|From: JakeStraw||6/18/2019 12:19:51 PM|
|TechCrunch has learned and confirmed that Bebo, one of the earlier platforms to let people share thoughts and media with their friends, has been acquired by Twitch, the streaming video platform owned by Amazon. Together the two will be working on building out Twitch’s esports business.|
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|From: Glenn Petersen||6/21/2019 12:01:20 PM|
|A big win for AWS:|
DHS to Move Biometric Data on Hundreds of Millions of People to Amazon Cloud
The department seeks a new platform to identify people using fingerprints, irises and faces, and eventually DNA, palm prints, scars and tattoos.
By Jack Corrigan,
Staff Correspondent, Nextgov
June 19, 2019 10:47 AM ET
The Homeland Security Department is looking to upgrade the software it uses to analyze biometric data on hundreds of millions of people around the globe, and it plans to store that information in Amazon’s cloud.
The agency’s Office of Biometric Identity Management will replace its legacy biometric analysis platform, called the Automated Biometric Identification System, or IDENT, with a new, more robust system hosted by Amazon Web Services, according to a request for information released Monday.
IDENT essentially serves as an enterprisewide clearinghouse for troves of biometric and biographic data collected by the Transportation Security Administration, Customs and Border Protection, Secret Service and other Homeland Security components. The system links fingerprint, iris and face data to biographic information, allowing officials to quickly identify suspected terrorists, immigration violators, criminals and anyone else included in their databases.
In total, IDENT contains information on more than 250 million people, a Homeland Security spokesperson told Nextgov.
According to the solicitation, Homeland Security is in the process of replacing IDENT with the Homeland Advanced Recognition Technology System, or HART. The new system will include the same biometric recognition features as its predecessor, and potentially additional tools that could identify individuals based on DNA, palm prints, scars, physical markings and tattoos.
Whereas IDENT stores records in government-run data centers, the Homeland Security solicitation states “HART will reside in the Amazon Web Services (AWS) FedRAMP certified GovCloud.” Further, “biometric matching capabilities for fingerprint, iris, and facial matching will be integrated with HART in the Amazon Web Services GovCloud.” Amazon Web Services will also store HART’s biometric image data.
Amazon Web Services’ GovCloud US-East and US-West regions are data centers specifically built by the company to house some of the government’s most restricted information. AWS is no stranger to hosting sensitive government data, having already claimed the CIA, Defense Department, NASA and other federal agencies as customers in part because of perceived security improvements over government legacy systems.
When reached for comment, an AWS spokesperson referred inquiries to DHS.
In 2018, Northrop Grumman won a $95 million contract to develop the first two stages of the HART system, and its contract is set to expire in 2021. The department plans to use responses to the latest solicitation to inform its strategy for further developing the platform, the DHS spokesperson said.
Specifically, officials are asking vendors for ideas on how to build those multiple identification functions into the new system, while leaving room to add any new recognition “modalities” as they arise. Officials also want input on developing a handful of general reporting, analytics and search tools, as well as desktop and mobile web portals where Homeland Security employees can access the system.
Interested vendors must respond to the request by July 17.
In addition to the hundreds of millions of records stored locally in its IDENT system, Homeland Security can also access swaths of biometric information housed at other agencies.
According to the solicitation, the agency shares biometric data and technology with the Defense Department and the FBI, which can access some 640 million photos for its own facial recognition operations. Officials also said they can tap into the State Department’s Consular Consolidated Database—which contained nearly 500 million passport, visa and expat records as of 2016—as well as the databases of “several foreign governments as well as state, local, tribal and territorial law enforcement agencies.”
The government’s use of biometric technology, particularly facial recognition, has come under sharp scrutiny in recent months. Members of the House Oversight Committee have expressed broad bipartisan support for reining in the use of biometrics at agencies like the FBI, and on Monday, a group of lawmakers raised concerns about CBP’s expanding facial recognition program.
Frank Konkel contributed to this article.
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|From: Glenn Petersen||6/21/2019 12:28:41 PM|
|CVS is worried about Amazon|
June 21, 2019
A lawsuit filed by CVS against a former employee suggests that major industry players are more worried about Amazon's foray into health care than they initially let on, CNBC reports.
What's happening: Amazon gained a pharmacy arm when it acquired PillPack, and it's also part of the trio that has formed Haven.
-- UnitedHealth has also sued a former employee for attempting to join Haven.The incumbent companies are worried that Amazon could negotiate directly with insurers, cutting out the need for pharmacy benefit managers.
-- CVS' PBM arm made up about 60% of its overall revenues in 2018.
-- "Given its robust infrastructure, operational capacity, and distribution reach, Amazon-PillPack is uniquely positioned to negotiate directly with payers (insurers) and displace CVS Caremark's mail-based services," CVS argued in a lawsuit to prevent a former employee from working for PillPack.What's next: CNBC reported last month that there have been talks between PillPack and Blue Cross Blue Shield.
The other side: "It is important to keep in mind that what's being reported here is another company's speculation about our business strategy for a lawsuit to which neither Amazon nor PillPack is a party," a PillPack spokesperson told CNBC.
Go deeper: Read CVS' lawsuit
|RecommendKeepReplyMark as Last Read|
|From: Glenn Petersen||6/24/2019 3:31:23 PM|
|What Happens After Amazon’s Domination Is Complete? Its Bookstore Offers Clues|
By David Streitfeld
New York Times
June 23, 2019
Antimicrobial Therapy, which publishes “The Sanford Guide to Antimicrobial Therapy,” bought 34 of its handbooks from Amazon and Amazon’s third-party sellers. At least 30 were counterfeits.CreditCreditIsabelle Baldwin for The New York Times
SPERRYVILLE, Va. — “The Sanford Guide to Antimicrobial Therapy” is a medical handbook that recommends the right amount of the right drug for treating ailments from bacterial pneumonia to infected wounds. Lives depend on it.
It is not the sort of book a doctor should puzzle over, wondering, “Is that a ‘1’ or a ‘7’ in the recommended dosage?” But that is exactly the possibility that has haunted the guide’s publisher, Antimicrobial Therapy, for the past two years as it confronted a flood of counterfeits — many of which were poorly printed and hard to read — in Amazon’s vast bookstore.
