business news in context, analysis with attitude

•  From the Associated Press:

"Walmart, Target and Amazon are all-in on the shipping wars, a move retail experts say will help them maintain a competitive edge against low-cost Chinese retailers Shein and Temu. For Walmart and Target, their investments are also aimed at narrowing the gap in delivery speed with Amazon, which has set the standard for fast shipping and remains the king of speed.

"Amazon packages have been arriving at the doors of Prime customers even faster this year under the company’s new distribution model, which divides the country into eight regions and predominantly ships items from warehouses in those areas. The idea, according to Amazon, is to get shipments to travel shorter distances with fewer touchpoints, which helps the company not only speed up deliveries but also cuts down on costs."


•  From the Wall Street Journal:

"Apparel and fast-fashion brands such as Perry Ellis and H&M are turning to a new weapon in the fight against costly online returns: artificial intelligence.

"They are using AI to sharpen product descriptions and recommendations, steer certain ads away from shoppers most likely to return those products, and aim advertising toward consumers they believe will hold on to their purchases."

The challenge, the Journal writes, is that "returns are a blight to online retailers: They need to make the process smooth enough to encourage sales, but prevent the cost of returns from swamping their balance sheets.

"Return-processing costs as a percentage of overall sales in 2022 held roughly even from the year before at 16.5%, according to the National Retail Federation. But the problem has grown more pressing as inflation crimps both consumers’ wallets and retailers’ bottom lines."

Some companies, according to the story, have embraced analog solutions such as just making it more expensive to return items, believing that this will discourage the easy-return impulse.  But others are seeing AI as a tool that can get the right products into people's hands, which will go a long way toward addressing a persistent and expensive problem.


•  From the Wall Street Journal:

"Diamond Sports Group, which carries the games of more than 40 major sports teams across the country and filed for bankruptcy earlier this year, is actively negotiating with Amazon about a strategic investment and a multiyear streaming partnership, according to people familiar with the matter.

"If an agreement is reached, Amazon’s Prime Video platform would eventually become the streaming home for Diamond’s games."

The story notes that Diamond has had significant financial issues as its "business has been challenged by cord-cutting as consumers drop cable subscriptions in favor of streaming services. The sports-network operator has seen declines in subscriber revenue, which also adversely affects its advertising rates, and it faced high fixed costs under its contracts that have become uneconomical."

The Journal writes that "for Amazon, which already has rights to stream National Football League games and is expected to pursue a deal to carry NBA games, adding popular local teams through Diamond would further boost its Prime Video platform. It already has deals with league-owned streaming services from the MLB and the NBA. 

"Amazon has already dipped its toe in the regional- sports-network business with a stake in the YES Network, the TV and streaming home of the New York Yankees and Brooklyn Nets."