business news in context, analysis with attitude

Yesterday, MNB took note of a Washington Post report that "Amazon was awarded a patent May 30 that could help it choke off a common issue faced by many physical stores: Customers’ use of smartphones to compare prices even as they walk around a shop. The phenomenon, often known as mobile 'window shopping,' has contributed to a worrisome decline for traditional retailers."

This is sort of remarkable, we wrote, not because the technology exists, but because it was just a few years ago that Amazon actually introduced a mobile application, called Price Check, designed to allow people to use their smart phones to scan any bar code anywhere and find out what Amazon would charge for the same item, and even order it if the price was lower."

I argued that "customers first" always has been a core value at Amazon, and that the company should avoid doing anything that even creates the appearance that this precept is losing importance.

Several MNB readers had a different take. One wrote:

Amazon could have an entirely different idea of why they need this patent. I could see a scenario where Amazon invents the technology to address this problem then patents it so that others cannot use the fastest easiest route for their competitors to block this activity while using it in their stores to provide offers to Customers.

If I did see a price comparison and was given an offer to match the lower price or a better incentive I don’t know that I would view this as anti-consumer if I were the consumer. They saved me a separate trip and gave me a better deal. That is pretty responsive and responsive to custom needs I have when I have them.
Game changer!

And from another reader:

I read about this Amazon patent in the Post.  Isn’t it possible (likely) that Amazon may have acquired the Patent to prevent other companies from using this technology to block “window shopping?”  No other company profits more from “window shopping” than Amazon.

And, from another reader:

To say this is a double standard is huge understatement.  The fact that this flew under the radar of a major news story is unbelievable.  Imagine if this was something that Wal-Mart patented?  There would be a huge uproar and many groups calling for boycotts, It’s a major double standard.

I have no dog in this fight and believe that both Wal-Mart and Amazon each have their own issues but it really appears that Amazon can do no wrong in the public eye.  The altruistic perception of amazon to isn’t total reality.  No doubt Amazon has been a very innovative company but also a very predatory company, is the perfect example.  If a traditional retailer attempted this tactic I believe it would have been perceived much, much differently.

It also makes me wonder what amount of information Amazon actually does gather with the Echo system.  After reading this story we placed ours in a remote room of our house.  Not because we are worried about the actual information, the thought of it just creeps me out.

For the record, I don't think this story flew under the radar. And it is worth noting that the first place it ran was in the Washington Post, which is owned by Jeff Bezos. Just sayin'...

Yesterday, MNB referenced a Wall Street Journal report that athletic gear giant Nike "has agreed to sell some of its products directly to Amazon ... a concession by the sneaker giant that it can no longer afford to ignore the online retailing behemoth."

The decision amounted to a public declaration that the company's traditional approach, selling to traditional stores and chains, is not enough. "News of the Amazon deal punished shares of retailers, with Foot Locker falling 5% and Finish Line down 4%. Shares of Nike gained 2%." The story notes that "Foot Locker and Finish Line each identify Nike as their largest vendor in securities filings, accounting for 68% and 71% of merchandise purchased last year, respectively ... Nike executives have been in talks with Amazon for weeks about cracking down on counterfeit product and the proliferation of unauthorized third-party sales on the site ... The two companies have reached an agreement where Nike would agree to provide some product directly to Amazon in exchange for Amazon policing counterfeit and third-party sales."

I commented:

Nothing wrong with Nike realizing that because its customers are taking a now well-worn path, it needs to do the same. The sad thing is how fast the markets react and punish the old ways of ding things. Not much that can be done about it, though ... The ways of the Lord are often dark, but never pleasant.

But one MNB reader thought I got it wrong:

Here's another way one might see this story...

There is something wrong with Nike realizing that because its customers are taking a now well-worn path of a "technological" shakedown, it needs to do the same capitulate to the Godfather of the Cloud ... Had Amazon done the "Right Thing", and policed the counterfeits, they wouldn't have needed to make Nike an offer they couldn't refuse.

Sometimes the RIGHT steps cost you some business, still, they are No Less, the Right Steps.

I get your point, but I think I would take issue with the notion that Nike was being shaken down by Amazon. But I agree about the counterfeiting issue - while Amazon has made moves to be more effective in policing this issue, I've been consistently critical of the company for not doing more, faster.

Regarding the Amazon-Whole Foods deal, MNB reader Jessica Duffy wrote:

What I am afraid of is that we will end up back in the dark ages of food production, where everything on the grocery store shelves came from some giant conglomerate…except now it will come with delivery. That was when a whole lot of crap ended up in our food as those corporations sought to pad their bottom line by extending shelf life with crazy chemicals and reducing costs by filling products with cheap corn and soy fillers. They didn’t care about consumers and didn’t need to because they were the only game in town. That is why and when Whole Foods came to fill such an important niche, but now they will be on the other end of the equation.

We referenced a piece in the Boston Globe about all the competition in the razor blade category, leading MNB reader Rich Heiland to write:

I now use Harry's. I like the price and convenience. I used to use Gillette.

I noticed the other day when I was in the drug store that the Gillette package now has this claim, or guide on it, that says how long you can go on the pack, the implication being that you can go as long as on Harry's and so the price per shave is equal.

I found that interesting. I always used the blue stripe on Gillette as a guide. It turns white, you need to change. (Like most guys, though, I'd go a bit longer). I looked to see if there were any claims to "new and improved." What did they do to suddenly extend the life of a blade to match or beat Harry's?

I couldn't find anything. I went on line, read the packaging. It just made the claim. Far from winning me back, it turned me off. How could I go longer with the same blade? Did they change the chemistry of the blue strip to make it last longer? Were they duping me all along to get me to use more blades?

A question from an MNB reader:

As Walmart seeks to have their suppliers distance themselves from Amazon Cloud it reminded me of this. Why do grocers sell gift cards for competitors? I’m talking about a grocer that sells cards for restaurants or hardware stores. After all the restaurant are competing for the same share of stomach that grocers are seeking.  Hardware stores offer many products also sold at grocers.  Seems to me that they are inviting their customers to go elsewhere.  Not that gift cards don’t have a place, just why make it so easy.

You're playing my song. I've been asking this question for years.

Respond to yesterday's FaceTime commentary, MNB reader Steve Workman wrote:

Your piece on Good Character in Business really hit home with me this morning.  I am refreshed to see that Character still means something to you, although I am not sure we are in the majority.  Our Dads probably grew up in the same generation.  My Dad will be 89 this fall and he is and always will be my mentor both in life and business.  He is also a very religious man, not that it matters, but worth noting as there may be a relation.

When I started out in the business world 33 years ago, my Dad’s first lesson was on integrity in business.  He told me to always be honest with people and in the long run that’s what they will respect, and that is what will make you successful.  Well, I have used that motto and advice for my entire career to date.  I have to admit that sometimes the temptation to sway and mislead a customer or “fudge” the information to make my company look better was hard to resist.  Especially when it was happening all around me.  Even as recent as this week in a situation came up where another Salesperson in my company called me crazy for being honest with my client about our ability to execute a project.  “Just write the order first, get the contract then you can always go back and tell them that there are some stores we may not be able to cover. At least you will have the contract signed and then it is harder for them to back out”.  That’s not me.  Why not tell my customer (partner) up front that we are challenged with some of the locations and maybe we can cover if they can provide some additional funding, etc.

In other words, be honest and as partners we can work it out together. Even if in the end they go to another resource to help cover the locations, they will respect me for letting them know in advance and allowing for them the time to make the proper planning to fulfill their total needs.

Every salesperson has their own style that works for them, and I always fall back on my first business lesson from my mentor.  I think that is why my clients respect me and continue to want to work with me in the long run.  It may not be the most popular style especially to drive short run revenue, but in the end that is what I will want my legacy to be.

P.S. I am also a religious person, I was raised that way just like you and chose that path to help guide me in business.  And I forgot the mention that my Dad was the President of Benjamin Moore Paints (You may have heard of it) for 25 years before retiring, so things kind of worked out for him...

A question from MNB reader Wanda Mundwiler about a phrase I used yesterday:

What does this mean: "The ways of the Lord are often dark, but never pleasant?"

It is a phrase often quoted by Robert B. Parker in his Spenser novels, and I've always interpreted it as meaning that the fates are rarely kind, nor predictable ... and usually inevitable. Which is why it is a good reason to prepare for what can happen, not what you think will happen.
KC's View: