bought Sapient, a digital consultancy, for $3.7bn) and gradually changing how they make money. Their plans mostly boil down to two things: investing in digital services and consolidating their collections of businesses so that they can provide a range of services to one client more cheaply under one account.
advertising  economics  marketing  advertising_agencies  Martin_Sorrell  digital_strategies  WPP  Google  Facebook  Amazon  competitive_landscape  P&G  Unilever  disruption  Deloitte  Accenture  Publicis  Omnicom  via:sparkey  ad-tech  programmatic  direct-to-consumer 
april 2018 by jerryking
Why Crate and Barrel’s CEO Isn’t Worried About Amazon WSJ
March 20, 2018 | WSJ | By Khadeeja Safdar.

Furniture has been late to shift online, but it is now one of the fastest-growing segments of e-commerce. Competition from online players such as Wayfair Inc. and big-box stores like Walmart Inc. and Target Corp. has put pressure on furniture chains. Amazon.com Inc. has been making a major push into the home-furnishings business, too.
retailers  furniture  Amazon  social_media  decluttering 
march 2018 by jerryking
Toys ‘R’ Us Case Is Test of Private Equity in Age of Amazon
MARCH 15, 2018 | The New York Times | By MICHAEL CORKERY.

The reality is that Toys “R” Us, which announced on Thursday that it would shutter or sell all of its stores in the United States, never had much chance at a turnaround.

For over a decade, Toys “R” Us had been drowning in $5 billion of debt, which its private equity backers had saddled it with. With debt payments siphoning off cash every year, Toys “R” Us could not properly invest in its worn-out suburban stores or outdated website. Sales plummeted, as Amazon captured more children’s desires — and their parents’ wallets — for Star Wars Legos and Paw Patrol recycling trucks.

Toys “R” Us is the latest failure of financial engineering, albeit one that could portend a potentially more ominous outlook for private equity in the digital era.....Most buyouts tend to work the same way. A private equity firm takes over a troubled company with the goal of sprucing up the strategy, cutting costs and overhauling the business over three or five years. But they often load up a company with debt to pay for the deal, which can prove problematic if the profits do not perk up.

In the age of Amazon, that formula can be dangerous. Consumer demands are changing so quickly that heavily indebted companies have trouble reordering their business to adapt and compete with better-funded rivals...... the deterioration of Toys “R” Us from a potential turnaround strategy to the end of an iconic brand — in a matter of months — shows just how difficult it can be for private equity to compete in a rapidly evolving industry. In retailing, Amazon is reordering everything on the store shelf. And children’s changing interest in games and toys, which now encompasses high-end electronics, adds to the complexity.....Enter Amazon. In recent years, the company had started to aggressively expand its toy business, creating a comprehensive, online showroom with low prices at the click of a button. Pressed by Amazon, Walmart also pushed hard into toys, dropping its prices to capture more market share.

Walmart could absorb the price cuts on toys because it makes up the profit on other items. But for Toys “R” Us, a price war on toys and games, its only offerings, was devastating.
private_equity  bankruptcies  toys  digital_economy  Amazon  Wal-Mart  KKR  Bain_Capital  Toys_"R"_Us  financial_engineering  LBOs  buyouts  shifting_tastes  category_killers  price_wars 
march 2018 by jerryking
Walmart Expands Online Grocery Delivery to 100 Cities - The New York Times
By TIFFANY HSU and NICK WINGFIELD MARCH 14, 2018

“There is a lot of experimenting going on as everyone tries to figure out that last-mile delivery — it’s a tough economic equation to make work,” said Mike Knemeyer, a professor of logistics at Ohio State University. “But if you can, you’ll have a big head start on the others, and you’ll end up making money not just in groceries but on all of the things that you sell.”

The nexus of e-commerce and grocery sales is increasingly appealing to retailers.
Wal-Mart  home-delivery  e-commerce  grocery  supermarkets  Amazon  Whole_Foods  distribution_channels  logistics  same-day  delivery_networks  last_mile 
march 2018 by jerryking
Amazon: The Making of a Giant
By Hanna Sender, Laura Stevens and Yaryna Serkez
Published March 14, 2018 at 5:30 a.m. ET
Amazon  e-commerce  Jeff_Bezos  new_businesses  new_products  retailers 
march 2018 by jerryking
Alexa: how can I be a better office worker?
March 12, 2018 | FT | Richard Waters in San Francisco

Amazon has announced that its Alexa voice service was now ready for business use, four months after it first disclosed the technology was being adapted to become a language interface for general work tasks.

The attempt to turn Alexa into a mainstream interface for office computing opens a new front in the battle with Microsoft, already its main rival in the cloud computing market.

“It looks as though Amazon is stomping all over Microsoft’s patch even though they did an alliance between Alexa and Cortana,” said Richard Windsor, an independent tech analyst.

