business news in context, analysis with attitude

Last week we reported that the Federal Trade Commission (FTC) said that it "is taking action against, Inc. for its years-long effort to enroll consumers into its Prime program without their consent while knowingly making it difficult for consumers to cancel their subscriptions to Prime … the FTC charges that Amazon has knowingly duped millions of consumers into unknowingly enrolling in Amazon Prime. Specifically, Amazon used manipulative, coercive, or deceptive user-interface designs known as 'dark patterns' to trick consumers into enrolling in automatically-renewing Prime subscriptions."

I commented:

This lawsuit is just part of the long-expected legal battle between Amazon and Khan, who was critical of the company's practices years before she got the FTC chair.  And it probably won't be the last time the two sides face off in the courts.

I find myself unable to judge the quality of the FTC charges.  I've been a Prime member pretty much since the program launched in 2005, and it never occurred to me that dark patterns had lured me into its clutches.  I thought I was there for the fast shipping and all the other benefits.  And I never realized how hard it was to get out of Prime membership, because I've never tried.  Never even thought about trying.  Gullible me, I totally bought into Jeff Bezos' declaration that he wanted Prime to be so compelling that it would be irresponsible not to be a member.  (I hope this contretemps doesn't have any impact on my Prime membership.)

I have no idea how this will turn out, but one thing is sure.  The lawyers are going to get rich.

One MNB reader responded:

Just try to cancel your membership and see how complicated it is. I was done funding Bezos space missions.

I had to Google ‘how to cancel Prime’ because Amazon doesn’t make it easy to ‘decouple’. Which is strange for a company that makes spending money with them very easy indeed.

I have no real issue with how Bezos spends his money.  It is, after all, his money when he spends it.   And as far as I am concerned, since he was willing to put $250 million of it to acquire a national treasure called the Washington Post, and continues to support it, I'm okay if some of my Prime fees helped to fund him.

On the same subject, from MNB reader Rich Heiland:

I, too, am scratching my head over the Amazon Prime charges. Like you, I joined Prime years ago mainly for shipping and since have started using Prime TV regularly. It never has occurred to me to cancel. For all I get out of it, the fees (increased though they have) are reasonable.

As for complicating cancellation, I’d suggest the Feds may want to take a broader look. There are a lot of companies out there that make cancellations difficult. Why wouldn’t they? I agree this is dreamland for lawyers. For consumers? Not sure how much of a difference will be made, one way or the other, longer term.

Part of the FTC argument simply put, is that Amazon "tricks" people into becoming Prime members by making certain deals contingent on membership.  Is that a "trick," or is is just a really effective version of what many retailers do, giving holders of frequent shopper cards better deals than those who don't have one?  And, the other part of the argument is that Amazon makes it tough to end a Prime membership, which I found interesting in view of this video online:

I'm not a lawyer, but I sometimes think that Amazon gets targeted not so much because of what it does, but because it does what other companies do so much more effectively.

Last week we took note of a New York Times report on Census Bureau data showing that "the median age in the United States reached a record high of 38.9 in 2022 … It’s a rapid rise. In 2000, the median age was 35, and in 1980, the median was 30 … "Low birthrates are the main driver of the nation’s rising median age, experts said … Birthrates fell steeply in the first year or so of the coronavirus pandemic. Since then, they have ticked up. Still, since the beginning of the Great Recession, in 2007, fertility has remained very low compared with previous generations."

I commented:

To be honest, if we were 30-40 years younger and we were talking about having children, I'm not sure how I'd feel about it.  It isn't exactly that I've abandoned hope;  it is just that my internal gyroscope tends to veer wildly between optimism and cynicism.

To me, the bigger problem about the aging of America is the aging of our ability to be innovative and adventurous.  Ernest Hemingway once wrote that "Hesitation increases in relation to risk in equal proportion to age," and I think that as we age, people generally become more fearful, more worried, more protective of what they have, less idealistic, less willing to take those risks.

That's not good for a country, a culture, or a planet.  We are - whether in our personal and business lives, as well as in our public policies - only as great as our ideals.

But Hemingway also said, "The thing is to become a master and in your old age to acquire the courage to do what children did when they knew nothing."

An MNB user wrote:

Another Hemingway quote:  “No, that is the great fallacy: the wisdom of old men. They do not grow wise. They grow careful.”

I did a FaceTime video the other day about the shift of ad revenue away from traditional and satellite TV to new platforms, ranging from streaming to things like retail media networks.  I argued that retailers need to learn from this that there is no such thing as an unassailable business model, and that they need to invest, innovate and invest, or they will find themselves idling - which means they're not going anywhere.

MNB reader Philip Herr wrote:

Interesting piece on the shrinking of the cable subscriber base. No surprise, the shift is to streaming. However, your point about advertising moving to retail networks struck me as a red flag for advertiser brands (brands from primarily packaged goods companies.)

My reasoning is that driving advertising from a “sit-back” medium to a “lean forward” medium is likely to shift brand perceptions. When viewed on TV in a living room, the environment for branded advertising is open and relaxed. Viewers are likely to accept and internalize messages when they are in a relaxed mode.  By contrast, when seeing commercials on retail networks, viewers are on a shopping mission. The story there is likely to be about brand features and hard sell reasons to buy. The “softer”, emotional message about the brand is missing.  

Bottom line, the brand has missed the opportunity to create an emotional bond with consumers. Since retiring, I no longer have access to brand strength data, but I’d hazard brands are losing loyalty and connection with consumers at the expense of short-term sales. 

We had a story the other day from AARP that did a grocery shopping basket comparison, concluding that Walmart was a little cheaper than Aldi, and both were a lot cheaper than Ahold Delhaize-owned Stop & Shop.

One MNB reader responded:

It is probably worth spending $2 more for the basket of groceries at Aldi than at Walmart to make up for the time and inconvenience of a Walmart shopping trip.  We shop at both Aldi and Lidl.  Both are very efficient at what they do.  Our Lidl recently removed the self checkouts and now ensure adequate front-end staffing to move customers through.  It is a good shopping experience.

Another MNB reader wrote:

I find these studies (sometimes funded by Aldi/Lidl) to be misleading.

These market baskets typically reflect only private label or commodity products, not the most common branded products dominating
a family’s pantry. Studies at EDLP retailers avoid brands on deep promotions featured at Hi-Lo retailers like Stop & Shop and Publix.

Any relevant market basket study should include category leaders like Cheerios, Charmin, Campbell’s Soup, Colgate etc which are usually
not sold at Aldi, especially in their most popular formats. A more relevant benchmark may be Dollar General, which generates twice the revenue of Aldi USA and also stocks national brands. Aldi has been in the USA for 46 years and is ranked as the #26 retailer - not a gamechanger.

I agree, to some degree.  I made the point, I think, that it was just a snapshot.  

On the subject of proposed federal legislation that would ban the banning of cash, one MNB reader wrote:

Until there is something better that gives anyone the ability to have an effortless transaction and simple anonymity of cash, you bet, I want cash to always be an option in any monetary/goods exchange.

MNB reader Carolyn Russell chimed in:

I live in the Minneapolis area.  When friends eat out, they get scammed using their credit card.  The help takes the number and heads to Amazon to buy what they want, then they have to cancel card and a new one!  CASH is safer!!!!

Your friends need to start eating in different restaurants.

I recommended the other day that retailers who sell wine ought to market their expertise through top lines and social media pages that turn them from a source of product to a resource for information.

MNB reader Deborah Faragher wrote:

There have been several pieces of yours that feel as if they’ve converged into an experience I recently had at Kroger.  They have a very good wine department.  There was a manager who had worked to build it in our local store along with communication to the customers through an email list he personally developed.  They have run 20% off sales on full cases for quite a while.  They started as 4 day sales about every 4 to 6 weeks.  The manager would let the customers know in advance and you could order cases to be picked up during the sale.  It had clearly grown as you’d see carts with many cases for customers to pick up.  He wound up leaving the company and a new manager came in.  I asked if he would be continuing the communication and service and he indicated he would as his job was to continue to build the business.  

The first sign of trouble came when he could not gain access to the email distribution list and was basically responsible for rebuilding his own from scratch.  In the meantime, the sales went from 4 day weekend sales to 7 day sales to coincide with the weekly ad.  It took many, many months before the first advance email finally went out.  That only happened two times then stopped.  This past week, I had been told by a friend that there would be a sale.  Good thing as the print in the weekly ad required a magnifying glass to see the sale was on.  No kidding—it was a teeny little liner below the “Bottles and Brews” section.  

I ran into the manager in the store and he expressed extreme frustration that his hands were being tied at every turn and his ability to communicate with his customers and to build the business were being stymied.  He felt as if all his efforts were coming to naught.  I don’t know if Kroger is a victim of their own success on those sales but if that’s the attitude, why even bother?  If you don’t want your customers to know about the sale, to preserve profit dollars—clearly they can’t be making much on the sale—why have it at all?  What I take away from this is a lack of care for the employee as well as the customer.  You can surely forget any knowledge transfer to customers as noted at Coppola.  Trying to conserve dollars for a deal with Albertson’s?  Who knows. I figured you’d find this interesting.  

MNB reader Jim DeJohn wrote:

I loved your FaceTime this morning – which I wanted to pass along some info – my favorite wine shop, in Saratoga Springs – is doing a bit of what you spoke about.  William there is fantastic!  And he has every Wednesday “Wine Wisdom” short video that he posts.  He will answer questions in these videos from customer questions (I had submitted some in the past!).  Like you mentioned – it is so nice having someone that is an expert in the products you are shopping for – especially with wine.  So – if you find yourself in Saratoga – this would be a great stop to stop in and chat with William (or stop by online and check out his wine info!) 

The other day I did a FaceTime video about how John Allan had to step down as the chairman of Tesco because of accusations of "inappropriate remarks and touching."  I commented, in part:

Now, he's copped to the "inappropriate remarks" but denied the touching, and now is saying that a lot of men are "increasingly nervous" about working and interacting with women in the workplace.  Really?  Because women have been nervous about working with a lot of men for centuries.

And, I argued that it was time for Allan to go, not because of his age, but because of the age of his ideas.

One MNB reader responded:

Brilliantly said. That CEO clearly is tone deaf to work environment in which he spends most of his time. Time to retire. 

We had a piece the other day about how retailers and delivery apps are dealing with abusive customers.

I commented:

It shouldn't be a surprise that in an increasingly intolerant world, where a lot of folks feel entitled and empowered to behave any way they want, these kinds of hostilities exist.  Of course they do.  And I'm sure there are plenty of occasions in which the gig workers are to blame for the problems.

It is interesting that in the Journal story, there is very little discussion or consideration of the retailers' dilemma.   They're committed to serving their customers, but they find themselves distanced from the shopper relationship in these cases, but so distanced that they're not going to be blamed by unhappy customers.

I think it is incumbent on retailers to work with the app platforms to find ways to be more plugged into the process so they can manage the relationships in a more effective way.

One MNB reader wrote:

Thanks for sharing. My son once worked for Kroger and where most customers are very nice, there are also those who quite frankly are horrible. They treated him like a second class citizen, would not bother to show ID or even roll down the window to discuss substitutions. Those customers should be properly admonished by Kroger. Unfortunately Kroger has been showing no support for its employees in this department. They need to take a page out of their competitors rules…

And, on another subject, MNB reader Doug Larsen wrote:

Kroger /  Albertsons is going to commit to giving away 10 BILLION meals by 2030?  Even if they can make meals for $3 each, that is still $30 BILLION dollars over 6 years, or $5 billion a year. 

Lets look at the financials -   Analysts are projecting that Kroger will generate $3.2 billion in net income this year and that Albertsons will generate $1.5 billion.  That is $4.7 billion combined and they are going to give away $5 billion ?  I don’t think so; not a good deal for shareholders.  Even if meals are $2, that is still $20 billion over 6 years or $3.33 billion a year.  And, they are going to do this out of the goodness of their hearts without raising prices?  What was it that PT Barnum said?  Maybe something like -  “There is a sucker born every minute.”  ?

Think they will commit to putting the money in escrow?  Probably not.  

This is what happens when one of MNB's readers actually does math.

Another MNB reader took it from a different perspective:

Tell me they’ll do this every year and I may be sold. They could single handedly end hunger in America. And then they should. 

We took note the other day of an Axios report on a new Harris Poll saying that "Americans are becoming more skeptical of corporate statements on social and geopolitical issues," with four in 10 respondents saying that companies are "speaking out too much these days."

There is, however, a generational divide:  "Older generations in particular hold this point of view, with half of boomers and 40% of Gen X agreeing, while only 31% of millennials and 18% of Gen Z feel the same."  Part of the problem is that almost seven out 10 people "believe that corporate messaging on social issues is a marketing ploy rather than an authentic opinion."

I commented:

I would be among the cohort of Americans who believe that "speaking out too much" means being inauthentic and/or exploitive when getting involved in political or cultural issues.  It'd be nice if we lived in a world where companies  did not feel compelled to speak out - and I suspect that even those that do would prefer not to - but that's not the way things are.  The same polarization that makes societal discourse so unpleasant is the reason that companies often feel the need to draw lines - the line between what they perceive as right and wrong is fairly clear, and they feel it is important to be on the correct side of that line.

The other problem is that every issue, it seems, takes on a political context.  Which makes things worse.

Corporate bigwigs are caught betwixt and between, faced sometimes with making a choice between what's seen as good for shareholders on the one hand and what is good for employees and customers on the other.

Me, I'm glad I'm just a poor country pundit.

Prompting one MNB reader to write:

A pundit indeed you are, and a very good one at that!  But “poor” and “country”? Hmmmm, not buying.

I was trying to channel Sen. Sam Ervin (D-North Carolina), who during the Watergate hearings described himself as "just a simple country lawyer."  And, at the same time, I tried to take a page from Dr. Leonard "Bones" McCoy, who I'm pretty sure at some point described himself as "just an old country doctor."