Morning Report

What you need to know one minute before daylight

Musk Back on the Twitter Train and Best Buy’s Turnaround

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DAYLIGHT  

Best Buy’s shares climbing up to 17 percent just became an example of how brick-and-mortar retailers can withstand the Amazon behemoth. “Comparable sales in the quarter that ended Feb. 2 rose three percent in the US—which represents well over 90 percent of the company’s business—amid higher demand for wearable and smart home devices and for Fortnite-driven gaming products and accessories. Appliance sales were also higher, with Sears’ struggles leaving retailers to jostle for an increased category market share.”

Another big factor in Best Buy’s turnaround is its emphasis on customer engagement and support where CEO Hubert Joly says the company was focused on selling products, but now is looking to sell experience: “The company in May 2018 introduced its $199.99 annual Total Tech Support membership to provide tech support online, in-store or via phone, regardless of when and where consumers bought a product; Best Buy said Wednesday that membership had grown to over one million.”

MARKETING
Walmart is following Amazon in building a digital advertising platform: “Digital advertising is a tough business that is dominated by Google and Facebook. But deep-pocketed companies with large amounts of data on their customers are in the best position to mount a challenge to that ‘duopoly,’ ad industry experts say. Amazon has already made significant inroads, and AT&T Inc. has designs on building a big digital ad business after acquiring media giant Time Warner…

“Walmart hopes that if ‘I’m the CMO of a large branded manufacturer I now think about Walmart as a network I can go advertise on,’ said Steve Bratspies, chief merchandising officer for Walmart US. The company believes the advertising can be more efficient than with competitors because marketers benefit from Walmart’s online and store purchasing data, said Mr. Bratspies.”

ZACK ELLER’S DEAL OF THE DAY

FoodStaff, a Charleston-based hospitality staffing agency has been acquired by Hospitality Staffing Solutions, a provider of outsourced services for the hotel and resort industry. “FoodStaff will operate as a wholly owned subsidiary of Hospitality Staffing Solutions, and founder and CEO Bailey Bolen will remain with the company through a transition period this year, according to a news release. The release said FoodStaff’s current internal and temporary employees will be retained by Hospitality Staffing.”

RETAIL

With a mission dedicated to connecting and supporting female business leaders, the Female Founder Collective sees an untapped opportunity in helping people who want to shop from women-owned businesses: “If designer/entrepreneur Rebecca Minkoff has her way, you’ll soon have a way to quickly identify women-owned businesses–a ‘female founder’ symbol to look for whenever you shop or hire.  

“‘I have 11 million businesses to reach,’ said Minkoff. ‘I would love all of them to turn the lights on this seal so it’s recognizable and we change our shopping habits…If we’re all shopping from females, that wealth trickles up.’

“Does the idea of identifying businesses by gender, ethnic or religious groups bother Minkoff? ‘It’s been filtered the opposite way for a really long time. So if the pendulum has to swing a little bit to get things more equalized, I’m okay with that. Men can have their own symbol.’”

The most satisfying internet retailer is not Amazon, but Costco. “That’s according to the American Customer Satisfaction Index, which interviews 300,000 customers annually about more than 400 companies in 46 industries to measure customer satisfaction for the quality of products and services. Costco notched an ACSI score of 83 this year in the first time it’s been scored in the Internet retail category on the report. It received the same rating for the in-store department/discount and supermarket categories. Meanwhile, Amazon scored 82, dipping three points from the previous year.” The survey also showed that the preferred shopping method was through mobile apps.

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TECHNOLOGY

If you’re wondering about 5G, it promises to connect everything: “The current generation of wireless technology ushered in a host of new smartphone applications that helped put the mobile phone at the center of e-commerce, socializing and navigation. The next wave of wireless—5G—will supercharge cellphones, but its real strength lies in its potential to power the ‘Internet of Things,’ a byword for everything electronic other than the smartphone.

“That includes factory production lines that get instructions over the air instead of through wires; driverless cars that receive incredibly detailed information about road conditions in real time; sports broadcasts that let viewers see the game from a dizzying number of angles, and get a host of new statistics superimposed on the screen to reflect the action; and wearable devices that monitor a patient’s physical condition and beam the information to doctors.”

MANAGEMENT
Inc. magazine asked 13 “all-star founders” to share the single best piece of advice they ever got. This one comes from Radha Vyas, co-founder and CEO of Flash Pack: “My friend Lucy told me to focus on doing the three most important things per day. I call it the rule of three, and it is game-changing. Cut out the background noise—social media, replying to emails—and instead always focus on building that big picture. It is also genius, because it recognizes that energy is a finite resource: You have to accept that you can’t do everything.”

SOCIAL MEDIA

Musk is back on the Twitter train, and it didn’t go well: “In a note to investors on Tuesday, Wedbush Securities analyst Dan Ives said that the SEC’s request on Monday to place the Tesla CEO in contempt for a tweet he sent out last week creates a ‘tornado of uncertainty’ for Tesla shares. He called the SEC’s move ‘a near-term overhang on shares until investors can better gauge the impact.’ And Ives is ultimately concerned that it’s “another distraction for Musk & Co.”

By the way, Facebook responded to that article from The Verge about content moderators’ working conditions and says it will hold a “partner summit” to review the issue. “Justin Osofsky…[said the] purpose of the meeting will be to bring together its vendor partners to ‘enforce our expectations for our partners, provide in-depth sessions on wellness and resiliency, quality, and training.’”

FOOD

Boston Market has recalled 86 tons of their frozen meals found in grocery stores because they might have glass and plastic fragments: “According to a statement from the USDA, the recall is being labeled as Class I, which means, ‘there is a reasonable probability that the use of the product will cause serious, adverse health consequences or death.’”

ENTERTAINMENT

TV networks and streaming services are in the middle of a talent bidding war when it comes to writers and showrunners. Universal just signed Sam Esmail (“Mr. Robot” and “Homecoming”) to a $100 million four-year deal: “With deep-pocketed streaming companies like Netflix and Amazon–and now Apple–eager to build up their own original content libraries as studios and networks pull back on their licensing deals, the amount of money being thrown around has reached an all-time high. In 2018, Netflix had 700 original TV series on the platform.”

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.

Please send comments and suggestions to mattg@oxfordcenter.com and lfeldman@oxfordcenter.com.

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