The Whole Foods acquisition by Amazon weeks ago was only the latest milepost in the latter’s inexorable march to the top of retail. The company sold $136 billion worth of products in 2016 – more than any other online retailer (and just over a third of what Wal-Mart did).
And we find that Amazon is big and gaining on Google for product-related searches (be they early or late in the purchase journey). This means that more and more purchase journeys will start on Amazon’s home page, and proceed via search to a variety of product pages all the way to a sale.
This changes a lot of things, but the upshot – to my mind – will be a massive outlay in product content and product-related experiences by manufacturers.
Jeff Domansky's insight:
Interesting angle: the number of product searches on Amazon is growing fast. What does it mean for content and marketing?
We asked our partners to reflect on the trends they see gathering momentum in 2017. Notable areas of concensus include accelerating merchant interest in B2B ecommerce, a continued focus on optimizing shoppers experiences on mobile, international expansion, and retailers rethinking the role of physical stores. Here’s a roundup of their thoughts:
Integrated B2B & B2C“More and more mid-market customers want to see both customer paths in one instance, which makes their overall process more efficient.” (Martina England,Corra)
"[We] see B2B online retailing as an on-going trend that will be gaining a lot more steam in the coming year. With the B2B eCommerce market approaching $1 trillion dollars according to Forbes, even mid-market retailers are looking for an agile way to break into this space." (Karah Finan, Web Solutions NYC)...
Jeff Domansky's insight:
Magento Partners look to the retail trends in the year ahead.
For retailers, returns are a necessarily evil that comes at the end of each holiday shopping season, but it appears even more holiday purchases are being returned this time around.
That's because American consumers did more of their holiday shopping online in 2016, and online purchases are returned in greater numbers, compared to traditional in-store purchases.
Amazon recently reported that 2016 was a record-breaking year for online holiday shopping; the company shipped more than a billion items worldwide during the holiday season. eMarketer projected online stores rang in a record $94 billion in sales this holiday season, up 17 percent from last year.
The company - and its competitors - are now facing a wave of returns, as customers re-box their items and ship them back. A new report from the commercial real estate firm CBRE found that about 8 percent of items purchased in brick-and-mortar stores are typically returned or exchanged, but online purchases are returned twice or three times more often....
Jeff Domansky's insight:
Jan 5 – National Return Day. Pity the poor retailers where 8% of goods purchased in-store are returned vs. 24% from online purchases.
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....
Jeff Domansky's insight:
Here's a great look at retail innovations and who's innovating and winning new customers online and in retail..
Black Friday is losing its relevancy to US shoppers. The holiday, which takes place the day after Thanksgiving, has historically been the biggest shopping day of the year in the US.
But over the last several years, shopper traffic in stores on Black Friday has been falling with many retailers like Walmart, Target, and Amazon kicking off their holiday discounts online several weeks in advance.
Foot traffic in stores this year is expected to fall by about 3.5% on Black Friday compared to last year, according to data from the location tracking service Foursquare....
Jeff Domansky's insight:
Black Friday isn't driving shoppers to stores like it used to. Victim of its online success?
Adobe Digital Insights predicts 2016 online sales will be up 11% and shoppers will be out earlier than ever. 55% of US and UK retailers say Amazon will drive the majority of their holiday sales this year according to research by ChannelAdvisor and Morar Consulting. The National Retail Federation expects US consumers to spend an average of $935.58 with overall holiday sales to rise 3.6% and online sales up 7% to 10%.
What’s Walmart’s holiday sales strategy? Value, price rollbacks and features, along with Santa’s helpers at checkout. UPS expects to be busy as well, shipping more than 700 million packages during the holidays, up 16.7% from 2015. Bestblackfriday.com, says Friday’s Black Friday sales may drop by 10% in-store to$9.2 billion though online sales may reach $3 billion, up 13%....
Jeff Domansky's insight:
Here's an interesting roundup of holiday e-commerce and retail predictions.
It would be too easy for RangeMe founder and CEO Nicky Jackson to define a retail “disrupter” as “leveraging technology to make this or that scalable or more efficient.”
The better answer, she says, is that retail disruption starts with understanding a problem and seeing where something small can make a big difference.
That’s exactly what Nicky did, and it’s what landed her company a spot as one of three finalists in the Shop.org Digital Commerce Startup of the Year competition.Originally, RangeMe was about connecting retailers and suppliers. A study showed that 93 percent of major retailers ranked product discovery as their top industry problem.
