Amazon Go is a new kind of store featuring the world’s most advanced shopping technology. No lines, no checkout – just grab and go! Watch the video: amazon.com/go
Farid Mheir's insight:
Take a minute to watch the video. This is the future of retailing.
WHY THIS IS IMPORTANT
Amazon has disrupted many industries with its online business. Recently, as other digital leaders have done, Amazon is trying to bring digital revolution in the world to blend our physical and digital experiences - think Google self driving cars, Starbuck mobile phone payment and geofencing app, Apple stores that are more showrooms and help centres than stores because eCommerce is there to fulfill orders to your door, etc.
Amazon has been focussed on grocery for the past 10 years to use this weekly recurring, low cost, high volume shopping trip to the supermarket as its pathway to bring digital into the real world and blend it with online e-commerce.
With Amazon Fresh for examples they have been busy putting trucks on the road to deliver groceries to your door overnight with minimal costs. Why grocery? Because its high volume guarantees that trucks will be on the road everyday in all areas. And once trucks are running around carrying groceries they can also bring other items - books, TVs, etc. - at little or no cost, effectively making FedEx irrelevant or at least giving Amazon huge negotiation power.
Here with Amazon GO, it addresses some of the major pain points of customers in grocery stores: waiting in line at the cash register. As they've done online, Amazon focusses on its customer issues to smash them or make them so irrelevant that they are not issues anymore. See "amazon secret sauce" for insights on this: http://sco.lt/979c4P
Take Amazon Prime for example. It addresses the delivery fee issue: we do not want to have to pay for delivery. So they make it a non issue, providing 2-day delivery for free for an annual fee. Side effect: if you've paid for prime, then you spend up to 5x more at Amazon (300$ annually for average client, 1500$ for prime member), basically becoming a loyal shopper. Wow.
Back to Amazon GO and why it is important. The grocery industry has not seen a major disruption since Costco started top sell grocery in bulk format years ago - grocers ost 10% market share with that new player in the field. But today, grocery stores are the same, the layout is the same, the process is the same than it was 50 years ago. There has been little or no innovation in stores recently (last one may be the barcode in 1970s) but GO shows that there may be a perfect storm of technologies that combine to make physical stores transformation a reality:
1- mobile phones are on every customer back pocket;
2- electronic payment is everywhere, making cash almost irrelevant;
3- loyalty programs and big data allows retailers unprecedented customer knowledge and forecasting trends;
From the concept store video and the Amazon description, all that GO is doing is applying these new technologies on a new problem set: adding and removing items to shopping basket and speeding the checkout process.
Of course, at the end of the day, the winner will not be the grocer with the best technology. It will be the one with the lowest prices and the best selection (best marketing and customer service won't hurt either). On those fronts (price & selection) Amazon GO faces huge headwinds from established grocers that have long standing relationships with suppliers and way more volume than Amazon. But it does not mean Amazon cannot provide customers with a more enjoyable, easy, fast experience - especially to millennials - which may give GO 5% or 10% of the market (the "good" 5% by the way, those that spend more and spend on higher margin items) from established retailers. And this will hurt established grocers like hell.
and the plans for Amazon to open up to 2000 store in the future if GO concept works: http://www.businessinsider.com/amazon-2000-grocery-stores-10-years-2016-10
Amazon recently came out with another feature of their company called Amazon Fresh. This addition to the company propelled their business into the grocery industry. As a part of this new feature, Amazon incorporated the phrase amazon go. Once again, they promoted this feature via video.
The sliced apples or cut broccoli -- the merchant won’t say what’s involved exactly -- are being used to test blockchain, a new database technology. If successful, the trial could change how Wal-Mart Stores Inc., which serves some 260 million customers a week, monitors food and takes action when something goes wrong. That could spur big leaps in food safety, cut costs and save lives.
Farid Mheir's insight:
WalMart is testing a new food traceability solution co-developed by IBM using blockchain technology.
