WebProNews

Category: EcommerceTrends

EcommerceTrends

  • Disney Takes a Playbook Out of Digitally Native Companies

    Disney Takes a Playbook Out of Digitally Native Companies

    “All of a sudden people are realizing that Disney is going to take the advantages that they have, content that nobody else has, moats that give them actual real leverage in the negotiations, and then they’re going to actually take a playbook out of these more digitally native companies,” says Sean Ammirati of Birchmere Ventures. “They’re going to actually build direct relationships with their end customers. They’re going to switch their business model from transactional to a subscription model.”

    Sean Ammirati, Partner at Birchmere Ventures, discusses how Disney has potentially reinvented themselves with the launch of Disney+ in an interview with Bob Evans on the always engaging and relevant Cloud Wars podcast:

    Disney Takes a Playbook Out of Digitally Native Companies

    Innovation is not relegated simply to 20-something small brand new companies. Large companies are able to leverage their assets and their unfair competitive advantages to play in this also. For instance, Disney recently had its Investor Day and announced its Disney Plus streaming offering. Disney Plus has been framed by a lot of people as a kind of “Netflix Killer.” The interesting thing about what’s happened there is the reaction from Wall Street tech journalists. All these different groups have been incredibly positive.

    All of a sudden people are realizing that Disney is going to take the advantages that they have, content that nobody else has, moats that give them actual real leverage in the negotiations, and then they’re going to actually take a playbook out of these more digitally native companies. They’re going to actually build direct relationships with their end customers. They’re going to switch their business model from transactional to a subscription model.

    How Do We Transform Our Relationships With Customers?

    These are things that we’ve been talking about for four years with lots of legacy companies under the category of digital transformation. But it’s hard every time someone steps up and tries to do that, you’ve got to re-educate Wall Street on how to think about your financial metrics. It turns out that GAAP accounting is not that similar to subscription accounting. To be fair, that’s an easier challenge than it was a few years ago. I remember years ago when Adobe made that pivot and what a struggle that was to say (to investors) we’re going to make less money next quarter and you should be excited about that. Their stock went through kind of a full J-curve there as they walked people through it.

    What was encouraging is after Investor Day there was a massive jump in Disney stock. All of a sudden these pieces that you’d watch the leadership put together for a while kind of came into a full mosaic picture. Not only did Disney stock shoot up but this arch competitor Netflix, they took a hit right away, although they’ve come back a little bit with recent earnings. I’m hoping that other CEOs in other boardrooms are taking note of this and asking themselves the same questions. How do we create products and services that transform our relationships with our customers to allow us to have that same type of growth mindset?

    Case Study: How to Be a CXO In This Subscription Economy World

    We have gotten to a point where we assume that if you’re a company that was born in the digital age and you’ve gone through the full capital formation prospect and gotten out and gotten public you must have certain things in your DNA that makes you the only organization who can win a market. Just look at the grocery industry. Amazon’s coming into grocery so I’m sure Amazon’s going to be the winner in that business. Maybe. But then you see the largest grocery chain in the United States (Kroger) partnering with Microsoft to actually be proactive instead of reactive.

    Companies can actually play in this business that weren’t born in the last thirty years. Disney is a great illustration of that. Now Disney needs to continue to execute. They’re going to need to actually finish the vision that they cast. They’ve got to launch these. They’ve got to make it work. They’ve got to pick the right partners. I really think in a couple of years this will be a case study lots of executives point to and say, man, we can do it. In the same way that the Adobe thing has been how to be a CFO in this subscription economy world that we live in.

    Disney Takes a Playbook Out of Digitally Native Companies – Sean Ammirati on Cloud Wars podcast
  • Jeff Bezos: We Need To Have Billion Dollar Scale Failures

    Jeff Bezos: We Need To Have Billion Dollar Scale Failures

    “At Amazon, we still take risks all the time,” says Amazon CEO Jeff Bezos. “We encourage it. We talk about failure. We should be failing. Our failures have to grow with the company. We need big failures if we are going to be moving the needle. We need to have billion dollar scale failures. If we are not, we are not swinging hard enough.”

    Jeff Bezos, CEO of Amazon, discusses how to be a successful entrepreneur by being customer obsessed in a conversation at the Amazon re:MARS conference in Las Vegas:

    The Most Important Thing Is To Be Customer Obsessed

    If you want to be an entrepreneur, the most important thing is to be customer obsessed. Don’t satisfy your customers, figure out how to absolutely delight them. That is the number one thing whoever your customers are. Passion. You have got to have some passion for the arena that you are going to develop and work in. Otherwise, you are going to be competing against people who do have compassion for that. They are going to build better products and services.

    You can’t be a mercenary. You have to be a missionary. Missionaries build better products and services. They always win. The mercenaries are just trying to make money. Paradoxically, the missionaries always end up making more money.

    We Need To Have Billion Dollar Scale Failures

    You have to pick something that you actually have a genuine passion for. You have to take risks. You have to be willing to take risks. If you aren’t going to take risks, if you come up with a business idea where there are no risks there, those ideas are probably already being done. There being done well by many many people. So have to have something that might not work. You have to accept that your business is going to be in many ways an experiment. It might fail. That’s okay. That’s what risk is.

    At Amazon, we still take risks all the time. We encourage it. We talk about failure. We should be failing. Our failures have to grow with the company. We need big failures if we are going to be moving the needle. We need to have billion dollar scale failures. If we are not, we are not swinging hard enough.

    Disagree and Commit

    If I have a new idea and I want to see it pursued I do have to build support for it. You need very smart people to embrace the idea and move it forward. We have a framework at Amazon, it’s one of our leadership principals, it’s called disagree and commit. That is extremely useful. After you discussed an idea, you do need to make a decision and move forward. The whole team needs to really commit to that. When I really feel strongly about something and the team disagrees with me I have a helpful phrase that I look to use which is, “I want you to gamble with me on this.”

    The truth is when you are in a position like that nobody knows what the right answer is.  You’re not saying I’m right on this. Go do this. You’re saying I want you to gamble with me on this because I don’t know if it is right either. I disagree and commit all the time. I promise the people when I do it, I’m very clear in saying, “I don’t agree with this. I think it is probably not going to work. But I will never say I told you so and I’m going to be on your team. I will do everything I can to make it work.”

    Broadband Access Is Going To Be a Fundamental Human Need

    A recent big bet (we’ve taken at Amazon) would be Project Kuiper. This is our LEO satellite constellation. The goal here is broadband everywhere. One of the things this does, it’s just the way the systems work, you have equal broadband all over the surfaces of the earth. Not exactly equal, it tends to be a little bit more concentrated toward the poles, unfortunately. You end up servicing the whole world.

    It’s really good because by definition you end up accessing people who are under bandwidth including rural and remote areas. I think you can see going forward that access to broadband is going to be very close to being a fundamental human need as we move forward.

    Amazon’s Jeff Bezos: We Need To Have Billion Dollar Scale Failures
  • Long-Term Goal With Alexa Is To Invent the Star Trek Computer, Says Amazon SVP

    Long-Term Goal With Alexa Is To Invent the Star Trek Computer, Says Amazon SVP

    “The long-term goal (with Alexa) was to try to invent the Star Trek computer,” says David Limp, Amazon’s SVP of devices and services. “I grew up watching Roddenberry and loved it. We all loved watching it and the science had moved up enough where we thought we had a shot at it. It’s still going to take us years, if not decades more, to get to the shining star that is that Star Trek computer. But we think we can do it.”

    David Limp, SVP of Devices & Services at Amazon, discusses the future of devices and Amazon’s role in building trust and protecting privacy in an interview on CNBC at the Amazon re:MARS conference in Las Vegas:

    Long-Term Goal With Alexa Is To Invent the Star Trek Computer

    The long-term goal (with Alexa) was to try to invent the Star Trek computer. I grew up watching Roddenberry and loved it. It was a lot more innocent than you might make it out to be. Which is, can we invent that computer? We all loved watching it and the science had moved up enough where we thought we had a shot at it. It’s still going to take us years, if not decades more, to get to the shining star that is that Star Trek computer. But we think we can do it.