“This threatens a bunch of patients — and our whole business,” said Scott Kelly, the publisher’s vice president.
Mr. Kelly’s problems arise directly from Amazon’s domination of the book business. The company sells substantially more than half of the books in the United States, including new and used physical volumes as well as digital and audio formats. Amazon is also a platform for third-party sellers, a publisher, a printer, a self-publisher, a review hub, a textbook supplier and a distributor that now runs its own chain of brick-and-mortar stores.
But Amazon takes a hands-off approach to what goes on in its bookstore, never checking the authenticity, much less the quality, of what it sells. It does not oversee the sellers who have flocked to its site in any organized way.
That has resulted in a kind of lawlessness. Publishers, writers and groups such as the Authors Guild said counterfeiting of books on Amazon had surged. The company has been reactive rather than proactive in dealing with the issue, they said, often taking action only when a buyer complains. Many times, they added, there is nowhere to appeal and their only recourse is to integrate even more closely with Amazon.
The scope of counterfeiting across Amazon goes far beyond books. E-commerce has taken counterfeit goods from flea markets to the mainstream, and Amazon is by far the e-commerce heavyweight. But books offer a way to see the depths of the issue.
“Being a tech monopoly means you don’t have to care about quality,” said Bill Pollock, a San Francisco publisher who has dealt with fake versions of his firm’s computer books on Amazon.
An Amazon spokeswoman denied that counterfeiting of books was a problem, saying, “This report cites a handful of complaints, but even a handful is too many and we will keep working until it’s zero.” The company said it strictly prohibited counterfeit products and last year denied accounts to more than one million suspected “bad actors.”
“There is strong competition amongst booksellers, from major retailers to independent booksellers,” the spokeswoman added.
What happens after a tech giant dominates an industry is increasingly a question as lawmakers and regulators begin taking a harder look at technology companies, asking when dominance shades into a monopoly. This month, lawmakers in the House said they were scrutinizing the tech giants’ possible anticompetitive behavior. And the Federal Trade Commission is specifically examining Amazon.
In Amazon’s bookstore, the unruly behavior has been widespread, aided by print-on-demand technology. Booksellers that seem to have no verifiable existence outside Amazon offer $10 books for $100 or even $1,000 on the site, raising suspicions of algorithms run wild or even money-laundering. The problem of fake reviews is so bad that the F.T.C. has already gotten involved.
Those who write a popular book open themselves up to being “summarized” on Amazon. At least eight books purport to summarize “Bad Blood,” John Carreyrou’s best-selling account of fraud in Silicon Valley. The popular novel “Where the Crawdads Sing” has at least seven summaries. “Discover a beautiful coming-of-age story without all of the unnecessary information included in the actual novel!” says one that has 19 five-star reviews, all of which read as if they were fake.
And then there are the counterfeits.
A counterfeit version of Danielle Trussoni’s acclaimed memoir, “Falling Through the Earth,” on Amazon misspelled the author’s name on the cover.
“It’s unacceptable and I’m furious,” the author Andrew Sean Greer tweeted after people complained last summer that fakes of his Pulitzer Prize-winning novel, “Less,” were being sold as the real thing. There was a counterfeit edition of Danielle Trussoni’s acclaimed memoir, “Falling Through the Earth,” on the site that misspelled her name on the cover. Lauren Groff tweeted that there was “an illegal paperback” of “Florida,” her National Book Award nominee, on Amazon.
Dead writers get hit, too. Arthur Miller’s “The Crucible” was pirated. So was a volume of classic stories by Jorge Luis Borges. For 18 months Amazon has sold a counterfeit of Agatha Christie’s “Murder on the Orient Express” despite warnings in reader reviews that it is a “monstrosity,” dispensing with such standard features as proofreading and paragraph indenting.
Technical books, which tend to be more expensive than fiction, are frequent victims. No Starch Press has tried to squelch fake editions of its computer manuals for three years. Mr. Pollock, No Starch’s founder, said Amazon had the same laid-back approach to bad actors on its platform as Facebook and YouTube.
“Amazon is the Wild Wild West,” he said.
Amazon has sold a counterfeit version of Agatha Christie’s “Murder on the Orient Express” despite reader reviews warning that it is “maybe even a fake?”
This is not really negligence on Amazon’s part. It is the company’s business model. Amazon, which does not break out revenue or profit from bookselling or publishing, assumes that everyone on its platform operates in good faith until proven otherwise. “It is your responsibility to ensure that your content doesn’t violate laws or copyright, trademark, privacy, publicity or other rights,” it tells prospective publishers and sellers.
At Antimicrobial Therapy, the first warning that something was amiss with the Sanford Guide came with reviews on Amazon. “Several pages smudged and unable to read,” one buyer said in 2017, posting photos as proof. “Seems as the book was photocopied,” said a second. “Characters are smeared,” wrote a third.
The company, whose books were sold to Amazon by distributors, did test buys. It got some copies from Amazon and others from its third-party sellers, including UsedText4u, Robinhood Book Foundation and 24x7 Book. Of the 34 books that Mr. Kelly bought, at least 30 were counterfeit. None of the booksellers responded to requests for comment.
The first warning that there might be problems with copies of the Sanford Guide available on Amazon came in the form of customer reviews.
Mr. Kelly spent hours writing responses to customers who complained about their copies but didn’t realize they had counterfeits. He tried tracking down the source of the fakes and attempted to communicate with Amazon. Eventually he wrote to the retailer’s founder, Jeff Bezos, saying, “Amazon is knowingly and willfully fulfilling most orders for our title with counterfeits that may contain errors leading to injury or death of their patients.”
Mr. Kelly got a response two weeks later from “Raj,” a member of “the Amazon Seller Performance team.” Raj said that an unnamed third-party seller had been barred from selling the book but that the seller might now appeal directly to AMT, and that if the company wanted to retract the whole thing, here was what to do.