WHY THIS IS IMPORTANT
Blockchain, the technology behind the bitcoin currency is being actively enhanced to be used for other application than Finance or payment. In this particular case, food retailers may find that using this technology will improve traceability of food products and facilitates recalls when they are needed. The fact that WalMart embraces it so early probably means the current systems are not very efficient and that there are opportunities to reduce costs and improves brand image and reduce liabilities. Digital transformation does mean more than just being present on social networks and improving marketing.
Unacast’s latest Q4 Proxbook report confirms that beacon deployments are on track and the numbers align with ABI Research’s forecast of 400 million beacons to be deployed by 20201. Last year, we saw big brands undertaking large scale beacon deployments. And, this year started with Rite Aid’s announcement of initiating the largest beacon-deployment in a retail setting till date. Discover the top 25 proximity marketing campaigns in retail and what they are doing right.
Farid Mheir's insight:
A review on real-life beacon deployments in retail store tends to demonstrate a resurgence of proximity geographic location tracking.
WHY THIS IS IMPORTANT
Digital transformation strategies require that customers are tracked in the real world as much as they are in the web-world. This often means that the mobile devices we carry enable a seamless digital communication - tools to push promotions and notifications while we walk the street or store aisles. To do so, retailers must know where you are and geofencing is not enough anymore. Beacons come to the rescue and mobile OSes - both Apple and Google - now build into their APIs very good location services which allow mobile app developers ways to connect with users in a very personal way. Using GPS location is not sufficient, especially indoors, so beacons are a must and reports such as this one show that our physical world has become a forest of digital beacons to track our every moves. We all thought this technology was dead after the initial failure of the 2013 Apple announcement. However, all retailers should now include geolocation and proximity tracking in their digital strategies and mid-term roadmaps, as it has apparently moved from the lab to the real world.
More on location services in the OSes, see the following links:
Explore consumer attitudes and trends about Black Friday retail this year in our latest report. Our pre-Thanksgiving survey polled more than 1,200 consumers across the United States to get a pulse check on their shopping strategy for the long Thanksgiving weekend that includes Black Friday and Cyber Monday. This year 76 percent of holiday shoppers plan to shop over the long weekend, spending an average of $400—that is $31 more than last year.
Farid Mheir's insight:
Deloitte survey on Thanksgiving weekend forecast.
WHY THIS IS IMPORTANT
Always interesting to look at the forecast then compare with actual numbers. In the past, the pattern was clear: people move their holiday shopping online. What is also interesting is in the chart above about webrooming and showrooming: physical stores continue to play a big role and that is why omni-channel technologies are more important than never.
Project Tango unleashes a new way for you to explore the world. With a few sensors and some computer vision software, your phone gets even smarter, and can start to see the world the way you do. Follow guided arrows to know which exit to take when you get off the subway, see how a sofa looks in your living room before you buy it, or watch zombies battle on your dining table. In this session, we explore the vision of Project Tango and how it will come to life with the launch of our first consumer phone, announced earlier this year.
Farid Mheir's insight:
A video from Google demonstrates how to drop virtual furniture in your home environment, make sure it fits in the room then buy it directly from the augmented reality scene. The eCommerce segment starts at 17m16s
WHY THIS IS IMPORTANT
Augmented reality has the potential to revolutionize businesses much before Virtual Reality because it can so seamlessly add to your existing world. The video shows examples of an AR measuring tape that can also be used in an commerce setting. Other uses for AR in the business context, to review floor plans and planograms in retail settings, or help with repairs have been proposed in the past. Some Google glasses videos demonstrated some interesting use cases. It now looks like our mobile phone will in fact be carrying the necessary hardware to make AR a reality much sooner than anyone may have anticipated...
Startups are outfitting retailers with augmented reality, beacons, wearables, and more to bridge the gap between digital and physical shopping.
Farid Mheir's insight:
An inventory of technologies that can be deployed in retail stores.
WHY THIS IS IMPORTANT
Retail stores are being transformed by digital technology. Apple stores have shown that retail space today is more than a warehouse where customers fulfill orders. Today's store must also demonstrate products, educate customers and provide customer service. Store must also fulfill orders, although that should preferably be done online. In that context, stores leverage technologies to communicate with their customers, inform them, as well as provide an omni-channel experience.
Choosing the right technology to deploy is a challenge, but my experience has shown that the overall retail store business model must be reviewed to ensure the right content, support and service is made available.
An inventory of technologies that can be deployed in retail stores.
WHY THIS IS IMPORTANT
Retail stores are being transformed by digital technology. Apple stores have shown that retail space today is more than a warehouse where customers fulfill orders. Today's store must also demonstrate products, educate customers and provide customer service. Store must also fulfill orders, although that should preferably be done online. In that context, stores leverage technologies to communicate with their customers, inform them, as well as provide an omni-channel experience.
Choosing the right technology to deploy is a challenge, but my experience has shown that the overall retail store business model must be reviewed to ensure the right content, support and service is made available.
In-store technologies can enhance the shopping experience, and many retailers are seeing the benefits of them. A June 2016 survey found that technology can help retailers reach more consumers, as well as better inform in-store employees.
Farid Mheir's insight:
Looks like in-store technologies - screens, beacons, kiosk, mobiles apps, etc. - should be considered for other purpose than to increase revenue.
There's a wide market for eCommerce apps, just as there are for almost any other popular software category. Some are simple tools for selling individual products; others are focused on enterprises with large sales volumes and warehouses of inventory.
Farid Mheir's insight:
A great reference if you are in the market to build your own eCommerce solution.
Mobile order-ahead refers to a consumer-facing mobile payment platform that allows customers to order food remotely, pay for the items on their phone, and pick up their order at a specific restaurant location.
Leading QSRs in the US are beginning to adopt these platforms at an accelerated pace and are benefiting from them. Taco Bell sees 30% higher average order values on mobile compared to in-store, and Starbucks' Mobile Order & Pay already represents 10% of total transactions at high-volume stores, directly contributing to increased company sales.
Farid Mheir's insight:
A report shows that letting customers order ahead using mobile apps converts to higher sales order value.
WHY THIS IS IMPORTANT
Retailer have invested in mobile apps in recent years mostly use them as marketing tools to notify customers of promotions, etc. With recent trends showing that customers download less and less apps to concentrate on a few well known ones (Facebook, etc.), retailer must find new ways to have their customers use their apps. Looks like if you allow customers to save time by pre-ordering their meal, it becomes a hot and customers spend more. Good to know.
Always interesting reading on digital transformation by Capgemini which has been at the forefront of defining digital transformation. Read this one, then flip through old ones...
Very good examples of digital transformation in some industries. The platform strategy developed by Visa could be very successful... if they really open it to developpers.
There is also a list of 15 startups showing good potential at the end of the document...
If there’s one thing that always stays the same in retail, it’s change. Since the birth of the first modern supermarket in Memphis, Tennessee in 1916, grocery retail has gone through three transformational eras. The fourth, and arguably most challenging era—the dawn of digital and omni-channel retailing—is just beginning.
Farid Mheir's insight:
A look at the evolution of retail in the grocery industry, this paper provides insights on 7 key trends that impact retailers today.
WHY THIS IS IMPORTANT
The paper was written 4 years ago and is as relevant today as it was then. Are grocery retail CEOs listening? I fear not.
In this episode of Pulsate Academy, Patrick Leddy introduces Geofencing for location-based marketing and how you could be using it with your app today
Farid Mheir's insight:
Outstanding 20 minutes video that explains what geofencing is and how to it, them in layman's terms.
WHY THIS IS IMPORTANT
We all carry mobile devices in our pockets so we are all targets for beacons and geofencing by retailers and brands. We were just getting used to being tracked everywhere we go online, and now we have become targets in the physical world as well. It is essential that we all know what level of tracking we are subjected to.
