A court has ruled Amazon is liable for defective products, including those sold by third-party sellers.
To date, Amazon has managed to avoid being held liable for defective products sold by third parties in its Marketplace. A California Court of Appeals ruling changes that, however, reversing a previous decision by a San Diego Superior Court.
The case centers on a woman who purchased a replacement laptop battery that later exploded, injuring her. Amazon has argued it is merely a service provider, and therefore shouldn’t be held liable. In her ruling, Justice Patricia Guerrero said Amazon’s involvement went far beyond that of a service provider.
“As a factual and legal matter, Amazon placed itself between Lenoge and Bolger in the chain of distribution of the product at issue here. Amazon accepted possession of the product from Lenoge, stored it in an Amazon warehouse, attracted Bolger to the Amazon website, provided her with a product listing for Lenoge’s product, received her payment for the product, and shipped the product in Amazon packaging to her. Amazon set the terms of its relationship with Lenoge, controlled the conditions of Lenoge’s offer for sale on Amazon, limited Lenoge’s access to Amazon’s customer information, forced Lenoge to communicate with customers through Amazon, and demanded indemnification as well as substantial fees on each purchase. Whatever term we use to describe Amazon’s role, be it ‘retailer,’ ‘distributor,’ or merely ‘facilitator,’ it was pivotal in bringing the product here to the consumer.”
This ruling will likely have profound implications on Amazon’s business, although what those are remains to be seen.
“It was a strong quarter for us certainly across almost every metric,” says PayPal CEO Dan Schulman. “What’s happened is the world has accelerated from physical to digital across almost every industry. If you look at health care it’s all about telemedicine right now. If you look at education it’s about remote learning. If you look at the retail industry it is now about online almost over offline or physical locations in store. If you look at the restaurant business you really can’t be in business.”
Schulman says that it is imperative for businesses to move toward a digital-first strategy. “If all you’re doing is trying to serve customers at your location given social distancing and the number of people coming out (you won’t survive),” he said. “You have to be about takeout and delivery. Across every industry, we’re seeing this surge towards a digital-first strategy. All of the tools and products and services that we offer are probably more relevant and important across multiple industries than they’ve ever been before.”
PayPal CEO: Across Every Industry, We’re Seeing a Surge Towards a Digital-First Strategy
We will have to essentially shut down Uber until the voters decide.
Reclassifying drivers from contractors to employees is unfortunate.
You would just get a much smaller service at much higher prices.
The vast majority of our drivers don’t want to be full-time workers.
Really unfortunate at a historical time of unemployment in California.
It would put vast swaths of our drivers out of work.
It would take away transportation from hundreds of thousands of Californians.
Our labor laws are hopelessly outdated.
It’s essentially how Uber started, kind of a black car service with few cars.
We can’t go out and hire ten of thousands of people directly overnight.
We would focus on the center of cities versus smaller cities or suburbs.
“We think the ruling by a California judge was unfortunate on reclassifying drivers from contractors to employees,” says Uber CEO Dara Khosrowshahi. “We think we (already) comply with the laws. But if the judge and a court finds that we are not and they don’t give us a stay to get to November then we will have to essentially shut down Uber until the voters decide.”
Dara Khosrowshahi, CEO of Uber, discusses a court ruling requiring Uber to classify Uber drivers as full-time workers. Khosrowshahi says that this will force Uber to become a much small black car service focused on city centers and with much higher prices for rides. Essentially the service would no longer exist in California suburbs and rural areas:
Vast Majority of Uber Drivers Want To Remain As Contractors
We think the ruling (in California) was unfortunate (on reclassifying drivers from contractors to employees). We obviously respect the law and the judge. We do have about eight days now where there is a stay. We are going to go back to the court and appeal the ruling and hope that the court reconsiders. If the court doesn’t reconsider then in California, it’s hard to believe we will be able to switch our model to full-time employment quickly, so I think Uber will shut down for a while. Really, the big question is in November with Prop. 22, we have a proposition out there that puts forward what we believe is the best of both worlds.
The vast majority of our drivers, a 4-1 ratio, want flexibility, and don’t want to be full-time workers. With Prop. 22 drivers can continue to have the flexibility that they have but they can enjoy the protections, benefit fund, an earning standard so that they have the protections that many people associate with full-time work. We are hoping that in November the California voters can speak. We are confident that this better way which is kind of the best of both worlds will be the way going forward for California.
We Will Shut Down Until The Voters Decide In November
In California, we have changed our model substantially. For example, riders in California pay drivers directly. Drivers can set their own price as an independent contractor would. Drivers have all the flexibility to decide whether or not they want to take a ride or not. We think we (already) comply with the laws. But if the judge and a court finds that we are not and they don’t give us a stay to get to November then we will have to essentially shut down Uber until the voters decide.
It would be really unfortunate at a historical time of unemployment in California. It would put vast swaths of our drivers out of work without the opportunity to earn. It would take away transportation from hundreds of thousands of Californians. It would be really really unfortunate. Obviously we would look to comply with the law long-term and we’re hoping the law gives us the best of both worlds. Our labor laws are hopelessly outdated. You’ve got the haves and have-nots and you can have actually a better way.
Smaller Service, Higher Prices, Only Focused On Big City Centers
Hopefully, the courts will reconsider. By no means do we want this to happen. If they don’t we are going to have to work to move to a full-time model. It’s essentially how Uber started, kind of a black car service with very few cars on the road and much higher prices. So we will look to flip to a full-time model but this is a model that we built over ten years. We can’t go out and hire ten of thousands of people directly overnight. It would take a significant amount of time to switch over. We have teams thinking about it and working on it. We don’t think it’s the likely outcome by the way and we would look to get back on the road as quickly as possible.
