Addicts Turned Entrepreneurs, Amazon’s Counterfeiters, and Why Chatbots Are Female

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DAYLIGHT  

Amazon says it has a new plan to help brands battle counterfeiters, but there are skeptics: “Amazon wants sellers feeling like it takes their concerns seriously, and now it’s dangling something they’ve been demanding for years: the ability to shut down counterfeit product listings themselves rather than having to report them and wait for a response.

“That’s one of the promises of ‘Project Zero,’ the name Amazon has given to its newest anti-counterfeiting initiative…Just how big a deal is Project Zero? Will it finally put an end to the Kafkaesque ordeals of startups like RGK Innovations, whose Brush Hero cleaning deviceas I detailed in my featurewas rapidly cloned by China-based fraudsters after its creators appeared on ‘Shark Tank’?

If so, it’s unlikely to be quick or neat. For one thing, Project Zero’s protections aren’t yet widely available. Amazon has been running a pilot program with 15 selected brands for several months to test it out. Now it’s opening it up, but brand owners have to apply to be added to the waitlist, and Amazon isn’t saying how long they’ll have to wait.

RETAIL  

Gap Inc is spinning off its leading brand: Old Navy continues to outpace Gap Brand and Banana Republic and is one the fastest-growing major apparel brands with comparable stores of three percent in 2018 growing to over $7.8 billion in 2018,” said an analyst with Moody’s.

“The company also announced it plans to shut 230 Gap locations over the next two years, as it works to restructure its business after mixed results for the holiday quarter. “To revive the Gap brand, it said it’s working on multiple initiatives to fix the fit of its products and ‘modernize its marketing.’”

PRICING

Tesla is ready to sell a $35,000 Model 3 and is changing its business model, only taking orders online, closing some showrooms, and reducing its workforce. Elon Musk said, ‘There’s no other way for us the achieve the savings for this car to be financially sustainable.’

“To put buyers at ease about making such big-ticket purchases on the internet, he said, customers will be allowed to return cars for a full refund within seven days as long as the cars have not been driven more than 1,000 miles. ‘It’s going to be super easy to get a refund,’ he said. ‘People should not have concerns about placing an order.’

“The $35,000 Model 3 is likely to bring more customers to Tesla at a time when it is struggling to serve the affluent buyers it already has, said Karl Brauer, executive publisher at Cox Automotive.”

TECHNOLOGY

A slew of newly announced bank chatbots are named Debbie, Inga, Mia, Erica, Eva and Cora. Why exactly do they all have female names? “So-called chatbots have become useful cost-cutting tools for companies with large subscriber bases (think banks, insurance firms and mobile phone operators). As they replace human call-center workers, such bots will help save banks an estimated $7.3 billion in operational costs by 2023, Juniper Research predicts.

“But the proliferation of bots with female names raises questions about whether they might also perpetuate gender stereotypes, particularly around the notion of women in the role of assistants. That criticism has already been leveled at Amazon’s digital assistant Alexa and Apple’s Siri.”

Fedex is developing a fleet of delivery robots and hired the inventor of the Segway to get them ready. It will test out the six-wheeled autonomous SameDay robot in Memphis this summer:  “FedEx’s robot has a top speed of 10 mph and can carry about 100 pounds. A company spokesman said its typical speed would vary depending on the route. The robot relies on sensors typically used on self-driving cars to identify and avoid pedestrians. The SameDay Bot is capable of climbing steps, but customers will need to be home to accept packages — it won’t leave a package on a doorstep or open a front gate.”

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ZACK ELLER’S DEALS OF THE DAY

Credit bureau Experian has announced it has canceled its acquisition of credit-scoring company ClearScore. “The move to scrap the acquisition comes as regulators voiced concerns regarding the deal…This instance shows that incumbents can’t always rely on bringing new products and solutions to market by acquiring fintech firms. Incumbents often bet on startups’ tech when overhauling their services, either by partnering with or acquiring fintechs.”

