Browsing the in-flight entertainment on a recent trip, I came across a TED talk by Eduardo Briceno, “How to get better at the things you care about”. It highlighted a challenge I see facing leaders in retail and consumer goods.
In a recent global survey, 350 retail CEOs were asked to nominate their strategic and investment priorities. The top response was “digital transformation”. I believe most of these leaders have misread the real challenge they are facing.
If you work in retail, I'm willing to bet you're fed up of hearing about Amazon. I'm also willing to bet that some of what you think you know about Amazon may not be right.
Ryan Spahr is a Philadelphia entrepreneur making a healthy income selling groceries, electronics and office products on Amazon. His company - Supply Tiger - turns over USD $6 million a year.
The speculation is over. Amazon is coming. It has confirmed that it will launch physical retail operations in Australia with its “Amazon Marketplace” platform for third party sellers. The question now is: how should business leaders respond? I propose to answer this question in my newsletter over the coming months. I’ll be highlighting the opportunities and challenges Amazon represents for Australian businesses of all sizes, from large conglomerates to solo entrepreneurs, and offering some practical suggestions on how to move forward.
We hear the word disruption every day. Joseph Bower and Clayton Christensen introduced the term “disruptive innovation” in a landmark 1995 Harvard Business Review article. They defined disruptive innovation as a process by which a cheaper new product launches with an “attack from below” on a market, but then gradually overtakes the incumbent players.
The formidable effects of compound growth underpin many long-term shifts in business and society. Yet our brains often struggle to grasp the maths, even when we see it unfolding right in front of us.
Amazon’s recent move to trial convenience stores, on the back of its foray into bricks and mortar bookstores, has reignited the debate about the long-term prospects of instore vs. online retail channels. Has the threat to instore retail been overestimated? Will we see a move back to shopping instore?
Retail giant Walmart recently announced the $3 billion acquisition of Jet, an online grocery start-up in the US with less than $1 billion of gross sales. The move is Walmart’s latest attempt to keep up with Amazon, which it has belatedly recognised is a disruptive threat to its core grocery business. The high-risk play, one of several large e-commerce investments by Walmart, reflects its urgent need to seriously compete with Amazon after ignoring the threat from online grocery shopping for several years.
Amazon has put speed at the heart of its online retail offer. It recently launched Prime Now, a city-based local delivery service offering up to 25,000 lines in a two-hour delivery window.
But how important is delivery speed to most customers and how does it affect the profitability of the retailers considering speedier delivery options?
As a school student my favourite subject was economics. One of my first lessons was about the basic models of microeconomics. They were attractive to me because they made the world seem understandable and predictable. Some critics, though, believe economic theory’s predictability is based on flawed assumptions about the way the world works.
Back in the early 1800s, before the Industrial Revolution and the advent of modern transport, most of western civilisation lived in small rural communities. Everyone knew each other’s personal information – not just names, birthdays, or hobbies – but also intimate information such as past relationships and even sexual orientation. However, the reality for most companies is that the personalisation journey is only just beginning.
A wave of innovation is unlocking the intriguing potential of home delivery. A recent survey in the UK showed about half of online shopping customers had experienced problems with home delivery; most were related to the timing of the delivery. The problems customers experience with home delivery are holding back online retail.
Consumers are becoming mentally exhausted by the constant choices they need to make. How can retailers make their customers’ lives simpler – while increasing loyalty?
A new class of technology is emerging. It not only thinks for you, but can also perform basic tasks on your behalf. What will it mean for retailers?
Is the logistics challenge for online retailers any easier today than it was in the 1990s? The first wave of online retailers faced a huge shortfall between what consumers were willing to pay for home delivery and its actual cost – also known as “the last mile challenge”. This profitability gap drove most online pioneers out of business.
Last week I lost a really important notebook (yeah, I know – pretty analogue for a digital retail adviser!). Still, I mention it because what happened after I discovered it was gone reminded me of a very important principle for every retailer.
Most online retailers face an operations bottleneck. Operations issues are driving poor service, high costs and team member frustration. These retailers are falling behind a handful of leaders who have their online operations under control and can now focus on improving their customer offer and profitability.
The “last mile problem” remains one of the biggest challenges for online retailers: how to find profitable ways to deliver products to residential customers’ doorsteps. A wave of high-profile innovators, from Instacart to Uber, are bringing fresh approaches to the last mile problem. But we can also learn from someone with a much longer track record in last mile delivery: Santa.
The last few years have seen a wave of interest in “digital transformation”. Many companies have now publicly committed to a digital transformation strategy, often linked to the appointment of a Chief Digital Officer to the Executive team. There are several definitions of digital transformation.