On the other hand if you are a brand or a retailer, you must know about beacons and geofencing and ensure your marketing team includes it in their digital strategy otherwise you may be missing out over your competitors.
Retail ecommerce sales—which include products and services (barring travel, restaurant and event ticket sales) ordered via the internet over any device—will reach $1.915 trillion in 2016, accounting for 8.7% of total retail spending worldwide. While the pace of growth for overall retail sales is subdued, the digital portion of sales continues to expand rapidly, with a 23.7% growth rate forecast for 2016.
Consumer behavior is blurring the lines between channels, technologies, and even companies thanks to an explosive penetration of technology into the everyday lives of consumers, savvy pure-play online competitors, and a growing number of innovative retailers. Consumers now expect comprehensive information and quality goods at the tip of their physical fingers in the store, browsing online at home, and on-the-go within their favorite apps. Retailers providing the elusive Omni-channel experience are adapting to this behavior. Those who don’t will continue to lose valuable consumer touch-points and, with that, the understanding to meet customer needs.
Farid Mheir's insight:
Study demonstrates direct link between omni-channel maturity and corporate profits. Also provides an index to measure the omni-channel maturity.
WHY THIS IS IMPORTANT
Companies ask why invest and transform into omni channel. It appears that those with the most advanced omni-channel implementation are able to translate this into profits. Thus, omni channel becomes something you do to improve bottom line more than something you do to improve customer satisfaction, as is often thought to be the case.
Amazon has opened 21 pop-up stores in major shopping malls across the US so far. It had 6 as of last year and is set to have at much as 100 by next year.
Farid Mheir's insight:
Amazon announces it will open 100 popup stores.
WHY THIS IS IMPORTANT
This is one piece in the vision for the future of retail. Here are the components:
great online store where you can find anything you want under one roof with a single payment and account profile - amazon.com
2-day free delivery - Amazon prime
low cost delivery network based on grocery delivery - Amazon fresh
small friendly stores where you can browse products, try them out, get help - Amazon popup stores (same principle as apple stores)
All retailers should copy this recipe. For example grocery supermarkets should shrink in size, provide customers with tasting stations and chefs and mini-restaurants (think Eataly) and cooking classes, along with butcher and other fresh produce. The rest (all packaged food that has a barcode) is delivered from a warehouse on a schedule right to your door at no cost if you are a member.
The idea behind amazon is an online shopping experience that is smooth, it will be interesting to see how this will impact all branches of business including groceries
In the UK, Morrisons and Amazon have become unlikely allies. After partnering up on Amazon Pantry, the supermarket chain has revealed new plans to ope
Farid Mheir's insight:
Amazon and Morrisons grocery store partnership in the UK is growing. I can see it be very good for Amazon, but is it for Morrisons? Typical reaction would be to think they are inviting the enemy within their stores. Maybe not. Here is what I think:
- Morrisons is a grocery fulfillment and distribution fighting to remain relevant in the digital age. Amazon brings orders and leverages its supply chain and procurement and expertise in buying fresh products;
- Amazon most likely will pay to host its lockers in stores, a new source of revenue;
- Amazon will bring customers to stores, something that is more and more difficult to do
- customers have an infinite aisle, able to shop online to Amazon when in stores, which may represent a new revenue stream
- competitors are investing heavily in money loosing or barely break even online ecommerce for grocery: morrisons can use this cash to do other, more profitable ventures, until the business model for grocery ecommerce becomes profitable
Who knows, this may be a wise move from Morrissons executives.
Summary The digital customer experience depends on interoperability between a wide range of commerce platforms, services and ecosystem applications. IT leaders can use this Vendor Guide along with other Gartner publications to guide their decisions about digital commerce technology.
Farid Mheir's insight:
Google research on the topic of eCommerce includes so many topics that I use it as guidance on the different aspects I need to cover when building an eCommerce strategy: just look at the table of content below.