    If you have that in your house or in your car or in your conference room, you’re going to find all sorts of things to do with it. Some, Amazon will invent and it’ll help Amazon. But much more, it’ll help developers. There are 90,000 plus skills and hundreds of thousands of developers building around Alexa right now. If you’d five years ago said there’s going to be a new developer ecosystem that’s not about an operating system and that’s not about applications, but about skills in the cloud, you would have laughed at me. But here it is sitting in front of us, all around us, right here.

    Star Trek popularized the idea of the Voice First computer. Amazon Alexa made it reality.

    Our Focus Is To Invent On Behalf Of Customers

    Our focus is to invent on behalf of customers. If we keep our focus there and build cool things that customers love to use and continue to earn their trust, which we have to do every day, then we think the outputs will speak for themselves. We focus on that. Customer trust is kind of the oil of the Amazon flywheel. We think about it every day. It’s thinking about privacy as you think about the kinds of products that we’re doing. Whether it’s a Ring doorbell or it’s an Echo sitting in your kitchen, it has to be foundational to the product. It’s not something you glom on later as an afterthought.

    We think about it at the very upfront when we’re beginning to invent the product. We’re gonna put these in our homes. What do we want to think about privacy? What do we think about trust? We build features into the products and into the services where (those concepts) are first and foremost and paramount. We’re continuing to evolve that as well. It’s not like you’re going to get everything right day one. As we learn from customers we’ll add new features and services that build on that and add more privacy and trust as we go on.

    The First Thing Is To Get Customers To Love A Product

    The first thing is to get customers to love a product. If you build a product that customers love and use then good things usually come in consumer electronics when you do that. For us, that’s the first thing that you want to do. It happened early on with Kindle. People loved it and then we figured out how to build a book business around it. Similarly, the great thing about Echo and Alexa is that customers love the product.

    I don’t think that they’re necessarily buying more yet because of that but they are doing certain things in digital that leads to buying some more things. Specifically, we’ve kind of brought music back into the home again. It had an atrophied in the home. Now music subscription services, Spotify, Amazon music, and Apple music starting last year. They’re growing on Echo and Alexa. People are listening to audiobooks. We have a business there in Audible with the subscription services. Those are the early signs where you start seeing that. In addition, people are buying more smart home products. Whether it’s a smart plug or a light bulb or a robotic vacuum, people are buying those more because it’s easier to control with a voice interface.

    Anything That Advances Privacy For Customers, I’m a Fan Of

    Anything that advances privacy for customers and gives them a more trusted environment, I’m a big fan of as a consumer. I don’t know enough about that product (announced on Monday by Apple) to weigh in on the specifics of it. As you think about Amazon and our credentials and being able to log on to Amazon, we’ve been doing that for 20 plus years. Your credit card number and your address which we ship your products to, that’s sacrosanct. We have to build trust every day. Any other company or any other person that’s furthering that I think it’s just great for the industry.

    Long-Term Goal With Alexa Is To Invent the Star Trek Computer, Says Amazon SVP David Limp
  • Everything Can Be Digital At The End Of The Day, Says Wingstop CEO

    Everything Can Be Digital At The End Of The Day, Says Wingstop CEO

    “Everything can be digital at the end of the day,” says Wingstop CEO Charles Morrison. “We still take a lot of phone orders and a lot of people still walk. So every time somebody accesses us we want the opportunity to digitize that transaction. Why? Because the digital transaction tends to have almost a five-dollar higher average ticket and is more profitable for our franchisees which means a better return on investment and more new restaurants to grow on.”

    Charles Morrison, CEO of Wingstop, discusses how digitalization is powering their growth and profitability in an interview with Jim Cramer on CNBC:

    Everything Can Be Digital At The End Of The Day

    We believe it’s a fantastic partnership with DoorDash. What they focus on is making merchants successful. As the merchant that’s exactly what we want. And they take care of the logistics. In our partnership, we’ve made sure that we are always working together to ensure that no matter how you access Wingstop, whether it be carryout or walk-in or through delivery, you’re going to get the same great experience. We believe they’re best positioned to provide that.

    Everything can be digital at the end of the day. We still take a lot of phone orders and a lot of people still walk. So every time somebody accesses us we want the opportunity to digitize that transaction. Why? Because the digital transaction tends to have almost a five-dollar higher average ticket and is more profitable for our franchisees which means a better return on investment and more new restaurants to grow on. I think people spend more time with the menu (on digital). They get to know the menu. They add a couple of items on to that and they’re not as intimidated by the phone call and the rush that they see at the front counter.

    Digital Technologies Create Efficiencies To Help Us Grow

    We’ve been a socially active brand as it relates to social media for many years. We’ve become large enough and have scaled to national advertising. Our franchisees generously added one percent to the advertising spend so they now spend four percent to a national fund. That has been redeployed into fantastic new media and new creative which is really helping drive that same point 7.1% comp that you saw in the first quarter.

    In our brand, we’re pretty well insulated (against labor shortages). We have a very small roster already, so in that small footprint, it doesn’t take a lot of people to operate a Wingstop. I don’t know that you’ll necessarily see us doing anything to remove the number of people in a restaurant. We do believe through digital technologies and further digitalization of our business that we can create efficiencies that create capacity that will help us to grow. This will take the pressure off the labor line.

    Everything Can Be Digital At The End Of The Day, Says Wingstop CEO Charles Morrison
  • How WeWork is Using Technology to Revolutionize Office Space Worldwide

    How WeWork is Using Technology to Revolutionize Office Space Worldwide

    “We open 15 to 20 buildings a month,” says WeWork CTO Shiva Rajaraman. “Anything we can use to automate or augment a person through machine learning we’re taking all that data in one central place and starting to create an engine around that. That’s key to successful scaling today. When we think about enterprise we sort of step back and say what’s our Google Analytics for commercial space?”

    Shiva Rajaraman, Chief Technology Officer of WeWork, discusses how WeWork is using technology to revolutionize office space worldwide in an interview on Bloomberg:

    How Do We Offer Space As a Service?

    There are three capabilities when we think about WeWork. One is how do we offer space as a service? If you just think about it’s really basic. Are you looking for what location do you need? Where do you need it? How long do you need it? Are there different pricing models for it? One of the things we’ve done is effectively taken all of this space and put it into a big database and we start to shape it based on what we see out there in the market. Some of that is just pricing automation at the end of the day. Some of it is how do we automate that supply chain of delivering a building?

    We open 15 to 20 buildings a month. Anything we can use to automate or augment a person through machine learning we’re taking all that data in one central place and starting to create an engine around that. That’s key to successful scaling today. The biggest technically challenging thing is operational scale. If you step back you don’t want a lot of variability. You want to step back and say, “Hey, can I deliver this building on time at quality as people need it?” That’s where you need operational technology that really works in a way that normally construction has not worked in the past.

    What’s Our Google Analytics for Commercial Space?

    One of the key things on the strategy side is that as we see this demand and we start to get critical mass in different areas can we disrupt the business model a little bit? Let me give you an example. If you take someone like GE Health in Seoul, South Korea, they had underutilized real estate. We redesigned that so they can use it in a more flexible way. We also created a new membership called the City Pass which gives all of their employee’s access to WeWork throughout Seoul. Now they can go where they’re more productive. One of the key things we’re looking at right now is what’s a density that translates to interesting memberships that allow people to be more productive?

    Let’s talk about the M&A that’s created a fabric that we can start to offer to enterprises. When we think about enterprise we sort of step back and say, “What’s our Google Analytics for commercial space?” Can we help these enterprises create a good workplace experience through things like room booking (service) all the way to understand how they use space so they can come and use WeWork on demand if they need it. We can also help them grow in the future if they’re looking at new markets to expand into.

    How WeWork is Using Technology to Revolutionize Office Space Worldwide


  • We Want To Be the World’s First Global Sleep Brand, Says Casper CEO

    We Want To Be the World’s First Global Sleep Brand, Says Casper CEO

    “We really consider ourselves the sleep company,” says Casper co-founder and CEO Philip Krim. “Everything we do is about helping our customers sleep better. It’s about getting a great mattress but it’s about everything that could help you sleep. We’re trying to take products to market that are end to end about sleep solutions. We want to be the world’s first global sleep brand and we think we’re well on our way to doing that.”

