Posts tagged with "Amazon"

Consumer wallets ‘spring a leak’ as prices soar on diapers, kitty litter, and toilet paper

February 12, 2019

Most of us cut back on everything but the essentials when household prices go up, but our budget remains the same. However, according to a February 10 report by The Wall Street Journal, the cost of staples—including such fundamentals as diapers and cat litter—is expected to increase in 2019, leaving us little choice but to ante up.

Producers of household products, from toilet paper to bleach, are set to raise prices again this year after already hiking prices in 2018, hoping to offset higher commodity costs and boost profits, the financial news outlet says.

New Jersey-based Church & Dwight already has increased prices for about one-third of its products, including Arm & Hammer cat litter and baking soda, and some OxiClean cleaning products.

“The good news is that competitors are raising [prices] in those categories as we speak,” Church & Dwight CEO Matthew Farrell said on a conference call last week, during which the company reported higher quarterly sales and lower profits.

What he left out of that statement to financial analysts was that it was good news for the company and its stockholders—but not for America’s consumers.

The company is now discussing more price increases with retailers, including for personal-care products, Farrell told analysts Tuesday. Those brands include Nair, Arm & Hammer Toothpaste, Orajel, Simply Saline, Waterpik, and Viviscal, among others.

Other household names that are planning to release similarly “good” news, according to the Journal, include Procter & GambleColgate-Palmolive, and Clorox, which are raising prices in response to higher costs of raw materials and transportation, as well as unfavorable foreign-currency swings.

For much of the past decade, the Journal notes, price cuts have been far more common than price increases as U.S. companies were mostly reluctant to test consumers’ spending power and brand loyalty in a fragile economic recovery.

When companies tried to raise prices, “they better have had a uniquely strong innovation or be willing to lose market share to competitors,” Sanford C. Bernstein analyst Ali Dibadj told the news outlet.

Adding to the challenge of raising prices is that more shoppers have been switching to store-branded paper towels and discount detergents, or opting for online upstarts such as Dollar Shave Club.

Traditional brands also have been under pressure from big-box retailers such as Costco and discounters like Walmart Inc. and Amazon to keep prices low—pushing the manufacturers to focus on lowering costs in their supply chains or pare back advertising.

Finally, after failing to see success when they tried to combat weak demand by lowering prices, the industry’s biggest player, P&G, shifted its course last summer, announcing it would charge more for several of its brands—and several rivals followed suit, the Journal reports.

The recent price increases are largely playing out in the companies’ favor, Wells Fargo Securities analyst Bonnie Herzog told the Journal. Sales volumes of household and personal products in the United States. declined 1.4% in January, according to Bernstein’s analysis of data from Nielsen. Dollar sales of those products rose 0.7% in the period, Bernstein said, indicating that the price increases, on balance, are padding the bottom lines at consumer-goods companies.

How consumers will deal with the price hikes long-term remains to be seen.

Research contact: aisha.al-muslim@wsj.com

Home free: Amazon sends gratis samples to its most gung-ho shoppers

January 9, 2019

Axios reported on January 8 that online retail giant Amazon has a “stealth pilot” in progress—testing whether consumer brands such as Maybelline and Folgers can pique consumer interest by sending out free samples.

The brands pay Amazon to ship out their complimentary goodies, based on what the popular website already knows its frequent customers are most likely to buy.

Everyone likes a freebie—and by using samples as “targeted ads,” Amazon is playing on its major strength as a trusted delivery service of everyday goods, Axios said. What’s more, this is a new gambit that Amazon is betting its biggest competitors—Google and Facebook— cannot duplicate.

Indeed, the Seattle-based tech giant has the purchasing data and logistics infrastructure to offer samples of actual products, whereas Facebook and Google currently can only offer display ads or search ads, respectively, for certain kinds of consumer packaged goods brands.

To date, Amazon, itself, has made most of its roughly $5 billion in ad revenue through its own display ads. But the company now says that marrying old-school samples with its customer data will provide brands “a higher likelihood of conversion than display ads,” according to a summer job posting.

With 100 million subscribers to its Prime services alone, Amazon certainly has the numbers and the established long-term relationships with customers who purchase goods regularly, to make this strategy work, Axios pointed out.

“Having this huge installed base of users, or really Prime subscribers, and putting something in the box that people will have a high proclivity for liking — that seems like a brilliant Amazon strategy,” Rich Greenfield, a managing director and media analyst at BTIG Research, told the news outlet.

Samples of new products are sent to customers selected using machine learning based on Amazon’s data about consumer habits, according to recent job postings and details listed on its site.

Right now, Amazon is keeping the pilot project under wraps among its other advertisers, but its legal terms for advertisers include details about how its sample program functions. “No later than the date specified by Amazon, Advertiser will deliver to Amazon at the location(s) designated by Amazon and at Advertiser’s expense, all Samples to be delivered or distributed by Amazon,” the terms say.

Most analysts are bullish on the program, Axios reports. However, there could be privacy concerns.

“Amazon sent me a random coffee sample!” said one Twitter user in August. “Is it because I have like 15 [different] types of coffee in my cart?” A package pictured in the tweet included both Amazon and Folgers branding, and a link to a website devoted to the new coffee offering.

On its website, Amazon promises that privacy conscious consumers will have the option to opt out. But will confidentiality win out over avid consumption? Stay tuned.

Research contact: @rebeccazisser

For ‘the morning after,’ Pedialyte offers Sparkling Rush powder packs

December 31, 2018

If the “merry” and the “happy” have skedaddled from your holiday season as a result of one too many glasses of eggnog or champagne—or a case of the flu—Pedialyte says it has just the solution (literally) in a new drink for the adult market.

The company, a subsidiary of Abbott Laboratories, has launched Sparkling Rush, which it describes as “advanced rehydration with a fizz, with an optimal balance of electrolytes and carbohydrate to prevent mild to moderate dehydration.” Free of artificial colors, the clear rehydration drink comes in grape and cherry effervescent flavors—stored for on-the-go use in convenient powder packs that can be poured into a glass of water and activated in ten seconds.

“The holiday season is unfortunately rife with dehydration pitfalls,” Pedialyte says in a December 19 release. “With flu season in full effect, air travel to visit loved ones, and even those late nights out with friends, you’ve got a recipe for your body to lose more water than it takes in—causing dehydration. Losing water also means losing electrolytes—essential minerals like sodium and potassium that are responsible for maintaining proper fluid levels in your body, balancing your blood’s pH levels, and firing signals to your nerves and muscles. Dehydration can bring on a headache, fatigue, even dizziness, which is no way to celebrate.”

And a glass of tap water won’t do the job nearly as fast, because it won’t provide enough of the electrolytes that your body is missing. What’s more, the company claims, while some people turn to sports drinks for those essential minerals, “the leading ones aren’t optimized for rehydration like Pedialyte. They are higher in sugar and lower in sodium, and may actually make dehydration worse.”

Specifically, the company asserts, “Each Pedialyte product has at least 1,030 milligrams of sodium and no more than 25 grams of sugar per liter; while leading sports drinks contain an average of 460 milligrams of sodium and 58 grams of sugar per liter.

The new product is available at Target and Meijer grocery stores nationwide, as well as online at Amazon

Research contact: @AbbottNews

‘Knock it off,’ says Williams-Sonoma in suit alleging Amazon is selling copies of its furniture

December 24, 2018

Some furniture being sold on Amazon this holiday season is not “sitting well” with housewares designer and retailer Williams-Sonoma. The San Francisco-based home furnishing chain brought suit against Amazon on December 14 in the U.S. District Court for the Northern District of California, asking for damages and injunctive relief.

The basis for the legal complaint? Williams-Sonoma claims that the online merchant has used its proprietary designs, patents, and common law trademarks to sell copies of its “home goods, lamps, chairs, and other furniture and lighting products”

Specifically, the suit alleges that Amazon’s line of Rivet furniture includes products that are “strikingly similar” to those made by Williams-Sonoma’s West Elm unit—among them,  a $300 Orb Upholstered Dining Chair that the household goods maker introduced two years ago,  SF Gate reported on December 18,

According to a report by The Washington Post, “It’s widely known that third-party vendors sell counterfeit products on Amazon, but the company has sidestepped blame in the past by claiming it merely provides the platform and can’t control those vendors. This complaint is different. The knockoff Williams-Sonoma products are being sold and marketed by Amazon itself, putting Amazon in direct competition with Williams-Sonoma, according to the company’s lawyers.”

Although Williams-Sonoma doesn’t license its branded products to other online retailers, Amazon markets some merchandise on its website as Williams-Sonoma products “in a confusing manner that is likely to lead, and has led, customers to believe” that they are buying licensed Williams-Sonoma goods, the complaint says.

Williams-Sonoma notes in its legal filing that, “Among the harm caused by Amazon’s infringing acts, consumers may come to associates [our] Williams-Sonoma [trademark] with overpriced, low-quality, or potentially unsatisfactory goods or services.”

The company claims that, already, “Many of these products have been the subject of customer complaints on the Amazon website, are not subject to WSI’s quality control measures, and/or have been damaged or altered such that the Williams-Sonoma mark no longer properly applies.”

The Post also reports that Amazon has marketed the knockoff Williams-Sonoma products through targeted emails—and to make matters worse, one such email was sent to the president of Williams-Sonoma, Janet Hayes. Court documents show an email Hayes received with the subject line “Janet: Williams-Sonoma Peppermint Bark 1 Pound Tin and more items for you,” which linked to a holiday candy priced at almost double what Williams-Sonoma sells it for.

Williams-Sonoma is requesting damages of up to $2 million per counterfeit item being sold by Amazon, as well as legal costs.

Who are ‘influencers’ and how do they get paid?

December 17, 2018

If you enter the hashtag #influencer on Instagram, you’ll quickly navigate to a page with nearly 10 million posts. But that’s only the tip of the influencer iceberg, so to speak. According to Mediakix, there will be 21.7 million brand-sponsored influencer posts on Instagram by the end of the year—and 32.3 million by the end of 2019.

From micro-influencers making $50 per post to Instagram superstars like singer Ariana Grande , who command half a million dollars per post, the Instagram influencer market runs the gamut in terms of following, audience, and engagement; and it has even the biggest brands buying in. AdidasSamsungAmerican ExpressMicrosoft, and many more are finding ways to partner with Instagram influencers to reach their audiences and create new ones.

But how do you get started? In the case of Amber Venz (#venzedits), who spoke to CNN for a December 12 report, by the time she was in high school, she was designing and selling jewelry. And by the time she was 23, Venz was running a website that showcased her work as a personal shopper

 “I posted three times a day, and it was like trend stories and sale alerts,” Venz told the network news outlet.

Within a few months, the site was generating so much buzz around her hometown of Dallas that The Dallas Morning News ran a full-page story about her site. “It said ‘Meet the Blogger… She is now doing all these services online for free.’ My blog actually became quite famous,” she says.

But the “for free” part irked her. According to the CNN rags-to-riches tale, Baxter Box (who was her boyfriend at the time and is now her husband) got her thinking about how she could make money from the “free” fashion and style tips she was offering on her site. That’s when they came up with RewardStyle, an invitation-only platform that allows fashion and lifestyle bloggers and influencers to make money from the content they post.

Created in 2010, the company website says, “RewardStyle influencers have exclusive access to an innovative ecosystem of monetization tools, a global network of 4,500+ retail partners, and tailored growth services-all designed to power the monetization of your content.”

Today, the website has formed a global community of more than 250 team members, 30,000 top-tier influencers, and 1 million brand partners across more than 100 countries.

“With a proprietary ecosystem of innovative technology, strategic growth consulting, global brand partnerships, and expansive consumer distribution, we’re doing more than just monetizing the industry—we’re defining it,” Venez claims.

Here’s how it works, CNN reports: Bloggers write a post or post a photo on social media and hyperlink to a particular brand or retailer’s web site. If a person clicks on the link and purchases the featured product, then the blogger gets a commission. Venz says the commissions vary depending on the brand, but are typically between 10% and 20%.

RewardStyle gets a cut as well, but Venz wouldn’t disclose how much the company makes each time an influencer helps make a sale. “Everyone only gets paid when a consumer actually makes a purchase and the retailer is paid. It is all commission-based,” she said.

