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Nate McCullough | News Editor 770-718-3431 | news@gainesvilletimes.com The Times, Gainesville, Georgia Thursday, January 2, 2020 A decade in review JOHN CLARK I Associated Press Boxes roll down the conveyor inside the Amazon Fulfillment Center on Tuckaseegee Road in Charlotte, N.C. Six ways retail shopping changed over the last 10 years BY DOREEN CHRISTENSEN Sun Sentinel Few decades in history have brought more change to retail shopping than the last 10 years. This year, more than 9,000 retailers went belly up or closed stores, accord ing to a tally by Business Insider. Payless Shoes, Dress Barn, Barney’s, Gymboree, Sears, Kmart, Charlotte Russ, Chico’s, Gap, Bed Bath and Beyond, and Office Depot were among the long list of legacy retailers that succumbed in the so-called Great Retail Apocalypse of 2019. Before that, David’s Bridal, Brookstone, Claire’s, Bon-Ton, Toys R Us and Sports Authority, among many others, went down with great thuds. Malls struggle to rent empty space. Amazon The retailer, which began as an online bookseller in 1994, has profoundly influ enced and changed how we shop. It now dominates every aspect of retail. Just a few years ago, it seemed unimaginable that millions of us would be forking over $119 a year for the privilege of shopping online. Still, Amazon has managed near total destruction of retail and it is only going to get bigger, with its long tentacles touching and shaping how and when we shop. While Amazon didn’t share sales fig ures, Cyber Monday was the biggest shop ping day in the company’s history. That played into a record $9.4 billion in sales on Cyber Monday, an all-time record this year. Walmart and Target are effectively competing, and have an advantage with thousands of physical stores. That has Amazon playing catch-up after acquiring Whole Foods Market in 2017, with plans to open dozens of grocery and Amazon Go convenience stores, sans cashiers. Amazon now has the $840 billion grocery market in its crosshairs. Prepare for simi lar disruption ahead. The great recession: The collapse of the United States real estate market in 2007 caused a calami tous financial crisis that would reverber ate through much of this decade, setting in motion a decade-long obsession with savings that became a survival tactic for many struggling consumers. Compa nies shed more than 8.8 million jobs as median household wealth fell 35%, from $106,591 to $68,839 between 2005 and 2011, according to the Center on Budget Policy and Priorities. The unemployment rate did not return to 5%, where it was at the start of the recession, until late 2015. South Florida suffered more during the recession than almost any other place in the country, thanks to a housing bubble and bust, a 2010 Brookings Institution study showed. The recession made using coupons and hunting down deals cool, ushering in the era of discount chains. Marshalls and TJ Maxx, long fixtures in off-price retail, had to move over as chains with cheap merchandise started popping up and prospering while legacy retailers struggled to adapt. Discount retailers Thanks to the recession, everyone needed to save a buck. Dollar Tree, Ross Dress for Less, DD’s Discounts, Tuesday Morning, Big Lots, Five Below and other off-price chains began to multiply like rabbits. Macy’s, Saks Fifth Avenue, Nor dstrom, Bloomingdales and others began opening and expanding outlets. Discount ers added pressure on brick-and-mortar legacy retailers such as Sears, Kmart, JC Penney and others to transform their business models with a multifaceted approach to sales or risk certain death. Any way you want it As the decade progressed, Amazon’s dominance made it necessary for retail ers to provide customers with a seam less shopping experience no matter how they wanted to make purchases. This omnichannel strategy offers consum ers a seamless experience in stores and online along with convenient services such as free in-store pickup and two-day delivery. Today, Sears and Kmart are on life support because they were unable to evolve quickly enough in this arena. JC Penney struggles. Target, Walmart, Best Buy, Macy’s and Kohl’s have thrived. Going mobile When Apple introduced the iPhone in 2007, few of us grasped how it would change so many things. It took a few years to catch on, but by 2010 we began paying hundreds of dollars for handheld devices for everyone in the family and also paying wireless phone bills that rival some mortgages. This Cyber Monday mobile transactions soared, with $3.1 bil lion of sales coming from smartphones, a record. Now we use these devices to ring up savings, log into loyalty programs, store coupons in mobile wallets, get text alerts, research products and make pur chases. Stores use smartphones and apps to track our movements and spending when in stores and market their products. Hearing voices Remember Hal 9000 in “2001: A Space Odyssy”? The 1968 film was a decade off in predicting the advent of artificial intelligence. Apple made Siri available on iPhones in 2011. Amazon introduced its voice assistant, Alexa, on Echo devices in 2014. Then Google introduced its assis tant in 2016. Now, we’re all talking to computers — which are eavesdropping on us 24/7 — asking them to turn on music, order items off the internet, make grocery lists and remind us of every thing from soccer practice to doctors appointments. Huawei announces record 2019 revenue despite export ban to American suppliers BY DAVID PIERSON Los Angeles Times In a year in which the United States mounted an unprecedented effort to undermine China’s largest telecommuni cations company, Huawei made sure it got the last word. The firm announced Tuesday that its revenue surged 18% to more than $120 billion in 2019 despite a ban on U.S. exports to the company starting in May. “Despite concerted efforts by the U.S. government to keep us down, we’ve made it out the other side and continue to create value for our customers,” Eric Xu, one of Huawei’s three rotating chairmen, said in a statement. “These figures are lower than our initial projections, yet business remains solid and we stand strong in the face of adversity.” The New Year’s Eve message capped the toughest year yet for the telecommu nications giant, which was pushed into the center of the U.S.-China trade war. In addition to being blacklisted for U.S. suppliers, the company was indicted in January by the U.S. Justice Department, accused of stealing American technology and violating trade sanctions against Iran. As a result, the company’s chief financial officer, Meng Wanzhou, has been under house arrest in Vancouver, Canada, fighting extradition to the U.S. She is the daughter of Huawei’s founder and chief executive, Ren Zhengfei. Huawei fought back by suing the U.S. HUAWEI WANG ZHAO/AFP I Associated Press Chinese telecom giant Huawei announced a revenue of more than $120 billion. government and launching a public rela tions campaign. Still, the company has struggled to dispel fears it poses a national security threat to other nations because of its dominant position in manufactur ing next-generation 5G mobile network equipment. The company’s murky past, which includes Ren’s tenure in the military, generous state support and evidence of spying and intellectual property theft has contributed to widespread distrust of Hua wei among the U.S. and some of its allies. The company’s 5G business continues to grow, however, as Washington hasn’t been able to persuade many other gov ernments to follow the U.S. in banning the Chinese company’s networks. Huawei’s competitive prices and technology have given it a leg up on 5G competitors such as Europe’s Ericsson and Nokia. Huawei is the world’s second-largest smartphone manufacturer, and sales of its handsets helped propel Huawei’s 2019 revenue, Xu said. Continued access to components needed to build those phones has been crucial. Analysts said Huawei has survived by increasingly relying on its own chip manu facturer, HiSilicon. It also switched from U.S. suppliers to those in Taiwan, Japan and South Korea after it was blacklisted by the Trump administration. Meanwhile, American suppliers that produce their equipment overseas are still allowed to do business with Huawei. These factors together allowed Huawei to forge ahead, said Dan Wang, a technology analyst for research firm Gavekal. “Huawei has been successful in replac ing components,” Wang said. “It’s a big surprise to the U.S. government. We’re in novel territory.” Where the company will struggle, ana lysts say, is in producing a viable alterna tive to Google’s suite of apps, which are no longer permitted on Huawei’s phones as a result of the blacklisting. While that won’t hurt the company’s China market, where Google is banned, it will affect its foreign markets, particularly Europe. Huawei will have to persuade app developers — many who are cash- strapped because of the nature of their business — to take a chance on Huawei’s mobile ecosystem rather than a sure bet such as Google. “The software is crucial,” Wang said. “It’s quite likely overseas smartphone sales will suffer.” Law to force TV providers to show costs BY RON HURTIBISE Sun Sentinel Who hasn’t felt ripped off when their cable or satellite television bill suddenly skyrockets, with no advance warning? Who hasn’t felt stung when the first bill for that $29-a-month plan arrives, packed with previously undisclosed charges for equipment rentals, advanced DVR services, broadcast fees, franchise fees, protection plans, multiple receiver charges, HD charges, regional sports fees and more? Well, lower your blood pressure. Help is on the way. A new bill enacted by Congress and signed in late December by President Donald Trump will protect consumers from some surprise fees and at least provide an opportunity to opt out of the ones to come. Called the Television Viewer Protection Act of 2019, the law takes effect on June 20 unless the Federal Communications Commission grants a six-month extension. It will apply to both stand-alone TV pack ages and the TV portion of bundled plans that combine TV with internet service. The law includes several key protections endorsed by the nonprofit consumer protec tion agency Consumer Reports: Cable and satellite TV operators will have to disclose the full price of their service — including all fees, charges and taxes, as well as when promotional discounts will expire — within 24 hours after consumers sign up. New subscribers will be able to cancel with no penalty within 24 hours after receiving the full-price disclosure. Providers are forbidden from charging cus tomers to rent equipment they don’t use, such as charging to rent a router or modem, when customers choose to use equipment of their own. “People across the country are fed up with all of the extra fees they pay each month that keep growing more costly year after year,” said Consumer Reports senior counsel Jona than Schwantes. “Cable companies shouldn’t be allowed to disguise the true cost of service by charging a long list of add-on fees that aren’t clearly disclosed when customers sign up for service.” AT&T, owner of DirecTV and U-verse, declined to comment for this story. But a spokesman pointed to a Dec. 19 blog entry on AT&T’s website blaming Congress for allow ing broadcast companies to increase retrans mission fees charged to cable and satellite providers from $200 million in 2006 to $11.7 billion in 2019 — an increase of more than 5,000% for content available for free through an antenna. Consumer Reports fought for the law as part of a campaign it called “What the Fee?!” aimed at requiring industries to disclose sur prise fees and encouraging consumers to fight back. Consumers spend an average $450 a year in extra fees imposed by TV and Internet provid ers, estimated a report in October. While some add-ons are taxes imposed by local, state and federal governments passed onto consumers, others are created by the pro viders “for things that are nothing more than a cost of doing business,” the October report stated. Examples include the so-called Broadcast TV Fee, Regional Sports Fee, and Set-Top Box Fee, the report said. Combined, the company- imposed fees amount to a 24% surcharge on top of the advertised price, the report said. Consumer Reports estimated the fees could be generating as much as $28 billion a year for cable companies. The new law wasn’t a grand slam for con sumers and Consumer Reports. The House version required disclosure of add-on fees before consumers sign up. But the version passed by the Senate shifts the disclosure requirement to within 24 hours after sign-up, according to the pay-TV industry watchdog site FierceVideo.com. Also, the law only applies to pay-TV provid ers, and not internet service providers (ISPs). Consumer Reports’ report points out that while TV consumers can fight back by “cut ting the cord” and relying on over-the-air and streaming apps, “hidden fees are starting to creep into ‘internet only’ service packages as well.” DREAMSTIME I Tribune News Service Cable and satellite TV companies will have to be upfront about how big new customers’ bills will really be under provisions of a new law enacted by Congress and the president this month. Tesla sputtering; analyst sees sales falling short of targets Musk BY REX CRUM The Mercury News Tesla took a hit on Monday as investors turned on the electric carmaker after a Wall Street analyst said he thinks the com pany will miss its own vehicle delivery targets for 2019. Jeffrey Osborne, of Cowen & Co., said in a research note Monday that he expects Tesla will report deliveries of 101,000 vehicles for the fourth quar ter of the year when it gives its quarterly delivery totals in early January. That number would be a record for vehicle deliveries in a quarter for Tesla, and would give the com pany approximately 356,000 deliveries for this year. Osborne’s forecast would leave Tesla falling just a bit shy of the 360,000 delivery target that Chief Executive Elon Musk said in October that he was confident the company would reach. Osborne actually raised his fourth-quarter delivery esti mates for Tesla from his prior forecast of 95,000 vehicles. However, Osborne said that he thinks the company will miss its own delivery targets due to weaker demand for Tesla’s Model S and Model X vehi cles. Osborne estimates Tesla will report 15,000 combined deliveries of those vehicles, as compared to the company’s forecast for 20,000 Model S and Model X deliveries. Tesla typically gives its quarterly delivery report within four days after the end of a quarter, and several days ahead of its full quarterly earn ings and revenue results.
