A motion graphic showing how Amazon’s new shopping experience Amazon Go will work. Simply scan in, take what you want and “Go”.
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WHY IT MATTERS: Digital Transformation
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Curated by
Farid Mheir
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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. 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 
Flores Marisol's curator insight,
December 7, 2016 9:04 AM
Wow! Now that would be nice! No standing in lines!
Emily Herbek's curator insight,
November 4, 2019 10:51 PM
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.
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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.
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Farid Mheir's insight:
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...
Jean-Marie Grange's curator insight,
October 24, 2016 2:02 PM
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...
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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.
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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.
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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.
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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:
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.
Also see Amazon's dedicated site for its popup stores: https://www.amazon.com/b?node=14303222011&tag=bisafetynet-20
Anthony Stephens's curator insight,
September 19, 2016 7:23 AM
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
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Summary
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.
You should too.
If you don't have a Gartner account or would like a free resource, start with their primer https://www.gartner.com/binaries/content/assets/gml/ki-pages/research-primers/94142c1d-730d-4251-97c7-938ce27b304c_gartner_for_marketers_digital_commerce_primer.pdf or go to one of the major solutions such as Hybris to get access to analyst reports that favor them positively (!): https://hybris.com/en/downloads?q=:prioritySort:type:Analyst+Report
Table of Contents
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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.
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Among the study’s findings: • 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.
related article: http://www.the-cma.org/resource/leadership/enhance-customer-experience study: https://www.the-cma.org/Media/Default/Core/Library/Publications/Using_Digital_Solutions.pdf
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From
qz
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.
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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.
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From
www
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.
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Selected quotes include:
Farid Mheir's insight:
Jeff Bezos said during Code conference that Amazon will not get into the delivery business to replace partners - but will supplement it heavily.
I wrote before that amazon will get into the grocery food delivery business because it is the only way they can reduce their delivery costs - costs they have to give to fedex, purolator, USPS and others. So basically they will go into grocery business to break even and get free local delivery in certain key market areas.
Recently, Walmart has begun pilot tests to deliver groceries using UBER (http://www.reuters.com/article/us-wal-mart-groceries-idUSKCN0YP0H6?il=0). This sounds like a great idea, focussing on each other's strength (walmart = products & logistics, uber = delivery) with no investment to access huge volume. This option may not be as efficient as the Amazon model however but be a great solution in periods of high volume.
To see what I wrote about this, see http://www.scoop.it/t/digital-transformation-of-businesses?q=amazon+fresh
WHY THIS IS IMPORTANT Delivery remains the biggest cost for online retailers. Between 10% to 20% of retailer costs are sunk into delivery. This remains a huge hurdle for both retailers and consumers compared to physical stores. I expect online retailer to be more and more creative on the delivery front to reduce costs and deliver faster.
Established eCommerce retailers should look for opportunities to improve delivery and newbies to never underestimate delivery as it is the CORE to make or break their online retail business. Mark my words...
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From
qz
Since supermarkets came of age in the 1950s, the American grocery store layout has largely been frozen in time. And for good reason. Every inch of the traditional track around US supermarkets—from the beautifully lit piles of produce and bounteous bakery section to the inviting prepared foods—has been honed to maximize the grocery industry's tried-and-true busines
Farid Mheir's insight:
This is not an article about grocery retailing but rather a demonstration of what the future holds for retailers and the stores they have.
With eCommerce, no longer do stores need to be mini warehouses with racks and shelves full of products. Today, eCommerce and automated picking can replace this more economically - remember Amazon mantra "your margin is my opportunity".
What retail stores will become is more like an Apple store than a costco: 1- a showroom for your products 2- a learning center on how to best use your products 3- a help center to get you out of trouble if that should occur
Exactly the layout of an Apple store. What would this look like in a grocery store? Well something like the picture in this paper 1- showroom for perishable products like meat, deli, seafood, produce, etc. 2- areas for cooking recipes, sampling, promotions, tastings, etc. 3- areas to prepare cooked meals to get you on your way without having to prepare a meal The rest - grocery products in boxes and cans - will be prepared automatically in a fully automated warehouse in the distance by robots who know what you've bought in the past and what you are missing in your fridge or need to prepare that recipe you just tasted. Delivered to your car's trunk in the parking lot.
Give it a few years and this should become reality....
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La décision de Canadian Tire d’effectuer un retour au papier est saluée par Jean Rickli, conseiller principal associé au J.C. Williams Group. « Ils vont aller chercher différents types de clients. Les personnes plus âgées, moins habiles avec les applications, et les plus jeunes, qui voient t&hel
Farid Mheir's insight:
(in french, english here) Canadian Tire follows the likes of IKEA catalogue, real estate, technical publication, tourist guides and other applications to extends its paper catalogue with additional information using mobile phone technologies. Not sure the IKEA project received huge success but again this was 2013 and a lot has changed in the past 3 years.