“These are primarily women who love fashion or interiors or talking about their family or their fitness routines and they have attracted an audience that loves their point of view and comes to their content on a daily basis,” says Venz. “We’ve given them a way to monetize that.”

And 4,500 brands, including Walmart, CVS, Amazon and Gucci, also use the platform, which has racked up $3.8 billion in total sales since it was founded.

Despite the company’s success, Venz told the news outlet that wants to keep innovating. “We are not low on ideas. So the thinking that we’ve peaked early is honestly not something that’s crossed my mind,” she says.

In 2017, for example, the business introduced a consumer shopping app called LIKEtoKNOW.it. The app lets users take a screenshot of content anywhere on the internet created by an influencer. RewardStyle will then send them links to buy the products that appear in the screenshot. The app has 2 million users and has generated $210 million in sales for its retail partners so far.

“One of the things I love about RewardStyle is that it is empowering thousands of women to do the thing I always wanted to do, which was work in the fashion and media industry,” says Venz.

Research contact: @rewardStyle

Cash on delivery: The selling of our mailboxes

December 13, 2018

The government is looking to “sell” Americans’ last bastion of privacy—our mailboxes—posthaste.

Specifically, in seeking ways to boost revenue for the U.S. Postal Service‘s money-losing operations–the Trump Administration is suggesting selling access to mailboxes, according to a December 11 report by CBS News.

“The legal mailbox monopoly remains highly valuable,” said a government report issued last week. “As a means of generating more income, the mailbox monopoly could be monetized.

While the report didn’t detail how much the USPS could earn from franchising mailboxes, it suggests that the USPS could charge third-party delivery services such as UPS or FedEx to gain access to consumer mailboxes, the network news outlet said. It’s currently illegal for other delivery services to drop packages or letters in a mailbox–a restriction that even applies to neighbors stuffing flyers for a local event.

The recommendation—a product of a task force created by President Donald Trump and chaired by Secretary of the Treasury Steven Mnuchin—is just one of the ideas that the group made to tweak the USPS business model. According to the report, as of the end of FY 2018, the USPS balance sheet “reflects $89 billion in liabilities against $27 billion in assets—a net deficiency of $69 billion between FY 2007 and FY 2018.”

Other proposals from the group included cutting costs and boosting prices for “nonessential services,” including delivery of commercial mail, such as advertising flyers, CBS News reported.

“As [mail service providers] and package delivery companies continue to expand offerings to multiple parts of the value chain, it is reasonable to expect a willingness to pay for access to USPS mailboxes,” the report noted. “By franchising the mailbox, the USPS could expand its revenue and income opportunities without necessitating any change to its current mail products.”

But the economics might not be as rosy as the Trump administration report suggests, Robert Atkinson, president of the Information Technology and Innovation Foundation, a think tank that focuses on productivity and innovation issues, told CBS News.

“Nobody knows what the economics of that are,” Atkinson said in an interview with the network news operation. “Right now, say what you want about the Postal Service, but the part that is perhaps the most efficient is the last-mile delivery,” or the delivery from postal offices to consumers’ homes.

Instead, it could actually backfire and end up costing the USPS more money, Atkinson warned: “One of the reasons the USPS is not even more financially troubled is because they have this monopoly for delivery” to your mailbox, he explained.

If the USPS sells access to consumers’ mailboxes, even more businesses may opt for rival services such as FedEx or UPS. It’s not clear whether the franchise fees would offset the loss of that mail revenue, he added.

“I’m dubious that they could charge a price that could be any better than they already make, because then they’d be delivering fewer of those letters or packages,” Atkinson said.

While the report didn’t single out Amazon, the online retailer , President Trump repeatedly has blamed the company for some of the USPS’ financial woes. The president has claimed the USPS loses $1.50 on average for each package it delivers for Amazon.

There’s little evidence to back up his claims, however, as the package delivery remains one of the few lines of business that’s growing for the USPS, CBS reports.

