Grocery isn't the only category where this is taking place. Robot retailing is happening in a variety of other areas like beauty, health and pet staples. Shoppers buy because of experience or convenience. Most retailers nowadays can only compete on experience because Amazon and Walmart are quickly monopolizing the convenience side. With their supply chain model and low operating cost, robot retailers could be one of the few "retailers" that can actually compete on convenience.
Having run a Workforce Management firm in a previous life, I can assure you that there is a big problem in scheduling for retail employees. Technology has come a long way but still has been unable to solve this issue. I don't believe that six bullet points of legislation will be more effective in doing so.
We are living in a time in which retailers have to compete on convenience or experience. Both of these are heavily reliant on having excellent people. I wish, after many years of working in retail, the feeling would be that treating your employees well (i.e., giving them very advanced schedules, not having a habit of last minute changes) would create a better culture, would allow retailers to attract better staff and would allow them to service the customer better. Better workforces lead to better sales. I am not sure legislating these points is the best way to drive this point home.
If people are looking at this legislation to help the retail industry, I don't believe it will do that. It will however, hopefully, reduce predatory and bad management so that workers aren't taken advantage of -- which could be a small win.
You can use whichever phrase you like but retail has always been about "co-opetition" or "frenemies." The gloves come off, however, at private label. That is a battle ground.
Jet (and Walmart) clearly have a strategy around going after this area of business and it will be interesting to see how that strategy plays out.
Yes, it is a sure thing. The only question is about the timing of it. Over the next few years, you will likely see the typical innovation cycle. Some retailers will do interesting experiments with it. It will be more of a marketing cost to the business. Next there will be glimmers of hope in terms of showing a return on some of that investment with evidence of specific programs driving sales. Then the good companies will operationalize it rather than treating it as an innovation project. Finally, the laggards will follow suit. It is a sure thing but I'm just not sure if this cycle is three years long or 10 years long. I would suspect it is somewhere in the middle.
When e-commerce was initially launched, you may recall that it mimicked real-world experience but in a digital world. As certain characteristics of the digital world became more apparent (i.e. the ability to track customers and gather behavioral data), the online experience changed. Historically, real-world retailers have been lacking in (real-time) data compared to online. As this changes, you will see the experience change. It won't be Amazon's influence per se but they will be a prime example. There is an entirely new generation of consumers growing up digitally native that is expecting a different experience. Just ask my five-year-old son who went up to a paper city map and tried zooming in by pinching his fingers together.
As with any new technology or model, influencer marketing was hyped quite a bit in the beginning as a cheaper, more effective ad unit. As the market matures, it is becoming an extremely effective tool. Influencer marketing has evolved from simply increasing reach to offering highly-targeted engagement and valuable content production. Initially a B2B function, we are seeing a big shift into B2B influence. It is great to have 100,000 Instagram followers but if you want real power, you start to influence the retail buyers and merchandising teams, not just consumers.
It will, but not on its own. Giving associates mobile devices is just one tactic in an overall digital strategy. Better access to product information, more personalized experience, better information on your customers and more seamless transactions are what retailers should be focused on. When they move in this direction, then mobile/digital is simply the mechanism to do that whether it is on the shelf, in the hands of employees or in the hands of customers.
I really like this play. You are starting to see this become the game plan for many brands and retailers. Whether you are an incumbent large retailer or brand, you are not going to be able to move at the velocity of some of the other more niche players. I foresee these large retailers and CPG companies becoming more like parent/holding companies to a portfolio of great other companies. Mark Lore has started this at Walmart and many CPG companies are enhancing their brand portfolio by acquiring up-and-comers.
Few areas of customer outreach yield the ROI of sampling. One of the hard parts, however, has been closing the loop on the purchase. By utilizing online as the connective tissue to engage customers, gather reviews/feedback and then follow through on the purchase, Sam's Club is in a strong position to set themselves up for success.
Of course I am not arguing that retail will disappear and be replaced by tech companies. However, I think the main point is, are decisions made by humans backed by tech tools or are decision made by tools back by retail gut instinct? It will be the latter.
Although I see where Ryan is headed with the power saw analogy, I am not sure it is a complete analogy in this situation. If a power saw were just a power saw, then yes. But with the technology available today, that wouldn't be the case. Imagine if the power saw remembered all of the movements it made on every single project it ever completed. Now imagine that the power saw had access to the billions of other projects around the world and throughout all of time. Imagine that the power saw had all of the reactions from the people who commissioned the work to know how well they did. Imagine, as you start a new project, that your power saw knows everything about what you like. Then imagine that it knows what millions of other people like that fit a similar profile to yours. And finally imagine that the power saw can now execute that project autonomously to a precision a human hand never could.
I would argue that you would get to a point (if we aren't there already) at which the power saw would be able to make a better decision than a carpenter on what I want (and do a better job of delivering it).
We all know that retail isn't going anywhere but the question is, will tech companies dominate retail? I am defining "dominate" retail by saying that we will reach a tipping point when retail moves from predominantly human-driven decisions backed by data to primarily tech-driven, data-based decisions augmented by humans.
I would be shocked if this was a move to cope with the success of the mobile click-and-collect activity rather than being a strategic rollout. In-store pickup was just stage one. This is stage two.
This is a growing trend and, in my opinion, it is a step in the right direction. We are seeing many shopping malls and plazas set up consolidated, click-and-collect stations in the parking lot or near the property. We are also seeing many urban, small-footprint locations being considered for click-and-collect for larger suburban retailers.
Pickup will be only one of Amazon's models to make grocery work. Grocery is a very difficult business. There are generally three things that can make it work when you roll out en masse in this vertical. Quality, unlike many other categories Fresh is very finicky. Convenience, rarely have companies been able to tackle in-store, pickup AND delivery. Scale, access to quality products fulfilled conveniently consistently and from anywhere. Amazon is positioned well to make it work.
This model can't be looked at simply by whether or not it works for AmazonFresh but how it fits into Amazon as a whole. This category is a strategic wedge for many other Amazon services so it may not even need to "work."
Online-only needs to be a proper strategic decision, not a last-ditch effort. It is generally easier to run an e-commerce site but it is extremely hard to do it well (and profitably). The biggest mistake that retailers switching to online-only make is that they digitize their real-world retail experience rather than breaking down the business and building it up from the ground. It is possible for a struggling retailer to be successful online-only but it is pretty unlikely unless they completely revise the business.
I know that it doesn't necessarily directly address the question, but can we discuss for a minute how aggressive HBC has been to build out their corner of retail? Where the default mindset in the industry has been defense, HBC has been all offense over the last few years. It is refreshing to see in this space. They would do very well with Neiman Marcus. They are solid operators who know this world well and there are two key reasons why this acquisition could work. First, with all of their other retail properties and buying power HBC now has (and is growing), there are economies of scale. Second, HBC can make some hard cuts and decisions to streamline Neiman Marcus in a way that Neiman Marcus itself can't at the moment.
The most important trend we see with brands is authenticity. Celebrity endorsements work when there is a strong affiliation but, because it comes with the notion that they are "only doing it because they are paid," it is hard for them to seem genuine, no matter what. I am a huge fan of what companies like Lululemon do. Most of their ads are employees or customers. It completely resonates with consumers.