Please enable JavaScript.

Coggle requires JavaScript to display documents.

FM422 Discussion 1: (WHAT HAVE WINNERS DONE DIFFERENTLY TO KEEP UP WITH…

- - - - Walmart Specifically
        
        Walmart acquired a number of e-commerce fashion apparel brands and retailers in 2017: the retail giant bought ShoeBuy in January, Moosejaw in February, ModCloth in March and Bonobos in June. Walmart is also creating a premium fashion destination on Walmart.com, building out elements of discovery and inspiration within the fashion portal. In the spring of 2018, Walmart will begin hosting a Lord & Taylor storefront on its portal, too.
        
        Retail Opportunity for 2018: Walmart will continue to be an industry leader and forward thinker in 2018. The company is challenging the entire retail industry to do some self-reflecting and step up to the plate to innovate and take risks.
        
        Walmart saw its e-commerce revenue growth take off when it acquired Jet.com in September 2016, and the company has reported explosive online growth the last few quarters: e-commerce sales grew by 63%, 60% and 50% in the first, second and third quarters of 2017, respectively. Walmart is proving that it is a serious competitor to Amazon in e-commerce.
        
        Retail Opportunity for 2018: Walmart is likely to continue to build its e-commerce strategy around growing its Jet.com business. The company’s aggressive “plan, build, grow” model of innovation should lead to continued growth in 2018.
      - Alibaba Specifically
        
        At its 2017 Investor Day, Alibaba guided for 45%–49% revenue growth for its 2018 fiscal year (which ends in March), and the company is on track so far to meet its full-year guidance. The company reported annual growth of 56% in fiscal 2017 and of 33% in fiscal 2016. Alibaba is now partnering with US retailers for growth and has announced that it plans to invest $15 billion in global R&D.
        Retail Opportunity for 2018: Alibaba will continue to collaborate with US retailers to grow its platform in 2018, and its various events will encourage US retailers to join its open innovation platform. The company will continue to be an example of both east to west and west to east collaboration.
  - - - Retail Opportunity for 2018: Retailers are discovering that many startups are creating innovative solutions that help drive top-line and bottom-line revenue growth and increase traffic. M&A activity is likely to continue in 2018 as retailers seek to benefit from these startups’ solutions and from synergies with other companies.
  - - - Additionally, traditional retailers are partnering with e-commerce brands to offer those brands in stores. For example, Target partnered with online men’s shaving brand Harry’s to offer the brand in its stores and with Casper to offer Casper mattresses in Target stores. Also, Macy’s collaborated with Samsung and b8ta to offer a Samsung in-store experience center at the Macy’s Herald Square flagship store this year.
        
        Retail Opportunity for 2018: There are multiple ways for e-commerce players to leverage the physical retail experience. In 2018, online retailers will continue to expand offline, and the number and size of collaborations with incumbent physical retailers will continue to grow, as both parties can benefit from the business model.
- - - - Find Opportunities in AI: "Chatbots, facial recognition technology, image recognition, robotics and more will offer opportunities this year. Retailers have a significant amount of data to power AI and deliver personalized, customized and localized experiences to surprise and delight customers. More data beats better algorithms every time, and retailers continue to generate significant amounts of data both online and offline. Retailers should focus on small wins as opposed to big elephants. Artificial intelligence in retail can be applied in many new ways across the entire product and service cycle, from manufacturing to post-sale customer service interactions. This coming year, we expect to see AI deliver both top-line and bottom-line for retailers across the value-chain." – Deborah Weinswig, managing director, Fung Global Retail & Technology
      - Digital Integration: "2017 was the year of digital discovery; 2018 will be the year of technology and more integration of it into mainstream retail. It will be the year where we see retailers create new operating models that are less focused on their store vs. the web and more focused on creating experiences that give customers more control and convenient ways to shop. I think it will be an exciting year where customers will find newness and creativity. The acceptance of omnichannel trade and digital-savvy merchandising is a requirement for success. However, it is not only acceptance of new ideas, but also the need to review old systems and procedures. Store operations and mindsets must change." – Walter Loeb, president, Loeb Associates Inc.
      - What’s App? "Many large retailers have only just begun to see the benefits of data and artificial intelligence as they deliver out within different areas of marketing, audience segmentation, delivery routes and customer care, and we will see more adopt it in the year ahead. One of the biggest lessons of 2017 is for retailers to be where their customers want them to be, engage with them where their customers want them to engage them and make the customer experience seamless across all touchpoints and channels. With large European retailers, such as Yoox Net-a-Porter, testing What’s App as a customer service and order confirmation tool in 2017, I predict we will see wider use of this messaging channel for talking to customers and streamlining communications with retail customers at different touchpoints of their journey." – Rupa Ganatra, founding partner, Millennial 20/20
      - Small Is the Next Big Story at Retail: "Shoppers will return to Main Street in 2018. This trend is fueled by the desire of the highest-potential and highest-spending customers’ passion for a new shopping experience that they can’t find online, at the mall, in the national chains or in big box stores. Owners of small retail shops often feel overwhelmed by the rapidly changing retail environment, with competition on all sides and most especially from Amazon. But small business retailers have a competitive advantage that none of these bigger, better capitalized and techno-powered retailers have: their personal touch. It is realized not just through the personal service that specialty retailers offer, but by being vital members of the local community. This trend will reshape the retail landscape over the next decade." – Pamela Danziger, president, Unity Marketing
    - - brands use a variety of known customer data points to serve contextually relevant content and products (https://www.bigcommerce.com/blog/ecommerce-trends/)
        
