Starbucks is facing long lines and delays in stores, and the CEO hasn't offered any specific solutions for restoring service.
Farid Mheir's insight:
I love to say that technology and digital in particular can bring huge benefits rapidly but that the impact of changes must be analyzed and addressed. Now Starbuck is in reactive mode after popular online orders are impacting in-store customers.
WHY THIS IS IMPORTANT
Change management and impact on humans and current processes is Paramount, especially now that we live in an omni-channel world.
Its very interesting to see how technology has affected their business making it easier to actually obtain coffee would have a negative effect on their sales. But a large company like Starbucks would not really be effected from this small decline in their stock.
Ecommerce continues to make gains among consumers, with more people buying products online than ever before. Indeed, eMarketer recently predicted that worldwide ecommerce sales would total $1.915 trillion in 2016, with $423.34 billion of that coming from North America. And the company forecast double-digit retail ecommerce growth through 2020.
Grocery and fresh foods
Health and wellness
Pet products
Artisanal/handcrafted goods
Sporting goods
Virtual reality
Farid Mheir's insight:
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! ;-)
The Artificial Intelligence Revolution isn’t around the corner—it’s here. A common remark is that as soon as some new form of AI is possible, it’s no longer AI, it’s just what computers “do”. And while we won’t notice most of AI’s effects in our world, there will be visible signs as digital technology is infused with AI. Through the lens of commerce, it’s easier to see AI’s deep effects as progress continues. Here are a few examples.
Farid Mheir's insight:
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.
Rethinking the Value Chain: New Realities in Collaborative Business – the premise of this report suggests that the industry’s traditional approach to the value chain, whereby product and information flow linearly and sequentially from supplier to manufacturer to retailer to consumer – is no longer sufficient. The findings further point out that value chains cannot keep pace with the new reality of global changes in consumer behaviour, business innovation, demographics and economics. As a result there is a need to lead a shift away from value chains towards more collaborative value networks. The report takes a closer look at the trends impacting the industry while presenting the strategic areas of focus for concrete actions.
Farid Mheir's insight:
Digital impacts back-office as much as front office - so why has BO changed so slowly and what should be done. Some recommendations here
The way people shop has completely changed over the past five years. A large part of this change in behavior has been driven by online access to information. Shoppers now have easy access to more product information than ever before. Yet as the modern buying experience has changed dramatically, the in-store experience at most retailers has remained frozen in time. In particular, most sales associates do not have tools at their disposal that might allow them to keep up with the information-empowered shoppers they now serve.
Farid Mheir's insight:
Amazing that those 4 tools are not already in sales associates hands today:
Access to deep product information
Access to customer profile information
The ability to sell items that aren’t physically in the store
The way people shop has completely changed over the past five years. A large part of this change in behavior has been driven by online access to information. Shoppers now have easy access to more product information than ever before. Yet as the modern buying experience has changed dramatically, the in-store experience at most retailers has remained frozen in time. In particular, most sales associates do not have tools at their disposal that might allow them to keep up with the information-empowered shoppers they now serve.
Farid Mheir's insight:
Amazing that those 4 tools are not already in sales associates hands today:
Access to deep product information
Access to customer profile information
The ability to sell items that aren’t physically in the store
Running a store can be hard, tiring work that requires you to wear many hats. Between shipping out orders, managing inventory, keeping track of accounting data, and answering yet another customer's email, it's easy to get overwhelmed. But it doesn't have to be that hard. Your eCommerce platform and other companion apps can keep your store running smoothly, managing the busywork so you can focus on your products and customers.
Your store will need the best-in-class tools—and the essentials are right here. From the best places to find themes and add-ons to your store, to the best tools and automations to run your store, here are the resources you need to keep your store running and growing. Consider it your extended cheat sheet for managing a successful store.
Farid Mheir's insight:
Creating and running an ecommerce store does not require technical skills anymore: anyone can do it. This paper provides very useful links to help anyone find solutions, tools and techniques to plan and execute the most common tasks behind a successful ecommerce store. Enjoy!
Floodwatch is a Chrome extension that tracks the ads you see as you browse the internet. It offers tools to help you understand both the volume and the types of ads you’re being served during the course of normal browsing, with the goal of increasing awareness of how advertisers track your browsing behavior, build their version of your online identity, and target their ads to you as an individual. We want to assemble the largest amount of advertising data we can— and then not give it to the advertisers.
Farid Mheir's insight:
WHY THIS IS IMPORTANT
Knowing what information is captured about you, stored and the digital profiles that is created behind the scenes as you browse the web is a first step in regaining control over our digital twin so we can have better digital lives.
Amazon is building an app that connects truck drivers with shippers, getting itself into the $800 billion trucking industry.
Farid Mheir's insight:
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:
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.
This transformation echoes the impact of Facebook on the media: there is a dramatic leveling of the playing field. The advantages of scale that guaranteed success in the post-war era just don’t matter very much when advertising is cheap, shelf space is infinite, and shipping is free. And, just as Facebook’s breakdown of the media broke down the political parties, Amazon’s break-down of physical retail will have its own knock-on effects: carrying household supplies is a major reason to own a car, for example, which means Amazon is a laying the foundation for a service like Uber to shift from being a car supplement to a full-on substitution.
Farid Mheir's insight:
A discussion on the impact that technology innovation has had on the election of Trump and more disruption to come from Amazon.
WHY THIS IS IMPORTANT
The author presents compelling arguments about reasons why technology innovation has had such an impact and forces us to rethink most business models. Moreover the analysis of Trump's election as evidence that the power has shifted from editors and political parties to voters and end users is just brilliant and I will certainly use it in the future!
New research shows that 66% of US adults aren't willing to pay more for groceries, even if it means skipping the checkout line
Farid Mheir's insight:
WHY THIS IS IMPORTANT
Amazon GO is pushing the boundaries of retail store technology by bringing together multiple innovations to reduce time it takes to shop by removing cash register and checkout counters. This is very useful in certain industry but it is good to remember the reality of grocery shopping: you do this every week and allocate a large portion of your budget to food. Thus price is very important, especially when you have families and limited budget. It does not mean Amazon GO will fail but that it may not be appropriate in every segment of the retail industry.
A motion graphic showing how Amazon’s new shopping experience Amazon Go will work. Simply scan in, take what you want and “Go”.
Farid Mheir's insight:
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.
As we pass 2.5bn smartphones on earth and head towards 5bn, and mobile moves from creation to deployment, the questions change. What's the state of the smartphone, machine learning and 'GAFA', and what can we build as we stand on the shoulders of giants?
Farid Mheir's insight:
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.
Subscription e-commerce uses AI to offer personalized, low cost, convenient products. It’s working.
Farid Mheir's insight:
Simple and efficient, I wonder why this concept has not caught on with grocery as my tastes and what I buy is often way more predictable than clothing or other items.
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.
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.
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.
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.
Success comes to those who learn and hustle. There's no better way to learn than reading. Here are the 47 most important eCommerce books for hyper growth.
Farid Mheir's insight:
Not sure what to read if you want to improve your ecommerce skills. Here is a starter list.
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.
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I love to say that technology and digital in particular can bring huge benefits rapidly but that the impact of changes must be analyzed and addressed. Now Starbuck is in reactive mode after popular online orders are impacting in-store customers.
WHY THIS IS IMPORTANT
Change management and impact on humans and current processes is Paramount, especially now that we live in an omni-channel world.