How Amazon Competes and How to Compete With Amazon

This will be a short article that may lead to a deeper investigation and white paper.

What is Amazon doing besides just selling stuff online that competes with other players?

How are other players competing with Amazon in ways that may or may not include selling online?

Let's take a look at a few examples.

First Amazon.

They are masters at taking something they already do and monetize it in a new way.  They had massive data centers providing web service to Amazon.com that was mostly not in use.  They needed the massive power for their busy times.  Why not sell it as a service?

Amazon Web Services was born and now you too can host anything you can dream of in "the cloud".

This was quickly followed by others.  Microsoft Azure has found its place and there are countless players in the space now.

Here is one way Amazon is vertically integrating, taking some upstream or downstream product or service and creating a way to do it themselves.  Package delivery.

Amazon Orders Vans for Prime Delivery

Next are a couple of players that took Amazon eCommerce ideas and started providing the same solution for others.

This company is called Mirakl, a Paris based company, that has created a platform for other eCommerce sites to add resellers, just like Amazon.com does. They're the only player in the space and are big already, especially in B2B, and will be growing dramatically in the years ahead.  I promise you.

https://www.mirakl.com/

Next is a similar concept.  The product reviews that worked so well on Amazon.com became something you can add to your own eCommerce site.  Now there are multiple other players in this space but the original may still be the best.

https://www.bazaarvoice.com/

I think these responses are the correct path for all but the largest retailers.  I used to refer to retailers in a Tier level segmentation, Tiers 1 to 5.  Tier 1 was Walmart while Tier 5 was the local YMCA Christmas Tree sellers. I think there is now a super-tier reserved for those who do brick & mortar well, digital well, and eCommerce well.  How can smaller and regional players compete?  Third party providers.

Here is a great example:

https://www.retaildive.com/news/perfect-corp-rolls-out-makeup-ar-tool-for-small-businesses/559242/

Hope this gave you some food for thought.

Happy Reading,

J.W. Gant

BRotD - Entry 0259 Regulating Technology

Best Reading of the Day

"Robber Barons"

That's what they were called.

In the late 1800s they industrialists who used questionable methods to get rich came to be known as robbers. 

Here is a bit more on that subject:

https://en.wikipedia.org/wiki/Robber_baron_(industrialist)

That is the language now in use to describe Google, Facebook, Amazon and more who have convinced the masses of the population to hand over their valuable personal data for free.  Time for regulations of these giants in technology?  There is an argument to be made.

Read more here:

https://www.technologyreview.com/s/611425/its-time-to-rein-in-the-data-barons/

Here is a snippet from the piece:

When Mark Zuckerberg appeared before Congress earlier this year to discuss how the now-defunct political-data company Cambridge Analytica acquired data of up to 87 million Facebook users without their knowledge or consent, one of the few pointed questions came from Lindsey Graham, a Republican senator from South Carolina. “Who’s your biggest competitor?” Graham demanded. After Zuckerberg replied that Google, Apple, Amazon, and Microsoft all had some overlap with various Facebook products, Graham chafed at the answer.

“If I buy a Ford and it doesn’t work well and I don’t like it,” pressed the senator, “I can buy a Chevy. If I’m upset with Facebook, what’s the equivalent product I can go sign up for?”

Happy Reading,

J.W. Gant

Customer Service via Drone

Walmart wants drones buzzing around in its stores, helping people.

Seems like a logical extension of the mobile shopping assistant.  Not ready for prime-time yet I'm sure but I have little doubt this is coming.

Here is the story:

https://www.mediapost.com/publications/article/316641/walmart-files-patent-for-in-store-drone-customer-s.html?edition=108241

Happy Reading,

J.W. Gant

The In-Store Shopping Opportunity for Mobile Apps

When I was first imagining the mobile app I would build for regional supermarkets the biggest opportunity I saw was to help reinvent the in-store shopping experience.

Want to find a store?  Don't you already have a favorite supermarket picked out?  Doesn't google do that for you?

After you've been to the store?  What?  Recipes to cook the food you bought?  Sure, but there are a few resources for recipes available already right?

In the store?

Now you're cooking with butter!

(I love that saying)

Walmart is at it in a big way and it is worth following.  With resources I could only dream of they are reimagining the shopping experience.