“They were very reluctant to actually engage with us about the problem,” Mr. Kelly said of Amazon.
The Authors Guild said it was also seeing “a massive rise” in counterfeit books. “Authors tell us, ‘I know I had more sales, but I don’t see them in my royalties.’” said Mary Rasenberger, the guild’s executive director. “Amazon owns the reseller platform, and we think that’s where these books are being sold.”
In February, Amazon included counterfeiting in its financial disclosures as a risk factor for the first time, saying it might not be able to prevent its merchants “from selling unlawful, counterfeit, pirated or stolen goods” or “selling goods in an unlawful or unethical manner.”
Yet the company has such a grip on books that counterfeits do not seem to harm it. They might even increase its business.
“A book takes a year or more to write,” said Andrew Hunt of the Pragmatic Bookshelf, a North Carolina publisher of computer books that had at least one of its titles stolen. “But to steal the book and upload it to Amazon takes only a minute. As the expression goes, there’s a low cost of entry.”
An original 2018 copy of “The Sanford Guide to Antimicrobial Therapy,” left, and a counterfeit that was available on Amazon.CreditIsabelle Baldwin for The New York Times
And when someone buys a counterfeit, Mr. Hunt added, the real author may get cheated but Amazon still makes a sale. “You could ask, What’s their incentive to do something?” he said.
A dream turns into something elseAmazon fulfilled Jamie Lendino’s dream of becoming an author.
A computer buff who delights in the digital past, Mr. Lendino, 45, wrote a book called “Breakout,” about the Atari machines of the 1980s that ushered in a new era of gaming. He self-published it two years ago through Amazon, which charged him nothing upfront but took a commission on the 1,223 paperback copies bought by devoted Atari fans.
Then Amazon fulfilled someone’s dream of becoming Jamie Lendino.
A fellow purportedly named Steve S. Thomas took Mr. Lendino’s book a year ago and remade it as his own. Mr. Thomas got rid of the title “Breakout” and converted the subtitle — “How Atari 8-Bit Computers Defined a Generation” — into the title. He put on a new cover and substituted his name for Mr. Lendino’s, although he kept all of Mr. Lendino’s biographical details about being the editor of ExtremeTech.com and writing for PC Magazine and Popular Science.
It was the latest entry in Mr. Thomas’s substantial body of work. He also put his name on scholarly and expensive books like “Preharvest and Postharvest Food Safety” and “Real-World Electronic Voting: Design, Analysis and Deployment,” none of which he had actually written.
The original “Breakout: How Atari 8-Bit Computers Defined a Generation,” by Jamie Lendino, and a counterfeit version credited to an author who probably does not exist.CreditKevin Savetz
Mr. Thomas’s plagiarism of Mr. Lendino brought his caper to a close. Kevin Savetz, another Atari buff, spotted “How Atari 8-Bit Computers Defined a Generation.” He ordered it, although, as he noted, “the title seemed a little familiar.”
When Mr. Savetz got the book, he realized it was more than familiar and tweeted at Mr. Lendino, who was surprised someone was stealing from him.
“If you’re going to counterfeit a book, you’d pick something by Dan Brown or Neil Gaiman,” Mr. Lendino said. “You don’t pick a tech guy writing about a 40-year-old computer.”
Things got weirder. Allison Tartalia, Mr. Lendino’s wife, was browsing on Amazon as all this was happening when she saw that a 152-page biography of her husband had recently been published.
“I was like, ‘Honey? Someone apparently knows something about you that I don’t,’ ” Ms. Tartalia said.
She ordered a copy of the biography, which had been put together by two entrepreneurs using a rudimentary artificial intelligence program scraping material from the internet. So far, they seem to have produced 3,000 of them, including titles such as “Dick Hardt, Identity Guy at Amazon Web Services.” They sell for $15, though sales seem to be rare and satisfied customers even rarer.
A telltale message printed on blank pages of “How Atari 8-Bit Computers Defined a Generation,” a counterfeit.CreditKevin Savetz
After Mr. Lendino complained to Amazon about the counterfeit, the retailer wiped Mr. Thomas’s oeuvre from its store. Only the faintest traces of him remain. He could not be reached for comment because he probably does not exist. Amazon declined to comment.
Ms. Tartalia never received her biography of her husband. The book is listed as “currently unavailable.”
Mr. Lendino holds no grudges against Amazon. “It was truly amazing that I could publish a book without walking into a lot of bookstores and asking them to carry it, or printing a lot of inventory and having to run online web sales myself,” he said.
Last year, he used Amazon’s self-publishing platform to issue “Adventure,” about the Atari 2600.
‘Amazon has done it again’Some counterfeit books, like Mr. Thomas’s, are wholly made on Amazon. Sometimes they come from elsewhere.
One example is “The Art of Assembly Language,” an older computer manual published by No Starch Press. It ended up counterfeited and on Amazon after a sequence of maneuvers that began last November.
That month, a counterfeiter sent 11 digital files — including “The Art of Assembly Language” — to IngramSpark, a print-on-demand publisher in Tennessee. Once the scammer was finished with the minimal paperwork, IngramSpark had 11 new books.
The titles became part of the distribution network of IngramSpark’s parent company, Ingram Content Group, which supplies thousands of retailers with physical books of all types. IngramSpark printed and sold 56 copies of “The Art of the Assembly Language” over the next three months. Amazon ordered many of them.
In January, a keen-eyed customer tipped off No Starch that the book did not look right. The counterfeits, listed for $48, were larger than the real thing, which put the cover noticeably out of alignment. Amazon featured the fakes in its product photo.
“Amazon has done it again,” Mr. Pollock tweeted.
In late 2016, No Starch had found a counterfeit of one of its books, “The Linux Command Line,” on Amazon. A few months later, it happened again with “Python for Kids: A Playful Introduction to Programming” and, the publisher said, at least three others.
Phil Ollila, chief content officer of Ingram Content Group, acknowledged that he had not told No Starch, the copyright owner, that its rights were violated. “That seems like the polite thing to do, doesn’t it?” he said.
That was just one of No Starch’s problems on Amazon.
