WHY IT MATTERS: Digital Transformation

WHY IT MATTERS: the first 3 "zeros" are technology-driven.

WHY IT MATTERS: wow! not often do I stumble upon a trend report that actually has valuable insights, trends and recommendations. And not too biased towards Shopify!

I pulled one chart on the importance of customer service but there are many more. Must read for anyone serious about eCommerce, big or small.

WHY IT MATTERS: this list of technology questions for 2022 feels like an answer to the question "what is digital disruption?".

We have reached a moment in time where old technologies - eCommerce or videoconferencing for example - are finally breaking into established industries. And the impact, at scale, cannot be found in technology but rather in every single industry it disrupts.

Very thoughtful piece, very good questions.

WHY IT MATTERS: search is clearly an essential component of eCommerce sites. With the move to small screen mobile devices and marketplaces with millions of products, finding what you need is not a question of browsing categories or keyword searches. eCommerce sites need AI-driven search solutions that enable users to ask questions in natural language and get personalized results in return. At least this is the claim here. With the rise of privacy, this is not easy . But data seems to suggest that users will give very personal information if and only if it delivers value to them, and indirectly for the retailer (higher conversion, etc.). Anyways, very interesting read.

WHY IT MATTERS: NPS is widely known and used in eCommerce and retail in general. The new version based on earned growth is described here as NPS 3.0. It is interesting to see how it is calculated and should make a lot of readers wary that their internal legacy systems (from POS and ERPs to their newer eCommerce websites and mobile apps) lack the information to compute the new NPS metric... 

WHY IT MATTERS: an essential read to best define new marketplaces and have a chance to compete against Amazon

WHY IT MATTERS: Prime has 200M members worldwide, 143M in USA. Interesting to see what people use it for - but the survey hides an important fact: the real value of PRIME for Amazon.

I wrote about the value of PRIME in the past but this increase warrants a review of previous numbers. Back in 2016 when "only" 48M members, this report valued PRIME at 143B$.

www.vox.com/2016/10/5/13175272/amazon-prime-valuation-worth-143-billion-cowen-report

Also more here: blog.fmcs.digital/?q=amazon+prime

WHY IT MATTERS: interesting take on a hot topic. How can retailers compete with Amazon? One way for local products is le panier bleu ;-)

WHY IT MATTERS: a great new overview of the digital transformation (my words), with fact-based data-full slides. I especially like everything about eCommerce in there which will become reference for me in coming months. I extracted just one striking illustration of the wide variation of eCommerce penetration depending on industry. This chart highlights how different the digital transformation strategies must be in the toys&games industry vs the grocery industry. Love it. Many more in the full presentation.

WHY IT MATTERS: I don't pay for much content these days but I did for Benedict Evans newsletter because he sits - as I do - at the confluence between technology and business and often, as in this quote, coins the issues in a few words. 

WHY IT MATTERS: always the same, reports stress all the elements and solutions on the FRONT-OFFICE and hide under the rug the make-or-break elements of the BACK-OFFICE - probably because they are the most difficult elements to get right. Or maybe is it because they don't know? ;-)

WHY IT MATTERS: this post is a bit theoretical for someone not bathing in digital transformation all day as I do (mostly). It explores what could come next but more importantly stresses an important fact: we now have a new platform - the mobile phone - in our pockets that has the potential to transform our world. We have started to see this with eCommerce - physical retail stores become irrelevant and we can price compare from anywhere - but we have yet to see the real impact of eCommerce+mobile+cloud+5G. THIS is what I think about most days...

WHY IT MATTERS: a beautiful illustration of the circular economy and the multiple options to consider before the landfill.

WHY IT MATTERS: a great overview of the long lasting impacts of COVID in our lives.

WHY IT MATTERS: we've seen an acceleration of eCommerce adoption during covid lockdown worldwide. McKinsey says 10 years in 3 months. Shopify stock has surged, instacart orders have grown 250x, mirakl has raised 300M$ in funding, all based on this recent trend. 

But guys that have been doing retail for a long time are skeptical - like WholeFoods CEO (now Amazon). When everyone is FORCED to stay home, then of course eCommerce and home delivery will explode they. When things go back to normal, then retail will go back to normal is their belief.

