Rebecca Day

Spotify sees its integration of podcasts and audio as a differentiator as the company looks to stave off competition from Apple’s bundled service package, announced Tuesday (see 2009150060), and Amazon’s entry into podcasts Wednesday.

Apple energized its growing services business at its Tuesday event, announcing a subscription-based fitness app, Fitness+ ($9.99 a month; $79 yearly), and an expected bundled services offering (see 2008130029) under the moniker Apple One. “It’s all about recurring subscription revenue,” tweeted Futurum analyst Daniel Newman. Gartner's Mikako Kitagawa called the prices “competitive,” questioning if they will be enough to pull in users “other than existing Apple service customers.” Heavy Spotify or Netflix users need to have “a good reason to add Apple Music or TV," she emailed.

Labor Day weekend e-commerce sales were below forecast, “even for a world without COVID-19 and lockdowns,” blogged Adobe Monday. E-commerce spending was $2.6 billion, up 12% year on year; prior-week sales grew 33%, said Adobe. Online shopping activity declined in August as more physical stores reopened. Online sales rose 42% in August year on year to $63 billion but lower than July’s 55% bump. Use of buy online, pick up in store fulfillment jumped 59% in August and 259% year on year; 30% of online customers prefer using BOPIS or curbside pickup over home delivery. The pandemic drove an extra $107 billion in online spending through August, said Adobe, with the first eight months of 2020 generating $497 billion. Smartphone sales were 40%; mobile shopping will surpass 50% of e-commerce volume by next September, the researcher forecast. A third of consumers said their online packages arrived later than expected. “There may never be another holiday season quite like holiday 2020,” said John Copeland, vice president-marketing and customer insights:​ “Both in-store and online experiences will be different than in years past, as stores become more contactless to abide by social distancing rules and digital channels work harder to convert shoppers into buyers. ... If you felt like the holidays came early last year, they will likely get here even earlier this year around," Copeland said.

Wi-Fi 6 is becoming a “major influence” in the IoT that Silicon Labs is supporting, said General Manager Matt Johnson at the chip company's virtual conference last week (see 2009100068). The next-generation Wi-Fi technology was the impetus behind the company’s purchase of Redpine Signals’ connectivity business this year. Johnson touted power consumption and “always-on” Wi-Fi. Wi-Fi 6 brings to the IoT the ability to support "hundreds of nodes without affecting network performance,” Johnson told us. “It allows prioritization and management across all the devices with their unique and different needs, and it supports doing this with lower power, which is something Wi-Fi has not been traditionally good at.”

Making internet services ubiquitous in households, a Silicon Labs’ virtual conference theme last week (see 2009110043), necessitates addressing security and other concerns, speakers said. “Our services should melt into the background, becoming as reliable and essential as running water or electricity,” said Grant Erickson, Google principal software engineer. Manufacturers incur high development costs to support multiple, “lightly differentiated and fundamentally non-interoperable stock keeping units,” he said. Consumers don’t know what works together and how their privacy and security are protected, he said. Such challenges must be met to reach the $150 billion 2023 valuation Google expects for the IoT, Erickson said. Google put its weight behind Project Connected Home Over IP. Erickson called CHIP a “critical movement to break through the fragmentation that’s holding the market back.” Comcast invested heavily there, said Jim Kitchen, vice president-product in its connected home devices and platforms unit. That the CHIP code will be available to developers as a starting point will drive ubiquity and interoperability that hasn’t existed before, Kitchen said. Though the IoT has gotten better with advances in technology, it’s confusing for end users, he said. He cited a “boundary” for shopping in store or online to "confidently purchase a device that they know is going to work with the rest of the things that are in their home or with whatever platform they’ve decided to invest in.” He doesn't “know if getting to the next level of interoperability is going to be the thing that finally lets these products get into 300 million homes in North America, but I know that has to happen before we get into 300 million homes.”

IoT's potential won’t be realized without universal interoperability, seamless operation, an easy development process and strong security, said Silicon Labs General Manager Matt Johnson, keynoting the second day of the company’s first “Works With” developer conference, held Wednesday and Thursday. “If we don’t get the trust and security right, this is not going to happen.”

Not all retailers got a quarterly sales assist from the pandemic, even as they shift online where shoppers are spending more money. Conn’s reported sales fell 8.6% to $279.7 million from the year-ago period. Same-store sales dropped 13.2% for the quarter ended July 31. Chief Operating Officer Lee Wright on a Thursday investor call said sales could be affected through the fiscal year. CEO Norm Miller said there are opportunities geographically and with different customer segments to “take appropriate risk for the back half of the year,” but the company is being “quite cautious as we go forward, with unemployment still at double digits and unknown what’s going to happen, having obviously never been through a pandemic.” There wasn't Q3 guidance. Shares closed down 16% to $11.52. Conn’s had a deceleration after stimulus from the Coronavirus Aid, Relief and Economic Security Act waned at the end of July, said Wright. Consumer electronics sales fell 11.7%. In response to what it sees as lasting changes in buying habits, Conn’s is accelerating digital investment. It launched an e-commerce platform last year and upgraded its website, resulting in 72% e-commerce growth in the quarter. Online was 2%-3% of the balance of sale in Conn’s credit portfolio in Q2, up 70%. It can ultimately be 10%, said Miller.

