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Business Report: Changes Coming To Amazon Delivery
Friday, May 3, 2019
Photo by Reed Saxon AP
KPBS health reporter Susan Murphy spoke to SDSU marketing lecturer and co-founder of BottomLine Marketing Miro Copic discuss some of the week’s top business stories.
Q: Consumer spending saw a big jump in March and we also had a strong jobs report out today. Is this a good sign of the strong economy for the year ahead?
A: Well, certainly consumer spending was up nine-tenths of 1%, the most since August of 2009. Consumer spending represents 70% of all economic activity. So this is really good news as we saw last week in the gross domestic product report. GDP growth of 3.2% that was driven by this consumer spending. Today's job report is even better news: 263,000 jobs added and the unemployment rate went down to 3.6%. And real wages increased. So all this is really positive. This gives momentum into this upcoming quarter because for consumers this quarter is really big.
Q: Amazon is known for its free two-day shipping and is about to cut that down to half a day or one day. What is this about?
A: Well, you know Amazon is also announcing that they're increasing the subscription for the Amazon Prime service by 20% to $119. So it's kind of offsetting that the service you're using is increasing by 20% and you need to see some value. And consumers really see free shipping or rapid shipping as a big value. So that's a big reason why Amazon is doing this. But also they're putting their money where their mouth is, they're going to invest this quarter $800 million in streamlining their logistics chain. So consumers, by the end of the year, in urban areas, suburban areas, and even rural areas, will get their Amazon packages in one day.
Q: The biggest Wall Street debut this year is fake meat. Why are so many investors hungry for Beyond Meat?
A: Well, you know this is because consumer trends are saying that consumers are looking to improve their diets. They're looking at meat substitutes. Millennials also look at it from an environmental perspective. So here's this company that earned less than $100 million last year. It lost $30 million in profits. And they are the most successful IPO beating out Levi Strauss or Lyft. The company is worth $3.7 billion. What it means is that consumers are looking for meat substitutes. We’ve had veggie burgers around for a long time, but the taste wasn't there. All of a sudden companies like Beyond Meat delivered both taste and texture. It's similar to ground beef. This week the Impossible Burger was expanded at Burger King, and nationally by the end of the year. Big companies are taking note like Nestlé. They're going to launch the Awesome Burger in the fall.
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