With virtual reality (VR) being trumpeted as the next big thing, Augmented Reality (AR) may actually provide something more useful and less intrusive - thus leading to faster and larger adoption? Microsoft hololens project sure thinks that way.
http://conference.corp.at/archive/CORP2013_128.pdf http://www.inglobetechnologies.com/docs/whitepapers/AR_printing_whitepaper_en.pdf http://www.scoop.it/t/digital-transformation-of-businesses/?tag=Augmented+Reality
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Amazon has never generated huge profits. It puts most of the money it generates back into the company.
Farid Mheir's insight:
Amazon must invest everything it has - all its profits - to create the tools, and technologies it needs to be relevant against established retailers. It underlines how much companies must invest when they go through their digital transformation: they must be ready to impact income in order to define themselves with digital technologies.
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If Costco and Whole Foods had an online baby, it would look something like startup Thrive.
Farid Mheir's insight:
I've been tracking this years now and it seems to be happening. Stores will transform to become points of service rather than warehouses. All the commodity products found on shelves in the center of the store are best candidates for eCommerce.
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Amazon on Tuesday announced the arrival of devices that order their own refills from the online retailer.
Farid Mheir's insight:
Amazon introduce a small Internet connected device they called "dash" a few years ago to simplify replenishment of consumables such as laundry detergent via the push of a button. Now they have licensed their technology to manufacturers such as GE to embed the device right into their products. Welcome to the new world of shopping at home! Have you planned to introduce Internet connected devices and gadgets into your products or offer your products via those devices? Have you made such innovations part of your strategic plan? What are you waiting for?... Read the following for more insights on how Amazon dash plans to revolutionize the way we consume at home: http://www.scoop.it/t/digital-transformation-of-businesses?q=dash
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Instagram has become a visual storytelling platform for marketers that offers both flexibility and function like we've never seen before. In our latest study, we analyzed how the world's top brands are using the network, revealing tactics that marketing organizations of any size, with any budget, can learn from. Download the report to learn:
Farid Mheir's insight:
This report presents many cas studies of corporations that use instagram for business purpose. Very useful for those that have yet to make the leap or that have not yet found their instagram sweet spot.
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With nearly one-half of growth over the next five years coming from digital channels, CPG manufacturers risk losing control of their margins, share, and brand equity.
Farid Mheir's insight:
A very good review of the digital challenges that the CPG industry faces today.
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Amazon has 173 logistics facilities worldwide, so it might build its own logistical network — which should terrify traditional vendors like UPS and FedEx.
Farid Mheir's insight:
Amazon may replace UPS and FedEx with its own delivery service. I wrote about this in the past when I assumed that Amazon is developing grocery delivery as a volume business to put trucks on the road and cut distributions costs drastically. In that light Amazon is not looking at grocery as a profit center - all it needs is an operation that breaks even because when it does, all other deliveries will basically be free of charge. And this would mean Amazon will never open stores.
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Retailers who aren’t forward-looking when it comes to digital technology risk being cut out of the value equation completely.
Farid Mheir's insight:
Accenture makes the case for disintermediation in the retail space where manufacturers - CPGs in the diagram - will find in digital technologies the tools to bypass retailers and sell direct to consumers. WHY THIS IS IMPORTANT This was raised early in the Internet days but never really materialized as consumers find value in retailers - proximity, multi-vendor comparison, etc. Moreover, retailers put up a fight whenever manufacturers try to bypass them, thus making the move to a direct-to-consumer switch unlikely. However it is true that digital technology provides new opportunities for business models that bypass retailers to bring value to consumers.
Luigi Cappel's comment,
October 14, 2015 1:50 PM
Agreed, I'm hearing a lot of talk about manufacturers leasing appliances direct as a service to consumers
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Retail ecommerce sales in Canada will reach C$29.63 billion ($26.83 billion) this year, eMarketer estimates, an increase of 16.8% over 2014 spending levels. Double-digit sales increases are expected through at least 2019. That year, ecommerce sales in the country will near C$50 billion ($45.28 billion).
Farid Mheir's insight:
Useful data on eCommerce WHY THIS IS IMPORTANT? eCommerce will account for 8.8% of all sales in 2020: that leaves a *lot* of room for late adopters to get started and take their place in the virtual world.
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Curated by Farid Mheir
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Below are some articles that describe AmazonGO technology in more detail, including a video animation. As you can see, we know very little and everyone is guessing at this time based on patent filing and an article from a consultant now hired by Amazon.
Various other articles: