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From Amazon to Instacart, online grocery shopping is back. But one of the biggest crashes in dotcom history still looms large. 
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Farid Mheir's insight:
The BestBuy omni-channel strategy document was made public in Nov 2012 and is available online. Sheds light into the company current state versus competitors and the strategy to regain its position.
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Electronics retail giant Best Buy Canada is cutting 950 jobs at its namesake and Future Shop stores as it streamlines its business to take on tougher competition. The job cuts underscore the increasingly competitive retail landscape as U.S. discount giants Wal-Mart Stores Inc. and Target Corp. expand in this country, other new foreign merchants arrive and online players steal away business from incumbents, leaving them scrambling to keep up. Best Buy’s same-store sales, a key measure of revenue at locations open for at least 12 months, fell by 0.9 per cent during the crucial holiday period. And margins were worse than expected The retailer enjoyed more than 50-per-cent sales growth in its e-commerce business in the past year while its new in-store “reserve and pick-up” service more than doubled in that period, Mr. Wilson said.
Farid Mheir's insight:
I wrote about the digital cliff a while back ("Survivrez-vous au précipice numérique?"), the concept that says digital transformations do not happen slowly over time. Digital transformation usually transform whole industries within a few years, rapidly, with established players disappearing overnight for the benefit of relative newcomers. It happened in the book industry, the music industry, the travel industry, the yellow pages industry and now is happening in the retail industry. What is challenging for digital natives is that the signs have been there for years, decades in fact, that retail will have to change due to the introduction of digital technology. It was the Internet at first, then came the mobile devices and soon, the revolution in order delivery and shipping. We are not sure yet what the retail store of the future will look like but we can assume it will look more like an Apple store than a Best Buy store:
Also read those recent posts:
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Find out what a Magento website costs and what you should expect to pay when getting a quote. - Shero Designs | Magento Experts
Farid Mheir's insight:
I get this question a lot and never know what to say because it really depends on a lot of parameters. Then again, if you want a first rule of thumb, these guys provide you with some answers. Assume these numbers as minimal costs and apply a 2x, 3x or 5x markup to account for your own company's need for custom development, tweaking, integration, and you should be in the right ballpark.
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Andrew Bleakley is a shopping cart consultant and SEO who helps companies sell and sell more online whatever ecommerce platform they choose.
Farid Mheir's insight:
I found this review of eCommerce solutions quite useful so I share. Given the hours I've spent building eCommerce catalogues, carts, checkouts, and everything around it, I find the solutions on the market today to be low cost, easy to use, and a great starting point for any business looking to sell online. Obviously, devil is in the details and you'll want to be aware of individual solution's limitations but they are minimal compared to building from scratch as we had to do 10 years ago. The real concerns should thus now move towards online order processing, returns management, customer service, promotion and marketing and product selection. Just like opening a brick-and-mortar store... ;-)
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Starting in the second quarter of 2013, Best Buy, No. 10 in Internet Retailer’s 2013 Top 500 Guide, began fulfilling web orders from 50 of its more than 1,500 U.S. stores. At first, Best Buy was much slower in delivering orders to customers than Amazon. But that changed over the holidays. During the summer, Best Buy took nearly seven days to deliver an order on average. That compared to four days for orders made with Amazon.com, StellaService says. By October the gap had narrowed, to about two days and seven hours for Best Buy orders compared with about three days and 12 hours for Amazon orders. Best Buy lost ground in November. But on Dec. 13 the chain could claim victory, if only barely. Its orders were in the hands of customers in just under three days, while Amazon’s orders needed a few more hours.
Farid Mheir's insight:
Looks like having real estate (read: stores) may not be as much as a liability as expected when it comes to eCommerce. This post breaks down the number of warehouses that online pure plays have but also makes the case that smart brick-n-mortar retailers can turn their stores into mini warehouses. Great idea if you think about it since stores are already close to where people live. I leveraged this concept back in the dotcom era to fulfill grocery orders from local stores instead of warehouses. Unfortunately, grocery may have been one of the worst product to implement this concept with, given the high SKU count, different planograms and inventory levels in each store, fresh products, large order size, etc. etc. But in the case of Best Buy, it may make sense if they can make 2 things work: real estate cost and delivery. Stores typically are in areas where rental rates are high compared to locations where warehouses are typically located. But that may actually be turned into an advantage if you leverage the location for customer pick-ups, which solves the high cost of delivery. Best Buy and other established retailer thus may have the upper hand here over Amazon that needs to build out its warehousing infrastructure. At least for a few years...