Amazon announced the Halo monitoring service and a wrist-worn wearable this week. The company is taking requests for the Halo Band ($65) at a 35% discount off the $99 regular price in an early access invitation program, an approach similar to the one it took with the launch of the Echo smart speaker. “If selected,” early access subscribers will get six months free of a Halo membership that will automatically renew at $3.99 a month unless canceled. Fitbit’s $329 Sense smartwatch works with the company’s $9.99 app; Fitbit also announced a $99 Inspire 2 tracker Tuesday. Amazon sees body fat percentage (BFP) as a better indicator of health and longevity than weight or body mass index alone; its Amazon Halo health membership has a “Body” feature that uses computer vision and machine learning to measure and track BFP using a smartphone camera and the Halo app, blogged Melissa Cha, vice president-emerging devices and technologies, Wednesday. Amazon says its body composition measurement is nearly twice as accurate as at-home smart scales and is a better value than clinical body fat analyses that average $80 per scan. The band has typical tracking features to monitor activity and sleep, analyze body composition and learn healthy habits. A differentiating feature of Halo is monitoring voice tone, because “strong social connections are just as important to long-term health as adequate sleep, being fit, having a good diet, or even not smoking,” blogged cardiologist Maulik Majmudar, Amazon medical officer, Thursday. Amazon's Tone voice analysis tool is designed to help users understand how they sound to others, “helping improve their communication and relationships.” Amazon gave examples of how one sounds to a partner, child, waiter, boss and interviewer, saying the app can help “maintain relationship health with tone of voice analysis." On privacy, Amazon referenced “multiple layers of protections” to keep data “safe and in your control.” It won’t sell health data “that ties directly to you.” Users can download or delete health data from the app at any time, it said. Amazon worked with 100 “expert developed labs” to test ways users can improve health and behavior using the device. It listed Mayo Clinic, Relax Melodies, American Heart Association, Sweat, Aaptiv, Weight Watchers and sound consultant Julian Treasure as consulting experts.

Fitbit is taking preorders for two smartwatches and a tracker slated for late September availability, including the Sense ($329), billing it as its most advanced health smartwatch. The Sense has an electrodermal activity sensor for stress management, an on-wrist-based skin temperature sensor and an electrocardiogram (ECG) app. When used with Fitbit Premium ($9.99 monthly), the watch can help track heart rate variability, breathing rate, and oxygen saturation using the company’s Health Metrics dashboard, said the company Tuesday. Pending regulatory approvals show the challenging route to digital health solutions for consumer tech companies. The ECG app, not intended for use by people under 22, will be available in the U.S., based on FDA clearance. It hasn’t received a CE mark and “will not be marketed, put into service or made available in the European Union until it receives regulatory approval,” Fitbit said. The Sense’s EDA sensor measures electrodermal activity responses; users place their palm over the watch face to detect small electrical changes in the sweat level of the skin. A stress management score calculates how the body is responding to stress based on heart rate, sleep and activity data, it said. Sense is Fitbit’s first device with an ECG app to assess heart rhythm for signs of atrial fibrillation. Results from a COVID-19 study of 100,000 Fitbit users suggested that changes in some metrics included in the new dashboard in the company’s Premium subscription service -- breathing rate, resting heart rate and heart rate variability -- can be detected by Fitbit devices simultaneously with the onset of COVID-19 symptoms, “and in some cases even before,” it said. Wearables “may be able to play an important role in the early detection of infectious diseases by acting as an early warning system for our bodies, which is critical to slowing the spread of COVID-19 and to better understanding disease progression,” said Chief Technology Officer Eric Friedman. “Our algorithm can detect nearly 50 percent of COVID-19 cases a day before the onset of symptoms with 70 percent specificity." The research could help detect other diseases in the future, he said. Fitbit also unveiled the Versa 3 smartwatch ($229) with GPS and Google Assistant. Also coming is the Inspire 2 tracker ($99) with a brighter screen, heart-rate tracking and 10-day battery life.

Target shares reached a 52-week high Wednesday closing 12.7% higher at $154.22 after its strongest-ever quarter of same-store sales growth. Q2 comparable sales jumped 24.3% for the quarter ended Aug. 1. Stores fulfilled more than 90% of sales in the quarter, said CEO Brian Cornell. It had market share gains of $5 billion in the first half, with “unusually strong” gains across all five core categories. Cornell credited a differentiated merchandising assortment and convenient fulfillment options, on a Wednesday earnings call. Same-day services, including order pickup, drive up and Shipt, grew 273%, accounting for 6 points of comp sales growth. Store comps rose 10.9%, while digital comp sales surged 195%, comprising 13.4 points of total comp sales growth. Drive-up fulfillment grew fastest at 734%. To meet demand, Target is adding extra drive-up slots sooner than expected, from two to 12 additional parking lot spots, depending on stores’ needs, said Chief Operating Officer John Mulligan. Electronics sales shot up 70% due to increased shopping in office equipment, home electronics and gaming, said Cornell. Despite solid Q2 performance, Target is being cautious and “flexible” about back-to-school (BTS) and holiday season plans, he said. It announced plans to close on Thanksgiving for social distancing and safety, and to begin holiday promotions in October, he said. Target is extending BTS because 60% of students are learning remotely, and it’s not clear whether they will return to classrooms this fall or in January, Cornell said. At some point those students will need school supplies, he said, “so we’ve made the decision to be flexible." Despite strong Q2 results, volatility continues to be “elevated,” said Chief Financial Officer Michael Fiddelke. May was “by far the strongest month” with 33% comp growth, followed by June at 21%, and July at about 20%, he said. August month-to-date comp sales have been running in the low double digits, strong historically but an “incredibly wide swing within a few months,” he said. That’s an indicator of how difficult it is to forecast in the current climate, said Fiddelke: “Given that our Q1 performance was not a good predictor of our second quarter results, our Q2 results should not be viewed as a predictor of our performance going forward.” He didn’t provide Q3 or full-year guidance. Target paused new store openings in March but resumed construction, with plans to open 27 more stores this year. Nine are scheduled to open this month, 16-18 in October, said Mulligan.