Here is a snippet from the piece:

With a new mobile app experience, Walmart is hoping to change the way people shop at its brick-and-mortar stores. The multinational retail chain, which now has more than 11,600 stores under 59 banners and ecommerce websites in 11 countries, recently debuted a new mobile app experience that promises to get customers in and out of stores more quickly, reimagining in-person shopping.

Walmart’s new Store Assistant is an all-encompassing mobile app solution...

Here is the full article:

http://streetfightmag.com/2018/02/27/walmart-reimagines-in-store-shopping-experience-with-mobile-update/

Now imagine if none of the past were present and no stores existed today and you wanted to open a store.  What would you do .... today?  Mobile interactions?  Social media interactions?  You bet.

Happy Reading,

J.W. Gant

Target's Profits Down

Target is in a bit of a hard spot.

Amazon on one side.

Walmart on the other.

A changing industry heavy on digital technology, ecommerce, and changes in the store experience.

Not everyone is going to get it right and the legacy merchants are going to have to craft a new path forward.  Target's efforts resulted in a problem in its profit as it missed efforts.

Great analysis and an interesting look in to what is happening in retail in the United States today:

https://www.bloomberg.com/news/articles/2018-03-06/target-s-turnaround-plan-weighs-on-profit-as-it-chases-amazon

Happy Reading,

J.W. Gant

Improving Retail Mobile Apps

Continuing the discussion on retail mobile apps.  I've been in and around this game for many years.  What I see is a new kind of "Tier 1" retailer. 

There's the classic Tier 1, but then there is a superpower level.  That retailer has it all: great retail stores, great mobile app, great online shopping.  Which ones qualify?  Walmart, Amazon, Target, Starbucks .... anyone else?

Here is the story:

https://www.clickz.com/retailers-improve-app-experience/207018/

Here is a snippet from the piece:

Most retail apps leave something to be desired, according to Jim Cusson, President at retail marketing agency Theory House.

“I think of that quote from Field of Dreams: ‘If you build it, they will come,’” he says. “A few years ago, there was this rush to build apps and everyone wanted one, whether it had a true purpose or not. You see a lot of injured soldiers on the battlefield now because companies have invested money in an app that’s obsolete.”

Happy Reading,

J.W. Gant

TargetPay is Here - Wallet

Following years of investment in mobile wallet through the now sold off MCX and the CurrentC mobile payments solution, and well after Walmart enacted its Walmart Pay solution Target has theirs in place. They call it simple "Wallet".

This is the beginning of furthering a huge divide between the top of the Tier 1 retailers and everyone else.  We may need to create a new designation like "Super Power" when mere "Major Power" was no longer enough.

The biggest merchants will have a strong physical presence, eCommerce presence, vertically integrated merchandising, strong mobile, and strong mobile wallet capability. Think Amazon and Walmart.  Now Target.

Everyone else?  Well, this speaks to the huge need for a white label solution for all of those merchants not big enough to handle all of this on their own.

Anyone?

Here is the story:

http://www.businessinsider.com/targets-mobile-wallet-is-finally-here-2017-12

Here is a snippet from the piece:

Target launched its long-anticipated mobile wallet for in-store payments on Monday, according to TechCrunch. The product, which will be barcode-based and housed in the existing Target mobile app, is known as Wallet. Two key features distinguish Wallet and could help optimize it for use:

The wallet is only available to store cardholders.

...

That’s especially true because it expands upon existing app functionality.

...

Happy Reading,

J.W. Gant

67% eCommerce Growth at Walmart

Now that's news for the day!

Huge growth at Walmart online.  Think the Jet.com acquisition is paying off?

Maybe?

Yeap.

Here is a snippet from the piece:

Walmart continues to invest heavily both in-store and out to redefine the shopping experience and blur the distinction between digital and physical retailing.

As the world’s largest retailer continues its fight with Amazon for consumers’ hearts, minds and wallets, the customer ultimately wins ― new solutions provide a seamless path to purchase and bring a new level of excitement to the shopping experience.

Here is the whole story:

https://risnews.com/walmart-posts-enormous-67-e-commerce-growth

Happy Reading,

J.W. Gant

Sears - A History

I thought I had nothing else to say, or read, about this story except the (surely soon to happen) looming bankruptcy.  Then I found this little piece by the New York Times that tells their whole story in brief.

Great little read.

Here is a portion of the piece:

Imagine a retailer that began by specializing in just one product, then grew into a mammoth that redefined the American shopping experience.

Among its innovations: No matter where you lived, it shipped your order directly to you, whether you were looking for cast-iron cookware, a mandolin, the newest technological marvel, or the latest in petticoats.

Amazon, right? Actually, it was Sears — a century ago.

Here is the full story:

https://www.nytimes.com/2017/08/11/business/the-incredible-shrinking-sears.html?mcubz=1

Happy Reading,

J.W. Gant

Small Towns and Walmart

The story of this little Massachusetts town really caught my eye.  Not only for the urban planning aspect but for the small business savvy and differentiating strategy.

Well worth the read.

Here is a snippet from the piece:

Downtown Hudson was quiet when Michael Kasseris stepped out into the late night air in 2012.

Behind him was a Main Street space that had once housed a printing shop, a bagel shop and a gifting shop.

His uncle owned the building. Kasseris and his two business partners had just opened Rail Trail Flatbread Co. -- a trendy new restaurant featuring wood-fired pizza and craft beer.

He looked around. The downtown stores, tucked inside historic brick buildings, were empty. The parking spaces were empty. There was no foot traffic.

He and his friends were investing everything they had into this place.

In a moment of panic, Kasseris thought, "What are we doing building a restaurant?"

Here is the full story:

http://www.masslive.com/news/index.ssf/2017/08/hudson_how_this_small_massachu.html

Happy Reading,

J.W. Gant

Amazon Acquires Whole Foods - What Does It Mean?

When the news broke that online retailer and all-around everything super-center Amazon was acquiring Whole Foods my instinct was to get straight to my blog.  I have thoughts on this, of course, but I also knew there would be a slew of industry leaders leaning in on this deal.  So I decided to wait a bit and gather the best articles in one place.

First, my thoughts.

Clearly Amazon wants to become more like Walmart as Walmart continues to try to be more like Amazon.

If I were to look in to the future of retail and how digital will ultimately impact it I think we'll see a new normal settled upon in the very near future.  Within that normal there will be room for all kinds of players so long as they define a clear space that differentiates them from others.  Pure online, pure mobile, pure physical retail, and everything in between will be the new reality.  The largest players will be heavy in physical AND digital, while smaller players will excel at only one or the other.

So Walmart might one day be 70/30 physical to digital and Amazon might become 30/70 physical to digital.  Something like that.  You'll still see the mom & pop shop on Main Street, and the little niche mobile-only player that gets the job done too.  Great time to be a customer huh?

The Food Marketing Institute back around 2012 was predicting roughly 10% of current Supermarket business would shift online.  Most of that, 80%, would be taken from packaged center store goods that were easily shipped and often good targets for subscription models (such as diapers).  Don't see any reason this prediction was off and that means big changes for Supermarkets across the country.  They are suddenly too large for their needs.  We should see stores removing aisles to make room for more fresh and prepared in-store options.  Combined with a robust digital presence the best Supermarket chains will survive and thrive (Wegmans).

Now to it and there is a lot of reading for you should you choose to do so.

RIS weighs in with their slew of experts:
https://risnews.com/experts-weigh-amazon-snatches-organic-grocer-whole-foods-137-billion

Re/Code tell you how to keep Amazon from swallowing your business too:
https://www.recode.net/2017/6/19/15832958/amazon-whole-foods-jeff-bezos-acquisition-aws-vendor-tips-cloud-open-source

RetailDive tells us how the war between Amazon and Walmart is accelerating:
http://www.retaildive.com/news/amazon-vs-walmart-why-the-whole-foods-deal-escalates-the-war-for-the-amer/445294/

Bloomberg tells us Amazon is after every single thing you buy (which is exactly what Walmart is after by the way):
https://www.bloomberg.com/view/articles/2017-06-20/amazon-s-real-target-isn-t-whole-foods-it-s-everything-you-buy

Digital Transactions tells us why Amazon is changing the checkout (payment) process with this acquisition:
http://www.digitaltransactions.net/news/story/With-Its-Deal-for-Whole-Foods_-Amazon-Could-Usher-in-Seismic-Change-for-the-Checkout

Business Insider is always a good read and they say Walmart and Kroger (supermarket) should be terrified by this deal:
http://www.businessinsider.com/amazons-whole-foods-acquisition-should-terrify-walmart-kroger-2017-6

Finally the NRF (National Retail Federation) tells us the retail reinvention is just getting started but also cautions against the belief that traditional retail is imploding (correct):
https://nrf.com/news/retails-reinvention-story-is-just-getting-started

Happy Reading,

J.W. Gant

Walmart Combines its Credit Cards with Walmart Pay

Why not put it all together?

Get a Walmart Credit Card and instantly begin using it in store with Walmart Pay.

Cool right?

Anything that reduces friction between customers and ... buying things will be adopted.

Read on:

http://www.digitaltransactions.net/news/story/Wal-Mart-Entices-Credit-Card-Applicants-With-Instant-Access-Via-Walmart-Pay

Happy Reading,

J.W. Gant

eCommerce Surging

All Amazon all the time right?  Sure but everyone else is getting better at the game too and the numbers tell it.  I'll share one story but a couple other highlights stand out.

Wayfair.com the home furnishings company is the fastest growing retailer in the U.S.

The top 500 retailers got there by seeing their eCommerce grow 15%.

Here is Walmart really getting in the game with a 63% increase in eCommerce.  Read more here:

https://www.mediapost.com/publications/article/301466/walmarts-e-commerce-surges-63-as-new-strategies.html?edition=103172

Happy Reading,

J.W. Gant

Wayfair Crushes Short Sellers

As an old hand in the investment game I love a lede that says short sellers got crushed.

Love it!

The little eCommerce company that could keeps on doing.  Not so little any more.  These companies are the future of eCommerce.  Amazon is huge and getting bigger.  A few big retailers will be able to play the game too (Walmart).  The rest requires strong understanding of a particular niche.

Here is a snippet from the news:

Wayfair shares spiked Tuesday after the online furniture retailer reported better-than-expected first-quarter results.

The stock was up 23 percent as of midday Tuesday. Wayfair is one of the market's best performers this year with its shares up 79 percent year to date versus the S&P 500's 7 percent return.

Here is the full story:

http://www.cnbc.com/2017/05/09/short-sellers-annihilated-after-wayfair-surges-more-than-20-percent.html

Happy Reading,

J.W. Gant

Digital Video Movie Conversion with Vudu

Do you like movies?

Do you love movies?

Do you have stacks of DVD videos lying around, in boxes, or maybe on display as your "video collection"?

Did you recently buy a new UHD television and have quickly recognized your old video collection is junk?  Love the convenience of Netflix movies "in the cloud" that you don't have to keep piled around?

Trying to figure out what to do with your huge, horrible, collection of old DVDs?

Vudu has a solution for you.

I love when companies create legitimate solutions to legitimate problems customers have, and they've clearly done something great here.

Get the Vudu app for your phone.  Scan the barcode of any movie, DVD or Blu-Ray, pay a very small fee and you get the digital copy, for you to own forever, of that movie.  Bye bye DVD.

Wow!

Here is the official site:

http://www.vudu.com/in_mobile_disc_to_digital.html?CID=Email&SCID=mobiled2d&KWID=md2d_v2_hl_03232017

The fee is quite small but varies depending on the movie you are working from.  If you have a DVD those are originally 480p quality, not "high definition".  You can use the Vudu app to grab the same "SD" quality version for $2 or you can upgrade the quality by paying $5 instead.  This is opposed to buying a new blu-ray or the digital equivalent for, usually, at least $10.

Awesome!

Own the blu-ray and want a digital copy?  $2 please.

Two caveats I've found:

First, if you don't have a hard-wired internet connection to your smart TV services like Vudu are not very good.  The times they are a changin'.

Second, I'm a huge believer in "ultra high definition" or 4K, especially on TV displays larger than 50".  This service does not offer a UHD option.

Have fun folks, and Happy Movie Watching,

J.W. Gant

Walmart Line Busting for Pharmacy and Money Transfer

Line busting is in play with technology helping out.  Order ahead.  Skip the line, just pickup and go, etc.