    Philip Krim, Casper co-founder and CEO, discusses how Casper, a highly successful direct to consumer brand (DTC), is still in the early days of growth in an interview on CNBC:

    We Want To Be the World’s First Global Sleep Brand

    We actually think Casper stands alone. We really consider ourselves the sleep company. Everything we do is about helping our customers sleep better. We think end to end about sleep. It’s about getting a great mattress but it’s about everything that could help you sleep. In January we launched a technology product, a lighting product, that actually helps you wake up better and fall asleep better. We’re trying to take products to market that are end to end about sleep solutions. We want to be the world’s first global sleep brand and we think we’re well on our way to doing that.

    We think we’re really one of the first of our kind. We were a digitally native business, having launched online with Casper.com, but we’re actually now scaling our business offline as well. We’ve opened up 23 retail stores and we have great partners with folks like Target. We believe that we will have a business where no matter how consumers want to shop for our products we have great products and great experiences. We actually think there’s really not a public company comp that’s done that journey.

    Repeat Revenue Increases Dramatically As We Launch New Products.

    Yesterday we launched our hybrid line which is actually the combination of innerspring technology and foam technology. We launched two different models around that. For us, we’re actually still able to compress those mattresses, ship them anywhere in the country, and they’re really phenomenal products that we’re in development for over a year in our Casper Labs program based in San Francisco. From a cost structure, it works just the same way as our foam mattresses. You can compress it, you can ship it anywhere, it’s super fun to open and they sleep really great.

    We make great pillows, we make great sheets, and we make great lighting products. We are seeing higher and higher attachment rates as we launch new products and we’re seeing repeat revenue increase dramatically as we launch new products. We’re only a five-year-old company, actually as of this month. We launched April of 2014. As we get our customers to be a little bit more mature we’re seeing them come back time and time again not just to buy mattresses but to buy our full suite of products. That’s really exciting for us.

    We’re In the Early Days of Scaling

    We actually changed the way that you would return a mattress. In the industry traditionally it’s a huge pain, but with us, you call us up and we’ll pick up the mattress. You don’t even have to pack it back up, nothing. We will come to pick it and up and then we donate it locally. We appreciate that you gave us a shot. We also are changing the way that people shop for the products. We have our Casper.com website where you can learn all about these great products but we have 23 stores that we’ve opened. We’re opening up over a dozen this quarter, two this week in fact, and those stores are a great complement to the online experience.

    We don’t break out profitability overall. Casper has a great product, we have a great business model, and we’re seeing that by taking it to market both online and offline that it’s actually growing our online business in a very efficient way. We think this go to market strategy is working well. We’re in the early days of scaling it and we believe we can keep building this out for years to come.

    We Want To Be the World’s First Global Sleep Brand, Says Casper CEO


  • The Secret to Subscription Business Models is to Think About Your Customers, Says Zuora CEO

    The Secret to Subscription Business Models is to Think About Your Customers, Says Zuora CEO

    “The secret of these business models or products is not just going beyond on products. Think about your customers,” says Zuora CEO Tien Tzuo. Zuora helps companies implement subscription business models into their existing products and services using their cloud-based software. They help their customers which include OTT (Over the Top) content providers, tech companies, and even traditional consumer brands like Fender Guitars enter the subscription economy.

    Tien Tzuo, Founder and CEO of Zuora, discusses how even the most traditional of companies can successfully implement a subscription business model in an interview on Fox Business:

    This is the Early Days of OTT

    It seems to easy as an end user. You just pick up your phone, fire up your browser, and you start using these (subscription) services. A lot of things have to happen behind the scenes. You have to check your credit card, remember to send out the monthly bill, figure out how much revenue you should recognize, or allow your customers to upgrade to a family plan or a better bundle. We take on all that so that companies can focus on what they do best which is providing a great service and a great experience for their customers.

    I think people are missing the big picture which that OTT really today only represents 5% of the $500 billion spent on TV. This is really the very early days and there is probably room for many vendors to thrive. If you think about the cell phone market there’s AT&T, Verizon, T-Mobile, and Sprint. It’s true that they use pricing packaging to compete with each other but they also have differentiated products in the marketplace.

    Think About Your Customers

    The secret of these business models or products is not just going beyond (and reinventing) products. Think about your customers. The great story about Fender (Guitars) is that Fender realized their customers obviously wanted to be musicians, but it was hard. Over 90% of their customers actually stopped playing the guitar after 90 days. So they asked, “How do we help our customers over the hump?”

    How to Play Guitar, by Fender

    If they are playing them well they are going to play for life and they’re going to buy a lot more guitars, a lot more amps, a lot more picks. They launched Fender Play to really teach their customers for a simple $20 a month how to play the guitar. They are seeing enormous success in the customers that actually sign up for Fender Play in sticking with it. So stick with the guitar and you can become really good. It’s never too late.

    The Secret to Subscription Business Models is to Think About Your Customers – Zuora CEO


  • Salesforce CEO: Every B2B and B2C Company Is Becoming a B2B2C Company

    Salesforce CEO: Every B2B and B2C Company Is Becoming a B2B2C Company

    Salesforce co-CEO Marc Benioff says that every company is becoming a B2B2C company. “Every B2B company and B2C company is becoming a B2B2C company,” says Benioff. “What company does not have to directly connect with the consumer? You could be a traditional industrial company who’s selling to B2B resellers and you have to be ready in this connected digital revolution to be able to connect directly to your consumer as well.”

    Marc Benioff, co-CEO of Salesforce, discusses their recent high flying quarterly results and talks about how every company is becoming a B2B2C company in an interview with Jim Cramer on CNBC:

    We Just Had a Fantastic Fourth Quarter

    We just had a fantastic fourth quarter. We’re taking a look at those numbers right now and it was an amazing quarter. In fact, we beat our revenue estimates quite handily. As part of that, our co-CEO Keith Block closed the largest transaction in our history and the largest transaction ever in Barclays history. It was a deep nine digit transaction to help automate their 50 million customers. It really goes to show how the three major trends that are playing out in computing today, the cloud, broad digital transformation, and a focus on the customer, can really impact our company by creating a huge deal and also being able to support a huge transformation at Barclays.

    I feel great about our business. I’ve always felt great about it. We’re coming up on our 20 year anniversary this Friday. It’s been 20 years that have been unbelievable to us here. We are coming up on a year that we’re going to do $16 billion in revenue that far exceeds my expectation. I still have never been more excited about Salesforce than I am right now. When I look at the short term I see $20 billion right around the quarter and I see $30 billion right around the corner. In fact, we initiated a four-year guidance today of $26 to $28 billion.

    Every B2B and B2C Company Is Becoming a B2B2C Company

    You can look at a great deal that we did this quarter with Amgen, a tremendous biotechnology company. This is a company that’s really expanding with our health cloud. This is our vertical strategy to build products specifically for certain industries. In this case, our health cloud is going to help Amgen connect with their customers in a whole new way.  Every B2B company and B2C company is becoming a B2B2C company. What company does not have to directly connect with the consumer?

    Not just Amgen, everybody. You could be a traditional industrial company who’s selling to B2B resellers and you have to be ready in this connected digital revolution to be able to connect directly to your consumer as well. That’s a major trend that we’ve benefited from for so many years now and you’re going to see that continue to play out. That’s certainly something driving this relationship with Amgen as well.

    Brunello Cucinelli and Lamborghini Using Salesforce to Connect

    Brunello Cucinelli is one of the great fashion brands in the world and we’ve completely transformed Brunello Cucinelli. He actually touches the customer in many different forms. He has a direct B2C relationship. He’s online with them. We run his website. You go into his stores. That’s a direct consumer connection. But did you know he’s a B2B company also? That’s because he’s selling to resellers who are reselling his products in some of the big retail stores around the world. He’s a B2B and a B2C company. We have to bring it all together with him and give him a single view of his customer. That’s the transformation he has to go through and has gone through and that’s why he’s had such great growth and we’re so excited for him.

    Another great example is Lamborghini. Of course, Lamborghini is actually traditionally a B2B type company. They’re selling to their dealers and they’re making sure their dealers are successful. some of those dealers are not even owned by Lamborghini but now they need to be able to connect with their customer in real time, all the time. They’re also a B2C direct customer. That’s why the new Urus, their new SUV, is built entirely on Salesforce. It’s the connected Lamborghini. That’s a vision for all car companies in the future that they can directly connect with you, not just connect with their dealer. That’s the B2C and B2B transformation that we’re talking about.


  • AI: The Secret To Sustainable Supply Chains?

    AI: The Secret To Sustainable Supply Chains?

    For businesses, especially those operating heavily within E-commerce, what do truly sustainable solutions look like? From open lines of communication to central intelligence systems, as the pressure in the shipping and logistics departments mounts, retailers have more to focus on than just creating quality goods and services. Artificial intelligence is changing the game for sustainability in supply chains.

    In 2018 alone, eight out of ten customers were unlikely to shop again with a retailer after a poor delivery experience. Setting aside dissatisfaction of products, poor quality, or too high prices, consumer focus on fast and reliable delivery is quickly becoming a top priority. Between 2016 and 2017, E-commerce sales themselves grew by 16%, express shipping air freight volume grew by 9%, and US imports increased 5%. As a result, companies in the US are spending a total of $1.5 trillion on shipping and logistics, and yet, it still may not be enough.

    Amazon shipping options have undoubtedly raised the bar for both consumer expectations and E-commerce as a whole. Free two-day shipping, for its millions of customers, is well worth the yearly Prime subscription and keeps shoppers localized within Amazon’s marketplace. Yet, three in four consumers would choose another retailer over Amazon if that retailer offered better delivery options – no small feat.

    Perhaps more so than any other department, shipping and logistics come with plenty of unique complications and problematic inefficiencies. Too many inefficiencies and the consumer base is likely to notice. For late and unsatisfactory deliveries 90% of consumers expect a full refund; additionally, their expectations range from notifications, flexible delivery windows, and real-time tracking visibility. This can be tricky to manage for businesses, especially when juggling the existing inefficiencies of transportation of tools, equipment, and even people. Over 2018, empty trucks traveling accounted for 16% of total mileage used by just one US company and unscheduled vehicle or equipment repairs made up 65% of all maintenance costs.

    Businesses with huge logistical demands need better solutions than just traditional operations efficiency standards. Now that customer experience and satisfaction is tied so deeply in with shipping and delivery, new standards are required – and smart suppliers are looking to AI. A 2017 study among retailers revealed that 71% of those retailers surveyed found that sharing logistical data like shipment, order, and delivery data, among all departments, was an important step for their business.

    While AI steps into the service industry, its presence in the world of e-commerce is more symbiotic and stabilizing. With AI, retailers and manufacturers can have opportunities to aggregate data from all parts of operations, even past data, to help build better and longer lasting solutions. In more board terms, AI is able to predict market demand and shift to help recommend solutions for adjusting inventory and avoiding excess, passing efficiency on to the customer.

    When the success of a business hangs in the balance of consumer satisfaction, and consumer satisfaction lies within shipping and delivery quality, smart business leaders make proactive move to streamline operations. Learn more about how AI is making sustainability possible.

  • Yext Delivers a New Paradigm in Search, Says CEO

    Yext Delivers a New Paradigm in Search, Says CEO

    “Search has changed,” says Howard Lerman, CEO of Yext. “It used to all be about websites where you’d type in a keyword and you get ten blue links back on a page. Today, when you search you just get an answer. The companies that put answers out there from them are the ones that are going to win in this massive paradigm shift.”

    Howard Lerman, CEO of Yext, discusses how Yext helps businesses adapt to the new paradigm in search by inserting brand verified answers into all the major search platforms in an interview with Jim Cramer on CNBC:

    Yext Delivers a New Paradigm in Search

    Taco Bell with they’re 7,000 stores is a partner of Yext. But we don’t just partner with food companies. We added 350 new enterprise logos last year with 128 and Q4 alone. That’s nearly one logo per day. We live in an era of too much information and much of it is wrong. In this era of too much information, Yext delivers a new paradigm in search that enables consumers to get brand verified answers on all the major search platforms like Siri and Google and Alexa even the Chinese search engine Baidu.

    So the overseas tourists from China that come and go to luxury brands or need to eat can find information or they can find facts in Mandarin. They don’t use Google when they come to the United States.

    The Ultimate Authority on a Business is the Business Itself

    Morgan Stanley has over 14,000 Wealth Advisors. They all use the Yext platform to manage all the facts about every one of their advisers. They can log in, update their photo, they can say whether their a CFP and what languages they speak. They put it into Yext and boom it’s updated everywhere. We stand for the truth. The ultimate authority on Old Navy, the ultimate authority on Taco Bell, the ultimate authority on Morgan Stanley or New York Presbyterian Health is the business itself.

    So when you look up a doctor and you’re looking up a doctor that treats certain conditions and accepts certain insurances you need to make sure that you get the right answer. The ultimate authority on the doctor is from the hospital and the doctor itself. That’s what Yext stands for. We put customers, the brand itself, with brand verified answers in all these different services. Every customer journey starts with a question and when you use Yext your customers can get a brand verified answer.

    Companies That Put Answers Out There Are Going to Win

    Yext Brain is an extension of Yext that lets customers create any type of entity they want with custom objects in their platform. They can publish events. They can publish menus. They can publish products. If you’re in the financial services industry you can publish a credit card. These are all new types of entities that companies can put into Yext to deliver answers to their customer at that exact moment of intent. Search has changed. It used to all be about websites where you’d type in a keyword and you get ten blue links back on a page. Today, when you search you just get an answer. The companies that put answers out there from them are the ones that are going to win in this massive paradigm shift.

    Does Wendy’s have gluten-free menu items? Do they have vegetarian items? How many calories are in a Whopper? How many calories are in a Big Mac? What about the new Burger King Impossible Burger. These are the types of questions people ask. The number one question someone asks when they visit New York Presbyterian health, that’s one of our customers, is they want to find a doctor that can treat their condition, that accepts their insurance, and is near them. If New York Presbyterian Health can’t answer that question the consumer is going to go ask the question to a different provider.

    Yext Delivers a New Paradigm in Search, Says CEO


  • Technology and Innovation Powering Levi Strauss Growth Strategy, Says CEO

    Technology and Innovation Powering Levi Strauss Growth Strategy, Says CEO

    Levi Strauss began trading on the New York Stock Exchange this morning under the ticker symbol ‘LEVI.’ By mid-afternoon, the stock was at $22.66, substantially higher than the price offered to institutional investors. It’s clear that investors believe that Levi’s can leverage technology and innovation to successfully compete online and in brick and mortar stores.

    Levi Strauss Soars in NYSE Debut

    Charles Bergh, CEO of Levi Strauss, discusses how technology and innovation are driving increased sales and market share in an interview with CNBC coinciding with their IPO:

    We Are Denim and We’re the Market Leader Globally

    We are denim and we’re the market leader globally. A lot of people as we were doing the (IPO) roadshow said aren’t you guys just riding the denim wave? We’re creating the denim wave. We’ve been driving the category with innovation across our men’s business and our women’s business. We’ve expanded to other categories. Last year we finished with 14 percent growth coming off of 8 percent growth the prior year. The business is really humming right now.

    I believe this is sustainable for the long term. Maybe not double digits forever. But we’ve got clear runway for growth across the categories that we’re competing in. We’re building share in our core categories and expanding to new categories. Last fiscal year, when we finished the year our growth was really broad-based. If you looked at it in the categories where we competed we grew every single category. If you looked at it by geography we grew every single geography. If you look at it by channel we grew across wholesale, including US wholesale, which is a little bit of a melting iceberg right now. We grew in our own brick-and-mortar and ecommerce. It was very broad-based growth last year and we’re confident we can continue that.