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Walmart To Go, the retailer's on-demand shopping service offering home delivery of general merchandise, including in some cases, groceries, is expanding its..
Farid Mheir's insight:
Some interesting pictures and stats regarding walmart ToGo.
André Bélanger's curator insight,
February 4, 2014 4:58 PM
Un magasin roulant sans avoir à payer d'impôts fonciers et de loyers. Brillant!
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One in four online clothing purchases are returned, often due to poor fit. And obviously, the only way to solve the problem is with shape-shifting robots.
Farid Mheir's insight:
For a while here in Montreal we had "le mannequin virtuel", a 3D computer model to help sell clothes online. Now this new robot provides a more natural option to determine how well a shirt, skirt or pant will fit. Look at this video to see the robot in action. It appears to really do a great job at showing if a garment fits well or not. Of course, retailers will be interested in the technology to reduce the high return rate the apparel industry has been experiencing. Not sure how the robots would be integrated into the online shopping experience? I also wonder if they could also help with in-store, where you would not have to try the clothes on but rather would let the robot do the work for you... Would bring a new tool to personal shopper, that could literally go "shop for now" and return only with the products that suit you perfectly. Of course, designers and others will benefit from having this new tool at their disposal. Read this for more details on the matter: As much as 33% of Internet sales gets returned? good reason why digital transformations require planning via @wsj http://sco.lt/5eALiL
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Behind the uptick in e-commerce is a little known secret: As much as a third of all Internet sales gets returned, in part because of easy policies on free shipping. Retailers are trying some new tactics to address the problem.
Farid Mheir's insight:
Very interesting insight from WSJ, the 33% figure appears to be very high and probably only applies to certain retailers or industries - apparel is the one feature in the article. One interesting figure from the article says "Rue La La said dealing with returns cost the company $5 million last year", which stresses the importance of the "transformation" component in your digital transformation plan. In fact, things like returns may come and bite you in the rear if they are not planned for and addressed properly early on. Poster child for this was Zappos (now Amazon) that built returns as part of the normal ordering process, making certain that returns were fast, easy and profitable. This was an essential component of the digital transformation because buying shoes online has a very negative aspect for the customer compared to in-store: they can't try the shoes before they buy. So Zappos *had* to make return a part of its process. Any digital transformation carries similar issues that must be accounted for early in the plan to make sure they do not kill your digital business model.
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Experts think it’s inevitable that sales of many non-perishable grocery categories will eventually take place online. Retailers need to meet that demand, but also the creative challenge of what to do with the space that it will open up in stores. Thom Blischok of Booz & Co. shared his ideas about “Tomorrow’s Trends Delivered Today: Store Design Trends — The Path to 2025” at a recent Food Marketing Institute conference, and then in an interview for this section. Today, 80% of the store is in merchandise, while 20% is accounted for by services, he said. Meanwhile 75% of capital investment dollars go to the store perimeter, while 15% is spent on center store, and 10% goes to the front of the store. “Recognizing that there is a movement to the Internet, becoming world-class at what you do on the perimeter and with services is critical,” Blischok said in an interview after he presented his concepts at the recent Food Marketing Institute Energy & Store Development Conference in Baltimore. Future store designs will have to account for certain center store categories moving online, which will result in much more available space in the store; decisions will have to be made about what to do with that space.
Farid Mheir's insight:
I am a technology expert, not a retailer or a store designer. I've posted blog posts regarding this trend for a while now and find this article to provide some of the background information to indicate that store designs are changing as some of the purchase for commodity items move to online. Retailers must thus act to prepare for this.
See also
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Amazon was granted a patent for what it calls “anticipatory shipping,” a method to start delivering packages even before customers have clicked “buy.”