Who's right? 

If you know me, you know where I stand on this. Going digital is like being an alcoholic: the first thing you must do on the road to recovery is recognize you have a problem... ;-)

WHY IT MATTERS: this article dates back a few years but is very important to understand Amazon and why it is so disruptive to retail.

Amazon invests most of its profits into developing solutions and infrastructure (via CAPEX or capital expenditure) in order to CAPTURE FUTURE ECOMMERCE SALES as the world moves from physical retail to digital.

To compete, retailers must either 1) leverage Amazon infrastructure (via marketplace, FBA, AWS, etc.) 2) or, if they are big enough, invest massively their CAPEX to build competing infrastructure to Amazon. This is difficult because their shareholders are used to getting return on their investments (which CAPEX will reduce): that may need to change. Or get the customers to pay for it (ie. massive walmart investments in eCommerce that they have just passed over to their suppliers - effectively having customers pay for it).

To maintain economic prosperity, governments should also invest in building shared infrastructure: large automated distribution centers, parcel delivery (canada post, USPS, etc.), digital payment processing, digital IDs, etc. This new infrastructure will benefit local retailers and local manufacturers, effectively financing their eCommerce competitiveness and ensuring survival of the economic fabric of their city / region / province / country.

WHY IT MATTERS: ecommerce has surged during covid lockdown. Data now proves what we've all assumed: covid lockdown has accelerated eCom growth in a few months. Now the question is: what will remain after the pandemic is over? Will consumer adopt eCommerce more or be happy to go back in store?

My take is that

- consumers will keep using eCom *if* we can reduce delivery costs as they make eCommerce unprofitable for most retailers

- an economic recession or depression (or government financial crisis) may see consumers go back to stores as they look for savings which are more often than not found in large stores, rarely in eCommerce

- categories probably will behave differently in the recovery, consumers being more price conscious on grocery than they are on clothing or appliances or other

WHY IT MATTERS: delivery is the last problem to solve for eCommerce to explode. Not only do delivery fees need to be reduced via automation and "milk runs", but it is impossible for retailers and restaurant to support the rent of mostly empty space (during covid and I assume some time after) in prime locations. The overall business model has to change. Ghost kitchens, dark stores, and other solutions are required.

WHY IT MATTERS: never waste a good crisis. Here CIRANO research group proposes to leverage digital technologies (blockchain) to track local content in products & services. Side effect: tracking the green ecoresponsible content as well. Not only is this useful, its implementation would make local businesses leaders in the field and capable of exporting their knowledge and solution to many parts of the world, as most countries face the same challenge in this post-pandemic era.

WHY IT MATTERS: you need to get over the misleading title to enjoy this report which highlights certain key elements that show eCommerce is evolving to stand on its own, just just in support of physical retail (covid-19 effect I guess).

WHY IT MATTERS: I wrote about popup stores from IKEA and Amazon in the past as well as the technologies that are required to make it happen. If this report from sidewalk proves true and popup stores become the norm to fill empty stores on main street and malls, then retailers must be ready to transform their retailTECH stack.

WHY IT MATTERS: super proud to see Shopify taking this strong position to facilitate the job of retailers to sell on walmart marketplace. Great of Walmart to make it easier for small shop owners to reach Walmart consumers.

But at the same time, as you see in the screengrab, retailers have many marketplaces where they can (should?) sell their products - walmart, amazon, google, bestBuy, wayfair, etc. etc.. And this fragmentation means a technology and logistical nightmare as every marketplace has its own set of rules, regulations, technologies, and idiosyncrasies. The future is NOT simple when marketplaces are concerned.

WHY IT MATTERS: this report is by far the best reference I found to understand the pricing strategy of software as a service and subscription services. Should be mandatory reading to anyone selling online today.

WHY IT MATTERS: covid crisis has forced 3.3B people in confinement to use digital technologies that have been developed and promoted for the past 20 years. I know grocery eCommerce well for having pionneered it in Canada, US and France since 1996. This article explores those forced experiment and what may remain once confinement is over. #mustRead