WHY IT MATTERS: Digital Transformation

WHY THIS IS IMPORTANT

Americans have been at the fore-front of eCommerce - and in many respects UK, France and other European countries also. However, news like this remind us to look East to China, India and other Asian countries for digital innovation - here in the context of Retail but I assume it may be the case for other innovations.

WHY THIS IS IMPORTANT

Retailers planning their eCommerce solution should take a hard look at their return policy and process. Statistics such as this demonstrate that return rates as high as 45% can wreak havoc on profitability, customer satisfaction and employee frustration!

You have to wonder if 2017 will really be the year for online grocery shopping to take off... I've been saying it since 1996, and one year I will be right! ;-)

Predictions for retail word this year.

Very proud to share an article I recently co-authored on CloudRaker blog with Simon Hudson. It sheds lights into the potential impacts that AI will have on retail stores.

A must read ;-)

WHY THIS IS IMPORTANT

A key piece of eCommerce and retail has to do with delivering packages from warehouse to customer homes or offices. Amazon spends 12% of its revenue for shipping and is expected to ship more volume than FedEx in 3 years. To reduce this cost and improve customer service by allowing more frequent and faster delivery, Amazon has been doing a number of things:

1- putting trucks on the road with its AmazonFresh grocery delivery service;

2- building delivery infrastructure between its warehouses and distribution centers and delivery spokes;

3- now it is planning to become a broker between small parcel delivery providers in a UBER like model (this article)

4- self-driving vehicles have been targeting trucking industry as their primary focus, with UBER recently investing in startup OTTO and demonstrating a 2000 case beer delivery via self driving truck

Combine all these innovations and you have a profound disruption in the delivery and logistics industry. Retailers should now consider Amazon no longer as an online marketplace and third-party logistics company (3PL) but also as a parcel delivery solution provider that can compete FedEx and UPS provide last-mile delivery solutions and eliminate the need for retailers to maintain or lease their own delivery vans and trucks.

Links in this post:

• amazon net shipping costs 4.7% of revenue: http://fmcs.digital/blog/new-e-commerce-strategies-threaten-ups-fedex/ 
• amazon total shipping costs 12% revenue: http://www.beyonddevic.es/2014/02/03/amazons-prime-problem/  http://www.wsj.com/articles/amazons-newest-ambitioncompeting-directly-with-ups-and-fedex-1474994758 
• amazon fresh trucks: http://sco.lt/7i9FbN 
• self-driving truck: http://fmcs.digital/blog/tesla-brings-self-driving-hardware-to-its-entire-fleet-see-the-video-for-a-glimpse-into-the-future-of-driving/ 
• amazon competes fedex: http://fmcs.digital/blog/jeff-bezos-amazon-wont-compete-with-fedex-and-purolator-usps-i-dont-believe-him/ 
• FBA 3PL: http://fmcs.digital/blog/27-tips-on-how-to-build-fba-strategy-via-cpcstrategy/ 

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.

• 2013 detailed report by Brittain Ladd, ex-consultant now Amazon employee, that may be the source of some of the concepts behind Amazon GO: https://www.linkedin.com/pulse/beautiful-way-save-woolworths-brittain-ladd 
• Amazon 2015 patents that supports the GO store technology: http://appft.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=HITOFF&u=%2Fnetahtml%2FPTO%2Fsearch-adv.html&r=1&p=1&f=G&l=50&d=PG01&S1=(Steven.IN.+AND+Kessel.IN.)&OS=IN/Steven+and+IN/Kessel&RS=(IN/Steven+AND+IN/Kessel) and older one http://appft.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=HITOFF&p=1&u=%2Fnetahtml%2FPTO%2Fsearch-bool.html&r=1&f=G&l=50&co1=AND&d=PG01&s1=%22DETECTING+ITEM+INTERACTION+AND+MOVEMENT%22&OS=%22DETECTING+ITEM+INTERACTION+AND+MOVEMENT%22&RS=%22DETECTING+ITEM+INTERACTION+AND+MOVEMENT%22 
• Very good analysis - in french - of what we know and some interesting tidbits about how Amazon may use it in the future: http://www.le-furet-du-retail.com/2016/12/amazon-go-comment-cela-marche-technologiquement-ce-que-l-on-sait-du-systeme-just-walk-out.html 
• Amazon GO website announcement and video: https://www.amazon.com/go 
• 2015 recode article that unveiled the concept a year ago - but went under my radar: http://www.recode.net/2015/3/30/11560904/we-may-have-just-uncovered-amazons-vision-for-a-new-kind-of-retail 

Various other articles:

• http://www.theverge.com/2016/12/6/13856158/how-amazon-go-stores-work-patent
• http://www.pocket-lint.com/news/139650-what-is-amazon-go-and-how-does-it-work
• http://www.usatoday.com/videos/tech/2016/12/07/how-amazon-go-work/95111660/

Amazing insights into the mobile industry state and trends.

WHY THIS IS IMPORTANT

Andreessen Horowitz, and Benedict Evans in particular, have been known to spot trends long before everyone else. Here again, it appears they are making predictions about retailing - following in the steps of the print industry when Internet came along. Not certain I agree about the parallel but I agree that mobile and AI and other technologies will impact and transform the retail world in the near future. However, as opposed to the print media, retailers often sell physical goods that cannot, for now, be 3D printed at home. So either you pick them up in the store or get it delivered by FedEx or a drone. 

That being said, retail stores are bound to transform in showrooms and service centers as I wrote about in the past. And this is a major shift that many will fail to take.

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.

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.