Farid Mheir's insight:
Retailers have been doing forecasting for a long time, predicting from previous sales and market conditions (and their best judgement), what to order for each one of their stores. When you have hundreds of stores, this is not a simple tasks, and it often requires years of experience - if you want to do it well. Because forecasting errors are very costly, resulting in lost sales or products that stay on shelves or racks and must be transferred to others stores, or worse, discounted at the end of the season. I've worked on systems - from simple excel spreadsheets to more complex applications - that automate the predictive aspect and provide tools to facilitate the forecasting process. But never were the tools using invidual client profiles to make the prediction. They always used global store-level or regional sales numbers. So, at least in theory, established retailers can have a leg up. But Amazon may (again) shock retailers into a digital transformation, bringing their individual client sales data into account when doing the forecast. This will require retailers to include individual customer transactions and possibly their "wish lists" and online search information, to include in your forecasts. Data is there but few reatilers have the systems or the integration to bring this data in a timely manner to the "forecasting team" desk. Amazon has been doing this with "replesnishment" options where they send you products on a regular schedule, so you don't have to "shop" for them: they come at your door at a predefined interval you control. And they give you rebates for sticking to your schedude (predictability is invaluable in a supply chain!). If you do, then your forecast will undeniably be better. If you don't companies like amazon, with lower overhead, will send your clients products before they even consider going to store to see what's on the shelves!
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Venture capitalists are willing to fund a new generation of online grocery shopping startups
Farid Mheir's insight:
1998 all over again?
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The Psychology of Online Checkout [Infographic] - infographic Checkout
Farid Mheir's insight:
Many other very useful insights in this infographics.
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KPMG's Global Head of Retail Mark Larson shares 5 areas retailers should focus on to build a more customer-focused, omnichannel organization.
Farid Mheir's insight:
Useful insights especially #4 : enhance both online and in-store.
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Canadians may be the heaviest Internet users in the world but our homegrown online retailers have yet to catch up to the performance of U.S.
Farid Mheir's insight:
No surprise here. Our own Quebec CEFRIO stated the same back in november. But this report is very detailed and provides some interesting insights. Also see New CEFRIO survey results- Quebec retailers continue to leave 75% of eCommerce retail $ to others #iceq http://sco.lt/58m2wD
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Get an inside look at the process of selling an eCommerce store. Includes business history, traffic stats & full financials.
Farid Mheir's insight:
Not often do I see such transparency into a business model and economics. I find that Andrew Youderian consistently produces very useful insights into his eCommerce business. I find this material to be at par with those provided by Fail Harder and reviewed here previously. Amazing overview of average margin earned by apparel distributors- can also be extended to other via @fail_harder http://sco.lt/96o67d
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An introduction to eCommerce Platforms for non-technical people. Ben explains some of the key trends in the eCommerce platform and online retail space.
Farid Mheir's insight:
Provides useful visuals and some market research. Useful starting point.
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Nos cartes drive sont mises à jour tous les trimestres. Découvrez sans plus attendre les nouveaux chiffres clés du parc de drive et services drive en France
Farid Mheir's insight:
(in french) mapping of grocery store pickup service (called "drive") in France for 2013. Amazing deployment considering that this trend started only in 2010 and now reaches 2655 and keeps growing. The service may be a sign of the future, offering bulky heavy items for pickup, keeping the cost of eCommerce delivery down. Also allows customers to "top off" their order themselves, selecting their tomatoes and meat themselves. The service is a sign of the times, with consumers finding eCommerce a solution for staple low cost items as well as high priced ticket items such as electronics. It marks a turning point for retailers, recently faced with showrooming and omni-channel, as they transform their stores to become more than glorified warehouses. Stores now are service delivery locations that must deliver a personalized experience. Technology becomes essential, although it may be hidden from sight. Distribution logistics must also evolve from bulk cases distribution to individual, order fulfillment. Who leads the way in this? Amazon, with its leadership in eCommerce technology, fulfillment automation, and personalization.
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Startups are loving the exposure that comes with joining the e-commerce giant's grocery-delivery business. But is dealing with technical hassles and giving up a large cut of revenue really worthwhile?