    We Have Built a Very Big Platform for Big Data

    First of all, to be successful it does come down to strong brands. Consumers at the end of the day love an emotional attachment with their brand. We’ve recreated that that love for Levi’s. We have built a very big platform for big data. In fact just a couple of weeks ago we announced that we’ve hired a head of advanced analytics and machine learning who will sit on the executive team and report directly to me. We are mining the data that we do collect and really turning it into revenue.

    Our strategies are working and one of the key strategic choices that we made seven years ago, shortly after I joined, was to become a leading world-class omnichannel retailer and it is working. The mix has shifted to omnichannel. When I joined the company it was about 20 percent of our business. Today, it’s almost a third. It is faster growing than our wholesale business and we’re continuing to invest in it. Most of our capital investment is going into retail and ecommerce and knitting that seamless consumer experience together.

    Implemented New Instance of SAP and Investing in RFID

    It (IPO funds) is going to go into continued investment in building out our omnichannel. So both brick-and-mortar retail as well as our ecommerce business and then knitting it together with technology. For example, we’re implementing a new instance of SAP and investing in RFID (radio frequency identification). We’ve implemented RFID across our business in the US and UK and that’s actually really turning into money. Every one of the products in our store is tagged with RFID.

    I’ve actually had this experience happen to me myself in our new Times Square store. There was an item I wanted to buy and they didn’t have it in my size. A stylist came over and scanned the tag and she could see that my size was available in the back room. Just two minutes later I was in the dressing room trying it on. A year ago before our RFID that would have been a lost sale. That just wouldn’t have happened. It gives us instant clear visibility to the inventory in our store, both in front of house as well as back of house.

    Levi’s Driving Market Share Through Product Innovation

    Back in 2013 and 2014, the headlines were the death of denim. It was all about athletic tights and Lululemon tights. It became a throwdown moment for us as a company. We have an innovation center a couple of blocks from our office. We brought our suppliers, the mills that make denim for us, into that innovation center. We understood what women were really telling us by wearing tights. That used to be a denim occasion. They wanted soft stretchy comfortable material that made them look great and gave them confidence. That was what was driving that conversion. So we innovated around soft stretchy comfortable denim which we can now do. We developed proprietary four-way stretch so that women don’t get baggy knees, which is their biggest dissatisfier.

    We relaunched our business in the middle of 2015 and we’ve grown 14 quarters in a row and in the last eight quarters at double-digit rates. It has been a huge part of our growth. We were under $800 million just on women’s bottoms about three years ago. We’re over a billion dollars today. We are number one globally with a nine percent market share, but we’re not number one in a number of markets including right here in the US. So I really do believe we can continue to grow at an accelerated rate on our women’s business. There are lots of what I like to call share donors out there for us to build share while we’re building the category.

    We haven’t seen any (backlash to being an American brand). This brand stands for everything good about America. Freedom, democracy, and allowing people to express themselves. Authentic self-expression is what the Levi’s brand is all about. We’ve not seen any backlash. None. We think there are lots of opportunities still for us. I am not worried at all about denim. We are denim and we’ll continue to drive this category through great innovation and marketing that connects with consumers and sends them into our stores.

    Technology and Innovation Powering Levi Strauss Growth Strategy


  • We’re Trying to Build the Amazon Prime of Rental, Says Rent the Runway CEO

    We’re Trying to Build the Amazon Prime of Rental, Says Rent the Runway CEO

    “You will see the continuous expansion over the next year into many different categories,” says Rent the Runway CEO Jennifer Hyman. The company just raised additional funds at a $1 billion valuation. “Anything that you do not use every single day, we want to make it fiscally irresponsible for someone to not have a subscription to Rent the Runway. We’re trying to build the Amazon Prime of rental.”

    Jennifer Hyman, CEO of Rent the Runway, discusses in an interview on CNBC how her company benefits from the growing sharing economy and how ultimately she envisions Rent the Runway becoming the Amazon Prime of rental:

    We Benefit From the Advancement in the Sharing Economy

    It’s been 10 years since we’ve been working hard to pioneer this new form of dynamic ownership. Ten years ago we were not a darling of the industry and really had to partner with designers to show them that this was an entirely new customer base for them and a new revenue stream. This is just how young people are thinking about ownership across the board. I actually think we benefit from the advancements in the sharing economy. If you think about how this concept of dynamic ownership where we have unlimited choice and the ability to use whatever product we want whenever we want it, our digital worlds have already moved there.

    That’s how we consume entertainment. That’s how we consume music. The idea that you would have that closet in the cloud for the physical world and that form of dynamic ownership, the Millennial Generation Z consumer is so ready to adopt this behavior. That’s what we’ve seen since we launched our subscription, just this dramatic growth and acceleration, not only in how many users we have but in how frequently they use the product. They’re using it 120 days of the year with the unlimited subscription, which is now 70 percent of our revenue.

    Dynamic Ownership Applies to the Closet, the Home, and Beyond

    Think about how frequently millennials are moving and how your home has become this new bastion of self-expression. Your home used to be a private space and now because of social media, it’s as public as you taking photos of yourself every single day. So the ability to continuously dynamically change your home and have new items arriving we really think that this idea of dynamic ownership applies to the closet, the home, and beyond.

    Think about all the things that you don’t have to use every single day and bringing that into the physical world and think about the sustainability of this as well. The millennial and younger customer really cares about the fact that there’s a huge amount of waste. Over 80 percent of the closet is not used regularly. So to create a new contract with the customer where she could have the variety that she wants but she doesn’t have to accumulate all of this stuff that she doesn’t use. You couple that with the fact that this younger generation is living in cities where you don’t even have the space to house all of the extra stuff that you might have put in your garage.

    We’re Trying to Build the Amazon Prime of Rental

    It (revenue) really depends on the item. That metric changes every year based on our cost to serve, which goes down every year. It also matters what cost we procure the inventory at. We started a model last year which is a platform where brands are giving this inventory on consignment and we actually are revenue sharing with them on that inventory. It’s our own version of fulfilled by Amazon and it’s now a new revenue monetization stream for the 600 brands that we work with.

    You will see the continuous expansion over the next year into many different categories. Anything that you do not use every single day, we want to make it fiscally irresponsible for someone to not have a subscription to Rent the Runway. We’re trying to build the Amazon Prime of rental. Rent the Runway is primarily a logistics company. What we really do is we restore physical goods to perfect condition before we send them out to the next customer. We now know all of these different data points about any given fabric, how to restore it to perfect condition and how to maximize the turns while it still looks brand-new.


  • Google Unveils Stadia Game Streaming Platform and is Dead Serious About Eliminating Barriers and Making High-End Gaming Accessible for Everyone

    Google Unveils Stadia Game Streaming Platform and is Dead Serious About Eliminating Barriers and Making High-End Gaming Accessible for Everyone

    Google CEO Sundar Pichai unveiled their Stadia game streaming platform at the 2019 Game Developers Conference in San Fransisco today. Stadia is designed to bring high-end gaming to Chrome and other devices and aims to eliminate the many barriers to gaming. It will likely be a subscription service similar to Netflix but focused on games that can be played without a console right in Chrome or other devices.

    Sundar Pichai, CEO of Google, introduces Stadia, Google’s new streaming gaming platform at the 2019 Game Developers Conference in San Francisco:

    Biggest Impact of Gaming is How it Pushes Technology Forward

    Perhaps the biggest impact of gaming is how it pushes us to make big leaps in computing and networking power, high fidelity graphics, and the infrastructure that supports it all. All of it is pushing computing and technology forward and I find it really exciting. At Google, we have always believed that technology should adapt to people. Not the other way around. We’ve been building towards this vision for some time. For example, when we launched Chrome a decade ago we envisioned that it could be a modern platform for web applications. We wanted to bring the power of the web to everyone including use cases that seemed impossible at that time like high-quality games.

    Finally, we are making progress towards that goal. In fact, over the last two years, we’ve been hard at work on game streaming technology. Last Fall, we launched our first public test with Project Stream. But a technical test wasn’t the whole view of our ambition. It was probably the worst kept secret in the industry. Internally, we were actually testing our ability to stream high fidelity graphics over a low agency network. We learned that we could bring a triple-A game to any device with a Chrome browser and an internet connection, using the best of Google to create a powerful game platform.