Research contact: @aimeepicchi

UK ‘player’ Hamleys may expand into U.S. toy sector

December 11, 2018

Although Toys R Us has returned as a pop-up store at Kroger for the holidays (and maybe longer), the retailer that used to rule the toy realm is just a shadow of its former self. And, without the industry leading Toys R Us megastores, nationwide, an $11 billion toy industry has been left with no dominant retail player in the sector, reported CNBC on December 10.

Companies like TargetWalmartAmazon and Kohl’s are trying this holiday season to sell more toys to kids and their parents, but the verdict is still out on which company will best fill the void that Toys R Us left behind, the news outlet said.

But now—seeing a huge opportunity— one iconic, international toy retailer could soon make its first move into the States with a flagship location in New York, and plans for a wider rollout of stores to follow. British toy retailer Hamleys is close to finalizing a deal for roughly 30,000 square feet at 2 Herald Square in Manhattan, near Macy’s and Victoria’s Secret, a person familiar with those negotiations told CNBC, requesting anonymity because the talks are confidential. The store is expected to open in 2020, should the deal go through, said the source—cautioning talks are still ongoing between the tenant and landlord and nothing has been finalized.

According to CNBC, Hamleys has been around since 1760 when it opened its first location in England. Today, it has a flagship shop on tourist destination Regent Street in London, in addition to locations all across the Middle East, Asia and Africa. And in North America, Hamleys has three stores in Mexico.

In the United Kingdom, Hamleys’ stores are known to draw kids in for exciting experience, including the opportunity to play with life-size Lego figures. Often, employees dress up as fictional characters to entertain shoppers. This excitement in stores is what many people say the toy industry is now missing in the United States, CNBC reports. And shoppers prefer it to the online experience, where it is impossible to pick up a toy and look at it, or try it.

After an opening in New York, Hamleys would likely mote into other  major markets such as Los Angeles, Chicago, and Miami to open store;  and would consider moving into some of the more profitable malls in the country, said the person familiar with its plans.

Hamleys didn’t immediately respond to CNBC’s request for comment.

Research contact: @laurenthomasx3

Amazon plans to split HQ2 in two East Coast locations

November 7, 2018

After conducting a yearlong search for a site for its second headquarters, Amazon has switched gears and is now finalizing plans to manage a total of 50,000 employees in two East Coast locations, The New York Times reported on November 5.

The e-commerce company is nearing a deal to move to the Long Island City neighborhood of Queens—a location just across the East River from Manhattan— according to two sources briefed on the discussions, the Times said.

In addition, Amazon is also close to sealing a deal to move to Crystal City, an urban neighborhood in the southeastern corner of Arlington County, Virginia, south of downtown Washington, D.C; one of the sources said.

Amazon already has more employees in those two areas than anywhere else outside of Seattle, its home base, and the Bay Area.

Amazon executives met two weeks ago with New York Governor Andrew M. Cuomo (D), said one of the people briefed on the process, adding that the state had offered potentially hundreds of millions of dollars in subsidies. Executives met separately with New York City Mayor Bill de Blasio (D), a person briefed on that discussion said.

“I am doing everything I can,” Cuomo told the press corps, including the Times, when asked on November 5 about the state’s efforts to lure the company. “We have a great incentive package,” he said.

“I’ll change my name to Amazon Cuomo if that’s what it takes,” Cuomo said. “Because it would be a great economic boost.”

According to the Times, the need to hire tens of thousands of high-tech workers has been the driving force behind the search, leading many to expect it to land in a major East Coast metropolitan area. Many experts have pointed to Crystal City as a front-runner, because of its strong public transit, educated work force and proximity to Washington.

JBG Smith, a developer who owns much of the land in Crystal City, declined to comment, as did Arlington County officials.

Amazon declined to comment on whether it had made any final decisions. The Wall Street Journal earlier reported Amazon’s decision to pick two new locations instead of one.

Amazon announced plans for a second headquarters in September 2017, saying that the company was growing faster than it could hire in its hometown Seattle. The company said it would invest more than $5 billion over almost two decades in a second headquarters, hiring as many as 50,000 full-time employees that would earn more than $100,000 a year on average.

HQ2 would be “full equal to our current campus in Seattle,” the company said. If Amazon goes ahead with two new sites, it is unclear whether the company would refer to both of the locations as headquarters or if they would amount to large satellite offices.

