Ep 28: Google devastates local food delivery, The boom in pet adoption leaves Vets overwhelmed, Amazon sellers paying to delete negative reviews

Part 1 Video Starts 00:13 -  The unintended consequences of Google ramping up Local Food ordering; local delivery devastated

Part 2 Video- Starts 7:40 - A surprising  outcome of Covid includes Veterinary burnout and a shortage of Vets

Part 3 Video- Starts 14:38 - In the strange world of review abuse merchants pay for negative review takedowns

Reference Articles:

1: Local food delivery companies say Google devastated their business

2: State of Veterinary Medicine in Portland, August 2021

3: U.S. animal shelters fill up as pandemic pets are abandoned

4: Amazon Sellers Paying to Delete Negative Reviews

Transcript:

EP 28

Greg: Welcome to so 28 of the near memo, um, David Mim, Mike Blumenthal, and me, Greg Sterling, talking about the important, uh, news items and developments of the week and local social and commerce. And we totally won't be talking about the UN climate change report. Because it's just too depressing. So we're not going to talk about it, but we will be talking about other things that are interesting, that happened this week.

Some of which we wrote about, and some of which we have yet to write about. And the first one of those was in the most recent newsletter, um, about Google's impact on local and regional food delivery services and how Google. Picking winners and losers in that space and make you, you wanted to talk about it?

Uh, I did

Mike: it, it was in fast company. It was titled local food delivery company say Google devastated their business story of, uh, independent food delivery services that existed long before GrubHub and DoorDash, which were growing five to 20% a year. And now they're year on year down, 50, 60%. And they lay a large part of that to Google.

And they recap in this article, the history of Google. First testing, uh, delivery in the local panel by and way, the way they do that as they partner with one or two of the big guy. Who the, and they pull in the links. Nobody can change them. Right? The links are there. And then the big guys, like the, see what they see.

So then they go out and do some quote, unquote growth hacking and add all fake websites for the, all the rest of the restaurants that aren't in there. They had all those links in creating this dynamic and then ultimately Google changes it so that businesses can. Delete those links themselves ultimately.

Uh, but it creates a dynamic which the small local delivery businesses are, you know, basically devastated and it speaks, you know, I know in your newsletter, you noted that Google claimed that it helped consumers. This is very Google-y though. They test this with a very large customer and often only leave these features, make these features available to the very low.

People like DoorDash and GrubHub often excluding small and you know, it creates a reality and then he's GrubHub and DoorDash can lose it cause they in dollars, it doesn't matter because they're venture funded forever, not forever, but for a very long time. And it just creates a dynamic in which local business landscape is devastated.

And it's because Google is how Google rolls. There's basically a blizzard. To that, to their impact

Greg: on that. One of the things they want in partners is scale, right? Sometimes they cobbled together scale by working with different regional companies. But one of the primary things they look for is, is, is the kind of scale that, that mirrors their capabilities.

And by definition, these local and regional companies don't have it

Mike: correct. And they often will test that without any user interface. Which makes it hard on the businesses upon which they're testing it. So essentially everybody's involved in this living experiment, whether you, whether you're a restaurant that wants to be or not.

And then of course, DoorDash and GrubHub level. Unethically as well and just create,

David: so I was just going to say, often the company, often the companies with the highest scale have the lowest ethical bar. So, um, it's really, uh, it's an unfortunate situation for, um, in this case, small businesses of both tech and offline varieties caught.

So,

Greg: right. And

Mike: it's not because Google is, so it's trying to deliver a benefit to the customer they are, but they're also trying to do it in a way that's easy for them, which means at scale. Right. So they take the easy route and it has all these unintended

Greg: consequences. Well, what's interesting here. I think there were a couple of things that were interesting beyond what you've already said.

One is. That Google may be relatively benign in its intent here. They're not trying to put people at a business. They're trying to deliver a good experience to the acoustic tumor. And then because of their modus operandi, this is how they do it. But as you say, there are these unintended consequences, but then that's, that's the second point, which is, this seems to be a pretty clear kind of antitrust scenario in the sense that.

Even though Google is doing this ostensibly for the benefit of the consumer and deliver a better experience for everybody what's happening is that they are driving people out of business at the local level, which eliminates competition, which will ultimately harm the consumer. If you have only four, three or four giant food delivery companies, national companies that can then extort all kinds of fees and so on and so forth, not withstanding the municipal efforts to push back on that.