Benefitfocus, a cloud-based benefit management provider has paid $24 million to acquire Connecture, an IT company that helps people decide on health care plans. “Connecture targets smaller employers, which should provide some balance for its new Daniel Island parent, which has focused on large employers, with more than 1,000 now paying to use its platform. According to financial disclosures, one unidentified customer accounts for more than 10 percent of Benefitfocus’ total revenue, or about $26 million based on 2018 figures.”

HEALTH CARE

In Prescott, Arizona, with spending on addiction treatment in America soaring past $35 billion annually, countless recovered addicts have gotten clean and opened their own clinics: “To meet the demand, an armada of former addicts have become entrepreneurs, offering a new and cheaper version of rehab. That is what has swarmed Prescott—small, outpatient clinics that use an approach known as the Florida Model.

“Named for the state where it was pioneered, the Florida Model provides patients with counseling during the day—usually chair-circles of group therapy—in what is typically a residential building. At night, clients live in sober living homes, where they are responsible for covering their rent. Often, the treatment facilities are owned by the same people who run the sober living homes. But by separating the two lines of businesses—treatment and housing—the Florida Model keeps costs lower for insurers.”

STARTUPS

The US Chamber of Commerce has unveiled a new website, dubbed “Co-,” that targets young founders: “While the site will offer practical advice and how-to guides on a wide array of topics, including collecting sales taxes, choosing the right business insurance, and running background checks on potential employees, it’s also designed to liven up the chamber’s somewhat musty image…

“The Chamber, which represents more than three million US businessesboth large and smallis best known for its lobbying prowess in Washington, DC. In recent years, however, it has sought to strengthen its ties beyond the beltway. In 2017, it expanded its annual Small Business Summit into a series of regional events, which will soon be recast under the Co- brand.”

MARKETING

After disappointing performance and a confusing name change, Weight Watchers, now known as WW, is calling on major shareholder, Oprah Winfrey, to promote the wellness products. “Weight Watchers strayed too far from its core weight-loss mission too fast. [CEO Mindy] Grossman assured analysts the company has already started massaging its message and will launch the new ad campaign with Winfrey this spring…While Winfrey is a powerful asset, the company’s reliance on her celebrity status also presents a risk.

“One of the bear criticisms for the stock is that Oprah is the whole reason for the company’s success,” Bolton Weiser said. “If they’re now saying they’re tying their whole advertising to her, doesn’t that fuel worries about the day Oprah decides not to be involved?”

SOCIAL MEDIA

TikTok, the social video app that allows people to share clips of themselves lip-synching popular songs, just reached one billion downloads, according to data firm Sensor Tower: “‘Approximately 663 million of these installs occurred in 2018,’ Sensor Tower founder Oliver Yeh said in a blog post. ‘To put this into perspective, the Facebook app was installed an estimated 711 million times last year and Instagram saw about 444 million new downloads.’ TikTok was created by a Chinese company, ByteDance, that has been privately valued at $75 billion according to Reuters, putting it on par with the country’s biggest tech companies.

HUMAN RESOURCES

Walmart has a history of hiring disabled and mentally challenged people as greeters, but some stores are replacing them with more able-bodied “customer hosts” and giving them more physically demanding tasks. “The Associated Press reported that affected associates were told last week that their positions would be eliminated on April 26 for the host roles. To qualify to be a host, they need to be able to lift 25-pound packages, climb ladders and stand for long periods.”

The news has sparked backlash: “In Marion, North Carolina, an online petition was started to keep Jay Melton at his greeter job of 17 years. Melton has cerebral palsy and can’t walk without assistance, according to the petition, which has close to 14,600 signatures.”

SPOTLIGHT

Commerce Dinner

Tuesday, May 9, 2019

6:30 pm – 8:30 pm

Murphy’s 997 Virginia Ave NE, Atlanta, GA 30306

Contact events@oxfordcenter.com to RSVP

And that’s what’s ahead.

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