You would just get a much smaller service, much higher prices, and probably a service that’s focused on the center of cities versus a bunch of the smaller cities or the suburbs that we operate in right now. That’s the reality. It’s not a game of chicken or one way or the other. It’s really up to the courts and we are going to comply with the law. We will look to get going but it will be a very very different service once we get going.
Uber CEO: Will Shut Down In California Until Voters Decide
“We expect around one in four restaurants to close and to not be able to return because of COVID,” says OpenTable CEO Debby Soo. “Unfortunately, now we think that number might even be conservative. Restaurants are going through a grueling time right now. We don’t know when it is going to come back to pre-COVID levels but it is likely to be after there is a vaccine available for people to take.”
One In Four Restaurants Closing Now Appears To Be Conservative
We expect around one in four restaurants to close and to not be able to return because of COVID (related mandates). Unfortunately, now we think that number might even be conservative. Restaurants are going through a grueling time right now. They are having to pay for their wait staff and rent is a huge cost. For restaurants to open back up any type of government aid that can be given to them would be amazing and is necessary. But also again, people have to feel comfortable being in an enclosed area and feeling safe to be around other people. With a lot of the restaurants space is a constraint.
We are thinking (about what’s going to happen in the winter when people will want to go into restaurants). It’s very much top of mind for restaurants who are right now experiencing a great surge in demand because it’s summer and dining out is so popular and prevalent. I imagine that takeout and delivery will continue to gain share, especially in the colder months. People now are much more willing to order food and get it delivered or to go and pick it up. That will be one of the main lifelines for restaurants during the colder months.
Vaccine Needed For Dining To Come All The Way Back
For dining to return all the way back to pre-COVID levels, a vaccine will be needed. However, we do see dining demand starting to pop up. We recently ran a survey at OpenTable and 25 percent of our respondents said they were dining out at least once a week. That demand is definitely there. Of course, safety precautions are very top of mind for both our restaurants and diners. They want to make sure that the restaurants are keeping both their employees and patrons safe with mask-wearing, table spacing, and all of that.
We don’t know when it is going to come back to pre-COVID levels but it is likely to be after there is a vaccine available for people to take. However, we are seeing signs of life and we know that diner demand is there. People are itching to get out and eat.
Launched Myriad Of Features In Response To COVID
We’ve recently launched a myriad of different features to adapt to the quickly changing environment around us. We launched Takeout which for diners is a really convenient way to browse a restaurant’s menu, order a meal, and pay all from your OpenTable app. For restaurants, it’s great because it is an additional revenue stream. We also released a new feature we call Safety Precautions. When you come to OpenTable for each restaurant that you are looking at going to you can see a list of all the specific safety and health initiatives that restaurants are following to keep their diners and staff safe.
We also recently launched Experiences. This can be anything from a happy hour to a prix fixe menu or a chef’s table. We are seeing a lot of demand for this, even now when people are still not completely comfortable going out to eat. There is this hunger and need for special occasions and these types of experiences.
OpenTable CEO Debby Soo: One In Four Restaurants Closing Is Conservative
Online marketing sensation Dan Lok says that when it comes to marketing online, there are only two things, conversion and traffic. That’s it. “To convert the right attention, to convert followers and likes into money, in between you a need conversion mechanism,” says Lok.
Lok adds that if you are getting zero conversions it doesn’t matter if you increase your traffic because you cannot multiply zero.
Dan Lok, one of the most-in-demand marketing consultants in the world, a 2 times TEDx speaker, and best-selling author, recently talked about the first rule of online marketing in a YouTube video (watch below):
Know Who Your Audience Is
The very first rule of online marketing is you need to know who your audience is. It’s not about making noise, it’s not about just getting your name out there. A lot of people I talk about, even entrepreneurs, marketers, and business owners, you hear this all the time, I just need to get my name out there. It’s not about getting your name out there, it’s about getting your customers into your door. It’s not getting them out there it’s getting them in here. That’s the very first rule of marketing online.
You Need the Right Type of Attention
You have to know it’s not just about getting attention. A lot of people they think they need a lot of followers or need a lot of fans or a big social media reach. I have a massive social media reach but fame doesn’t equal fortune. The right type of fame to the right type of people equals fortune. So it’s not just about getting attention because right now you could run around naked in the winter in Vancouver. Guess what, you will get a lot of attention but it’s not the right attention.
You need the right type of attention at the right time from the right prospect, that’s what makes sales. If you run any kind of business, it can be a home-based business or any type, whatever you’re selling online, first, you have to define exactly who you’re selling to. Who is your ideal customer? If your answer is anyone who breathes, anyone who has a heartbeat, then you’ve got a problem.
Who are they? Are they men or woman? What age group? What kind of professions? What did they do and what are their ping points. Once you’ve narrowed that down then you craft your offer, you craft your message specifically talking to this group of people. The amount of money you’ll make from marketing, the amount of money you make for your business, is in direct proportion to how well you understand your potential customers. Once you do that then you will know where you could get traffic.
When Marketing There is Only Conversion and Traffic
For example, if you know this is your demographic, this is the ideal customer profile, then yes now you can do Facebook Ads, now you can do banner ads, now you can do affiliate marketing, now you can run Google Ads, now you can do Instagram, now you know exactly who you’re talking to. Versus I need to get more followers, I just need to make some noise, I need to get more traffic. It doesn’t help. When it comes to marketing online, there are only two things, conversion and traffic. That’s it.
If you’ve got these conversions going on, let’s say you are converting one out of every hundred visitors buying your product, a one percent conversion. That’s fine, so now you know if you get two hundred visitors that are the right type of visitors that will get you two sales and then three hundred visitors and so on and so forth. It’s a one percent conversion.