And so it's a pretty clear. Case if assuming everything, uh, fast company says it's true between Google doing something and justifying it on the basis of better experience for the consumer and its impact and its ultimately negative impact on the market. And then in turn in the consumer, it's, it's just a nicer capsule that really reflects all these things together, you know, in, in one kind of case.

Yeah. And I

David: think Mike, you know, the, there isn't currently a vector of antitrust law that, um, that talks about harm to small businesses. But Mike and I have have mentioned this for years in our old street fight columns, even, um, just that, that, that is not a direct consumer harm, but it does, as you just said, lead to indirect consumer harm, uh, in the future.

And right now, there really isn't a way to pursue that legally, as far as I know. So.

Greg: Well, I mean, I think some of those arguments can be taken into account, but I think that's, that's, that's a minority kind of that's uh, that's, uh, that's not the same. That's the thrust is consumer harm, you know, and, and this is, this is a kind of delayed consumer harm scenario, which, which I think increasingly people will recognize, you know, I think that, that there's, there's a shift going on.

There's the other

Mike: side of it too, which is just the amazing impact that Google has. Society in this regard and you see it with their stupid business naming policy, where they allow businesses to rename themselves sort of Willy nilly to gain ranking, uh, bit value. And you see all these businesses renaming themselves.

San Diego, personal injury lawyer. And now there's 10 San Diego personal injury lawyers. It's like  yes, best Denver's that's right. I mean, it's just so bizarre. They have, it just speaks to their position in society. And the, and this impact that they do have is very significant.

Greg: I mean, I don't want to speak to Google Slack's, uh, sort of enforcement of spam.

Quite so spam rules, but I mean, you know, the yellow pages that was going on in the analog world, right? AA towing, AA plumbing, right. There are people that did that. It's just easier to do it now.

Mike: Yes, it is easier. And we were told the other day that we shouldn't report it unless there's at least four modifiers.

Two or three years, they're going to look

Greg: at what is that? Is that an official position that they know

David: except for the year

Mike: right there, that's something I shouldn't be saying in public because it was so fucking stupid cats out of the bag. Yeah. It was

Greg: really a dumb one. Okay. And then, uh, I think David, you, you, you had another, uh, local local story, um, about

David: unrelated, but yeah, so there's not, unfortunately, Greg, there's no way for you to segue, but I did find it a pretty fascinating, uh, story and a great piece of marketing actually from my local veterinarian Northwest neighborhood vet, uh, on Northwest Thurman in Portland.

Um, so they're, they're most. I would say roughly monthly newsletter, uh, just highlighted it. I think a totally underreported, at least I've not seen it reported story of COVID. I think everybody has probably seen the fact that, oh, all of these, you know, dogs and cats and everything else got adopted over COVID cause people were stuck at home.

Um, and they needed a companion and blah, blah, blah, blah, blah. It was a great time to do that. And isn't this such a feel good story. The flip side of that is now that there's so many more pets out. The shortage of veterinarians and clinical facilities, hospital facilities for pets is overwhelming. Um, veterinarians have been one of the highest suicide rate professions for a very long time.

Uh, and the last year has probably only exacerbated the burnout and the emotional toll, um, that they must've experienced. And so now, in addition to Delta, you know, causing a, uh, shortage of ICU beds for humans, COVID has also caused a shortage of. You know, all kinds of care, uh, care facilities and, um, and caregivers for these pets.

And I thought that was really fascinating and also highlighting a really great local newsletter, local business newsletter. Um, that didn't, I don't think take a ton of time to put together if I think we'll link to it in, in our own newsletter. Uh, you know, it's, it's fairly basic in terms of its layout. It doesn't do a lot of, uh, best practice things such as call to action above the fold.

Um, you know, really, uh, mobile, it's not particularly mobile friendly. Um, but it's a really strong piece of content marketing. Uh, that helps me empathize, uh, with, with a local business. And as a result, I actually had forgotten to get medication for our dog, uh, and said, Hey, can I schedule a contactless pickup for this in the next couple of days?

Greg: Well, what's great about it. I mean, the, the, the substance is kind of horrible about the shortage of beds and facilities and the suicide piece of it is terrible, but what's great about it is that it delivers what local businesses are good at, which is sort of the human side of this business interaction.