“We then discovered, through our work with retailers, that buyers spend a substantial amount of time managing new supplier requests. RangeMe broadened its offering to not only assist with a marketplace of close to 100,000 products for discovery, but also the management of inbound proposals.”...
Jeff Domansky's insight:
RangeMe helps innovation-hungry retailers discover new products and suppliers.
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....
Jeff Domansky's insight:
Amazon plans to open more than 100 pop-up stores across the US.
When it comes to digital smarts, Nordstrom, Macy’s, Kohl’s and JC Penney rank at the Genius Level, according to the latest report from think tank L2. But while the industry as a whole is getting sharper, now spending 52% of digital ad budgets on mobile and maximizing customer engagement on Instagram, stores are still no match for the Amazon onslaught.
“Only five years ago, Macy’s apparel and accessories sales were five times that of Amazon, providing a wide lead in a logistically challenging product category that features a high exchange rate,” the new ranking says. “By next year, Wall Street analysts estimate that Amazon will overtake Macy’s as the largest U.S. retailer of apparel and accessories, with sales of $28 billion in the category.”
But Amazon isn’t the only problem. Department stores are also challenged by the fast-fashion wizardry of brands like H&M, Zara and Uniqlo, as well as companies like Coach and Michael Kors cutting back on department-store distribution. “With key partnerships that help differentiate the customer shopping experience under threat, the historical outperformance of department stores versus the S&P 500 has evaporated over the last 18 months,” it says....
Jeff Domansky's insight:
As mobile now gets 52% of digital spending, some retailers are getting it right.
Many people can envision a new kitchen, but few can actually visualize it – not correctly anyway. That island ends up taking more space than you thought, and the refrigerator door opens right into the entranceway.
So Lowe’s turned to virtual reality. It created the Holoroom, its self-described “digital power tool for kitchen and bath design.”
Launched in November 2015, the Holoroom enables customers to design their dream kitchens or bathrooms on an app, and then, with virtual reality goggles such as Oculus Rift or Google Cardboard, virtually step into the design.
With this technology, Lowe’s is literally extending the experiential phenomenon of virtual reality from a household word to a retail one. It is not alone. While augmented reality and virtual reality (AR/VR) feel a little futuristic for commerce, big-name retailers are testing the technologies in ways that appear surprisingly simple and adaptable. If these efforts continue, consumers will increasingly come to expect them to aid their purchasing....
Jeff Domansky's insight:
Augmented and virtual reality may feel a little futuristic for today’s retail aisles, but big-name brands are testing it in ways that appear surprisingly simple and adaptable. If these efforts continue, consumers will increasingly expect it.
In the fourth quarter of 2015, Amazon.com Inc. posted a profit of $482 million, more than double its previous highest-earning quarter. In the two quarters since, profits continued to rise, to $513 million in the first quarter and $857 million in the second quarter. In the first six months of 2016, the company’s combined profit was $1.37 billion—no other half in Amazon’s history is in the same universe.
So after years of reporting little to no profit, Amazon is now posting record gains quarter upon quarter. At the same time, its expenses are growing faster—26.4% in the first half of 2016 versus 17.5% in the first half of 2015.
So what’s propelling Amazon into profitability? Let’s look at the numbers.
First, there’s revenue. Amazon’s compound annual growth rate from 2012 to 2015 was 20.5%.....
Jeff Domansky's insight:
Here's a look at why Amazon is 'suddenly" in the money.
As of the first quarter 2016, the total amount of retail spending online (ecommerce) was $92.8 billion, which was only 7.8% of all retail sales. Ecommerce is in its infancy, which means that there are huge opportunities ahead, not just for the types of Amazon, but for small merchants and startups as well.
Worldwide retail sales, including in-store and internet purchases, surpassed $22 trillion in 2015, up 5.6% from 2014, according to a study by eMarketer. They say that retail ecommerce sales, those purchased over the internet, will make up 7.4% of the total retail market worldwide, or $1.671 trillion. By 2019, that share will jump to $3.578 trillion, yet retail ecommerce will still only account for 12.8% of all retail purchases.
Even though the internet and technology is the source of major disruption for retailers, brick and mortar is alive and well for the foreseeable future.
The study says that retail ecommerce sales are accelerating faster than previously anticipated and will jump 25.1% year on year in 2015. "Online sales growth will outpace brick-and-mortar sales growth by a more than 3-to-1 margin over our forecast period," the report predicts....
Jeff Domansky's insight:
Want some impressive numbers for the size of e-commerce in the future? How does $1.671 trillion strike you for today's e-commerce sales? How about $3.570 trillion by 2019?