You Need a Conversion Mechanism
However, if you have had a few hundred visitors or even a few thousand visitors to your website, to your offer, and none of them bought, listen to me, you cannot multiply zero. If you’re not getting sells with a few thousand visitors, guess what, let me get more followers, let me get more visitors. I’ll get 20,000 visitors and then my problem will be solved. I’ll get more sales. No, it won’t.
You cannot multiply zero and you cannot go to the bank and say hey, you know what, I don’t have a check to deposit but I’ve got a lot of Instagram followers to deposit. The bank wants cash. You cannot deposit likes, you cannot deposit followers, you cannot deposit fans, you deposit cash. To convert the right attention, to convert followers and likes into money, in between you a need conversion mechanism. Whatever that thing might be.
Most People Suck at the Conversion Mechanism
It could be your ecommerce site, it could be a webinar, it could be a good old telephone to convert them to a sale. Whatever that mechanism is I can tell you from my experience that when it comes to making money online most people they focus on traffic, but they all suck at this conversion mechanism. Either they don’t have one in place or the conversion mechanism they have sucks.
Their web page sucks, it doesn’t convert, it doesn’t get people to act, it doesn’t get people to buy, it doesn’t get people to click. They thought, then just get more people viewing my page, let me get more traffic and that will solve my problem. It won’t.
What Offer Will Get Them to Put Up Their Hand?
The very first action that you need to figure out is who is my ideal audience? What kind of offer can I put in front of them to get them to put up their hand? Maybe it’s generating a lead, maybe it’s a making a small purchase, maybe a big purchase, it doesn’t matter. What is the right offer to put in front of them?
Once that’s converting then you can find ways to buy traffic. There are so many ways and so many places you can buy traffic. That’s how you do it, that’s the rule of marketing online and that’s the rule of selling anything online.
“Until we fix this occupancy problem, even though you are open, it is not possible to pay full rent,” says Landry CEO and reality TV host Tilman Fertitta. “How do you pay a mortgage when you only operating at 25 percent or 50 percent? To all of you judges out there, this is a taking by the state and the government when you take 50 percent of my occupancy.”
Tilman Fertitta, Landry’s chairman, and CEO talks about his frustration with the incompetence of the State of New York and the City of New York in dealing with restaurant reopenings:
It’s Unbelievable That New York Won’t Give Us A Metric To Reopen
We love to complain about leadership on a national level and on some state levels but nobody knows what to do. Everybody wants to blame DC right now but we are sitting here in New York and they can’t even give us the metics and say if the pandemic only has this much hospitalization or cases for a 14-day rolling average. Then you can plan on opening your restaurants at 25 or 50 percent. We get absolutely no information at all out of the State of New York and the City of New York. The City of New York is unbelievable that they will not give us a metric when they can open these restaurants.
Just think about it. Everything is a metric and everything is data points. We all want to blame everybody else for the data points and not making decisions. Wouldn’t you look at four or five key data points and say as soon as we hit these data points you are going to open? What is so difficult about that? We hear about the great leadership of New York and up east in New Jersey while we are treating the rest of the country like they’re from other countries that they are quarantining us and they can’t even go visit up there. It’s ridiculous right now. Yet they won’t even give us business and data points to operate. In New Jersey, you still can’t have a drink of water in the casino unless you are dehydrating and you are about to pass out. It’s extremely comical to me.
Lack Of Unions In Regional Casinos Enabling Them To Thrive
All the regional casinos are doing extremely well, take out New Jersey of course. I hate to say this but the reason the regional casinos are doing so much EBITA right now is that number one, people are moving around, they don’t have to fly in, and you don’t have the union wages in the regional casinos. They are also not opening their buffets and all their full service restaurants. You are really able to watch your costs in a regional casino that you can’t in Vegas or in New Jersey where you have the high union wages. It’s tremendously helping us all.
But we are doing 100 percent of the same gaming revenue in the regional casinos where in Vegas you are doing below 50 percent and in Atlantic City, you are doing about 40 percent. Regional is where you want to be right now.
Not Letting Restaurants Open Fully Is a ‘Taking By The State”
The State of Missouri is one of the few states that lets us open 100 percent of the occupancy of our restaurants as long as we keep six-foot distancing, which we 100 percent do and abide by. They’re for it because you are able to open the establishment and can seat your seats and still be careful. That’s why you are running the best same-store sales comps in that particular market right now.
Until we fix this occupancy problem, even though you are open, how do you pay full rent? How do you pay a mortgage when you only operating at 25 percent or 50 percent? To all of you judges out there, this is a taking by the state and the government when you take 50 percent of my occupancy.
Disney Is Not Even Hitting 20% Occupancy Target Right Now
We are down 70 percent in Orlando and we have some of the biggest stores at Disney. They are coming out now and saying it. The traffic is just not there. I give Disney a lot of credit for going out and putting great protocols to protect their guests. They were only going to let 20 percent of the park’s occupancy come in. I don’t think they are even doing 20 percent.
This is a problem all over America right now that you can’t even do the business. I’m not speaking for Disney but I know my restaurants aren’t doing 20 percent down there right now. We usually do a lot more than the parks do when it comes to percentages.
Landry’s CEO Tilman Fertitta: Not Letting Restaurants Open Fully Is a ‘Taking By The State’
Some things in the new world will change forever. Customer meetings will change forever. In the past, I never thought that I could do a Zoom call or a Teams call with the CEO of a company I’m trying to sell to. In the future, I don’t think my customers will want me to come and see them. There’s continued opportunity for remote access. Anything that allows you to connect with clients online or build the brand is going to be really valuable. I had an Instagram Live yesterday with Kris Jenner. She’s been selling online for years now. Every business needs to move online, especially small business.