You know, here's a person and here's a human story, and that enables you to really identify and empathize with the business that makes you a more loyal customer. As opposed to like a corporate, you wouldn't get that from a corporate pet pet chain. Right. I mean, in all likelihood, they wouldn't, they wouldn't give you that same information.

David: Right. And you wouldn't really see, I mean, it's not the same thing. You know, the electronics equivalent and be like, oh, best by saying O R R S you know, geek squad is overwhelmed. Like you don't have the same level of empathy. I think for, for, unfortunately, in some cases for sort of corporate employees,

Mike: it's interesting to speculate whether this bubble in pet ownership is kind of like a post-World or tomb baby boom, that will sort of just work its way through or whether it is a more permanent change to the whole business environment.

And. Uh, you know, we'll have to be dealt with over a number of years with winners and losers in some form or another like many industries.

Greg: Right?

David: Well, I think the work from home or hybrid working situation, I don't think is going away anytime soon, even if COVID does subside. Um, so I think that that could be a positive, a long-term positive in terms of the number of pets who find homes.

Um, but I also, there was the flip side of that is that there have been reports. Taking their COVID pets back to the shelter, um, which is truly awful. So

Greg: awful for the pet.

David: Yeah, exactly. You're curious because

Greg: they're going, because they're going back to work

David: because they're going back to work. Yeah. I'll see if I can find one and those

Greg: links as well, incredibly selfish.

Yep.

Mike: Pet ownership is hard

David: to pick responses. It is hard, but it's totally worth it highly, right?

Mike: If you're going to do what you gotta do, it's like having a child. There's no, there's no backing out

Greg: of that. People don't realize the amount of responsibility, the amount of emotional responsibility and logistical responsibility.

Like we have a, we have a dog that we got five years ago. I had screwing up, but we got a dog five years ago and now we have a cat. That was a COVID. And we used to be able to sort of board the dog or give the dog to a neighbor that had other dogs. And now with the two pets, you know, the idea of a vacations is almost an impossible, possible thing.

You know, we have to get somebody to come in and sit for the cat and it's just, it's challenging, but yeah, well worth

David: it. We're going to end it on a positive

Greg: note. So we're not indicative work. I know before we turn it over to you, we can come. Yeah, we could that's before the commission. Um, so w th th th I mean, there are a lot of there, there are always a lot of interesting stories.

One of the most interesting stories, which I'll digress for a moment that I didn't write about was this, this outdoor furniture company I linked to it, but I didn't write a piece of edit called outer and what they've done to it's a direct to consumer brand, but what they've done in order to create a physical presence is that they've turned their buyers into showrooms, right?

They've, they've created incentives for their local buyers. People in communities to invite other people into their homes to see this outdoor furniture, which I think is just super interesting. It's sort of like an Airbnb style approach to physical stores. It's super creative. Super interesting. I wanted to write about that, but I didn't maybe I'll do something like that later, but anyway, that was, that was fast.

Mike: Is it kind of like the home sale thing, but it's just a fixed location as opposed? No, no, no, no.

Greg: So you, you buy this, you buy the furniture, right. You buy this company's furniture and then I don't know what the particular business relationship is or the, the, uh, you know, what, they give you an exchange, but then you, you make the referral something.

Yeah. So you get it's, I'm sure it's in the original.

Mike: Oh, so you can give your friends into your house

Greg: to see you make your house available to people in your community. Maybe selectively maybe for a period of time. And they come in and they chat with you and look at the furniture and say, oh, what do you think of it?

And so it's both a physical store presence and a word of mouth experience at the same time, which is pretty interesting. And it has more credibility than an in store sales rep. I just thought that was a really creative, interesting director.

David: And eliminates the need for leasing real

Mike: estate. True. It doesn't work that well with Casper beds though.

Greg: Yeah. Come into my house and sleep. Try my

Mike: advantage. Really comfortable. Alright. Well,

Greg: Casper actually has physical distributors. Okay. So here's, here's the real item. The real item is, is the, uh, the story on, um, on the appeared originally in the wall street journal and then was picked up by others. Where some Amazon sellers are offering cash incentives and harassing customers who write negative reviews.

So I write a negative review under the guise of a customer service interaction. The company comes back to me and says, Hey, we want to, a reviews are important. We want to make it right. We'll give you a refund. Um, and, you know, as a kind of quid pro quo for taking down your review, and if you, if you decide you don't want to take down the review, then they follow up and they hassle you.

