This week Amazon CEO Jeff Bezos got the tech sector’s attention with emerging reports of his “fascination” with the rapidly developing world of autonomous autos.
“If you think about the auto industry right now, there’s so many things going on with Uber-ization, electrification, the connected car — so it’s a fascinating industry,” Bezos said. “It’s going to be something very interesting to watch and participate in, and I’m very excited about that whole industry.”
Amazon has made some sizable investments to accompany that interest — most notably in automation and electrification start-up Rivian and self-driving startup Aurora.
And fascination aside, Amazon has a race for the consumer’s whole paycheck to vie in with Walmart — and there is little doubt that auto automation plays like Rivian and Aurora could put some octane, so to speak, behind that effort. Self-driving cars, for example, could assist with Amazon’s last-mile logistics and reduce its shipping costs, which climbed 21 percent to $7.3 billion in the last quarter.
But then it was a fairly big week for engine revving — and there were more than a few surprising turns in the track.
Big Play of the Week: Shoring Up The Sellers To Power One-Day Prime Delivery
Since announcing the switch from two-day Prime delivery to one-day, Amazon has been reportedly working overtime to push sellers to get more goods into their factories. And it isn’t be shy about offering big discounts to do it.
The push comes because to make one-day delivery work effectively, Amazon will need to have more goods spread through more U.S. warehouses so they can get quicker to customers’ doors. Sellers this week saw just how committed Amazon is to getting that migration of goods started yesterday when an email went out mid-week offering discounts of up to 75 percent on Amazon warehouse storage fees in exchange for sellers storing more of their most popular products with the company.
Amazon marketplace sellers represent more than half of all sales on Amazon’s eCommerce platform — which means the importance of getting them locked into one-day shipping almost can’t be overstated.
“We did this because customers love getting their orders quickly, and we have found they order more products when there is a one-day delivery promise,” the email said about the move to one-day shipping.
The promotion starts in June and will run through January of 2020. To be eligible for discounting, sellers will need to have sold 60 or more of a product every month, or have products that were selected specifically by Amazon.
AI Enhancement: A Wearable That Feels Your Pain
While wearables are able to track all kinds of things about their wearers — how much they exercise, when they are sitting or standing or how regular their sleep habits really are — they aren’t renowned for their ability to sense how their wearer is feeling emotionally speaking. But, if recent reports are accurate, Amazon might be looking to change that by developing a wearable that is activated by voice to recognize human emotions.
The effort is a collaboration between the Alexa voice software team and Lab126, which is a group behind the Echo smart speaker as well as Amazon’s Fire phone, Bloomberg reported.
Reports indicated the project is still in its early stages, and that as of year there are no plans to monetize it or roll out it to the general public. The project is reportedly codenamed “Dylan,” with ongoing work toward a program for beta testing.
Alexa’s reach is long and getting longer, now integrated into 100,000 smart home devices in the market. It remains to be see if consumers will like her better or worse if and when she receives an emotional intelligence upgrade.
Left Turn of the Week: Gifts Cards For Body Scans
In an attempt to learn more about the diversity of human shapes and sizes, Amazon is paying volunteers (a $25 Amazon gift card) to get scanned, taped and photographed as part of a study to “learn about diversity among body shapes.”
Participants will take a survey and assent to 3D scans (plus photos and videos) of their body — first in their everyday attire, then in “form-fitting” clothing. The effort comes care of Body Labs, a startup Amazon acquired about two years ago that specializes in detailed 3D body models for shopping and gaming, as Mashable notes.
The company promises it will use the data “exclusively for internal product research and not for marketing purposes,” and though it is unconfirmed, it is widely speculated that the data gathered will go to supporting the Amazon Echo Look, a “style assistant” camera that takes pictures and analyzes them to provide fashion advice. And when you combine this advance with the above data, it means Amazon’s artificial intelligence (AI) will soon be able to accurately size shoppers, and then sense their sadness when the number is going up and offer them comfort.
Big Play of the Week: The Big HQ Upgrade
While Amazon’s search of a new HQ location at some point became like a national edition of “The Bachelor” where only U.S. cities could compete, Walmart’s construction of a new HQ in Bentonville Arkansas has been a comparatively quiet affair. But as of this week, details are starting to surface. The new corporate campus will cover 300 acres and house almost 17,000 employees, with room for more as it grows. It will feature bike trails, a park, food trucks, childcare, fitness centers and other amenities.
