retail

created 2 years ago

For years, retailers have been haunted by the thought of Amazon using its technological prowess to squeeze them into powder. That battle has mostly played out on Amazon’s home turf, the world of online shopping.
If those experiments work — and there is no guarantee of that — they could have a profound influence on how other stores operate. Over time, they could also introduce new forms of automation, putting traditional retail jobs in jeopardy. At the same time, locating those stores close to customers’ homes could also help Amazon further its ambitions of delivering internet orders within hours.
The company is exploring the idea of creating stores to sell furniture and home appliances, like refrigerators — the kinds of products that shoppers are reluctant to buy over the internet sight unseen
These would not be your average Home Depots: Amazon has considered using forms of augmented or virtual reality to allow people to see how couches, stoves and credenzas will look in their homes,
Amazon is also kicking around an electronics-store concept similar to Apple’s retail emporiums, according to two of the people familiar with the discussions. These shops would have a heavy emphasis on Amazon devices and services such as the company’s Echo smart home speaker and Prime Video streaming service.
And in groceries — a giant category in which Amazon has struggled — the company has opened a convenience store that does not need cashiers, and it is close to opening two stores where drivers can quickly pick up groceries without leaving their cars, all in Seattle. It has explored another grocery store concept that could serve walk-in customers and act as a hub for home deliveries.
Overseas, Amazon is quietly targeting India for new brick-and-mortar grocery stores. It is a vast market, and one still largely dominated by traditional street bazaars where shoppers must wander from stall to stall haggling over prices and deliberating over unrefrigerated meat sitting in the dusty open air. Amazon’s internal code name for its India grocery ambitions: Project Everest.
Last week, Amazon opened its fifth physical book store in Chicago, and it has five more announced locations under construction.
It is possible that some of the store ideas will never see the light of day.
“We are always thinking about new ways to serve customers, but thinking is different than planning,”
One big desire many customers have is that they want to see fresh fruits, vegetables and meat in person before buying them. The relatively high cost of home delivery — Amazon charges $15 a month for its Fresh service, on top of a $99 annual Prime membership — is another barrier.
Online grocery delivery accounts for only about 3 percent of the market in the United States, though it is closer to 10 percent in Britain
Joe Thompson, a former general manager in Amazon’s retail business, sees physical retail as key to Mr. Bezos’s outsize ambitions for the company. "I can’t help but feel that, in Bezos’s mind, he wants to be the first trillion-dollar valuation company,” said Mr. Thompson, who is now an executive at BuildDirect, an online home improvement store. To do that, he said, Amazon would have to “crack” a couple of “completely underpenetrated markets online.”
Amazon’s current market value is bobbing around $400 billion.
A growing number of established grocery retailers are experimenting with this “click and collect” approach to shopping, including Walmart, Kroger and others.
the company has been developing technology for automatically detecting when a customer pulls into the parking lot so orders can be brought to them more quickly.
A few miles away from its other Seattle stores, on the ground floor of one of its many office towers in the city, the company is testing Amazon Go, a convenience store concept stocked with beverages, sandwiches and prepared meals, which are put together by chefs in a kitchen that is visible from the street.
“Amazon is wonderful at frictionless commerce,”
“I’ve probably been in 30 boardrooms of retailers in the past year,” Mr. Galloway said. “I would say the No. 1 topic of conversation is Amazon.”
India could represent another big market for Amazon in physical retail. The company, which has vowed to spend billions of dollars on its efforts in the world’s second-most populous country, recently sought approval from the Indian government to open online and physical food stores in the country, The Economic Times reported in February.
“What appears to be clear is they haven’t yet zeroed in on a format they’re willing to massively scale,” he said. “This is a company that the moment it figures out something that works, it puts nuclear energy behind it.”
www.nytimes.com
Basically, Mahaney forecasts Amazon's retail business will continue to grow 20% year-over-year on average, while the AWS cloud business will grow at a 40% annual clip for the next five years. In its most recent quarter, Amazon's retail grew a little over 25% year-over-year. AWS grew 55% year-over-year.
Then, put a 10% margin on the retail side, and a 40% margin on AWS, and you would get to roughly $82 in earnings per share, he said. If you give a "modest" 25X P/E multiple on that, Amazon's stock will hit $2,000, which would equate to a $1 trillion market cap.
www.businessinsider.com
You may recall that it was three years ago that I shared with you what I sensed were the early signs of a seismic shift in consumer behavior – away from bricks-and-mortar and towards mobile and online retailing. Today, that shift has taken firm hold around the world, both disrupting and redefining retailing and significantly reducing the consumer foot-traffic that traditional retailers have relied on for decades.
Despite the shift, Starbucks has been able to consistently outperform the retail industry. We’ve been able to do so because our stores, our offerings and the experiences our partners create make us a destination, and because we invested way ahead of the curve to create world-class mobile, loyalty and digital capabilities that enable us to provide our customers with an increasingly elevated Starbucks Experience to our customers.
I also shared with you the view that the U.S. was over-retailed. To survive – let alone succeed – traditional bricks-and-mortar retailers would have to evolve their physical spaces into relevant customer destinations, as Starbucks stores have been for the last 40 years through the environments we create and the beverages and foods we serve – and create premiumized, experiential consumer venues.
Since its opening two years ago, our Seattle Roastery has become widely recognized as the world’s most immersive, coffee-forward retail experience.
Starbucks Reserve is a new, premium retail coffee format that will showcase the newest coffee-brewing methods and offer customers the finest assortment of exclusive, micro-lot coffees sourced from around the world in an all sensory experience emblematic of our Seattle Roastery, paired with artisanal food offerings developed with our partners from Italian artisanal baker Princi.
As I shift my focus to this next wave of retail innovation, I am sincerely pleased that Kevin Johnson – our current president, coo, a seven-year board member, and my partner in running every facet of Starbucks business day-to-day over the last two years – will be assuming the duties of Starbucks chief executive officer in April 2017. This move ideally positions Starbucks to continue to profitably grow our core business around the world.
fortune.com
American Apparel is seeking bankruptcy protection for the second time in just over a year, unable to find its footing even after a contentious fight for control with founder Dov Charney.
www.inc.com
The company surveyed 2,000 customers in the U.S. over Labor Day weekend, and found that 55 percent of them said that they begin their product searches at Amazon, up from 44 percent in 2015. That's a 25 percent swing in just a year.
The numbers were pretty close on mobile, though Google does have a better standing: 50 percent saying they go to Amazon first, while 34 percent said they use search engines. Again, only 16 percent go straight to the retailer sites.
A full 90 percent of respondents said they will go to Amazon, even if they want to the retailer first, to see if they can get a better price. Of those who do this, 78 percent said they do it "often or always."
Only a third said that Amazon had better personalization and recommendations than retailers, and over 40 percent said they'd go a retailer if they improved their personalization (note to retailers: improve your personalization!)
vator.tv
The fusion of digital and physical channels is proving more powerful than either one alone. That accounts in part for why E*TRADE has invested in physical branches and why retailers such as Warby Parker and Bonobos have launched physical stores.
These patterns demonstrate that there are many ways to succeed by delivering various kinds of value. Amazon expanded functional excellence in a mass market. Apple excels on 11 elements in the pyramid, several of them high up, which allows the company to charge premium prices. TOMS excels on four elements, and one of them is self-transcendence, because the company gives away one pair of shoes to needy people for every pair bought by a customer. This appeals to a select group of people who care about charitable giving.
hbr.org
Joining brands like Modell’s Sporting Goods, Saks Fifth Avenue, and Cole Haan, Zara retail workers in New York City have decided to unionize for the first time
profitable and still recognize [their] workers’ right to dignity, justice, and respect on the job.”
www.refinery29.com
The new brands with names like Happy Belly, Wickedly Prime and Mama Bear will include nuts, spices, tea, coffee, baby food and vitamins, as well as household items such as diapers and laundry detergents
Amazon has been working to develop the new private-label lines for several years and had approached branding consultants and manufacturers including TreeHouse Foods Inc.,
An Amazon spokeswoman declined to comment.
Consumers have warmed to private-label brands since the days of generically named products sold in plain white packaging. Today, retailers from Wal-Mart Stores Inc. to Sephora to Dean & DeLuca sell a range of in-house brands that some may even view as higher quality.
“Private label allows them to test out new prices and distinctive flavors with less risk.”
Amazon only will offer the private-label products to members of its $99-per-year Prime membership,
www.wsj.com
US consumers have been trained to never pay full price for anything, and it's crushing some American retailers.
www.businessinsider.com
Changing consumer shopping tastes and expectations are quietly transforming the retail industry.
Shoppers  increasingly crave instant gratification, one-of-a-kind merchandise and are cozying up to the idea of borrowing goods versus buying them.
As a result, the shopping model of the near future is poised to look radically different from just a decade ago, and retailers that don’t keep pace with changing tastes are setting themselves up for a rude awakening, at best, or extinction
“Technological innovations and a hyper-connected world have significantly influenced consumer behaviors and expectations. As a result, retailers are faced with a scary reality: change or become obsolete.”
They are no longer willing to wait for a taxi on the corner without knowing when it will arrive or trust the restaurant that promises delivery within 45 minutes. Instead, consumers want as much information at their fingertips as possible and as soon as possible.
retailers must be able to deliver an intuitive experience in stores and online or they will lose customers’ loyalty.”
“In the electronics space, we are seeing mobile device rental programs skyrocketing.
Retailers of the future will need to ensure that their supply chains are also evolved enough to handle the demand for custom orders.”
ut the electronics retail store of the future will also sell smart apparel — picture a winter coat with a built-in smart watch.
Additionally, stores of the future will emphasize selling experiences and lifestyles over products.
“Another great example of the retail model of the future is to provide value-added services attached to a product. For example, if a consumer is buying a new phone then the retailer should automatically offer in-store classes to train the consumer on the device.”
forbes.com
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