Walmart is doing the incremental work to help lines around their stores.  Pharmacy and money transfer first.  What next?

http://www.chainstoreage.com/article/walmart-updates-app-speed-store-pharmacy-refills-money-transfers

Happy Reading,

J.W. Gant

Walmart Online Growing by Double Digits

Looks like the Jet.com acquisition is paying off for Walmart.

Here is a snippet from the piece:

Wal-Mart posted its third straight quarter of double-digit online growth, which helped its holiday results top estimates. The world’s largest retailer is benefiting from last year’s acquisition of Jet.com, a $3.3 billion deal that reinvigorated a flagging e-commerce business and brought a new executive team to the division.

Wal-Mart is finally “playing offense,” said Peter Benedict, an analyst at Baird Equity Research.

Here is the whole story:

https://www.bloomberg.com/news/articles/2017-02-21/wal-mart-s-bid-to-become-e-commerce-giant-helped-by-online-surge

Happy Reading,

J.W. Gant

BRotD - Entry 0245 Mobile Payments Stuck?

Best Reading of the Day

Seems like I've been studying, following, and involved in mobile payments forever and haven't see the change we continue to expect.  Is that a correct assessment?  What is the current state of things?  What should we expect tomorrow.

Excellent article by the folks over at Payments Source:

http://www.paymentssource.com/news/technology/mobile-payments-09-why-is-the-tech-forever-stuck-in-beta-3024617-1.html

Here is a snippet from the piece:

Mobile technology is radically changing the way people hail taxis, book lodging, consume entertainment and find prospective dates.

So why hasn't the same kind of revolution taken hold when it comes to how people spend money?

Years of efforts by banks, payment networks, tech startups, wireless networks and retailers have failed to a produce a mobile wallet app that's broadly used and accepted. This despite near certainty among the technology and pundit class that the much-anticipated migration to mobile payments is inevitable.

There's no simple answer to why mobile payments keep failing to gain traction in the market, but a close look at what's gone wrong so far could provide clues to what — if anything — could provide a decisive breakthrough.

Happy Reading,

J.W. Gant

$3B Jet.com eCommerce Play by Walmart

For as long as there has been retail there have been many ways to approach the proposition.  I see no reason this won't continue as online sales/retail ascends.  Why only Amazon when the last 100 year has had Macy's and Sears and Walmart, etc.??  No way we won't see more players, even if some of those get bought up by others.

Walmart is picking up Jet.com for a mere $3B dollars. Announcement is happening today.

Not bad for a few years work.  I saw one short story that a lucky customer of Jet won some shares in the startup, and those shares are now worth a few pennies.  Laughing all the way to the bank.

Here is a snippet from the news:

Walmart missed out on a Marc Lore company once, when Amazon swooped in to beat it to the purchase of Diapers.com’s parent company several years back.

The giant retailer may not let it happen again.

Walmart is in talks to acquire Jet.com, Lore’s new startup that has raised more than $800 million in financing in an attempt to build a new online megastore, according to a person familiar with the talks. It is not clear how far along they are. News of the talks was first reported by the Wall Street Journal, which said the tie-up could value Jet at as much as $3 billion.

Here is the full story:

http://www.recode.net/2016/8/3/12368608/why-walmart-acquire-jet-com

Happy Reading,

J.W. Gant

Grocery Stores in Decline

If you aren't growing, or increasing market share, you are probably going the other way.

Bad news for the well-established Supermarket concept.

Here is a snippet from the story:

Sure, Americans head to Costco some days, drop by the dollar store another, and sometimes swing by their neighborhood grocer, too. But that doesn’t mean they’re happy about all that running around, andProgressive Grocer’s new annual report finds that many feel forced to make multiple trips to find everything they want.

And whether shoppers are looking for deals, quality or variety, supermarkets continue to be on the losing end, with their share of total grocery spending—about $2 trillion each year—falling to 54.5%. That means its slice of the grocery pie has fallen more than six percentage points since 2007. Warehouse clubs and supercenters continue to be the big winners, with their combined share rising from 25.1% in 2007 to 31.3%.

Read on:

http://www.mediapost.com/publications/article/280591/report-finds-grocery-stores-continue-to-lose-share.html?edition=94758

Happy Reading,

J.W. Gant