A conference and expo for retailers looking to optimize their business through supply chain, logistics, fulfillment, warehousing and transportation.
Farid Mheir's insight:
To succeed in eCommerce you need to master one thing: delivering products to your customers rapidly at the lowest cost possible.
This is why events such as this one have become essential. I would even say that delivery is the single most important aspect of an eCommerce solution, as it is where your margins are made or lost. Ensure you have a comprehensive last mile model and you will be guaranteed not to loose money.
Ecommerce research, latest blog posts and training. Includes case studies, recommended reports, buyer's guides and supplier search.
Farid Mheir's insight:
A great blog on different elements regarding eCommerce, from strategies to solutions and statistics. Here, one post that identifies the issues that prevent ecommerce deployment.
• 65% of shoppers have used some sort of mobile device to support them while shopping in-store and 45% have used a device in-store that has led them to make an immediate purchase
• 63% of consumers who have previously received location based notifications are very or somewhat likely to continue receiving them
• 62% of shoppers who own smartphones find receiving rewards relevant to location to be appealing, while 47% want to receive product information relevant to location and 35% want mobile payment options
• 20% of consumers have uninstalled or opted out of push notifications from a retailer’s app due to lack of relevance
Farid Mheir's insight:
A recent survey and study confirms that shoppers want to receive notifications on their mobile phones when they are in store.
So far, 3D printing has not quite lived up to expectations. Skeptics are abandoning the idea of a future when you'll be able to 3D print just about anything in your living room, and MakerBot, the only relatively well-known maker of 3D printers, has stopped producing its own printers, outsourcing the work to China. Industrial use, rather than personal, ha
Farid Mheir's insight:
A short article on the use of 3D printing in fashion, with lots of links to follow for more details.
WHY THIS IS IMPORTANT
Technology permeates every industry and changes basic assumptions and business models. We often think this is limited to low margin commodity products but it looks like specialized, niched industries can benefit too. Look at your industry and ask, where can I apply 3D printing, eCommerce, augmented reality, connected objects, etc. in my company to revolutionize the way I design, fabricate, distribute, market, sell, support.
Think of everything because everything is on the table and open for digital transformation.
By marrying tech with traditional craftsmanship, 1Atelier hopes to redefine bespoke fashion for the digital age.
Farid Mheir's insight:
1Atelier leverages a fully digital customer experience and strong back office systems to provide one-of-a-kind luxury handbags in 21 days instead of many months for traditional firms such as Hermes or Louis Vuitton.
WHY THIS IS IMPORTANT
Niche retailers and small handmade manufacturers should look into this new disrupting company for clues into how best to transform traditional industries that are based on hand-made, custom, high quality solutions and products. Going digital does not mean sacrificing customer interactions or hand-made manufacturing: it can revamp, improve and recharge the back office support systems and processes.
A mechanical arm created by a Dutch team of roboticists wins Amazon's Picking Challenge award.
Farid Mheir's insight:
Amazon has invested heavily in warehouse automation to reduce costs and improve quality. It holds an event every year to select the best robots to accomplish warehousing tasks, this year to pick different items from store shelves.
WHY THIS IS IMPORTANT
Looking at the video it is clear that the technology remains primitive. That being said, with large investments made by Amazon in Kiva autonomous warehouse robots in the past, it is clear they are serious about warehouse automation.
It is clear that order fulfillment and delivery remain the 2 bottlenecks of eCommerce providers, adding costs and delays to the process compared to brick and mortar retailers. If Amazon could develop fully autonomous warehouses and have low cost delivery by leveraging Amazon Fresh grocery delivery trucks, it could have a profound impact on the viability of online pure plays and mark the decline in store-based commerce, which still account for 95% of all sales in the USA today.
Remember your first attaboy or attagirl... That pat on the back, look of approval, or recognition you deserved for accomplishing something special? There’s just
Farid Mheir's insight:
Explains how runkeeper uses eCommerce to reward customers and achieve impressive conversion rates of 4% to 7%.