Robert Herjavec, mega entrepreneur and Shark Tank star, says on CNBC that the coronavirus crisis has caused the word to change forever. Meetings will never be the same and many other post-pandemic changes are in store:
Customer Meetings Will Change Forever
When all of this first happened we wanted to use Zoom because all our customers use Zoom. But I have got to tell you, some of the security issues are really pretty bad within Zoom. So we’ve switched over to Microsoft Teams. I think that’s one of the reasons that Microsoft stock is doing so well. The use of Teams at the corporate enterprise level is really taking off. We’re also seeing Webex usage really go up. There was also the acquisition of BlueJeans (by Verizon), another video conferencing platform.
I have become very optimistic about the return, whenever the return is, and what the world will look like. Some things in the new world will change forever. Customer meetings will change forever. In the past, I never thought that I could do a Zoom call or a Team’s call with the CEO of a company I’m trying to sell to. In the future, I don’t think my customers will want me to come and see them. There’s continued opportunity for remote access. Anything that allows you to connect with clients online or build the brand is going to be really valuable. I had an Instagram Live yesterday with Kris Jenner. She’s been selling online for years now. Every business needs to move online, especially small business.
We’re Into This For The Long Haul
I used to think that we were in a light switch moment where miraculously President Trump will get on the news and say we’re all back on this date. But I think what we’re seeing now in California and in New York is that it’s going to be⎯⎯we’re into this for the long haul. Certain parts of the economy will go back quickly. But even the ones that do go back are going to be limited.
Restaurants will have to distance half the tables. If I have more space in my restaurant can I charge more along that line? I think it’s going to be challenging but with all those challenges there’s going to be opportunities. The key for me about going back is testing. What that means and how people get tested. There’s a great new saliva test that was approved by the FDA where people can do it at home and I think we just have to be able to do that at scale.
Nobody Wakes Up And Says “I Want My Life To Suck”
Shark Tank is a mirror to what’s happening in the American economy. When we started the show twelve years ago it was during the financial crisis. Nobody could get a loan. So people started a lot of businesses that you didn’t need capital for. Then we moved to online selling. This will be the same thing. If I’ve learned anything on twelve years from Shark Tank it is that the human condition is about hope. Nobody wakes up and says I want my life to suck. Every time somebody comes on Shark Tank they are full of hope and they’re full of optimism.
This is a challenging time but entrepreneurs will figure it out. The key though is you’ve got to have a growth plan. The stimulus plan, the protection plan, all these relief funds, are simply survival funds. They are not growth funds. If you don’t have a plan to grow, if you don’t have a plan to gain market share, getting a stimulus today is just keeping you in business. It’s not helping you to grow. You’ve got to have a game plan for that.
I want to know what people’s plan is for survival. It makes me want to invest in two types of companies, either a company that has a very strong balance sheet or companies like an Uber or a small business that can scale back its costs. I want to invest in a company that can quickly scale its expenses to meet a decline in revenue or vice versa. So fluidity and the ability to adapt in a small business is really going to be the key. I don’t want to invest in a business with a large infrastructure, buildings, equipment, and all that kind of stuff. That stuff is very difficult to scale down.
Customer Meetings Will Change Forever, Says Shark Tank’s Robert Herjavec
“There’s a lot of crazies out here in Arizona,” said Uber driver Randy Clarke in a very interesting online chat with Uber CEO Dara Khosrowshahi. “I just wish you guys had some sort of way for us to put our rules of our vehicle on the app so the passengers know what to expect beforehand.”
“For example, in January this guy came into my car trying to get into the front seat. I don’t like to allow people in the front seat when I’m driving alone at 11 o’clock at night. He gets mad after I cancel the ride he jumps in the back and argues with me, calls me the N-word, slams the door and leaves. What that guy did was bad and disgusting, definitely not good.”
https://youtu.be/kRpbHp8UbaQ
“But if there was a way for him to know that I don’t allow people in the front seat when I’m driving with them alone I’m sure he would have just canceled there and then.”
Then Uber driver Randy Clarke gave Uber’s CEO a suggestion. “I just wish there was a way for us to upload dashcam footage directly to you guys. Sometimes I get to run around and they transfer me to safety and support. There needs to also be some sort of way for Uber to somehow encourage the footage in case something was to happen.”
Randy added, “I think a lot of drivers are afraid of the dashcam policy you guys have in where we can’t put the footage out or we get deactivated. In my situation, I was like whatever happens happens. I showed people the footage and lo and behold he was a guy who owned a business in my community and he got a lot of crap for that.”
“Dashcams Is Technology That We’re Working On,” Says Uber CEO Dara Khosrowshahi
“Well he sounds like he deserves a lot of crap for that,” said Uber CEO Dara Khosrowshahi. “Dashcams and in general taping rides, etc. is actually technology that we’re working on. There’s this fine balance with privacy concerns. You guys know with TikTok and all that stuff, privacy is rightfully a huge thing.”
“Most drivers are like you, good people that are totally open to dashcams,” says Khosrowshahi. “Hey take the footage, I have nothing to hide, this is part of my profession, I act well and I treat my riders well so they don’t have a problem. I think a lot of riders when they’re in the car they do expect privacy and they’re nervous about the balance of safety and privacy. Safety’s super important as well. They’re both important. So we’re trying to work on technologies that balance the two.”
Khosrowshahi added, “Every single state statute, by the way, is different. So you can’t have one solution. You’ve got to have a state-by-state solution that works for everybody. I really would like to get something that bridges that and balances safety and privacy, but it’s a lot of work to do so. The tech teams are totally working on it. So one day Randy we’re gonna get you that magic!”
