Public Relations & Social Marketing Insight

It’s easy to have missed some interesting innovations in retail with the past few weeks focused on Black Friday sales. Today, we’ve got a roundup of retail innovators and news to keep you up-to-speed on who’s getting industry and consumer attention.

First, we start with the announcement of Amazon Go – the online leader’s latest retail innovation which lets consumers pick up grocery products at an Amazon convenience store, pay by mobile app with their Amazon account and leave without a check out lineup thanks to innovative technology. Amazon also opens a drive through store concept early in 2017 in addition to new retail bookstores. With 2,000 or more stores on the horizon, that’s the sound of retail competitors shivering and the industry buzz is enormous.

Walmart is building new warehouse distribution centers and investing in new technology in order to keep up with Amazon.  Not to be left behind, Target is developing and planning to open hundreds of new smaller-format stores in urban centers and college towns. Toys “R” Us launched a fourth new interactive toy store in Santa Ana, CA with interactive in-store displays including video screens, sound effects and motion-sensor lights.

Nike used the launch of its $720 HyperAdapt high-tech, self-lacing sneakers to generate consumer buzz and store visits. Ace Hardware and online marketplace The Grommet launched a “makers” initiative to sell 20 unique US-made products exclusively in its 160 stores. What’s ahead for retail in 2017? Social is king and influences everything. And of course, Amazon will continue to innovate and be the elephant in the shopping centers....

Amazon has been experimenting with the pop-up store concept for a number of years. They have opened up dozens of locations in malls all over the United States. It looks like Amazon intends on opening 30 new locations all over the United States so people can easily buy Kindle e-Readers, Fire Tablets and Echo Speakers for the holidays.

Amazon is on a hiring spree to find temporary and permanent employees, which suggests that the stores could be semi-permanent installations.  They are looking for staff in Texas, Washington, New York, Florida and dozens of other States.

Additionally, it looks like Amazon is also looking to hire a major executive to oversee all of the pop-up stores and implement a unified strategy, design and stock each location with more products. Having a dedicated person in charge is a good move if Amazon plans on expanding this program in the coming years....

Amazon this morning is introducing a new way to read short-form content on Kindle devices and in the Kindle app with the launch of “Singles Classics.”

The service will bring articles, stories and essays from well-known authors and top periodicals – many available in digital format for the first time. The articles will be priced at 99 cents each, with writers and publishers retaining up to 70 percent of the royalties from the sale of every copy.

For those who subscribe to Kindle Unlimited, Singles Classics will be available for free.

As of this morning’s launch, there are over 140 different essays and stories available, including those from writers like Susan Orlean, Norman Mailer, Gloria Steinem, Lawrence Wright,Margo Jefferson, Gay Talese and Chang-rae Lee, as well as authors such as John le Carré and Kurt Vonnegut. Some of the works originally appeared in magazines like Time, Vanity Fair, The New Yorker, Rolling Stone, Esquire, The Atlantic andPlayboy....

A year ago this month, Netflix launched in India with much fanfare. The company made a conscious decision to target the rich elite of India and then to broaden from there. As a Netflix spokesperson said at the launch, “Our early adopters are usually consumers who are tech-savvy, who have smartphones and own Apple accounts,” but that the company will later expand “through deeper local insights.”

On the surface, Netflix’s plan made perfect sense. The growth of smartphone, e-commerce and online streaming in the US has slowed, so global internet companies are on the hunt for their next big market. China’s protective policies and regulatory hurdles make it off-limits for most such behemoths. So India it is.

But a year after its launch, Netflix has failed to take over India. As it turned out, home-grown and international competitors alike fought back. The strategies they used revealed the short-sightedness of Netflix’s early-adopter approach....

The e-commerce technology company announced on Monday a new Seattle location, Amazon Go, that has no registers. Instead, shoppers scan into the store with their free Amazon Go app, shop as normal, and leave the store with the items billed to their Amazon.com account.

While some stores have used a wedding-registry technique to allow this kind of shopping, Amazon takes it one step further. Using computer vision — the kind of technology that lets self-driving cars “see” — the store recognizes the user, making it unnecessary to individually scan items.

According to the Seattle Times, the 1,800 square-foot store, featuring ready-to-eat meals and snacks, is open to Amazon employees participating in a testing program. The store will open to the public in early 2017....

Starting Wednesday, the e-commerce giant is offering deals on a variety of products, including toys, electronics, kitchen and home goods and video games.

However, the company said many of its top deals will be offered during the "Turkey 5," which starts on Thanksgiving Day and runs through the Monday following the holiday -- known as Cyber Monday.

Samsung, LG and Sony TVs and is reducing some prices of Barbie, Hot Wheels and Fisher-Price toys by as much as 50%.

The rate of eCommerce growth as steadily outpaced total retail growth by a multiple of three to four times, Amazon.com’s growth has outpaced eCommerce by one to two times, giving it a dominant lead in many of the world’s most mature eCommerce markets. According to Forrester, Amazon drove 60% of total US online sales growth in 2015, capturing $23 billion more in U.S. eCommerce sales in 2015 than the previous year (up from $77 billion in 2014 to $100 billion). 

Alex McCord of Compass Marketing, an agency which works with some of the world’s largest CPG brands: “We’re now seeing the advent of what I’ll call e-commerce native companies: companies that come onto Amazon and other e-retailers and who are able to gain traction through getting a ton of recent reviews. They know how to work the Amazon algorithm and then launch products that, from the perspective of a brand in the brick-and-mortar world, have as low as zero market share. But in the world of unbranded search on Amazon and other retailers, they’re enormous players.”

So who is winning on Amazon?

Profitero analyzed our Amazon FastMovers reports between January-May 2016 to rank the best-selling products at Amazon in several key categories. We then identified the number of products that featured in the top 100 best sellers by brand to determine best-selling brands by category....

Selling through Amazon is extremely tempting for a simple, logical reason: you don’t have to pay for digital marketing to drive traffic to Amazon. The volume is bigger than any marketer can dream. Before Journelle, I worked at an Amazon subsidiary, Quidsi, and during my tenure, our core strategy pivoted from investing in its stand-alone sites like Diapers.com and Soap.com to rapidly scaling sales on Amazon’s Marketplace, exactly for this reason.

Amazon Marketplace vendors simply need to offer the most competitive price on a product to win the coveted Amazon “Buy Box”. “Buy Box” winners take all of the sales volume without any marketing spend required, making up for margin loss and commission to Amazon. To scale on Amazon, Quidsi capitalized on selection breadth and uniqueness, and created effective and predictive pricing algorithms to beat their competitors. Overnight, day-to-day business became more like trading stocks than traditional online marketing.

At the same time, there are downsides to relying too much on Amazon. First, there’s the risk of having too much of your revenue coming from a platform you don’t control. There’s also the risk that if you offer all your products on Amazon, you’ll cannibalize your own direct sales (and lose those higher margins). Finally, for high-end brands, Amazon’s site does not offer luxury customers a distinctive experience....