        Search Queries: Recommend products based on a customer’s search terms
        
        Purchase History: Recommend products based on a customer’s past purchases
        
        Shopping Cart: Recommend products based on the current contents of a customer’s cart or wishlist
        
        Social Behavior: Recommend products based on product rating, shares and likes
        
        Geographic Location: Suggest relevant products based on customer’s local climate or other regional considerations
        
        Customer Segments: Use purchase histories of customers with similar demographics to recommend products
    - - baby boomers
        
        Some 47 million households headed by people over the age of 55 will account
        for the bulk of spending growth in major categories such as food (92 percent), housewares (73
        percent), and apparel (56 percent).3 The segment’s sheer size will drive growth in these
        categories, but boomers will also disproportionally spend their disposable income on services
        and experiences instead of off-the-shelf products.
        
        Specifics (Snapshot based on Frequents of nationwide retailers in top 100 including walmart, kohls, and target (http://adage.com/article/adagestat/demographics-retail/233399/)
        
        Gender: highest percentage are female
        
        Marital Status: highest percentage are married
        
        Age Range: highest percentage are in the 45-54
        
        Annual income of highest percentage of shoppers is between $50,000 to $75,000
        
        U.S. Census Region: highest percentage reside in the Midwest
      - hispanics
        
        The retail spending of Hispanic consumers will nearly double over the
        next ten years and account for almost one-fifth of total retail spending.4 Importantly,
        Hispanics spend money differently from other consumers—for example, they spend at least
        one and a half times more on children’s apparel, footwear, and fresh food than non-Hispanic
        consumers do—and retailers will have to account for this accordingly.
      - millenials
        
        People between the ages of 13 and 30 constitute 15 percent of US consumers.
        Millennials are the first group that grew up after the Internet, social media, and mobile
        became the norm—most have never known a world without them. They will account for nearly
        one-third of total spending by 2020.5 Even through the economic tumult of the past five years,
        the spending of millennials has grown by 3 percent a year.
    - - walmart logistic innovations, 1 seller 2 channels
      - Amazon already offers same-day delivery in ten cities and guarantees one- to two-day ground
        delivery in the continental United States. It is not unreasonable to think that consumers will
        expect comparable shipping speeds from all retailers—we expect same-day delivery to become
        available soon in at least the top 150 metropolitan statistical areas, which hold nearly 75 percent
        of the population.12 Furthermore, we believe retailers will offer shipping free of charge to their
        most loyal and profitable customers, as opposed to providing it only for those who make
        minimum purchases. We also expect to see third-party distribution services evolve and expand.
        Some companies may make big investments in distribution infrastructure and sell it as a service
        to other retailers, as Amazon and eBay do now. Others are beginning to invest in infrastructure
        to provide convenient and secure package-delivery locations: lockers and pickup boxes are
        appearing in groceries, convenience stores, and drugstores nationwide, and new services are
        sprouting up to let retailers ship packages for pickup at other retail locations or self-storage
        facilities.
        Consumers have come to expect simple and seamless processes not only for receiving the
        products they’ve purchased but also for returning unwanted products. Free and easy returns—
        including th
      - Logistics: Not Sexy, But Necessary: "It’s not the sexiest topic in retail, but logistics will be a defining issue in 2018. As shoppers come to expect that all of the best stores are omnichannel, the ability for brands to deliver products quickly and painlessly will separate the strong from the weak. Offering perks like same-day delivery, reliable delivery estimates and easy in-store pickup will continue to create customer loyalty while the stores that mess it up will suffer. Consumers are busy, stressed and discriminating. Nobody wants to revisit a brand that makes shopping feel like work. We’ll see brands and carriers alike innovate in this space in an attempt to keep up, and perhaps some new names in logistics will emerge. Ultimately, this falls into a bigger conversation about what shoppers really want: efficiency." – Rachelle Bergstein, writer and author
    - - Mobile means everything
        
        Mobile experience will be key in 2018.
        Mobile traffic has already overtaken desktop traffic, and we are seeing mobile sales approach desktop sales.
        This trend will continue, with mobile eventually overtaking desktop sales.
        "Retailers with a mobile-first mentality will outperform those that treat mobile as a second priority. This mobile-first mentality applies to everything: web design, email layouts, reward programs and more."
        – Steve Deckert, Co-Founder, Smile.io
        (https://www.bigcommerce.com/blog/ecommerce-trends/)
- - - - emphasis on non-product sales
    - - need to address direct product costs, the indirect costs of
        goods not for resale, and labor costs.
        
        direct cost: Increasingly, leading retailers use techniques such as private-label “design to value,”
        in which they identify the features consumers value most and redesign products accordingly,
        aiming to strip out anything that increases costs, but not value, to consumers.
        
        Indirect cost: Progressive retailers are attacking indirect costs with similar rigor—for instance, by developing
        “should cost” models to reset the dialogue with vendors from delivering modest year-over-year
        unit-price reductions to redefining unit costs altogether
    - - Given the sensitivity of property values to levels
        of available inventory, the earlier that retailers shed unneeded real estate the better off they’re
        likely to be—and this is especially true for retailers that own the underlying real estate. Those
        that rent space should negotiate to create flexibility through leases of shorter duration, in
        particular for properties with less certain futures
        
        For many retailers, future store layouts will have to
        foster greater customer learning and experimentation
        
        Technology will need to be fully
        integrated into how stores and employees engage customers. And the lines between physical and
        digital must continue to blur—for example, as stores become fulfillment and return centers for
        online orders.
    - - Forward-thinking retailers are leveraging the vast amounts of data they possess and building
        analytical muscle to enable targeted marketing, tailored assortments, and effective pricing and
        promotions. Gathering and analyzing data to understand the needs, preferences, and attitudes
        of growing consumer segments, such as Hispanics, baby boomers, and millennials, will be
        especially important, as will understanding individual consumers and customizing offers on a
        one-on-one basis.
        
        Cutting-edge retailers are using them to tailor assortments
        at the store level, to anticipate changes in customer traffic patterns, and to determine optimal
        distribution routes, inventory levels, and allocations, simultaneously enhancing the customer
        experience and improving unit economics
    - - We believe retailers will need to offer deep product expertise
        (that is, they must help consumers decide what to buy and explain why it makes sense for them)
        and a unique product education (that is, they should help consumers learn how to use the
        product better and do this over time, not just during the moment of purchase)
        
        Additionally,
        retailers must do these things in an environment that is increasingly experiential (for example,
        fitting a golf club or curating a wardrobe using a “magic mirror,” which employs computer
        technology to show customers how clothes look on them, making the process more efficient and
        engaging).
        
        Some retailers could position themselves as the champions of style or demand in certain
        segments, perhaps by developing products and services specifically for population groups that
        will drive retail spending