“There are solutions you can imagine where we don’t take the dashcam footage but we only take it if you tell us that there’s an issue It’s in the cloud someplace and no one has access to it. We want to do it the right way because we should not be inappropriately watching someone if we don’t have to. It’s only for those exceptional circumstances.”
“Exactly,” says driver Randy. Some people do it for clout while others just want to do it just to make sure it doesn’t happen again. So I totally understand that.”
Everybody who sells something through a third party needs to figure out their ecommerce strategy,” says VaynerMedia CEO Gary Vaynerchuk. “The thought to be reliant on retailers or Amazon or anybody else and not being the driving force of your own destiny of producing something and sending it to somebody is crazy to me.”
Gary Vaynerchuk, CEO of VaynerMedia discusses on Bloomberg the necessity for sellers of products to develop their own sales channels and to not rely on Amazon or other third-party sellers:
It’s Crazy To Rely On Amazon To Sell Your Product
Everybody who sells something through a third party needs to figure out their ecommerce strategy. The thought to be reliant on retailers or Amazon or anybody else and not being the driving force of your own destiny of producing something and sending it to somebody is crazy to me. Regardless of where the world is, try not to overextend yourself on CapEx and OpEx. Let’s get into the game. For others, it’s trying to mitigate their excitement on how good their numbers look so that they don’t overspend.
Innovation comes from times like this. If you’re selling through a retailer and you make a product you’re in a bad business. Walmart, Target, Albertsons, they have disproportionately too much leverage. If you’re selling through Amazon you’re really just setting up the next giant that’s going to have too much leverage and they’re going to ask you for more brand dollars and you’re going to spend less on the consumer.
I think the change that you’ll see, much like anything, you look at downtown, supermarkets, and now e-comm, I do think you’ll see a fragmentation of products going direct-to-consumer, not through Amazon or Walmart. In seven years I think that many will talk to this time as the aha moment of we need to get our act together on going direct to consumer.
Customer Acquisition Costs Right Now Are Crazy Attractive
Meanwhile, because this is a complicated game. Facebook and Instagram and Google prices are down in costs in the auctions because a lot of people are not spending. Customer acquisition costs right now are crazy attractive. So the cliche plays out. Cash-rich businesses always accelerate aggressively during downtimes. If you have the ability to spend on acquiring customers right now and have a healthy business there’s a huge growth opportunity.
For others, it’s a restrategize opportunity. Dwelling and going on full defense is only the answer if you’re actually on the verge of going out of business.
“We’ve partnered with the National Restaurant Association for a restaurant safety app called VirusSAFE Pro,” says Restaurant Impossible host Robert Irvine. “When you say you’ve done something, say you’re cleaning the refrigerator, and you’re actually outside smoking a cigarette, I know because of geotagging that you didn’t clean that when you said you did. It’s really about accountability of duty of care. What we’re trying to do is put back the consumer of customer confidence through transparency.”
Robert Irvine, celebrity chef and host of Restaurant Impossible, discusses the launch of his new app VirusSAFE Pro which helps restaurants and consumers monitor the implementation of safety protocols. Irvine says the key is restoring “consumer confidence” in restaurant dining:
VirusSAFE Pro App Helps Restaurants Stay Healthy
We’ve actually partnered with the National Restaurant Association for a (restaurant safety app) called VirusSAFE Pro. It enables checklist reminders on your phone so that COVID-19 safety protocols are done in a timely manner and all the protocols are completed. You think about standing operating procedures for restaurants especially in the COVID-19 times where we’re looking at masks and gloves and everything that’s clean.
We’ve all been to airports and restaurants where people say that things have been done and they actually haven’t. VirusSAFE Pro is an app for phones that also has a desktop which helps with mitigation. When you say you’ve done something, say you’re cleaning the refrigerator, and you’re actually outside smoking a cigarette, I know because of geotagging that you didn’t clean that when you said you did. It’s really about accountability of duty of care. What we’re trying to do is put back the consumer of customer confidence through transparency. That’s the biggest part. It’s simple. It’s easy to use. It provides verification of stuff done in real-time.
Right Now The Problem Is Consumer Confidence
It’s 99 percent fail-safe as opposed to a pen and a piece of paper. I can actually tell you where you are and what you are doing. This is the only consumer-facing app that when you’re verified and you’re using that system you can put a check and verified sticker in your window. A consumer can then take their smartphone use it on the QR code and find out exactly what’s been done for the last 24 hours or 48 hours of your protocols. That allows a guest who has two kids that are below three years old or an 89-year-old grandmother to feel safe to go back into your restaurant. Right now the problem is consumer confidence.
It’s tracking everything that we’ve done for two years or more. You know what it’s like right now, everybody’s saying I got sick in your restaurant. Now I’ve got this mitigation tool to say we have done our best practices and protocols and our duty of care to make sure you are your safest. There is no system that’s 100 percent clear but this is 99 percent that we can follow what you’ve done, how you’ve done it, and make you want to get back to a restaurant. If you don’t do this and this is a big don’t, we already are at 30 to 40 percent of failure with the restaurants that will not be able to come past this pandemic. That is a huge amount when we’ve got 11 million folks out of work.
Restaurant Impossible Reopen
I’ve just reopened six restaurants in three weeks in four states following COVID-19 closures putting in new practices and protocols to make sure that consumers are safe. You will hear more from me regarding this on my TV show Restaurant Impossible Reopen which you’ll see very soon. It’s really important that we take these protocols seriously.
Robert Irvine: New App Makes It Possible For Restaurants To Reopen Safely
Everything you do in the company drives you toward the vision and the mission of the brand and the company itself, says Jan Bednar, Founder & CEO of ShipMonk. “Something we have learned in the last few years is that once you communicate those values and what the brand really means to your employees and to your customers, it kind of does the job itself,” he says. “You don’t really have to spend a lot of time maintaining it.”
