WHY IT MATTERS: Digital Transformation

WHY IT MATTERS: FMI and Nielsen provide data to suggest that food grocery shopping online may reach disruption levels in 5-7 years. It is important because online grocery may be the last frontier of digital transformation. What we started in 1996 is finally showing signs of strong growth. We're almost there!

WHY IT MATTERS: delivery models are plenty and need to be expanded to reduce the cost of eCommerce deliveries.

WHY IT MATTERS: delivery is the last problem to solve to continue ecommerce growth. McKinsey explores the different delivery models for the last mile in this article.

WHY IT MATTERS: good to compare France and US online grocery retail to show how much behind we are in north America...

WHY IT MATTERS: always good to know that store retail remains the largest solution by far in all categories but that growth at 15% or 25% means ecommerce doubles every 4-5 years.

WHY IT MATTERS: this article reviews of the 6 companies are changing the in store experience to deliver true omni-channel.

WHY IT MATTERS: this german institute reports on omni-channel support in retail which visually shows that few retailers embrace omni-channel fully at this time. Would be interesting to see the same elsewhere to compare.

WHY IT MATTERS: online shopping penetration is growing and now accounts anywhere from 10% to 50% of sales. However this study shows that consumers have a hard time finding local retailers and local products. I assume this is because the market attention is captured by very large providers - Amazon, Google, EBay, Alibaba, Walmart - leaving the corner retail store with a dilema: how to let shoppers know they exist. This is a problem that needs to be resolved. Or a business opportunity?

WHY IT MATTERS: chinese eCommerce giants are making sure there is no difference between on-line and in-store, paying to renovate stores with the latest hitech (AI, Big Data) and turning them into loyal customers. The future of retail is being defined in China.

WHY IT MATTERS: eCommerce is growing even in fast moving goods (as opposed to categories such as travel or electronics)

WHY IT MATTERS: traditional retailers and shopping malls are facing store closures as the eCommerce traffic continues to grow in popularity. This first part of a series provides some very useful insights and facts about what many are calling the retail apocalypse.

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/ 

WHY IT MATTERS: one chart say it all: retailers are not equipped to fight against Amazon unless they band together and innovate.

WHY IT MATTERS: I was floored when Amazon announced the GO concept in Dec 2016 (13 months ago!) and commented about it in different posts http://fmcs.digital/?s="amazon+go". Now their 1st store opens and pictures start surfacing. The big question now is: how are established retailers going to compete with this level of digital innovation given their anemic investments in R&D? Most don't even have a good eCommerce website. No wonder pundits predict a retail armageddon...

top 20 R&D spend: https://www.statista.com/statistics/265645/ranking-of-the-20-companies-with-the-highest-spending-on-research-and-development/ 

retail armageddon: https://news.usc.edu/121222/retail-armageddon-more-bankruptcies-in-four-months-than-all-of-2016/ 

WHY IT MATTERS: I reported in the past that Prime programme has a total value of 143B$ (http://sco.lt/8ot9NJ). These updated numbers show that growth continues outside the US. Expect Amazon to leverage its membership programme to wall-in its clients and protect it from competition. Tough road ahead for other retailers as Prime members will be looking to stay with the brand.

WHY IT MATTERS: my 17 year old says everyone at school is doing it - selling their old clothes on instagram. Very simple: open an account like "oncelovedclothing", take pictures of clothes you don't wear anymore, let instagram users bid for the items, at school they simply exchange money for items. Easy. No eBay, no kijiji, no intermediary. Wow.

WHY IT MATTERS: actually it doesn't matter but it hurts when I see stats like this one... Only 20% of grocery sales will be conducted online says FMI+Nielsen, when we estimated that we'd reach that number by 2005 when we first launched IGA cybermarket on Aug 25 1996! Grocery will probably the last industry to convert to online - and I understand why because of intrinsic complexity (perishable products, tiny margins, etc.).

WHY THIS IS IMPORTANT

First, it is from the head of the largest retailer on the planet. Second, it draws from insights - and a great video - from the World Economic Forum.

WHY THIS IS IMPORTANT

The chart says it all: walmart investments in ecommerce have paid off with 60% growth in recent months. 

WHY THIS IS IMPORTANT

The report provides a good overview of key trends in eCommerce today with some useful trends and survey data.

WHY THIS IS IMPORTANT

In today's eCommerce world, winners do not limit themselves to building great catalogs and payment processing experience. They actively analyze data to understand customer behaviour, to provide them with exceptional information to speed-up their shopping experience, but also maybe make them buy more or more expensive products. This is a great example of such a data analysis by grocery shopping leader instacart. It provides amazing insights into grocery shopping but also has open sourced the data for others to benefit.

WHY THIS IS IMPORTANT

Grocery is the last frontier for digital disruption, everyone knows (huge market but late adopter of digital, especially eCommerce see http://sco.lt/8ai7W5 http://sco.lt/6q1Ijx http://sco.lt/8Y94vh ).

But no one knows when exactly they'll get disrupted. Many are betting on eCommerce but from the looks of this report, we may see a lot of changes in our weekly trip to the supermarket, from shelf monitoring to augmented reality.

Then again, grocers are pre-historic in their use of technology because of low margins and a very repetitive shopping experience. We mostly always buy the same products and are looking at our store "experience" to be fast with low prices, not so much fun and experiential (see Amazon GO http://sco.lt/8MTY8X where there is no cash register to slow you down still needs to be cheap http://sco.lt/80HuqX).

So my bets are on the startups that enable faster grocery shopping at a low cost- all others I expect will have a hard time (sorry AR and VR startups...)!

WHY THIS IS IMPORTANT

Amazon is a beacon in the digital transformation space - part of the famous GAFA acronym - Google Apple Facebook Amazon. This teardown from CBinsights shows that Amazon is way more than the eCommerce retailer we have come to love and rely on so much. The report reviews where Amazon invests and provides unique view into where it may be going. Retailers beware!

WHY THIS IS IMPORTANT

If you are a retailer with physical stores or a real-estate owner, this chart should scare you into rethinking you long-term strategy regarding a decrease in physical store square footage and increase in eCommerce. From the looks of it, as soon as the cost of money will increase (interest rates), we may see many retailers from the old-wave (read: no eCommerce) be forced into bankruptcy...

Also read this for other very interesting stats, including sales per sq.ft.

http://www.zerohedge.com/news/2017-04-22/retail-bubble-has-now-burst-record-8640-stores-are-closing-2017