WHY IT MATTERS: Digital Transformation
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WHY IT MATTERS: Digital Transformation
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Curated by Farid Mheir
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The biggest challenge in #eCommerce today is delivery cost and timing: Amazon is in a great position to solve this one as are grocery retailers via @statista

The biggest challenge in #eCommerce today is delivery cost and timing: Amazon is in a great position to solve this one as are grocery retailers via @statista | WHY IT MATTERS: Digital Transformation | Scoop.it

Amazon spent $21.7 billion on shipping in 2017.

Farid Mheir's insight:

WHY IT MATTERS: Amazon spends 14.2% of its net sales to fulfill orders and 12.2% to deliver them to consumers. Thus a quarter of the costs of products sold is allocated to logistical costs and this is the biggest hurdle to eCommerce wide adoption. Amazon and other pure plays have a number of key advantages over established brick-n-mortar retailers (no retail store costs, no store employees, etc.) but they have to battle with order preparation and delivery which traditional retailers delegate to their customers as they push their carts in the store aisle. In that context, recent announcement of Sobeys to leverage Ocado's automated warehouse technology or recent Amazon announcement to create a parcel delivery solution that competes with FedEx and UPS makes sense. Any retailer thinking of scaling its eCommerce operation should thus make sure that its business model is viable regarding fulfillment and shipping - all other elements of eCommerce are not an issue.

- Amazon SWA service: http://fmcs.digital/blog/amazon-package-delivery-service-to-compete-with-fedex-and-ups-swa-ecommerce-disruption-retailapocalypse/ 

- Sobeys Ocado partnership: http://fmcs.digital/blog/u-k-s-ocado-taps-into-canadas-online-grocery-market-with-sobeys-tie-up-is-canada-mature-enough-to-have-automated-grocery-fulfillment-centers-ecommerce-robots/ 

- Ocado's technology: http://fmcs.digital/blog/video-shows-ocado-warehouse-technology-that-sobeys-has-acquired-to-prepare-grocery-orders-is-based-on-an-army-of-small-robots-working-on-3d-hive/ 

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#Amazon Running the U.S. Postal Service? Another #digitalFlip #disruption via @marcuswohlsen @Wired

#Amazon Running the U.S. Postal Service? Another #digitalFlip #disruption via @marcuswohlsen @Wired | WHY IT MATTERS: Digital Transformation | Scoop.it
Amazon's drive for global domination took on a new dimension today with the news that the world's largest online retailer now owns a day of the week.
Farid Mheir's insight:

Very cool piece on another digital flip, or how digital is transforming an industry. In this case, delivery services. The US post office - like all other post office service in the world - has seen shrinking volume of letters, mostly due to the prevalence of email in today's world. 


What if this marks the start of subsidized parcel delivery? As it was for letters, we could see this mark the beginning of an affordable parcel delivery, even in remote areas of the country. In the US it would be good. In Canada, it would be great and is pretty much essential, as the cost to deliver packages is astronomical.


Also consider reading this piece in the Washington Post where they rightfully point out that this use of a government body by a private sector company is something relatively new they label "reverse contracting".

Amazon’s brilliant plan to rescue the Postal Service and disrupt the shipping industry

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Same-Day Delivery not important, next-day delivery/pickup may be traditional retailer edge via @stratandbiz

Same-Day Delivery not important, next-day delivery/pickup may be traditional retailer edge via @stratandbiz | WHY IT MATTERS: Digital Transformation | Scoop.it

The proper URL is

http://www.strategy-business.com/article/00213?pg=all 

Farid Mheir's insight:

No surprise: customers are not willing to pay for delivery and they don't care much about same-day delivery. What is interesting is the analysis that this may provide an edge to traditional retailers, as they already have a network of stores close to where their customers are. 


Booz adequately stresses the need for retailers to transform their business in order to offer order delivery. The changes are profound as they impact not only technology but processes and people as well, which rarely like change... 


I believe Booz may have forgotten to mention that order pickup in stores may actually provide a better alternative than delivery does. That being said, the transform is as important for pickup as it is for delivery.


Moreover, the analysis misses one key element I believe: delivery (or pickup) adds costs that traditional retailers did not have before online shopping. That places them at cost disadvantage over online pure plays (even if those pure plays open distribution centers, as they will target lower cost facilities that are perfectly suited for delivery or pickup).

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