No Starch publishes “Python Crash Course,” a how-to guide to the Python programming language. Anyone searching those three words recently on Amazon would have seen several self-published books, often “sponsored” — that is, advertised — so they would be perched at the top of the search page.
One book, also called “Python Crash Course,” is an entirely dubious effort. On its front cover is a distorted logo appropriated from the respected publisher McGraw Hill but subtly changed to “RcGraw Hill.”
“Python Crash Course” by Alexis Jordan, with a biography that included details stolen from the suspense thriller writer Dean Koontz.
The book features a biography of Alexis Jordan, its purported author, on the back cover that was stolen from the popular suspense writer Dean Koontz. (“His novels are broadly described as suspense thrillers,” etc.) Inside, there is a completely different biography plagiarized from Jürgen Scheible, a German media artist.
Mr. Scheible said he was dismayed to learn that his life had been stolen. “This has shaken my trust in Amazon and its future,” he wrote in an email. “Where are they going if they are so negligent that a thing like this book and other such books can happen for real?”
Amazon sells “Python Crash Course” for $7. The No Starch book goes for $28.
“Their book is a joke, but it will sucker some people into thinking they’re buying a cheaper version of my book,” Mr. Pollock said.
Bait-and-switch schemes are common in the Amazon bookstore. If someone wants to title a book of self-published poetry “To Kill a Mockingbird” — and someone did — Amazon will sell it next to Harper Lee’s classic novel. Some customers wrote in Amazon reviews that they felt tricked by the author of the verse “Mockingbird,” whose many other titles include “War and Peace” and “For Whom the Bell Tolls.”
In February, Amazon introduced a plan called Project Zero. No longer would brands have to report counterfeits and wait for the retailer to investigate. Project Zero, Amazon said, would give brands “an unprecedented ability to directly control and remove listings.”
Mr. Pollock said Project Zero was a further insult. “Why should we be responsible for policing Amazon for fakes?” he said. “That’s their job.”
But No Starch still needs to keep its books ahead of the imitators and knockoffs. So in November, it began advertising on Amazon.
“It’s about $3,000 a month and rising,” Mr. Pollock said. “I need to keep my books on the first page of results.”
Rewarding Amazon’s dominanceThe Sanford antimicrobial guide has its roots in the work of Jay Sanford, the chief of infectious diseases at UT Southwestern Medical Center in Dallas in the 1960s and later the president of the Infectious Diseases Society of America. There is now a digital version, but many doctors prefer the familiar printed format.
Antimicrobial Therapy is run today by Jeb Sanford, Jay’s son; his wife, Dianne; and Mr. Kelly, who is Dianne’s son and Jeb’s stepson. It is a small operation, only 13 employees working out of a large barnlike building in Sperryville, Va., on the edge of the Blue Ridge Mountains.
Jeb Sanford, Antimicrobial Therapy’s co-chief executive officer, left, and his stepson, Scott D. Kelly, the publisher’s vice president. “There are versions of our text out in the world over which we had no control,” Mr. Kelly said.CreditIsabelle Baldwin for The New York Times
The company declined to disclose its annual revenue, but the Sanford Guide is its principal product. Sales of the book have drifted lower the past few years, with a downward spike in 2018.
In retrospect, this was probably a clue to the growing abundance of fakes. “My estimate is that approximately 15 to 25 percent of our sales were taken away by counterfeiting,” Mr. Kelly said. “We’re talking thousands of books.”
After the guide is printed, all copies go to Sperryville. They are then shipped to wholesalers, retailers and individual buyers. The wholesalers sell the book to Amazon. Third-party sellers on Amazon acquire their stock in several ways. One seller of a counterfeit copy told Mr. Kelly that she had bought the book from Amazon in one of its periodic sell-offs of damaged and returned books.
Sellers on Amazon can pool their goods with the same exact goods offered by Amazon itself, a practice known as commingling. This has advantages for sellers — less processing is needed, so it’s cheaper — but it also explains how Amazon can unknowingly ship counterfeits despite getting stock directly from the printer.
Some of the counterfeits appear to have been copied by scanning. That process can easily introduce numerical errors, especially with a typeface as small as the handbook’s. “There are versions of our text out in the world over which we had no control,” Mr. Kelly said.
The company filed complaints with Amazon about counterfeiting last fall. The bookseller ultimately removed many of the resellers, some of whom then went to Antimicrobial Therapy and complained that they were innocent. Amazon declined to comment on the publisher.
The communications impasse between Amazon and Antimicrobial Therapy was complicated by the fact that they did not have a direct relationship. So in December, AMT opened a vendor site on Amazon, with the bookseller getting a commission of about 20 percent on each copy sold. Under this arrangement, Amazon tells Antimicrobial Therapy where the customer lives, and the publisher ships the book from Sperryville.
As AMT was getting ready this spring to release the 2019 guide, it proposed an even deeper integration with Amazon.
“To eliminate the possibility of Amazon facilitating the sale of counterfeit books, we would like to offer Amazon the opportunity to serve as a wholesaler of our titles, cutting out the middle man,” Mr. Kelly wrote to the company.
It was, in essence, rewarding Amazon by surrendering to its dominance.
“We’d rather not be on Amazon,” Mr. Kelly said. “But we felt like we didn’t have a choice.”
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|From: Glenn Petersen||6/27/2019 9:17:37 AM|
|Amazon partners with retailers for new Counter package pickup service, starting with Rite-Aid|
by Taylor Soper
on June 27, 2019 at 12:36 am
Amazon is teaming up with national drugstore Rite Aid as part of a new package pickup service that further expands the tech giant’s logistics network.
The new service, Counter, turns physical retail locations into package pickup centers, giving customers another delivery option for their Amazon orders at no extra charge. It went live today in more than 100 Rite Aid stores and will reach 1,500 locations by the end of the year. Amazon plans to ink deals with other businesses and chains. It’s under the Amazon Hub umbrella, which also includes Amazon Lockers for picking up packages.
“We are excited to partner with national businesses like Rite Aid, and local businesses in the future, to create an outstanding experience for our shared customers,” Patrick Supanc, worldwide director of Amazon Hub, said in a statement.
It’s not clear how these partnerships are structured financially. In any case, it’s a fascinating deal — physical retailers such as Rite Aid hosting package pickup hubs for Amazon, the e-commerce giant that has taken business away from brick-and-mortar retail companies over the past several years.
How does Rite Aid feel about lowering last-mile shipping costs for Amazon and helping its customers, the very ones that may have otherwise purchased products from physical Rite Aid stores before Amazon rose to e-commerce dominance?
“Creating a seamless, convenient customer experience is a key element of our strategy and digital transformation,” Jocelyn Konrad, executive vice president, pharmacy and retail operations of Rite Aid, said in a statement. “Being the first store partner for Counter in the U.S. is a differentiator for Rite Aid and we believe our partnership with Amazon, that includes Locker, creates a stronger in-store experience for existing customers and new customers that come in to pick up their packages.”
One advantage for a company such as Rite Aid in a deal like this is increased traffic in its actual store.
Rite Aid’s stock has dropped from above $170 two years ago to around $7. Shares dropped more than 10 percent on Wednesday alone after the company reported a larger-than-expected loss.
Amazon, which bought Whole Foods in 2017 and is inching closer to the $2,000/share milestone, has been rumored as a potential acquirer of Rite Aid. Amazon’s acquisition of Pill Pack last year adds more fuel to that idea.
Rite Aid’s deal with Amazon is similar to the one Kohl’s inked in April, with the department store accepting Amazon returns at its stores as part of an extended partnership.
Amazon originally launched Counter in the U.K. with NEXT and in Italy with Giunti Al Punto Librerie, Fermopoint, and SisalPay stores to positive reception.
Counter adds another option for Amazon customers beyond their front door for getting packages delivered. The Amazon Hub family includes the 2,800-plus lockers that Amazon has scattered around the U.S. — like inside Whole Foods locations or outside 7-Eleven stores — in addition to apartment lockers that Amazon developed last year. The company has also rolled out initiatives such as in-car package delivery.
The Seattle tech giant also operates Amazon pickup locations, a glorified version of the lockers that are staffed by workers, and pickup locations for groceries.
The centralized pickup points help Amazon fulfill its promise of 2-day and soon-to-be 1-day free shipping for Prime members who spend $119 annually. It speeds up delivery times and offers an alternative to receiving packages at home or work, particularly for those concerned about package theft.
These services also help Amazon compete with companies such as Walmart and Target that offer in-store pickup for online orders. Walmart offers its own package pickup locations, as well.
Amazon has historically relied on partners such as FedEx, UPS, and USPS to help deliver its packages. But the company is now investing heavily in its own cargo jets, trailer trucks, and related infrastructure to help support its Prime fast-shipping program. Amazon is also debuting its delivery drones later this year.
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|From: Glenn Petersen||6/28/2019 11:54:53 AM|
|Amazon, the new king of shipping|
June 27, 2019
Less than a decade after Amazon broke into the logistics industry, it has become its own biggest shipper.
Why it matters: While the world has fixated on Amazon's moves into books, groceries and cloud computing, perhaps most formidable of all has been its swift break into a different business — package delivery.
In a relatively short time, Amazon has built up a logistics arm that is already turning this industry worth many billions on its head.
-- "Amazon is about 40% of all e-commerce. If they're handling half of their own shipments, that's 20% of the whole market," Alex Pellas, a logistics expert at market research firm Rakuten Intelligence, says. "That's huge."In a dataset provided first to Axios, Rakuten Intelligence followed tracking numbers for millions of Amazon packages per month.
-- Researchers found that nearly half (48%) of Amazon packages are delivered by the company itself.
-- That's a dramatic shift from two years ago, when the Postal Service delivered more than 60% of Amazon parcels, and Amazon just around 15%.The total U.S. domestic package market in 2018 was about $106 billion. Of that, $35–$40 billion, or about a third, was e-commerce, according to David Vernon, an analyst at Bernstein.
In a statement to Axios, Amazon said, “The numbers are not an accurate representation of how Amazon shipments are shared between Amazon and our carrier partners.”
What's happening: As Amazon becomes a shipping juggernaut in its own right, experts say it will attack two different sets of rivals — retailers and shippers.
-- The e-commerce behemoth is already faster than competitors — and it has ambitions of getting even speedier. It takes Amazon an average of 3.2 days to deliver a parcel after a shopper clicks "buy," per Rakuten Intelligence. For all other e-commerce companies, the average time is 6 days.
-- Amazon — which has started offering its shipping capabilities as a service — will be able to ship products for about two-thirds the rates of UPS and FedEx, Pellas projects. Its trucks and planes are out delivering Amazon packages anyway so it can offer shipping at cost, instead of collecting a margin."We're now talking about a retailer that will control the entire process" from manufacturing to delivery, says Mark Rosenbaum, a professor at the University of South Carolina.
But, but, but: While Amazon's suddenly large profile might look menacing, it won't necessarily move as it did in books to knock out its rivals, says Yossi Sheffi, director of MIT's Center for Transportation and Logistics. "They just want to take all the profitable routes and operations and leave the carriers with all the dogs.”
The bottom line: Amazon's march into shipping is the company's "classic model of partner with, copy, and unseat their competitors," says Jaimee Minney of Rakuten Intelligence.
-- Shipping partners have begun cutting ties with the e-commerce giant as it steps onto their turf. Earlier this month, FedEx chose not to renew its contract with Amazon for air shipments. Others could follow suit, experts say.
-- Like Amazon, Walmart also has a logistics business of its own and could emerge as a shipping competitor.Go deeper: The race to own logistics
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|From: Glenn Petersen||6/30/2019 11:09:09 AM|
|Amazon Air is quietly expanding toward Asia's doorstep in its latest warning shot to FedEx and UPS|
Jun. 24, 2019, 5:22 PM
Observers say Amazon is building a logistics empire to compete with UPS and FedEx. Beginning June 27, Amazon will start daily operations out of Stevens Anchorage International Airport — one of the 20-plus US airports from which Amazon Air flies. It does not appear that the move points to Amazon's desire to cater to Alaska's 737,000 residents. Rather, it shows that Amazon is positioning itself to start flying to Asia. Visit Business Insider's homepage for more stories.
Amazon Air is adding another gateway to its network of airports: Anchorage, Alaska. Amazon's in-house air cargo fleet, which will total 70 planes by 2021, is key to the e-commerce behemoth's plan to achieve one-day shipping for its Prime members this year.
"We're thrilled to bring Prime members in Alaska their packages faster," an Amazon spokesperson told Business Insider in a statement. "Amazon Air's daily service to Anchorage Airport will begin this week. We are currently focused on expanding our network across the United States."
But observers say Amazon is not necessarily invested in catering to Alaska's 737,000 residents — the third-smallest state in the US by population with about 2% of the country's residents.
Rather, it's a sign that Amazon is inching toward expanding its in-house logistics capabilities to be able to move goods to and from Asia.
"There's no other reason," Brandon Fried, the executive director of the Airforwarders Association, told Business Insider. "Alaska and specifically Anchorage is a technical stop for freighter aircraft traveling to and from Asia."
Anchorage International is the classic pit stop for air cargo shuttling between North America and Asia Stevens Anchorage International Airport is the fifth-busiest cargo airport in the world and No. 2 in the US, according to Jim Szczesniak, the director of Anchorage International. There are more than 20 daily flights from Anchorage to Chicago, and more than 20 daily flights from Anchorage to Shanghai, China.
Of cargo flights going between Asia and North America, 79% of them stop at Anchorage.
"Anchorage gives you the option to do both — you can serve the Anchorage market but you have the ability to get the Asian and American markets, too,"Szczesniak told Business Insider.
UPS and FedEx both have bases in Anchorage, while DHL and Chinese cargo airliner SF Express also both operate out of the airport, Szczesniak said. "Now we've added Amazon Air," Szczesniak said. "We've got all these integrators that are there and taking advantage of Anchorage."
Amazon is blurring the line between e-tailer and transportation company — again But there aren't any retailers flying their goods to and from the Alaskan cargo hub in their own branded planes. Opening the base in Anchorage shows Amazon's ever-growing interest in becoming a third-party cargo carrier to compete with FedEx and UPS.
"We've told our members that Amazon is obviously an online retailer that is trying to expedite the delivery process as efficiently as possible for its customers," said Fried, who has nearly 40 years of experience in the air-freight industry. "But, at the same time, their foray into freight forwarding and transporting cargo for outside entities that are not buying its products is entirely possible in the future."
UPS and FedEx both had no comment on Amazon's latest move.
Starting this year, Amazon has begun describing itself to investors as a "transportation and logistics services" company. It said in its 2018 annual filing that it competes "across geographies, including cross-border competition."
And just last week, Amazon announced it's adding 15 new cargo planes to its network, bringing it to 70 planes by 2021.
"In the last three years, Amazon has built a global end-to-end logistics network that comprises of their own internal last-mile network, their own trucks, their own trains, their own planes, their own truck brokerage, and their own air and ocean freight forwarding," Morgan Stanley analyst Ravi Shanker previously told Business Insider.
But the cargo line is still developing. Most of the planes in Amazon Air's fleet have the range to cover the US, but not enough to make the trek across the Pacific. In order for Amazon's fleet to get to Asia, it makes sense to invest in Stevens Anchorage International Airport as a refuel and technical stop.
"That technical stop is going to be required and they're probably using Anchorage as a beachhead for an assault on Asia," Fried said.
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|From: Glenn Petersen||7/3/2019 4:56:04 PM|
|Inside the conflict at Walmart that’s threatening its high-stakes race with Amazon|
Walmart bought Jet.com to compete with Amazon, but Jet founder Marc Lore is feeling the heat as e-commerce losses surpass $1 billion.
By Jason Del Rey @DelRey
Jul 3, 2019, 6:30am EDT
Amazon now accounts for nearly 38 percent of online retail in the US. Walmart has just 4.7 percent. Javier Zarracina/Vox
In September 2016, Walmart made a giant, risky bet.
The country’s most dominant brick-and-mortar retailer agreed to the largest-ever acquisition of an e-commerce company: a $3.3 billion purchase of a fast-growing but money-sucking online shopping site called Jet.com.
There were no other bidders for Jet back then, but Walmart was desperate to close the huge gap between itself and Amazon, the online shopping wrecking ball. And CEO Doug McMillon had become convinced that Jet founder and CEO Marc Lore, who previously founded Diaper s.com and sold it for a fortune to Amazon, was perhaps the only person who could do it.
Nearly three years later, Walmart’s stock price is up 53 percent, compared to a 38 percent increase for the S&P 500 over the same period of time.
The company’s US online sales increased 40 percent last year, buoyed by a successful expansion of an online grocery business; the digital-first brands and digital-first talent it has acquired have breathed new life into its portfolio; and it has shed at least part of its reputation for being a digital dinosaur.
Walmart is, by most measures, in a more competitive position than it was before it acquired Jet.
But it’s still far behind Amazon, and inside Walmart, tensions are rising. Multiple sources tell Recode that the company is projecting losses of more than $1 billion for its US e-commerce division this year, on revenue of between $21 billion and $22 billion. Walmart does not disclose these figures publicly and declined to comment.
That size loss is an eye-popping figure for a company that is used to printing cash and that prides itself on its profitable operations; the overall Walmart business brought in nearly $7 billion in profits during the last fiscal year.
And CEO Doug McMillion and Walmart’s board of directors are not happy about it. So they are increasing pressure on Lore and his online business to cut losses, multiple sources told Recode, which will likely result in selling off at least one online fashion brand, ModCloth, which it purchased just a few years ago.
To make matters worse, the executive team that leads Walmart’s core business in the US — physical stores — is increasingly frustrated by some of the money-losing initiatives, and sources say its leader is perturbed by the credit Lore’s division gets in the media and on Wall Street for the success of Walmart’s growing online grocery business.
While this strained dynamic inside Walmart is not unheard of for a well-established company attempting to navigate big, technological disruption, the stakes are huge and the company cannot afford the delays that typically result from infighting.
Walmart CEO Doug McMillon delivers his keynote during the annual shareholders meeting event on June 1, 2018, in Fayetteville, Arkansas. Rick T. Wilking/Getty Images
Amazon now accounts for nearly 38 percent of online retail in the US, up from 32 percent in 2016, according to an estimate from eMarketer. Walmart, on the other hand, accounts for just 4.7 percent, up from 2.6 percent three years ago.
While e-commerce still only represents 5 percent of Walmart’s entire US business, it represents where the industry is moving.
This is the reality Lore is still struggling to get Walmart’s entire executive team and board to accept, though sources say McMillon also acknowledges it: E-commerce in the US is becoming a “winner take all” industry. Or, at a minimum, a “winner take most” market.
Amazon is a very real existential threat to Walmart’s entire future if the retailer does not significantly close this gap — and fast. If Walmart falls further behind Amazon or doesn’t make up ground, we’re increasingly likely to face a future where Amazon is even more the de facto online store for everyone, with little legitimate competition or compelling alternatives on the market.
Money-losing is not the Walmart waySo Walmart is in full catch-up mode just to make a dent in Amazon’s lead.
Lore has aggressively pitched the company’s management and board on the idea that Walmart needs to spend billions a year on new warehouses if it’s going to seriously compete online with “the Everything Store” and its speedy delivery offerings, sources say.
Amazon has 110 fulfillment centers in the US, while Walmart has 20 at most. Walmart’s in-store selection is also not large enough to use stores to fulfill online general merchandise orders at a scale that would rival Amazon’s product catalogue.
The problem is that building the online version of the Everything Store requires millions more products, and that means two things that Walmart’s current infrastructure does not support: dozens more e-commerce warehouses and a lot more merchants and brands selling through Walmart.com.
The former is mainly a cash problem. As in, you need to spend a lot of cash to build a warehouse network to rival Amazon’s. But Walmart has not secured the same trust — and long leash — from Wall Street investors that Amazon has.
Amazon, on the other hand, has literally been building out its warehouse infrastructure for two whole decades, and it can offset its losses from expensive investments via high-profit businesses like Amazon Web Services and its fast-growing advertising business.
Adding more selection certainly involves hiring more corporate employees to source tons of new brands, but it also requires the infrastructure to be able to keep the quality of products high while rapidly expanding selection. And that’s not an easy proposition, as Walmart has found and as Amazon certainly has too.
Walmart has mostly rebuffed Lore’s entreaties for huge new warehouse spending, in part because of how much deeper into the red the investments would put the e-commerce business over the next few years.
But sources say the company recently did agree to some investments that would expand and improve current e-commerce warehouses, while possibly adding more new facilities. The timing is important because Walmart recently announced a push to offer free, next-day shipping on a curated selection of up to 220,000 items — with no membership fee.
That followed an Amazon announcement a few weeks earlier that the standard shipping speed for Amazon Prime members, who pay $119 a year for a membership, would soon decrease from two days to one day. Amazon says that shipping speed will be available on more than 10 million products, dwarfing Walmart’s selection.
Walmart has added more than 2,000 new brands to its website over the past year, in part through acquisitions of online specialty retailers.
“It’s taking longer than I thought it was going to,” McMillion told analysts in October of the e-commerce unit’s profitability, “and I have been surprised at just how many brands there are out there to get signed up. ... Who knew we needed 2,000 of them. I didn’t.”
Even so, there is still a huge online selection gap between Amazon and Walmart, and it’s a critical reason for Amazon’s success.
First, the wider the selection, the more types of orders a customer can depend on Amazon for, and thus the more frequently they shop on Amazon.
Second, online retailers like Amazon and Walmart can typically squeeze more profits from lower-volume goods, such as an obscure book, a generic Halloween mask, or an air filter — what is referred to in the retail industry as the “long tail.”
While big retailers beat each other up on price for the most popular and oft-purchased items, like name-brand diapers or toothpaste, they often have more wiggle room on profits in the long tail. And Amazon’s long tail is millions of products long.
How Walmart’s next-day delivery push will impact profitability remains to be seen. At least initially, a large percentage of products available for next-day delivery consist of those that would be unprofitable if they were ordered on their own, two sources told Recode. That might also be true for Amazon, but Amazon has Prime members’ annual membership fee to help cover shipping costs.
Walmart is hopeful that the $35 minimum order threshold it has set for its free, next-day delivery program will lead to multi-item orders, which have a better shot at creating a profitable order. And that explains why Lore has publicly said that next-day shipping can actually help profits, because multi-item orders will typically now come in one box from the same warehouse, rather than from several, saving the company on shipping costs in the process.
Selling off new assetsThe push to rein in losses has also forced Lore to reevaluate some of his division’s non-core, money-losing businesses. As a result, Walmart will likely sell at least one of the three digital fashion brands the company has bought under Lore.
Lore has overseen the acquisitions of the menswear brand Bonobos for $310 million, the vintage-style clothing brand ModCloth for less than $50 million, and, most recently, the women’s plus-sized fashion brand Eloquii for $100 million. Part of the thinking was that those deals would give Walmart and its online stores exclusive merchandise that shoppers can’t find on Amazon, which could help the Middle America retail giant appeal to a new generation of consumers who typically wouldn’t shop at Walmart.
But all three businesses are still unprofitable, sources say. And in recent months, Walmart has discussed the potential sale of both Bonobos and ModCloth to separate outside buyers, according to multiple sources familiar with the discussions.
ModCloth will likely be sold this year, these people said, and almost certainly for less than what Walmart paid for it. On the other hand, Walmart plans to hang on to Bonobos, after contemplating a sale but deciding against it.
The decision to sell ModCloth appears to stem from a realization that Walmart is going to be unable to turn around the company’s economics in the near term. The company was not performing well before the acquisition, and the business has not improved dramatically since.