The alliance linking the two company’s digital assistants, announced in August last year, was meant to let Alexa users call on tasks handled by Cortana, and vice versa. However, it has yet to result in a working link, and Amazon’s push to win over office workers — Microsoft’s core users — has intensified competition between the two companies.....To prepare Alexa for office use, Amazon had added a management layer and allowed companies to create applications, or “skills”, that can integrate with the voice interface while at the same time keeping them private.
Amazon  Microsoft  Alexa  workplaces  Cortana  voice_assistants  personal_assistants  chatbots  voice_interfaces  Richard_Waters 
march 2018 by jerryking
Next Up for Amazon: Checking Accounts - WSJ
By Emily Glazer, Liz Hoffman and Laura Stevens
Updated March 5, 2018
financial_services  Amazon  JPMorgan_Chase  e-commerce 
march 2018 by jerryking
Acronyms Gone Wild: How FANG Has Mutated This Year - MoneyBeat - WSJ
By Steven Russolillo and Ben Eisen
Sep 27, 2017

five giants — Apple, Amazon, Microsoft, Facebook and Alphabet, Google’s parent company plus Netflix FAANG
Facebook  Netflix  Amazon  Apple  Google  Microsoft 
february 2018 by jerryking
What It Would Take for Amazon to Become UPS or FedEx - WSJ
By Laura Stevens, Jennifer Smith and Paul Ziobro
Updated Feb. 10, 2018
Amazon  FedEx  UPS  delivery  B2B  last_mile  USPS 
february 2018 by jerryking
No lines, no registers, no fun: Amazon Go’s sterile future - The Globe and Mail
ELIZABETH RENZETTI

there's only one Amazon Go, located in the bottom of the company's Seattle headquarters, but you can bet more are on their way – especially since Amazon now owns the retail chain Whole Foods. The expansion of a chain of cashierless stores, whose shelves will one day likely be stocked by robots, raises many good questions about what kind of work we value and want for the future. Amazon's opaque data-collection procedures raise other important questions about privacy and information security..... We already know that, in the West, we suffer from a crisis of social isolation – what used to be called loneliness – that is so acute it is becoming a public-health crisis. Social interactions, even small and seemingly meaningless ones, can have great benefit to people who feel disconnected and adrift. A smile from a cashier or a commiseration from a fellow shopper could be the highlight of someone's day. ....."The more contact we have with other human beings, the better the world is, even if it's just a gas station attendant or a store clerk," Dr. Yarrow said. "This is how we form communities, in these seemingly inconsequential interactions."....But community-building isn't the buzzword of the moment – "seamlessness" is. That is, all experiences are meant to be as convenient as possible, requiring the least number of clicks, human interactions, waiting times. Friction is the enemy. Bumps are the enemy, and so, I gather, are sidesteps and interruptions and serendipity. I'm not sure if the proponents of seamlessness have ever listened to Leonard Cohen, or they would have heard the master's wisdom: "There is a crack in everything, that's how the light gets in."
Amazon  Amazon_Go  retailers  e-commerce  experimentation  soulless  Communicating_&_Connecting  sterile  loneliness  cashierless 
february 2018 by jerryking
Big brands lose pricing power in battle for consumers
Save to myFT
Anna Nicolaou in New York and Scheherazade Daneshkhu in London 2 HOURS AGO

The product manufacturers are being squeezed by the big retailers — notably, Amazon and Walmart, which together sell $600bn worth of goods a year. Walmart has long put pressure on suppliers to cut prices. Amazon’s rise has exacerbated the “deflationary impact”, Société Générale says, creating a “much tougher environment in the US”. After Amazon bought Whole Foods in June, the price war grew more intense in groceries, pushing prices to historic lows that punished producers. 

Brand loyalty has suffered in the process. Equipped with the tools to compare prices online instantly, and bombarded with more choices, shoppers are growing more likely to opt for cheaper and discounted products — particularly in categories such laundry detergent and shampoo. To keep their spots on store shelves, brands are having to accept lower prices......Former Amazon employees say the company’s algorithms scan prices across competitors in real time, automatically adjusting its own so it can offer the lowest price. While most big brands have wholesale agreements with Amazon, third-party sellers are prolific on the site, complicating price control further. A 34oz bottle of P&G’s Pantene Pro-V Shampoo & Conditioner was listed by 10 different sellers — nine of them third parties — on the shopping site.

Amazon’s dominance makes it difficult for brands to abandon the platform, or try to sell directly on their own websites. “You have 200m customers on Amazon. If you walk away, there’s 200m people who are going to just buy from your competitors,” says James Thomson, a former Amazon manager who consults brands. “You’re probably not going to win.”

“This is a pretty dire situation,” he adds. “If brands are worried about meeting quarterly targets, they can’t afford to lose Amazon sales.”

Still, “the retailers have nothing to gain by pushing [consumer products makers] into bankruptcy”,
......Consumer goods companies have responded to the pricing pressures by aggressively cutting costs, led by the “zero-based budgeting” model of 3G Capital,
large_companies  Fortune_500  brands  CPG  pricing  price_wars  shareholder_activism  Amazon  P&G  Nestlé  win_backs  price-cutting  Nelson_Peltz  shifting_tastes  Colgate-Palmolive  upstarts  Unilever  zero-based_budgeting  3G_Capital  e-commerce  Mondelez  Big_Food 
february 2018 by jerryking
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