WHY THIS IS IMPORTANT
We too often think of eCommerce in classic, undifferentiated terms: catalog of products, shopping cart, checkout. This paper offers an interesting twist to the whole thing, embedding eCommerce within the mobile app and unlocking certain products based on goals achieved by customers. Retailers should apply this approach to leverage their eCommerce platform beyond the classic website: behaviour-based rewards, special categories, loyalty-based commerce, mobile commerce, social commerce, etc. The eCommerce platform should become a platform not merely a transactional tool.
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Take a minute to watch the video. This is the future of retailing.
WHY THIS IS IMPORTANT
Amazon has disrupted many industries with its online business. Recently, as other digital leaders have done, Amazon is trying to bring digital revolution in the world to blend our physical and digital experiences - think Google self driving cars, Starbuck mobile phone payment and geofencing app, Apple stores that are more showrooms and help centres than stores because eCommerce is there to fulfill orders to your door, etc.
Amazon has been focussed on grocery for the past 10 years to use this weekly recurring, low cost, high volume shopping trip to the supermarket as its pathway to bring digital into the real world and blend it with online e-commerce.
With Amazon Fresh for examples they have been busy putting trucks on the road to deliver groceries to your door overnight with minimal costs. Why grocery? Because its high volume guarantees that trucks will be on the road everyday in all areas. And once trucks are running around carrying groceries they can also bring other items - books, TVs, etc. - at little or no cost, effectively making FedEx irrelevant or at least giving Amazon huge negotiation power.
I wrote about this in many blog posts, just see here: http://www.scoop.it/t/digital-transformation-of-businesses?q=amazon
Here with Amazon GO, it addresses some of the major pain points of customers in grocery stores: waiting in line at the cash register. As they've done online, Amazon focusses on its customer issues to smash them or make them so irrelevant that they are not issues anymore. See "amazon secret sauce" for insights on this: http://sco.lt/979c4P
Take Amazon Prime for example. It addresses the delivery fee issue: we do not want to have to pay for delivery. So they make it a non issue, providing 2-day delivery for free for an annual fee. Side effect: if you've paid for prime, then you spend up to 5x more at Amazon (300$ annually for average client, 1500$ for prime member), basically becoming a loyal shopper. Wow.
Back to Amazon GO and why it is important. The grocery industry has not seen a major disruption since Costco started top sell grocery in bulk format years ago - grocers ost 10% market share with that new player in the field. But today, grocery stores are the same, the layout is the same, the process is the same than it was 50 years ago. There has been little or no innovation in stores recently (last one may be the barcode in 1970s) but GO shows that there may be a perfect storm of technologies that combine to make physical stores transformation a reality:
1- mobile phones are on every customer back pocket;
2- electronic payment is everywhere, making cash almost irrelevant;
3- loyalty programs and big data allows retailers unprecedented customer knowledge and forecasting trends;
4- artificial intelligence enables real-time image analysis, feature detection, and robotic improvements.
From the concept store video and the Amazon description, all that GO is doing is applying these new technologies on a new problem set: adding and removing items to shopping basket and speeding the checkout process.
Of course, at the end of the day, the winner will not be the grocer with the best technology. It will be the one with the lowest prices and the best selection (best marketing and customer service won't hurt either). On those fronts (price & selection) Amazon GO faces huge headwinds from established grocers that have long standing relationships with suppliers and way more volume than Amazon. But it does not mean Amazon cannot provide customers with a more enjoyable, easy, fast experience - especially to millennials - which may give GO 5% or 10% of the market (the "good" 5% by the way, those that spend more and spend on higher margin items) from established retailers. And this will hurt established grocers like hell.
Also see the analysis from business insider here: http://www.businessinsider.com/amazon-go-grocery-store-future-photos-video-2016-12/
and the plans for Amazon to open up to 2000 store in the future if GO concept works: http://www.businessinsider.com/amazon-2000-grocery-stores-10-years-2016-10