    Google Committed to Paying Billions to Game Developers

    When we say best of Google, it always starts with our cloud and networking infrastructure. Our custom server hardware and data centers can bring more computing power to more people on planet Earth than anyone else. Today, we are in 19 regions, and in over 200 countries and territories connected by hundreds of thousands of miles of fiber optic cables. The best of Google also includes our open platforms that allow us to reach billions of people. With Google, your games will be immediately discoverable by over two billion people on a Chrome browser, Chrome Books, Chrome Cast, Pixel Devices, and we have plans to support more browsers and devices over time. That’s in addition to all of the people playing and watching games across YouTube and Google Play.

    When we build these ecosystems, we always take the approach that we only succeed when our partners do. Collectively, our partners across web, Google Play, and YouTube have earned more than $110 billion over the last four years alone. We are committed to this approach here as well. So now, we have focused on our next big effort, which is to build a game platform for everyone. And, when we say for everyone, we really mean it. It is one of our most cherished values as a company. Be it Android or Chrome or AI, we are dead serious about making technology accessible for everyone.

    Google is Dead Serious About Eliminating Barriers

    But, if you think about games, there are a lot of barriers for users to play high-end games. Beautiful graphics really need high-end consoles or PCs. And games don’t have instant access. Think about the way the web works. You can easily share a link and it works seamlessly. We want games to feel that way too. Instantly enjoyable with access for everyone.

    I think we can change the game by bringing together the power and creativity of the entire community, people who love to play games, people who love to watch games, and people who love to build games. That means all of you. We are really excited to work with you. We want to build a platform and we want you to show us what’s possible. And together, I think we can create a new games experience powered by best of Google and built for everyone.


  • 5 Takeaways From SXSW 2019

    5 Takeaways From SXSW 2019

    SXSW Interactive has evolved over the past decade that I have been going. For starters, I’ve watched ridesharing services come, go, and come back again, but it doesn’t seem to help the traffic situation either way. This year there were scooters on top of everything, which come with their own set of issues. It was bigger and more crowded than ever this year, but SXSW is still the best place to learn about the cutting edge of business and technology as well as the latest trends.

    Of particular note this year was the first ever tracks for blockchain and cryptocurrency as well as one for the business of cannabis. Both sectors are red hot right now, and while cryptocurrency isn’t always at the forefront of the news cycle these days, blockchain is more popular than ever.

    The great thing about SXSW is that you get to peer into the future of technologies and businesses that most people don’t yet know exist, or in some cases that we often just take for granted. Here are the 5 biggest takeaways from SXSW 2019:

    1 – LinkedIn went way bigger than last year.

    From a tradeshow booth at the SXSW trade show to an entire creator lounge at Brazos Hall, LinkedIn was all in for SXSW 2019. There were multiple stations for a series of creator speeches that included Brian Solis and his new book, Lifescale, Goldie Chan on brand reputation, and Rosanna Durruthy, LinkedIn’s Head of Diversity. Numerous LinkedIn creators were filming live content, which is only available to a very small test group at this time. There was even a fireside chat with Mindy Kaling about how to live your best work life, which included tips like owning who you are and focusing on focusing.

    Photo: Brian Wallace

    2 – Scooters were the new Uber.

    This was my 10th SXSW over the last 11 years, and I’ve watched the city grow and get significantly more and more crowded during that time. Popular ridesharing services entered the city, got kicked out and made way for new local ridesharing services, and then the original ridesharing services finally returned. What I wasn’t expecting this year was to see an onslaught of scooters and the dangers that they entailed. According to CNBC, the number of scooters in Austin during SXSW from five different companies was around 9000, solidifying the trend of ‘micro mobility’. It was concerning to see so many scooters and so few people wearing helmets or obeying traffic laws, but as with any new technology there’s always going to be a learning curve.

    3 – Crypto/Blockchain and the Cannabiz were the new kids on the block.

    This marked the first year that SXSW had official tracks for cryptocurrency / blockchain and cannabusiness. Unfortunately, they were mainly happening after the SXSW Interactive days, so many of the business and marketing folk didn’t get the opportunity to learn more about these growing industries. This year at SXSW was the second annual Just HODL It event, which featured speakers from multiple blockchain and cryptocurrency startups. Among them was my friend Adryenn Ashley from Loly.io, who is using blockchain to develop a revolutionary dating app. The main crypto and blockchain track focused on the future of these technologies, how policy will affect their use and implementation, and what the future might hold.

    4 – The Mercedes TechSet Lounge is SXSW’s best kept secret.

    The TechSet lounge, hosted by Mercedes this year, has been the best place to grab some downtime for the last 12 years at SXSW. The lounge’s co-hosts were Brian Solis and Stephanie Agresta. It’s one of the best kept secrets for a solid place to work, meet, network, get great coffee, recharge, and watch a full plate of speakers. Mercedes did a fabulous job with the lounge this year!


    Photo @aaronrogosin of @outer_elements 

    5 – Mental health tech like calm.com is the next big tech frontier.

    By some estimates, one in four people worldwide will be affected by a mental health problem at some point in their lives. The tech folks, entrepreneurs, political enthusiasts, and the rest of the people who end up at a place like SXSW are often driven to their breaking point at times. It was great to see a number of SXSW panels dedicated to mental health themes this year, most notably Calm.com. Calm.com, which produced an app to help folks with mindfulness, meditation, sleeping, and more, is the first mental health unicorn company. Their booth at the trade show was all about relaxation — and it even featured a sloth!


    Photo: Michael Acton Smith @acton

    If you missed out on SXSW this year, it’s time to start planning for next year. After all, where else are you going to see a sloth?

    Top Photo via: Jordan French

  • Direct to Consumer is a Fundamental Platform Shift, Says Tim Armstrong

    Direct to Consumer is a Fundamental Platform Shift, Says Tim Armstrong

    Direct to Consumer, or DTC, is a fundamental platform shift, according to former AOL and Verizon digital properties CEO Tim Armstrong. “There have been a couple times in my career where there has been what is basically a fundamental platform shift,” noted Armstrong. “I felt like direct-to-consumer was something that was going to be a platform shift. Not for probably the obvious reasons, but some of the reasons that were less obvious, but things that I thought were important for the future.”

    Tim Armstrong, former AOL and Verizon Oath CEO and current founder and CEO of The DTX Company, discusses how direct to consumer (DTC) ecommerce businesses represent a “fundamental platform shift,” in an interview with Recode’s Kara Swisher and Jason Del Rey at An Evening with Code Commerce in Las Vegas:

    Direct to Consumer is a Fundamental Platform Shift

    About a year and a half ago I started spending a lot more time just on where the underlying infrastructure in the world was changing around the internet and mobile and all the things that we’ve talked about for years. One of the things that stood out to me was there’s been a couple times in my career where there has been what is basically a fundamental platform shift. I felt like direct-to-consumer was something that was going to be a platform shift. Not for probably the obvious reasons, but some of the reasons that were less obvious, but things that I thought were important for the future.

    One was data management, just in terms of things like GDPR and similar things that were happening. I think the power and data is going to shift back more towards the consumer side over the next 10 or 20 years. I thought that would fuel direct to consumer. The second is that the product development cycles that were happening at the direct the consumer companies were much faster and much deeper than what was happening in the normal channels of product development. I think that’s another thing that over a 5, 10, 15, 20 year period these companies are going to have a real advantage in terms of how they develop products and distribute them.

    Customer Communication: Two Way or No Way

    The third thing was just the two-way communication. At DTX we have a growing team, but one of the things we say is two way or no way. Two-way communication with the customer having a direct relationship with companies. The last thing is how the relationships between consumers and companies are going to change. This seems like a really important trend and probably there’s a really big opportunity here. There may not be but that that’s what got me interested in it.

    What we’re doing right now is really kind of two simple things. One is we’re putting investments directly into DTC companies and we’ve done a number of those and we’ll do a few more. The second thing we’re doing is spending a lot of time on an acronym that I hear all the time now which is CAC, customer acquisition cost. Really, on the operating side of the business what we’re doing is not CAC, it’s CRAC, which is an unfortunate acronym, but it’s customer revenue and acquisition cost. Having the balance on the equation of those two things we’re going to be testing things in 2019, some experiences and and other things that will hopefully put the R back in the CAC equation.