You're not, they're not supposed to have your email address, but there are all kinds of companies in the background that are providing that information. And so they essentially stock you and, and try and Badger you into taking down your reviews sometimes with payments sometimes, you know, with, with, with just persistent harassment.

Yeah. It's it's sort of the flip side to companies offering financial incentives. Like here's your $25 reward. Give us a good review. These are pretty insidious and difficult to police situations. And increasingly, you know, the form of review manipulation. It's, they're not fake reviews. Exactly, but it's, it's it's review manipulation, which is, um, is really an interesting.

And, and, and has equally deceptive. It has the same. It has the same ultimate impact on the consumer because you're looking at all these positive reviews. But what you're not seeing is the reviews that have been removed, which, which may illustrate the products flaws or whatever.

Mike: I had a lawyer client who, whenever he got a bad review, he'd call them up and offer him a hundred dollars to take it.

Greg: And did they take it down

Mike: most, all the time. And then finally I said, look, you don't want to be a Five-O you're better off having some negatives. The people that were the most sales are, you know, four to four diapers. We got a few of them

Greg: up. Yeah, exactly. That's a totally different, that's a totally different argument than the ethical argument.

Right? That's a, that's a tactical

Mike: argument. Um, when I was like, I was losing on the PR on the ethical argument, it's like this guy had gotten A's as a whole. You know, I could, he was, I imagine his mother was squawking at him, his whole life about getting A's and he got A's and got A's through law school and he's going to get A's on his reviews.

That was the end of the story, you know, it's like,

Greg: geez. Well, I mean, it, it, it raises in my mind, increasingly I'm working on finally, I'm sort of writing this Uber, I'll do this research and fake review. With the, with what Curtis Boyd, it's now he's now calling himself the transparency company and I'm finally writing the report.

And so I'm, I'm pretty deep in all these issues. And it just makes me think longer term about the credibility of reviews, you know, just as, uh, just the utility of reviews and, and there is growing distrust, but still the brands Google, Amazon are highly trusted and highly used by people. You know, people still would look at reviews.

As a primary factor in who they work with. And you did that whole thing with the forklift company, the guy got totally ripped off by fake reviews. You know?

Mike: Well, I'm for Google. I think they see reviews. You know, they've they're have enough hubris. They think they can remove the noise from the reviews and extract the value of the data, but have very little understanding of the impact of their 20 or 30% fake review.

On the world. It's a similar story. Well, that circles back to the first story in a very similar way scale, and they'll figure it out after they've got the scale and they don't really care about the individual story

Greg: behind it. So that's not the number we came up with for Google, Google, a local, you know, for the Google, my business, but it's a conservative, it's a conservative 10, 15%, 10%.

I think. It's, I have to go back and look at the total. It's something, it's something over 11. But it's, again, it's a sort of a cautious number and in any given probably very category

Mike: dependent, very category dependent, very locale dependent. I mean,

Greg: precisely. So I'll tell you pharmacies had the lowest, uh, and the highest I think were, uh, locksmiths as you would expect.

And, uh, door repair and moving, moving companies were very well. And Boston was came out at me. I mean, I, I have to, I'm revisiting all of this. So I'm speaking sort of loosely here, but, uh, Boston, I think was the most honest city in America and Miami St. Petersburg was the most dishonest. Those are two different cities, Miami and St.

Paul. Well, it's a Metro area, MSA, it's an MSA. So it's Tampa, Tampa, or Miami or whatever, whatever. What is the closest city to Miami? I never go to Florida.

David: Miami Fort

Greg: Lauderdale, maybe Fort Lauderdale is what I meant. It's not St. Petersburg. St. Petersburg. Burke is totally somewhere else. Sorry. I apologize to all Floridians, um, uh, St.

Pete, uh, Fort Lauderdale is what I'm meant. Miami, Florida, Fort Lauderdale. Yeah.

Mike: I'm

David: looking forward to, but it's funny. It's funny what Metro area, our former president now resides in. This is the

Greg: least totally appropriate of America. Yeah, totally appropriate.

David: Sorry. Well,

Greg: we're out of time. Yes, we're out of time for this week, but thank you everybody again for listening and for subscribing to the newsletter and any final words from you guys, just be safe out there.

Stop eating meat and driving gasoline powered cars. All right.