Marketers spend a lot of time trying to nail down abstract concepts. They're tasked with turning brainstorming sessions and comments sourced during focus groups into campaigns that sum up everything about a brand's identity in a neat, tidy, and most importantly, interesting way.
But what if a consumer could walk into a room and fully experience your brand with all their senses? Pop-up events offer just that -- the chance for consumers to get up close and personal with their favorite companies in a truly immersive setting.
In their simplest form, pop-up events are temporary retail spaces that give companies the opportunity to sell their products in an environment completely designed and controlled by them. Since they're temporary, they offer a relatively low-cost and low-commitment way for companies to take creative risks, generate buzz, and introduce their brands to new audiences.
Consumers love the lure of exclusivity, and brands love the unmatched opportunity for experimentation. To inspire your next branded experience, we've curated a list of 15 innovative and visually stunning pop-up events....
Jeff Domansky's insight:
Creative marketing concepts are evident in these 15 examples of branded pop-up stores. good lessons. Good lessons.
Retail management consulting firm BRP released its 2017 Customer Experience/Unified Commerce Benchmark Survey and found 55% of retailers are focused on optimizing the customer experience to increase customer loyalty with tactics including improving the mobile shopping experience and creating a unified experience across all channels per a press release.
The survey also found that 45% of retailer intend to begin using artificial intelligence within three years to enhance the customer experience.
In the press release, Perry Kramer, vice president and practice lead at BRP, described the customer experience in unified commerce as more complex than in pure e-commerce or brick-and-mortar retail environments adding the complexity “expands exponentially” as technologies including social media, the Internet of Things, (IoT), artificial intelligence and machine learning impact the retail sector and its customer journey.
To better accommodate more than three million customers and 115,000 associates each week across 780 store locations, Ahold USA’s retail divisions, Stop & Shop New England, Stop & Shop New York Metro, Giant Landover, and Giant Carlisle, embarked on a technology overhaul in collaboration with Verizon Enterprise Solutions to create a ‘smarter store’ for today’s always-connected consumer. With consumers increasingly relying on smartphones and public Wi-Fi when shopping, retailers are recognizing the imperative to offer strong and reliable networks for delivering the digitally rich in-store experience that is now an expectation.
Underscoring the growing popularity of the Wi-Fi feature, in December 2016 alone Ahold USA’s divisions saw an overall 23% spike in the number of users over the previous month.
On top of improving the customer experience, the technology upgrade includes operational enhancements across all Ahold USA division stores. All locations are now equipped with Verizon’s business-grade voice-over-IP (VoIP) phone solution which streamlines network management and cost efficiencies while extending the capabilities of the company’s existing phone system. Further, the addition of Verizon’s industry leading wireless network capabilities in each location will provide backup connectivity to help maintain business continuity in the event of outages which can be harmful to business and a company’s brand.
Jeff Domansky's insight:
Ahold USA’s retail divisions embarked on a tech overhaul in collaboration with Verizon Enterprise Solutions.
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....
Jeff Domansky's insight:
Amazon is now testing three different types of retail – bookstores, pickup/drive-through and now, an innovative no cashier, no checkout, no lineups, convenience store. Retailers look out!
The migration of consumers from stores to online shopping over the crucial Thanksgiving-Black Friday weekend continued dramatically this year, adding to the pressure on brick-and-mortar retailers as they seek to compete with Amazon.com.
A survey released by the National Retail Federation on Sunday estimated that 108.5 million Americans shopped online over the long weekend that kicks off the holiday shopping season in earnest, well above the 99.1 million who hit stores.
Last year, the numbers were about even for both avenues of shopping.It’s not a surprising finding given that Target tgt and Kohl’s mss , among others, reported record online sales on Thanksgiving.
Adobe said online shopping not only eclipsed the $5 billion mark for Thanksgiving and Black Friday, but told Fortune that U.S. online sales from Thursday to Saturday rose 17.3% to $7.23 billion. Many retailers, including Walmart, began their Black Friday deals online right after midnight on Thanksgiving morning....
Jeff Domansky's insight:
Online ruled! Some 108.5 million Americans shopped online over the long Black Friday weekend, far more than the 99 million who went to stores
Singles Day is a huge promotional deal in China. How big you ask? Imagine Black Friday in the US and then triple it. In its first five minutes, Alibaba has already racked up more than $1 billion in sales and more than $5.2 billion in the first hour, more than$7 billion after just two hours, with than 84% of sales on mobile devices. Now, halfway through the promotion, sales have passed $12 billion.