Research contact: @KYWeise

As China continues to ‘go low’ on shipping rates, Trump moves the bar higher

October 22, 2018

President Donald Trump is threatening to intensify the trade war between the United States and China by ordering the U.S. Postal Service to withdraw from a treaty that has set shipping rates among 192 member nations for 144 years.

The Universal Postal Union—established in 1874 and adopted as a body of the United Nations in 1948—has enabled developing countries to pay lower rates when shipping packages internationally; often putting some of the cost of delivering packages on the postal services of wealthier countries.

Indeed, according to an October 17 report by Politico, the policy initially was intended to spur economic growth in poorer countries by connecting them with global markets.

But now that some of those countries—including China—have become exporting giants, the Trump administration hopes to use its withdrawal as leverage to negotiate more favorable terms for historically wealthy countries, like the United States.

Reaction has been mixed. A senior administration official told Politico that  the administration would prefer to stay within the union and that a full withdrawal takes a year to implement. Therefore, he said, he hopes that America can negotiate more favorable terms within that time frame.

“You could have something shipped from Indiana to New York and it would be more expensive than having it shipped from China because of price distortion introduced through the [old] rates,” Professor Rick Geddes, a postal service expert and Director of the Cornell Program in Infrastructure Policy at Cornell University, told NBC News for an October 19 story.

Companies such as Amazon and FedEx have long taken issue with the treaty, the network said—both citing what they believe are unfairly discounted shipping rates for foreign shippers.

However, on the plus side, American manufacturers, believe that withdrawing from the agreement would level what they see as an unfair playing field.

Indeed, Jayme Smaldone, CEO of the New Jersey–based company, Mighty Mug, wrote an opinion piece for the Wall Street Journal last February, noting that his firm paid $6.30 to ship by regular mail; but a Chinese company that sold a knock-off version could ship it to the same location from 8,000 miles away for just $1.40.

Jay Timmons, CEO of the National Association of Manufacturers, told

NBC News that the administration was making a positive move. “Manufacturers and manufacturing workers in the United States will greatly benefit from a modernized and far more fair arrangement with China,” he said.

American consumers had for years benefited from lower e-commerce prices on sites like Amazon and eBay when buying lower-priced Chinese goods. Without the discount, those sellers could evaporate and U.S. online shoppers would have to pay higher prices.

“Chinese sellers on eBay and other platforms may disappear, or at the very least they will not find it so easy to sell to Americans anymore,” Gary Huang, chairman of the Supply Chain Committee of the American Chamber of Commerce in Shanghaitold Bloomberg.

He added, “American consumers will have less access to that really cheap stuff.”.

Research contact: @matthewchoi2018

Amazon’s minimum wage hike will deprive workers of bonuses and stock awards

October 8, 2018

Amazon announced on October 2 that it would increase the minimum wage of its full-time, part-time, temporary, and seasonal workers nationwide to $15 an hour starting November 1.

The new Amazon$15 minimum wage will benefit more than 250,000 Amazon employees, as well as over 100,000 seasonal employees who will be hired at Amazon warehouse sites across the country to ship holiday purchases.

However, It appears the changes came with a caveat: Bloomberg  reported on October 3 that, even as its workers enjoy higher salaries, Amazon will remove their bonuses and stock awards.

In other words, the Internet giant will balance the scales—and fund its new largess—by eliminating other monetary perks. Bloomberg, which spoke with two unnamed sources at Amazon, noted that, in past years, the company’s workers have seen bonuses that amounted to hundreds of dollars.

Still, the company says it’s not all a wash. In a statement, Amazon told Bloomberg that the workers still will see their overall compensation increase, despite losing bonuses.

“In addition, because it’s no longer incentive-based, the compensation will be more immediate and predictable,” Amazon said, according to the business news outlet.

But Amazon easily could have afforded to both pay its workers and provide incentives.

Over the past few years, workers have intense pressure to produce, especially at the online retailer’s warehouses. “It is modern slavery,” a worker told Business Insider last May. “Jeff Bezos has become the richest man in the world off the backs of people so desperate for work that we tolerate the abuse.”

Research contact: nsmith150@bloomberg.netnimu