Archive for the 'Retail technology' Category

Is there a market for “ultra-fast” fashion?

RetailWire panelists weighed in on the growing trend toward “ultra-fast” fashion. If the short lead times of fast fashion retailers (think Zara) aren’t short enough, how about two to four weeks from concept to delivery? And what sacrifices need to happen as a result? Here’s my comment:

Retailers have been too slow reacting to the fast-fashion capability of companies like Zara and Forever 21. These two companies (and a few others) have brought great supply chain management and data science to the art of getting relevant product to their customers quickly. But the key word here is “relevant”: Does a two-week lead time offer enough chance to test and reorder in depth?

Cost is another factor: Ultra-fast retailers will probably have to pay a premium for manufacturing labor close to their stores (especially in the U.S.), even if there is some offsetting saving on transportation. Fast turnaround makes sense if your store needs Stanley Cup championship jerseys tomorrow, but for the majority of goods a little extra time is worth the investment.

In praise of Amazon (again)

As the biggest “disrupter” in retail, Amazon is always a hot topic on RetailWire. Here’s a recent comment:

There may be more innovative retailers who are not as visible as Amazon, but it’s hard to think of a company with such scale that is less willing to rest on its laurels. I know that some panelists view Amazon’s push into new businesses and logistics methods as not much more than a well-oiled PR machine (see yesterday’s discussion of intimate apparel as an example). But it’s hard to deny that the company is anything but complacent when it comes to extending its reach and improving its execution promise.

The real test for Amazon will be its success in rolling out innovative brick-and-mortar retailing models. The bookstore and especially the C-store tests will be telling, because most other stores with “omnichannel” strategies have not succeeded in offering an innovative approach to the business of shopping.

And more thoughts from another post:

Amazon’s competitors have it all wrong if they think it’s all about low prices. (And this is the fundamental error behind Walmart’s “brand promise” over the years.) Amazon has always been focused on breadth of assortment and great execution. As the company has entered more categories (starting all the way back when when they were in the business of shipping books), it has never lost sight of these key competitive advantages. Customers’ expectations have been scrambled as a result, and everybody else (whether pure play e-commerce or omnichannel) is just trying to keep up.

“Voice assistants” riding a wave

Two recent RetailWire posts address the growth of Amazon and competing voice recognition devices — with Amazon’s Echo being the most popular:

Anything that makes the Amazon shopping experience even more seamless is a market share opportunity. As the panel discussed recently, it’s no wonder that several national retailers are aligning with Google’s voice assistant instead.

Retailers probably have their own opportunities to apply voice recognition technology to their own mobile apps. (Maybe this has already happened.) Voice activation seems to be the next “smart” thing, so it’s a win for whoever gets there fastest.

The second post concerns the national retailers who are aligning with Google, not Amazon:

If this works, it’s an opportunity for Google to play catch-up on the head start that Amazon has established with Echo, and to establish a stronger beachhead on the “device” front. But it’s also an opportunity — or attempt — for several retailers to marginalize Amazon’s e-commerce business that has eaten into their own market share.

Department stores’ search for relevance

From a recent RetailWire blog post, I have some comments about the continuing struggles in the department store segment. Some of my concerns are based on the relevance of their merchandise content, and some are based on the “sameness” of the shopping experience:

There are two key “relevance” issues, especially pertaining to traditional department stores: First, are retailers using all of the technological tools at their disposal to enhance their brands? Are they leveraging today’s tools (mobile payment, RFID, and so forth) to improve customer service or simply to cut costs? And how has “omnichannel” (especially BOPIS) actually eroded the shopping experience? There is very little difference between shopping at Macy’s or Dillards today compared to 30 years ago, other than UPC scanning and more sophisticated POS terminals.

Second — and it always comes down to this — is merchandise content. I’ve shopped a lot of traditional department stores over the last few weeks, and I’m struck by how much inventory and square footage continues to be devoted to dressy career apparel for men and women. This may be the retailers’ sweet spot (as they see it), but the lack of adaptation to change is concerning. Do these stores not recognize that Boomers are retiring — and leaving the workforce — in droves? Do they not see that most Millennials are working in more casual environments and are shopping elsewhere for their wardrobe needs? (Add to this the slow reaction to the movement toward activewear-as-sportswear.)

Sometimes achieving “relevance” costs money — whether through new tech tools, more payroll or a fresh coat of paint. But mostly it’s about the products, brands and trends that stores choose to put forward.

Amazon Go: Reinventing the C-store?

A delayed posting from late 2016 about Amazon’s convenience store concept being tested in Seattle. What’s unique about this store is that customers can pick what they want and walk out the door without “paying” — it’s all handled through mobile payment technology. My RetailWire comment speculates on the impact on other types of retail:

Amazon has redefined convenience in every category they have entered (starting with their original business of shipping books). The company has raised customers’ expectations for speedy execution, and has raised the bar for all of its competitors at the same time. Whether Amazon Go works or not is almost beside the point, because the company can afford to fail — but Amazon appears committed to bringing its vaunted tech-driven efficiency to brick-and-mortar retail models that haven’t advanced much beyond the UPC code. (But if Amazon Go works…watch out!)

Target’s continued struggles with groceries and supply chain

I’ve combined a couple of recent RetailWire comments here — first about changes at the top of Target’s grocery business, and second about new hires on the logistics front — to reflect my concern that the company continues to have problems executing. First, about food:

It’s hard to judge Ms. Dament’s performance based on less than 18 months on the job and the possibly insurmountable challenge she faces. Maybe she underperformed, maybe it was a bad cultural fit or strategic clash –who knows? Anybody trying to turn this around quickly has not been dealt a winning hand.

Brian Cornell wrote off the Target Canada fiasco very quickly, but I’m not sure he can walk away from the grocery business so easily. The company spent billions on remodels and infrastructure to establish the business, and it doesn’t appear to have a replacement strategy waiting in the wings.

But how does Target fix it? It’s not a “top of mind” business and doesn’t have the critical mass needed to draw weekly shoppers. Perhaps Target should hire somebody from a more disruptive grocer (think Aldi or Trader Joe’s) who can offer up a more innovative, curated approach to the category.

Second, about logistics:

I’m no expert on supply chain management, but it’s clear that Target recognizes a logistics problem when it hires executives from two of the best in the business — first Amazon and now Walmart. I also don’t know whether Target has spent competitively over the years on logistics (compared to its competitors) but this is a longstanding issue. One of the biggest problems that doomed Target Canada was its inability to keep the store shelves filled, and anybody who shops Target regularly sees plenty of empty pegs on a regular basis.

Target has long pushed the idea of inventory turnover at the expense of satisfactory in-stock rates. If their new hires can accomplish both goals, more power to them….but the company needs to commit to higher service levels first, not just more speed and lower cost.

Should retailers realign their tech budgets?

A short comment (from RetailWire) on the subject of how retailers can reallocate their tech spending to benefit the consumer experience:

Retailers might think that the smartest use of their tech projects is to lower costs, through better logistics management, sourcing and so forth. But they are better off shifting the focus to areas of improvement that the customer will recognize. This may involve smarter replenishment tactics, associate scheduling or targeted loyalty programs. Consumer-facing enhancements ought to be the priority.