2015 Singles Day sales were $14.3 billion in China for one day alone. compared with a $5.8 billion in US Black Friday/Cyber Monday sales. Impressive, for a promotion started by Alibaba in 2009. Here’s what’s planned, projected by the leading e-commerce companies for November 11 and a couple of early returns.
Singles Day has turned into a huge “Retailtainment“, three-week event complete with international celebrities and sales at Alibaba alone are expected to grow by 40% and exceed $20 billion. Launching Singles Day this year in Shenzhen for Alibaba were NBA superstar Kobe Bryant and super-celebrities David and Victoria Beckham after Lady Gaga canceled citing post-US election blues.
Alibaba,JD.com, Baidu, Amazon, Tencent and other e-commerce leaders received warnings from the Chinese government about past Singles Day consumer complaints of counterfeiting, delivery of damaged products, falsification of facts and other fraudulent behavior.
Rivals JD.com and Alibaba traded insults ahead of the extra-competitive Singles Day sales event. JD.comreported 14 million sales last year but did not disclose dollar value. This year, JD.com is partnering withWalmart and promoting sales in advance of November 11 as well as during the sales promotion. Both JD.com and Alibaba are hoping the addition of tens of thousands of international brands will push sales higher. By the time you read this post with your coffee this morning in North America, Singles Day will be over in China and we’ll have updates on our Twitter feed and in-depth sales analysis next week....
Jeff Domansky's insight:
Alibaba has already racked up more than $1 billion in sales and more than $5.2 billion in the first hour with more than 84% of sales on mobile devices. 2015 Singles Day sales were $14.3 billion in China for one day alone.
Called a "Retailtainment", JD.com and Alibaba rivals over who will make the most sales from the three-week event "Singles Day" held in China. Sales at Alibaba alone are expected to grow by 40% and exceed $20 billion. This year, JD.com is partnering with Walmart and promoting sales in advance of November 11 as well as during the sales promotion.
If a company wants to open store on one of the world's most prestigious shopping streets, that company has to have deep pockets. Renting a store on a shopping street in one of the world's largest cities comes with an enormous rent burden with New York's Upper 5th Avenue the most expensive according to commercial real estate agency Cushman & Wakefield.
A square foot of retail space in that part of New York would cost $3,500 a month on average. Hong Kong's Causeway Bay area and the Champs-Élysée in Paris also have extremely high rents of $2,399 and $1,372 per square foot every month respectively....
Jeff Domansky's insight:
Shop till you drop at the world's most expensive retail shopping streets starting in New York and Hong Kong.
U.S. retail and food services sales were down 0.3 percent in August, the Census Bureau reported on Thursday, which was an unexpected drop. It’s also a metric that might make retailers nervous ahead of the critical holiday sales season (and no matter how retailers try to stretch it forward, we’re still not there yet), though one month’s data can, in the long run, be noise. Compared with the same month last year, retail sales are still up, turning in a gain of 1.9 percent.
Only a few kinds of retailers gained any ground at all in August. Clothing store sales were up by 0.7 percent for the month, and electronics retailers eked out a gain of 0.1 percent. Grocery store sales were up 0.4 percent in August, and food services and drinking places enjoyed a 0.9 percent gain for the month.
Remarkably, non-store (Internet) retail sales, which rarely see any kind of downtick in sales, were off 0.3 percent for the month. The two categories that did the worst in August—each down 1.4 percent for the month—were building material and garden equipment and supplies, along with sporting goods, hobby, book and music stores....
Jeff Domansky's insight:
Retailers saw an unexpected drop in sales in August, but most are still seeing year-over-year gains, the Census Bureau reported. E-commerce dropped 0.3% too.
Chatbots — AI-enabled messaging programs that respond to text-based requests — are the latest innovation that startups and corporations are using to serve existing customers and bring in new ones. Companies across a wide variety of industries are building these tools on popular messaging apps like Facebook Messenger, Slack, Kik, and Hipchat, as well as on their own websites and apps. Some are even available by text, to help users do things like fight parking tickets, respond to customer service inquiries, and order tacos.
This is by no means an exhaustive list, so if you see we’re missing a chatbot that’s currently up and running, please share the link with us in the comments section. We’ll add new, significant chatbots to the list over time.
Jeff Domansky's insight:
since we're already thinking about chatbots, CB insights has an excellent overview of companies that are already using chatbot technology in their business or customer service. I only hope when I order my next pizza I don't get a chatbot with attitude.
Today, we’re looking at a collection of innovative retailers using these exciting new technologies for maximum impact on their customers. Join us for a 3-D roundup of who’s using AR / VR in showrooms, changing rooms, for in-store entertainment, product information, sales, on mobile apps and much more.