    DTC Might Re-Engineer the Entire Way Commerce is Done

    All of my experiences and basically all the stuff I did on the media side was all two-way relationships. The more time I started to think about really what happened was the reason I thought about DTC’s. I started to go back to those memories based on meeting a lot of the DTC founders and of coaching CEOs for DTC founders. I started to think about things like GDPR and some of the things that are happening underneath the surface that I think is going to change long term. I thought wow, this might actually re-engineer the entire way commerce is done and this is a really interesting opportunity.

    There are a bunch of spaces online now you can look at where people are piling money and where there’s probably over investment. But DTC overall, if you went product by product, category by category, industry by industry, in DTC, there are so many companies that you’ve never heard of and rightly so. The Casper’s, the Warby Parker’s, those are amazing companies and they get a ton of notoriety. There are also about 10,000 other categories. They don’t have ten people, they might have one or two, but they’re doing interesting things in them.

    People ask us all the time, is there a DTC ceiling, these companies can only get so big? That may be true but I don’t think it’s true. What will happen is the aggregate of all these things together. If you have ten thousand DTC brands and they’re $10 million or $50 million or $500 million they may not have to look like Google and Facebook right now, but when you add up all of them together over time and what’s likely to happen with a condensing of the market in the next 10 or 20 years (it is significant).

    DTC Could Be an Amazing Transformation

    There are two things that stand out to me. One is every major press article around traditional commerce tends to be negative. Not all the time, but there’s so much angst around what’s happening in retail overall. A lot of it is deserved, but there are a lot of interesting things happening in traditional retail. The second one is the DTC categories that are super hot, the four or five super hot categories, get 90 percent of the coverage and press. What we’re seeing and we have people coming in offices all day doing DTC and there’s just an amazing amount of ingenuity, invention, and innovation happening in different categories.

    I think again it’s one of these things you’re going to wake up 5, 7, 10, or 15 years from now and say, wow, this was like a really amazing transformation. It’s going to be for the reasons that these companies all talk to their consumers all the time. The amount of product innovation that’s happening is truly tremendous. If you take the Beauty category or any category and you dig into all of the DTC brands and micro categories within, if you went to a Procter & Gamble or Unilever and look at all of their products, each one of their products has multiple DTC companies trying to innovate that space.

    I think you’ll end up seeing the recreation of really large consolidated companies. It may not happen for years, but I think it will happen. The reason is not because they were cheaper than what happens in the Unilever Procter & Gamble it’s because the product innovation is hard. Having spent so much time now with DTC companies, the amount of product innovation that happens at that those companies with direct consumer interactions seems to me to be deeper and faster than it is at most other traditional companies.


  • Rakuten Super Logistics To Open 6 New Ecommerce Fulfillment Centers

    Rakuten Super Logistics To Open 6 New Ecommerce Fulfillment Centers

    The recent USPS shipping structure changes will increase retailers shipping costs, says Rakuten CEO Mike Manzione. What Rakuten does is help retailers offset these increases by utilizing a network of order fulfillment centers, thereby controlling shipping costs while decreasing shipping times. “With the change to zone-based pricing for First Class Packages, all clients must reconsider how to locate their product closer to their customers,” says Manzione.

    Mike Manzione, CEO of Rakuten Super Logistics, discusses RSL’s plan to open six additional ecommerce fulfillment centers in 2019:

    Retailers Must Locate Products Closer to Customers

    Our continued expansion into major metropolitan markets is a commitment to our clients. We’re creating a network that provides our clients a greater choice and flexibility that aligns their customer base with their product. With the change to zone-based pricing for First Class Packages, all clients must reconsider how to locate their product closer to their customers.

    By 2021, worldwide retail e-commerce sales are projected to be 4.9 trillion dollars (USD). At the same time, customers are demanding shorter shipping timelines. RSL is uniquely positioned as an industry leader with our nationwide network of fulfillment centers. With our increased major metropolitan presence, RSL will reduce ground transit delivery to within one day.

    RSL To Open 6 New Ecommerce Fulfillment Centers

    Houston and Los Angeles will be our first 2019 expansion markets. The new Houston facility will be strategic for our clients importing product and materials from all over the world – including Brazil and Germany. Los Angeles will be strategically located near the Port of Los Angeles, a major container port. The Los Angeles location will be instrumental for our clients that import product from Asia.

    As a leader in the order fulfillment industry, RSL will also be employing state-of-the-art technology in all six new facilities. In 2018, RSL began deploying ‘order fulfillment robots’, developed by inVia Robotics, in its facilities nationwide and will be expanding with inVia’s automation technology in the new warehouses.

    About Rakuten Super Logistics

    RSL  Fulfillment Centers have been carefully managed from the ground up, to create unique, high-velocity operations:

    • Maintain complete control of your fulfillment with a cloud-based fulfillment management system.
    • Save on shipping costs and expedite shipment times with the 2-Day Delivery Network.
    • Improve customer satisfaction and earn repeat business from shoppers.
    • Focus on your business by partnering with the industry leader in eCommerce order fulfillment.
  • We Are Not Going Back to Old Retail

    We Are Not Going Back to Old Retail

    With the future of retail we have crossed over the demarcation line, says Walter Robb, the former co-CEO of Whole Foods. “We’re not going back to the old retail,” said Robb. “It’s just not going to happen. That’s the combination of digital and physical. We’re in what I would call new retail, which is the integration.”

    Walter Robb, former co-CEO of Whole Foods, discusses the retail revolution currently underway in an interview on CNBC:

    Traditional Retail Models Are Under Pressure

    From where I sit the customer is doing pretty well. They’re spending. They’re pretty strong. There was a lot of pessimism at the back half of last year that was reflected in some of the stock prices, but I think that was overblown. We’re going to see a customer that’s doing pretty well this year in 2019 and might surprise a little bit to the upside. That being said, traditional retail models are under pressure. The customer is spending their dollars in so many different ways and places than they could before. You used to just open up four walls and open a store and now the customer has so many more options.

    We do know that in the United States we’re about 24 square feet of retail space per capita and that’s two and a half times more than any other industrialized country. We have too much space so there’s going to be a winnowing out that’s going to happen here. There’s going to be winners and losers and we’re already seeing that. In 2019, I think that continues, but I do think that we’re in the second half of that. What we’re actually seeing that the mall is beginning to switch over and putting in exciting new uses and we’re seeing retail stores start to open again.

    We Are Not Going Back to Old Retail

    With the future of retail, we have crossed over the demarcation line. We’re not going back to the old retail. It’s just not going to happen. That’s the combination of digital and physical. You’re seeing the digital retailers, the Allbirds, the Warby Parker’s, come out and say, alright we’re going to open physical stores because we realize our customers want to experience our brand and be with us in that way. They’re bringing new ideas to that presentation of retail, which is pretty exciting.

    At the same time, you’re seeing physical retailers adapt to digital ways. Take a look at Target and how they’ve employed all the new tools that they have for the customers, in-store apps and those sorts of things. You’re seeing a combination of these two. In some cases it’s adolescent and in some case it’s more mature, but we are not going back to just the simple form retailer. We’re in what I would call new retail, which is the integration.

    The edge of which is actually in China with a supermarket called Hema from Alibaba, which is which is simply fantastic. It’s integrated on the back end and on the front end. I think you’re seeing retailers say, we’ve adapted to the age of Amazon and we understand this is how customers want to shop. We’re seeing a whole new generation of businesses and entrepreneurs say, I’m going to bring the customer this fusion of digital and physical in a way that’s really exciting and really compelling. We’re not going back. I opened my first store in 1978 but that’s just not as easy to do anymore because you have to have that the tools to really understand your customer personally. I think it’s pretty exciting to see what’s happening.