Bednar adds: “Everything you do at that point is the brand.”
The one important thing in the way we look at our products and our brand is we try to figure out who are users are and what does our brand mean. We have a certain set of values that are associated with our brand. It’s not just a bunch of text that we put on a whiteboard three years ago and we never look at it. We have them everywhere and everyone knows them. They basically become the pillars of the organization. It’s something that everybody looks up to. You know what they are.
Everything you do in the company drives you toward the vision and the mission of the brand and the company itself. Something we have learned in the last few years is that once you communicate those values and what the brand really means to your employees and to your customers, it kind of does the job itself. You don’t really have to spend a lot of time maintaining it.
ShipMonk Values
Everything You Do is The Brand
Everything you do at that point is the brand. It’s how you answer the phone. It’s how you decorate your office. It’s how you go to work. It’s what you wear to work. Every single detail, as long as you have those values in the back of your mind and you know what the brand really means, it’s almost like a self-sustaining organism at that point.
That’s been really important for us. We really see with our customers that once they like our brand and they see what we are doing they become part of it. It’s one of the most rewarding things. They love coming to our office. They love sharing their thoughts and improving the product. It becomes this one big ShipMonk family in a way. Everything we do from a branding and marketing standpoint surrounds those values and the proposition of the brand.
From their inception in 2014, ShipMonk has operated with a singular guiding principle: to help small and medium-sized businesses scale by offering technology-driven fulfillment solutions that enable business founders to devote more time to the things that matter most in their businesses. Put simply, ShipMonk helps eCommerce companies stress less and grow more.
The coronavirus pandemic has led to a stellar quarter for Zillow, as potential homebuyers looked online.
The pandemic has forced many individuals to take a second look at their housing situation. With people spending unprecedented amounts of time at home during lockdown and quarantine orders, many are looking to upgrade their homes with more room and features conducive to telecommuting. Others are looking to take advantage of work from home trends, and move out of expensive neighborhoods or cities to more scenic and affordable locales.
These factors led to a stellar quarter for the company, reporting that revenue grew 28% year over year to $768 million. This was up from industry estimates of $618 million.
“Zillow’s second quarter results are even better than we had hoped, and firm up our belief that powerful tailwinds in both real estate and technology are rapidly converging, with Zillow at the nexus,” said Zillow Group co-founder and CEO Rich Barton. “I believe we are at the dawn of a Great Reshuffling, as COVID and work-from-home policies are inspiring people to rethink their homes and consider moving. In addition, real estate, like other industries, is experiencing an acceleration in technology adoption, as people move their shopping habits from offline to online. We’re lucky to be in a position to serve our customers no matter how they want to move, whether through a seamless Zillow Offers transaction or in partnership with our best-in-class Premier Agents.
“Even more important than the business results is the way our team has responded over the past several months, as we all grapple with fear, loss, protest, and anger through a health crisis and social reckoning. We’ve managed through all of this with a strong commitment that we can and will do more to support our communities and address systemic barriers in real estate.”
Barton’s comments that he believes this is the beginning of a “Great Reshuffling” are significant and should give many industry leaders pause.
Apple released its earnings report for the June quarter, and it was good news coming out of Cupertino.
Apple smashed its previous June quarter results, thanks to strong growth in both Products and Services.
“Apple’s record June quarter was driven by double-digit growth in both Products and Services and growth in each of our geographic segments,” said Tim Cook, Apple’s CEO. “In uncertain times, this performance is a testament to the important role our products play in our customers’ lives and to Apple’s relentless innovation. This is a challenging moment for our communities, and, from Apple’s new $100 million Racial Equity and Justice Initiative to a new commitment to be carbon neutral by 2030, we’re living the principle that what we make and do should create opportunity and leave the world better than we found it.”
“Our June quarter performance was strong evidence of Apple’s ability to innovate and execute during challenging times,” said Luca Maestri, Apple’s CFO. “The record business results drove our active installed base of devices to an all-time high in all of our geographic segments and all major product categories. We grew EPS by 18 percent and generated operating cash flow of $16.3 billion during the quarter, a June quarter record for both metrics.”
In addition to its strong results, Apple announced a four-for-one stock split. The goal is to make Apple’s stocks more accessible to a wider array of investors.
Under normal circumstances this would be an excellent quarter. Under the cloud of the global pandemic, the results are nothing short of spectacular.
Microsoft has scored a major contract that will see the Redmond-based company be the preferred cloud provider for PepsiCo.
Microsoft’s Azure is firmly in second place in the US cloud market, behind Amazon’s AWS and ahead of Google Cloud. The company has made signification headway, and has been racking up a string of high-profile contracts.
PepsiCo is the latest company to sign on with Azure, choosing it as its preferred cloud platform in a deal that will also see it deploy Microsoft 365 and Teams for all 270,000 employees.
“As a global leader in convenient food and beverages, our commitment to the timely delivery of PepsiCo products has never been more important,” said PepsiCo CIO, Seth Cohen. “Through our partnership with Microsoft, we aim to improve service delivery capabilities to meet rising demand for essential goods while driving new innovations to make our operations and workforce stronger and more resilient for the future.”
“Our partnership with PepsiCo applies Azure and AI capabilities to the ever-changing supply chain and retail landscape in new and exciting ways. By migrating PepsiCo’s global data estate and SAP landscapes to Azure, we’ll be able to help PepsiCo drive efficiencies from farmer to consumer,” said Deb Cupp, Microsoft CVP Enterprise Commercial Business. “We’re also pleased to deliver Microsoft 365 to PepsiCo’s associates worldwide as part of this partnership. Mobile communication and collaboration for PepsiCo’s workforce will be one of the keys to realizing the value Microsoft brings.”
This is a huge win for Microsoft and will no doubt help it convince other companies to give Azure strong consideration.
KFC has announced it will begin using 3D bioprinting technology to create lab-grown chicken nuggets this fall in Russia.
Alternatives to traditional meat have been gaining popularity as consumers look for environmentally friendly alternatives. Impossible Foods and Beyond Meat are two companies that specialize in plant-based meat alternatives. In both cases, these products are designed to mimic the look, texture and taste of the real thing.
KFC is going in a slightly different direction, with plans “to create the world’s first laboratory-produced chicken nuggets” using plant material, chicken cells and bioprinting technology. KFC will give its partner, 3D Bioprinting Solutions, all the necessary ingredients to perfectly duplicate the restaurant’s signature chicken nuggets. The end result is a product that is reportedly cleaner, has minimal impact on the environment and does not harm animals.
“At KFC, we are closely monitoring all of the latest trends and innovations and doing our best to keep up with the times by introducing advanced technologies to our restaurant networks. Crafted meat products are the next step in the development of our ‘restaurant of the future’ concept. Our experiment in testing 3D bioprinting technology to create chicken products can also help address several looming global problems. We are glad to contribute to its development and are working to make it available to thousands of people in Russia and, if possible, around the world,” said Raisa Polyakova, General Manager of KFC Russia & CIS.
“3D bioprinting technologies, initially widely recognized in medicine, are nowadays gaining popularity in producing foods such as meat. In the future, the rapid development of such technologies will allow us to make 3D-printed meat products more accessible and we are hoping that the technology created as a result of our cooperation with KFC will help accelerate the launch of cell-based meat products on the market,” said Yusef Khesuani, co-founder and Managing Partner of 3D Bioprinting Solutions.
While KFC’s announcement is fascinating, from a technological point of view, it remains to be seen how many customers will buy into ‘printed chicken.’
Twitter may be looking at subscription options in an effort to boost revenue and offset sluggish ad sales.
Like many social media platforms, Twitter has seen a surge in users as a result of the pandemic. During the most recent quarter, the company’s Monetizable Daily Active Users (mDAU) grew some 34% year over year, coming in at 186 million.
In spite of the good news, sluggish ad sales resulted in a 19% decline in year over year revenue. With $683 million in revenue for the quarter, Twitter saw an operating loss of $124 million.
To help offset the ad business, Twitter is looking at a number of options, including subscriptions.
We’re also in early stages of exploring add’l potential revenue products that complement our advertising business, which may include subscriptions & others. It is very early; we do not expect any revenue against these in 2020. $TWTR
Twitter Investor Relations (@TwitterIR) July 23, 2020
Subscriptions could be a game-changer for Twitter, giving it a way to better compete with new platforms. Only time will tell, however, if the company will commit to this route, and what the final version may look like.
Apple has released its latest Environmental Progress Report and has committed to becoming carbon neutral by 2030.
Apple has a long history of taking the lead in protecting the environment, from recycling rare metals from iPhones to every facility running on 100% renewable energy. The company is taking that stand further, however, with the goal of becoming 100% carbon neutral within a decade, including its supply chain.
“We’ve led our industry in reducing our environmental footprint for years, but we know there is more to do,” writes Lisa Jackson, Vice President, Environment, Policy & Social Initiatives. “So we’ve set a groundbreaking new goal to further reduce our impact on the planet we all share: By 2030, we’re committing to total carbon neutrality. We are already carbon neutral for our corporate emissions, including corporate travel—resulting from our use of 100 percent renewable electricity for our facilities and investing in high-quality projects that protect and restore forests, wetlands, and grasslands. And we’re well on our way in our supply chain. But we’re going further to cover our entire, end-to-end footprint. All the way down to the shipping that moves our products around the world, and the energy used to power our customers’ devices.”
The company is using innovative methods to achieve this goal, including sourcing aluminum from suppliers that use hydroelectricity, rather than fossil fuel, for their smelting process.
Apple’s stand comes at a time when companies around the world are taking a more active role in addressing social and societal issues.
“Demand for space is actually increasing because ecommerce is growing much more rapidly than it was before,” says global logistics real estate company Prologis CEO Hamid Moghadam. “We probably got three, four, or five years of growth in a quarter or two. Ecommerce is a big tailwind for our business. It’s a pretty good business otherwise but ecommerce just supercharges it.”
Hamid Moghadam, chairman, and CEO of Prologis, the global leader in logistics real estate, while discussing their earnings release says the pandemic has rapidly accelerated the growth of ecommerce worldwide:
Ecommerce Is Growing Much More Rapidly Than Before
We started the year with a very optimistic outlook and of course, all of that was before COVID. When we got to the first-quarter results, they were strong, but we softened our outlook a bit because nobody really knew what we were facing. As the business has progressed in the second quarter we’re finding that demand for space is actually increasing because ecommerce is growing much more rapidly than it was before.
We probably got three, four, or five years of growth in a quarter or two. Ecommerce is a big tailwind for our business. It’s a pretty good business otherwise but ecommerce just supercharges it.
Our Business Is Vital To The Supply Chain
We run a global business. If you look at our collections globally, the US is actually stronger than the global numbers. But if you look at the overall numbers they are actually running better than last year which was a record year. You might ask why in an environment like this that collections are running ahead of last year? The reason is pretty simple. Our business is vital to the supply chain. Even people whose businesses are not doing well have to keep their inventory somewhere and that’s usually in one of our buildings.
An interesting statistic is that 2.5 percent of global GDP goes through our billion square feet around the world. We’ve got pretty good visibility as to what’s going on in the global economy. Both on the good end and the soft end people need inventory and a place to store their goods.
Houston Is The Softest Market In The US
Houston is probably the softest market in the US. Globally, I would have to say France is probably one of the weaker markets. But generally, through this cycle, we’ve held up pretty well around the world. The primary reason is that unlike other cycles supply of space was very tight going into this downturn. Vacancies were under five percent and utilization rates were in the mid-80s. Both of those are records.
I’ve been doing this for about 37 years and those are numbers that are unprecedented in our business. Unprecedented good.
Ecommerce Is Growing Much More Rapidly Than Before, Says Prologis CEO Hamid Moghadam
eBay has streamlined its focus and reached a deal to sell its classifieds business for nearly $9 billion.
In addition to its traditional business, eBay has a Craigslist-style classifieds business in approximately 1,000 cities around the world. eBay has been looking to sell that portion of the business for some time.
According to Reuters, Norwegian firm Adevinta has won the auction for the classified business, which includes Gumtree and Kijiji, agreeing to pay almost $9 billion. eBay will still maintain a minority stake in the business. Adevinta already maintains online marketplaces in some 15 countries, and will double in size as a result of the deal.
Given how popular online shopping has become as a result of the pandemic, eBay could not have chosen a better time make this deal.
“You have got to have a subscription business model just like Netflix, just like Adobe and just like Microsoft,” says Nutanix CEO Dheeraj Pandey. Customers subscribe and we stream innovation. We’ve been streaming a lot to our customers. We talked about Home Depot recently. They’re seeing a record demand in the pandemic and we really helped them consolidate their infrastructure.”
Tech Companies Must Have A Subscription Business Model
As a company, we started almost ten years ago in a recession. The first killer workload for hyper-convergence was virtual desktops. People said Windows is dead. We said long live Windows. We went after federal customers and did an amazing job of building a very reliable company. Just taking a step back, we’re in the business of building cloud software. A lot of this comes down to the word software and cloud. We’re really thinking hard about being amorphous, being everywhere, being in the private data centers at the edge, and in the public cloud.
Cloud is hard and you really need to make it simple, seamless, and secure. But most importantly, you have got to have a subscription business model just like Netflix, just like Adobe and just like Microsoft. Customers subscribe and we stream innovation. We’ve been streaming a lot to our customers. We talked about Home Depot recently. They’re seeing a record demand in the pandemic and we really helped them consolidate their infrastructure.
Cloud Is About Consuming Smaller Things
The best way to measure our performance is a cloud subscription currency. We started talking about it as of last quarter and we grew really well with annual contract value. If you think about it cloud is about consuming smaller things. Hardware was about seven-year entitlement and software is still five to seven years. We’re saying let’s go do three-year terms and one-year terms. You’ve got to start small.
The recession is also the best time to go back with bite-size of what the customer really wants to buy. Annual contract value is the way of measuring our growth. It is also going to make this whole transition. I talked about Netflix and others and this whole transition unlocks amazing operational efficiencies for the company as well.
Tech Companies Must Have A Subscription Business Model: Nutanix CEO Dheeraj Pandey
Doordash has announced that they have partnered with Walgreens to ultimately bring the entire Walgreens store to the door of 100 million Americans.
Doordash COO Christopher Payne discusses their new Walgreens delivery collaboration and explains how this deal is part of their customer-centric focus which has driven the company’s growth from its founding:
We Are Bringing The Entire Walgreens Store To Your Door
Our new partnership with Walgreens is going to be fabulous. We have 2,300 items that will be available to the Doordash customer base. We cover about 100 million Americans. This will bring for the first time Walgreens products in over the counter medicine, grocery, and household items and other categories that are totally appropriate for this COVID crisis that we are in.
While we are starting with 2,300 items we are going to rapidly grow that to 5,000 items, essentially bring the entire Walgreens store to your door on demand. That’s the key thing.
With COVID We Shifted Into Going Beyond Restaurants
One of the things we did with COVID is we shifted into going beyond restaurants and focused on empowering local economies by bringing other things that people want to be delivered into their home. Walgreens is a perfect example of that. We are going to ramp up to cover all of their stores over the coming months.
That will touch 100 million Americans. That’s a huge announcement today and we are thrilled to be in a collaboration with Walgreens.
Core To Us Is Listening To Our Customers
One thing that is true of this space is that it has been competitive since day one. What sets Doordash apart is we are not focused on our competitors. We have been focused on our customers. That is one of the core values of Doordash and is one of the key reasons we have a market share lead in food delivery in the United States. We are going to continue to focus on that. Core to us is listening to our customers and being merchant first.
Our original vision was to empower local economies. The idea is that we want to connect every local business to every local consumer. That’s a very different strategy than just broad ecommerce. That is making these businesses successful that are around you and me. That’s what sets Doordash apart and what will continue to set Doordash apart.
We Are In The Early Days Of This Category
We are in the early days of this category. We are not focused on what our competitors are doing. That is the right strategy for us. However, we won’t rule out potential acquisitions. We did a Caviar acquisition last last year that has gone incredibly well. Our focus has been on helping our merchants thrive. A great example of that is what has happened with COVID-19.
We swung into action back in March and April and designed a program called Main Street Strong. This exemplifies what I mean by merchant first. We built a program that generated $120 million in relief for merchants to keep them on their feet.
Doordash Restaurants 4-Times More Likely To Survive COVID
One stat that I love to share is restaurants that were on Doordash during this crisis were four times more likely to make it through the first wave by being on the platform. That $120 million in relief took the form of commission and promotion to drive sales to small businesses. We will continue to focus on our customers, our merchants, and our Dashers and that is what is key right now. We are not going to be bothered by what other companies are doing.