Farid Mheir's insight:
What is most useful here is the opportunity for small and local businesses to leverage a large, well known brand like amazon (or Walmart, or another). This has been happening for years in other industries (electronics, books, etc.) and now food and CPG are finding their way into Amazon's amazing marketplace where shelf space is infinite and listing fees are small.
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Cyber Monday exceeded all expectation with a record setting day, according to IBM's digital analytics. Over the full day of online shopping, retailers raked in 20.6% sales growth over last year.
Farid Mheir's insight:
Very good insights on the latest eCommerce xmas craze.
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Pantry will help Amazon expand more in the huge consumer package goods market and take on warehouse club stores Costco and Wal-Mart's Sam's Club, sources say
Farid Mheir's insight:
Alone this sounds like the dummest idea on the planet: go compete on low cost, low margin, high volume, bulky and heavy products (read difficult to ship) against the lowest price market leaders (Costco, Sam's). True in isolation. Step back and consider those facts: 1- Amazon does not have retail stores, but is building warehouses close to its customers to reduce delivery costs 2- You can only do #1 when you have volume 3- How do you build volume? staples, stuff that people order on a regular basis 4- Amazon has a Prime programme where delivery is free for a yearly membership 5- Amazon is build Fresh to deliver groceries to home - easy to tag Pantry products in the same vans - additional cost in marginal 6- Amazon has a very successful replenishment programme - and what do you replenish most? pantry items! After careful consideration, Amazon Pantry makes perfect sense, doesn't it?!
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Amazon got a lot of ink for its sci-fi drone delivery idea this week, but a more real and immediate robot effort underway in the Seattle retailer’s warehouses could save it as much as $916 million a year, according to one analyst.
Farid Mheir's insight:
How can brick and mortar retailers compete with this level of automation when they must support real estate and HR costs? They can 1- invest in similar automation (but onlny if they have volume to scale) for comparable products in their online operations 2- provide an in-store experience that is fully linked with the online information: order picked and return in store, value added services in stores (training, support, etc.) 3- embrace local and niche products from small businesses to bring unique personalized products and solutions to shoppers Anything else?
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Needle leverages your best advocates, certifies them to sell your products, and enables them to do it from anywhere.
Farid Mheir's insight:
Needle is part of a new set of solutions and companies that provide tools, technologies and services to help retailers enter the world of "fan sourcing" or "curated commerce". The concept is simple: there is too much offering on the web and it is difficult to decide what to buy online, even with enhanced descriptions, high definition pictures, reviews and ratings. This due in part because we have come to not trust them, and in part because we rely on recommendations from people we know or from experts, rather than the promotion marketing material that brands and retailers prepare. This is what needle appears to provide. It facilitates the creation of a network of "advocates" that can speak to your potential customers and inform them on the products you have to sell and determine which is best for your customer. One on one, personalized shopping. OK in reality they are pimped-up sales reps, paid when they sell you a product. Nothing new here. But the way in which they sell, online rather than in store, may mean that shopping for a TV on amazon wesbite tomorrow will feel a lot more like going to a Best Buy store today.
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The e-commerce company, which primarily sells electronics, opened the retail location – attached to its warehouse – on Nov. 29, Black Friday, a day when traditional retailers typically offer big discounts.
Farid Mheir's insight:
I see a downside from having showrooms attached to warehouses. Distribution centers are often located in areas convenient for distribution (low real estate costs, proximity to highways, etc.) but not so much in prime real estate where consumers go to browse. I am sceptical of the model, not sure it scales and I do not expect amazon to open a showrooms next to each of its warehouses. However, the need to see and feel and touch products in certain categories (cars, electronics, food, etc.) will scream for showrooms in the future, along the lines of previous posts I wrote such as this one: Amazon warehouse & operations and Apple stores trace the future of brick-n-mortar stores via @bi http://sco.lt/5pCgBl
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Farid Mheir's insight:
This study demonstrate what we feel here in Canada: we are lagging behind on eCommerce and have a good growth potential, larger than the US and most western european countries.
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Curated by Farid Mheir
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Another model for grocery pickup and delivery is proposed by instacart, which has a business model similar to Uber. They hire individuals to do the picking and delivery and leverage stores for fulfillment. I cannot believe that this will make for a low cost and high quality solution but it may provide a very good niche offer for a while.