“We are striving to attract and retain the best talent in order to win the future of retail and the key component of that is the work environment that we are creating,” said Dan Bartlett, Walmart’s executive vice president of corporate affairs, who is overseeing the project.
Bartlett said Walmart didn’t receive any “special packages or tax breaks that were out of the ordinary” when building its campus, a not-so-thinly veiled jab at Amazon — whose financial incentive package with New York City causes such massive local uproar that Amazon was eventually persuaded to pull the project entirely.
“Our goal was not to extract things from the community,” he said.
While Walmart’s very front-facing innovations — like grocery pickup curbside — have drawn a lot of interest, CEO Doug McMillon wants the world to know that on the back end Walmart is quietly committed to leveling up its digital game. Particularly when it comes to AI and advertising.
McMillon notes the retailer is progressing to serve as a “digital enterprise,” CNBC reported.
Walmart is experimenting with a New York lab to tap into AI; it acquired Polymorph Labs for an unreported amount with the aim of leveraging its technology to make advertising easier for smaller brands, and recently purchased startup Aspectiva, a firm that observes shoppers’ browsing behaviors and aids in making product recommendations.
At the same time, Walmart is looking to beef up its advertising business, McMillon said earlier this month. “As we think about new revenue and income streams, we know we can do more in the advertising space,” he said. (Amazon became the third biggest ad platform in 2018 in the United States, trailing Facebook and Google.)
Walmart told investors the early results for the year meant the world’s biggest retailer by sales is in “a good position” to achieve its goals for the full year, driven by its new work as a digital enterprise, even though it will face some tough spots during the year — particularly in regards to tariffs.
Left Turn of the Week: Walmart Feels The Bern
Given the giant mega-force in capitalism Walmart is — and how very little patience presidential candidate Sen. Bernie Sanders has with high-test capitalism, particularly as practiced by Walmart — one might not expect the Vermont politician to be the special guest at Walmart’s annual shareholder meeting.
Sanders, who has publicly called out Walmart for the wages it pays employees, is headed to Bentonville, Ark., on June 5 to introduce a shareholders’ proposal that would give hourly Walmart workers a seat on the company’s board.
“These workers need and deserve a seat at the table,” Sanders told The Washington Post. “If hourly workers at Walmart were well represented on its board, I doubt you would see the CEO of Walmart making over a thousand times more than its average worker.”
If passed, the measure would require the retailer to consider its 1.5 million hourly U.S. employees when nominating candidates to its board. It was filed by Walmart employee Cat Davis, who is also a leader for workers’ rights organization United for Respect.
“We really want Walmart to think about us — the lowly associates who, behind the scenes, are the ones bringing in the money,” said Davis.
Walmart’s shareholders will doubtless enjoy their time with Sanders, who in November introduced a bill that was colloquially called the “Stop Walmart Act,” to prohibit corporations from buying back their own stock — which drives up share prices and ultimately benefits shareholders — unless they pay all workers $15 an hour, offer seven days of paid sick leave and limit executive compensation to 150 times median employee pay.
“Walmart is not a poor company,” Sanders said. “Workers are sick and tired of being paid poverty wages, while the Walton family is worth over $170 billion.”
The measure, though, is not likely to pass. Walmart shareholders have voted down every employee proposal in company history.
A spokeswoman for Walmart said the company would not comment on the proposal until it was formally presented at the meeting.
“We’re proud of the fact that 75 percent of our U.S. management associates began their career as frontline hourly associates,” the company said in a statement. “If Senator Sanders attends, we hope he will approach his visit not as a campaign stop, but as a constructive opportunity to learn about the many ways we’re working to provide increased economic opportunity, mobility and benefits to our associates — as well as our widely recognized leadership on environmental sustainability.”
We don’t’ have fancy Amazon wearables, but we’re pretty sure we can guess how Walmart feels about Bernie coming to its annual shareholders meeting. We also somehow suspect that team Amazon is deeply looking forward to that day of press clips.
But until then, the race remains on with machines thinking better, deliveries getting faster and Walmart building a fancy new HQ.
The race is never dull and never quite going where you think.