North Face has several augmented and virtual reality applications worth viewing – one is product focused and the other is entertainment. Forbes takes a look at whether virtual reality can save retail and how Samsung is pushing the boundaries in AR. In 10 locations, Macy’s is testing Macy’s On Call, an app developed by IBM and Satisfi. Craig Smith’s Retail Innovation has an excellent collection of profiles of retailers using digital innovations including augmented reality, virtual reality and more. Recommended viewing!
Marxent also has a useful set of e-commerce and bricks-and-mortar examples of augmented and artificial reality used in retail. Wayfair’s new virtual reality app lets customers visualize patio furniture on a deck to help them on the path to purchase. Lowe’s Holoroom gives customers help in visualizing a new kitchen or bathroom in its popular new virtual reality room.
Whisbi highlights virtual reality storytelling by North Face and virtual test drives by Lexus. M-commerce start-up Spring launched one of the first Facebook chat bots for virtual shopping. Sephora’s new Chicago store mixes old-fashioned makeup fun with futuristic touches including augmented reality and lots of touch-screens. Best Buy is betting big on virtual reality with Oculus Rift and PlayStation VR demos and sales in-store this fall. Finally, Pokémon Go further illustrates the potential for augmented reality to drive local or in-store retail traffic in big numbers. Enjoy your roundup of these retail innovators and learn from their creativity and digital marketing savvy.
Jeff Domansky's insight:
If you're a marketer, retailer or just looking for the latest trends in augmented and virtual reality, you'll find lots of inspiration from these retail innovators who are changing the face of the place formally known as stores. Dozens of the latest profiles and case studies and recommended reading. 10/10
It’s no secret bricks and mortar retailers are struggling to maintain profitability and manage expenses for their retail stores. As the importance of omnichannel grows, who are the US retailers finding success with e-commerce? Today’s retail and e-commerce roundup answers that question.
According to the US Department of Commerce, Q2 2016 e-commerce sales grew 16%. Walmart announced positive Q2 earnings and an 11.8% jump in its e-commerce business.Target had a strong first half 2016 with e-commerce sales for pickup in-store up 50%. While Perry Ellis online sales grew 35.6% in Q2, it also plans to close 15 US stores, 20% of its retail locations.
Overall revenue decreased at Bon-Ton but sales on mobile devices were up 129% after enhancements to the mobile shopping site and simplifying its checkout for customers.
Q2 2016 total sales for Nordstrom.com grew 9.4% to reach $683 million. Revenue was up 6.6% at Home Depot and it fulfilled 42% of online orders in-store. Staples saw online revenue grow to more than 50% of sales in its B2B e-commerce business....
Jeff Domansky's insight:
Retailers struggled to grow in-store revenue but e-commerce shone brightly for many US retailers, up 16% in Q2 2016 according to the US Department of Commerce.
The largest-ever acquisition of an e-commerce company likely won't be enough for Wal-Mart to dethrone Amazon. But there's no shame in playing for second.
In a bid to juice its online business, the world's largest retailer agreed Monday to purchase Jet.com in a $3.3 billion deal. The acquisition will beef up Wal-Mart's e-commerce prowess, from deepening its bench of talent to finding the cheapest way to ship online orders. These capabilities should help Wal-Mart grab a larger piece of the growing e-commerce pie. They're also the best chance it has of closing the wide — and growing — gap between it and Amazon, analysts said.
"Amazon's got this huge lead. That lead is going to be tough to relinquish but there's a lot of [share] out there," Moody's analyst Charlie O'Shea told CNBC....
Jeff Domansky's insight:
Worst-kept secret, but Walmart finally completes the deal to buy Jet.com.
Both current and former customers of the outdoor-clothing company Patagonia, for example, are more likely to consider themselves quite knowledgeable when compared to other shoppers, yet less equipped with social skills than the Lord & Taylor crowd. People who shop at Hot Topic, which caters to a younger, more alternative demographic, see themselves as highly imaginative, while patrons of Jos. A. Bank, which sells men's suits and business casual attire, see themselves as leaders.
Overall, these distinct personality types reveal the power of marketing, if done right.
One report anticipates that the retail industry alone will spend $15.09 billion on digital ads in 2016, followed by $16.95 billion in 2017 — a 12% increase. While it's important to know the best location to place an ad, knowing the personality of your intended audience is just as crucial....
Jeff Domansky's insight:
There are potential strategic marketing advantages within the personalities of retail brands.
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Interesting angle: the number of product searches on Amazon is growing fast. What does it mean for content and marketing?