The Bonobos talks, on the other hand, started after a private equity firm expressed unsolicited interest in purchasing the brand, two sources said. Walmart engaged in some discussions but ultimately decided against a sale.
Either way, Walmart has decided to stop purchasing digital-native brands for at least the next year, according to three sources, barring an incredible acquisition opportunity that is just too good to pass up. Buying these brands was part of Lore’s vision for how Walmart would differentiate from Amazon, so this shift is more evidence that some of his plans aren’t working out how he and Walmart had hoped.
Walmart does plan to continue to incubate its own brands, but with a focus on ones that are natural fits to be sold on Walmart.com and at Walmart stores. The company launched a mattress brand, Allswell, last February in both Walmart’s physical and digital storefronts, to compete with other bed-in-a-box brands like Casper and Tuft & Needle. The company has also been working on a new beauty brand, but it is unclear when or if it will launch publicly.
On the other end, no Bonobos, ModCloth, or Eloquii products are sold on Walmart.com or in Walmart’s stores. These brands are sold on Jet.com, but Walmart continues to deprioritize the shopping site Lore founded and to scale back its ambitions. Walmart has significantly cut the marketing dollars it spends on Jet since the acquisition, as well as the geographic markets in which it promotes the shopping site. And Lore announced last month that Jet’s president would be leaving the company and that the Jet team will be folded into the larger Walmart organization.
Internal tensionsAll the while, the relationship between Lore and Walmart US CEO Greg Foran has soured, according to two sources familiar with the dynamic. One sore spot is the online grocery business. Foran is miffed by the public credit that Lore’s division gets for the growth of the service, which involves shoppers placing orders online but picking them up curbside at one of 2,000-plus stores after they are picked out by Walmart store employees. The program launched before Walmart acquired Jet.com.
“Greg and Marc started out in a good place,” one person familiar with the dynamic told Recode. “But over time, it’s very hard to be the person running a huge part of the organization that’s printing all the cash and get no public credit.”
The two leaders have also had strategic disagreements over the size of the losses that Lore’s online businesses are racking up in the US, and how resources could otherwise be allocated to moneymaking initiatives inside Walmart’s physical stores. Foran would prefer more resources go toward initiatives with clearer payoffs, like cutting in-store prices, multiple sources told Recode.
Foran and some members of his leadership team have also been frustrated by some of the company’s money-losing forays into building in-house startups that seem unlikely to ever reach mass scale or grow large enough to move the needle for Walmart’s overall business.
Walmart launched an incubation arm, called Store No. 8, under Lore, and one of its in-house startups is Jetblack, a Walmart-incubated personal shopping service initially targeting affluent moms that is only available in New York City. Members pay $50 a month to be able to order a wide range of products day and night — via text message — with no added delivery fee.
Lore recently commented that Jetblack customers spend on average $1,500 a month through the service, but Walmart has not released any information about how many customers the startup is serving or disclosed any financial metrics.
“The whole Walmart culture is to be humble, so all these startup announcements are countercultural in Bentonville,” one source said.
One other factor to keep in mind, though it’s unclear if it contributes to the Foran-Lore tension: In past years, Foran’s annual performance bonus has been heavily tied to the operating profit of Walmart’s US business, which includes the e-commerce division that Lore runs. Walmart’s US operating profit hasn’t, however, factored into Lore’s annual bonus.
Either way, the politics and push-pull has worn Lore down, according to three people who know him well.
Lore still largely has McMillon’s support, but the entrepreneur has not previously had a boss for this length of time since at least the early 2000s.
All three sources told Recode that they do not know for sure whether Lore will stay at Walmart for the full five years — through the fall of 2021 — that he agreed to at the time of the acquisition. But all three said they would be surprised if he does.
“The public narrative is basically that Marc is boosting the top line and hitting all these numbers,” one of these people said. “But then you talk to people internally and it’s doom and gloom. He’s suffering.”
Still, a person familiar with Lore’s thinking said the e-commerce executive fully intends to keep his commitment to stay at Walmart for least five years. Among the reasons: a sense of loyalty to McMillon.
But he has other good reasons, too. Entering this fiscal year, Lore was still owed $291 million in cash from the acquisition over the next three years, as well as shares of Walmart stock that’s valued at nearly $300 million today.
What’s nextSome inside Walmart would like the company to lean even harder into its digital strength: its grocery business. By the end of this year, Walmart says it will offer grocery pickup from 3,100 stores across the US and same-day grocery delivery from 1,600 stores. Walmart also plans to soon restart an experimental service where it will deliver groceries to someone’s home and actually load up the customer’s fridge when they get there.
Executives in this camp believe Walmart doesn’t need to match Amazon blow for blow when it comes to the size of its online product catalog, as long as Walmart builds a larger online grocery business than Amazon does.
Such an approach would resemble in some ways what Target has done: differentiate in one way, and then scale back the ambition of building the Everything Store online. In Target’s case, it differentiates itself through a growing assortment of exclusive in-house lines like the kids’ clothing brand Cat & Jack and the women’s apparel brand A New Day. Both now register more than $1 billion in sales annually and are only sold at Target stores and on Target.com.
The company is also fulfilling more than 80 percent of Target.com orders from its stores, meaning both that Target doesn’t need a ton of expensive warehouses and also that it is okay selling mostly the products that can fit in those stores.
The problem with a similar approach for Walmart is that investors are likely to punish it if it invests too much in the future, but they are bound to also disapprove if Walmart greatly scales back its overall ambition. That mainly has to do with its size: In the past fiscal year, Walmart’s US business had revenue of more than $330 billion. Target’s revenue, on the other hand, was a fraction of that at $75 billion.
In the end — whether Lore stays or goes, whether Walmart management and its board come to a better alignment on how aggressively to challenge Amazon or not — one counterintuitive thing is for sure: Amazon actually needs Walmart to be a strong No. 2 competitor in online commerce.
That’s because politicians and the Federal Trade Commission are already asking tough questions about Amazon’s business practices and market power. How much more intense would the scrutiny get if it became clear that even Walmart, with its history and its own market power, didn’t stand a chance against Amazon?
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