    Physical and Digital Retailers Need Each Other

    The business model on the last mile is very challenging unless you’re connected into a physical store. If you just out there floating without a connection to physical retail those have not proven to be sustainable. I think it’s clear to me that the customer wants that choice. I think the data is very clear that they want both. They’re not going to give up physical stores and that’s why you’re seeing these digital and physical retailers. They need each other and they need both parts of that to make the thing actually compelling for the customer.

    I think there’ll be a shakeout. You seem some consolidation already, but the most interesting combinations are where the physical retailer buys the digital, where Target buys Shipt and where Walmart buys Flipkart or whatever you see around the world, realizing the combination is the most powerful. That will be the most sustainable from a business model perspective.

    We Are Not Going Back to Old Retail, Says Walter Robb, former co-CEO of Whole Foods

    Also Read:

    Nothing Short of a Revolution Happening in the Food Marketplace

  • We Are Definitely Under a Digital Transformation at Chipotle, Says CEO

    We Are Definitely Under a Digital Transformation at Chipotle, Says CEO

    We are definitely under a digital transformation at Chipotle, says Chipotle CEO Brian Niccol. Chipotle is in the midst of a digital and innovation revolution that is starting to see results. “Our digital business is up dramatically and the good news it’s also incremental so the total business is up,” said Niccol. “You have to have innovation happening all the time.”

    Brian Niccol, CEO of Chipotle, discusses their digital transformation and new innovation culture in an interview on CNN Business:

    We Are Definitely Under a Digital Transformation

    Our digital business is up dramatically and the good news it’s also incremental so the total business is up. We are definitely under a digital transformation at Chipotle. We are creating access through all these mobile applications and then obviously the website. But the big transformation is actually digitizing the restaurant. We have a second line where we now have put up all the digital capability there.

    When you order in the app it doesn’t interact with the front line where consumers coming into the restaurant are. It has just increased the speed, increased the accuracy, and it’s also increased the opportunity for additional forms of access. Whether it’s delivery or our new Chipotlane we are testing where people can literally just drive up, grab their food and go. We are just going to give people more ways to interact with Chipotle with a lot less friction.

    Innovative Chipotlane Speeds Digital Pickup

    Chipotlane is just taking your off-premise order and giving you access where you don’t have to get out of your car. This is literally where you order ahead in the app, you select your pickup time, and when you get to our restaurant you will see your name on a board and you can come around and pick it up.

    We’ve got it in ten restaurants right now and it’s going really well. Every restaurant already has the second make line, so we are just putting in the digital capability. The other key piece of the puzzle is that when you walk into the restaurant there’s a place for you to pick up your digital orders. Whether it’s the deliver driver coming in to grab the food and go or whether it’s a customer coming in.

    You Have to Have Innovation Happening All the Time

    Consumer expectations are changing faster than ever. When you look at one of our key groups that loves Chipotle is this 18-25 year old crowd. Their attention spans are built from social media. That’s why I think it’s important to show up in the places where they are consuming media. We’ve really revolutionized the way Chipotle has communicated through our social, mobile, and digital channels. You have to have innovation happening all the time.

    It could be little things that show up in social or it could be big things like we are working on doing a new quesadilla or the new advertising that’s coming out or new restaurant designs. You see innovation at big levels but we are trying to create a culture at Chipotle where we want creativity and innovation to be happening all the time. Then we need to be accountable for what this innovation teaches us, the good and the bad.


  • Yum CEO: Driverless Cars, Robots Making Pizzas, This is All In Our Future

    Yum CEO: Driverless Cars, Robots Making Pizzas, This is All In Our Future

    Yum Brands which owns Taco Bell, KFC, Pizza Hut and other restaurant brands are at the forefront of technological innovation. Yum also isn’t afraid to experiment with seemingly outlandish ideas either such as their announcement of the Toyota Tundra Pie Pro which makes pizza on the go.

    Yum Brands CEO Greg Creed recently discussed Yum’s use of technology:

    We Love Our Relationship with Grubhub

    “We love our relationship with Grubhub, it’s a great partnership,” says Yum Brands CEO Greg Creed. “By the end of the year in the U.S., we’ll have about 2,000 KFC’s and probably close to 4,000 Taco Bell’s delivering. In the stores that are already delivering we’re getting check increases and incremental sales that are coming from it, so we’re very excited about this partnership. We think it obviously bodes well for the future sales growth for both KFC and for Taco Bell in the U.S.”

    Driverless Cars and Robots Making Pizzas is Our Future

    Pizza Hut has partnered with Toyota to develop a zero-emission Tundra PIE Pro, a mobile pizza factory with the ability to deliver oven-hot pizza wherever it goes. The full-size pizza-making truck was introduced at Toyota’s 2018 Specialty Equipment Market Association (SEMA) Show presentation.

    “I love our partnership with Toyota,” added Creed. “This is really about technology, this is about robotics, this is about what the future is envisioning. Driverless cars, robots making pizzas, this is all in our future. Is it in our future next week? No, but is it in our foreseeable future, absolutely. Everything that we can do to make the brands more relevant, make them easier to access and more distinctive, that’s what will lead to continued success, not just for Pizza Hut but also at KFC and at Taco Bell.”

    Pizza Hut Partners with Toyota on the Tundra PIE Pro

    Pizza Hut has partnered with Toyota to develop the one-of-a-kind, zero-emission Tundra PIE Pro, a mobile pizza factory with the ability to deliver oven-hot pizza wherever it goes. The full-size pizza-making truck was introduced at Toyota’s 2018 Specialty Equipment Market Association (SEMA) Show presentation.

    “Nothing tastes better than a fresh Pizza Hut pizza straight out of the oven,” said Marianne Radley, Chief Brand Officer, Pizza Hut. “The Tundra PIE Pro brings to life our passion for innovation not just on our menu but in digital and delivery in order to provide the best possible customer experience.”

  • Nothing Short of a Revolution Happening in the Food Marketplace

    Nothing Short of a Revolution Happening in the Food Marketplace

    There is nothing short of a revolution happening in the food marketplace today and it is not a quiet one, says Walter Robb, the former co-CEO of Whole Foods. “It is disrupting things left and right, all the way up the value chain back into the farmer’s field,” says Robb.

    Walter Robb, former co-CEO of Whole Foods, discusses the revolution happening in the food marketplace in an interview on CNBC:

    Nothing Short of a Revolution Happening in the Food Marketplace

    There is nothing short of a revolution happening in the food marketplace today and it is not a quiet one. It is disrupting things left and right, all the way up the value chain back into the farmer’s field. For me, to see these (organic) brands and to see it show up at the Super Bowl, the biggest media stage of the world, is kind of an exciting thing.

    Some 75 percent of the food we eat is from 12 plants. Somebody’s woken up to that realizing, wow, there’s a whole lot of stuff that we can create from stuff we don’t even know yet. The Natural Food Expo, which is the next month in LA, 85,000 people are going to that show. This is where the energy and the edge of the food industry is at right now.

    We’ve broken into this area now where there’s an amazing amount of innovation with young companies and entrepreneurs. This is where the growing edge of the food industry is now. It’s not just natural and organic but it’s this innovation around new foods and new food types.

    Amazing Amount of Innovation With Entrepreneurs

    You have to build the tools to really understand your customer personally. I think it’s pretty exciting to see what’s happening. On the physical side, Walmart is doing a lot of things, Kroger is doing a lot of things, and Whole Foods is doing a lot of things to try to integrate digital and physical retail in a way that gives the customer a very rich experience.

    I do think in terms of the food service delivery, Grubhub has had phenomenal growth. What’s happened is the world has woken up to how exciting food is again. We kind of went along after World War two for a number of years with this kind of dull drum of production, just regular stuff with the major CPG brands.

    If you get a $5 latte and it’s probably a $5 delivery charge at what point does the customers say that’s a great value problem? I don’t know, but I think we’re going to find out. I do think this idea that the customer wants the convenience is here to stay and that they’re used to having that option. In some cases, they will choose it. Where that line is it’s too early to say exactly where they’ll say, that’s too expensive or that’s not a good deal.


  • Digitizing Unilever is One of My Top Priorities, Says CEO

    Digitizing Unilever is One of My Top Priorities, Says CEO

    “Digitizing Unilever is one of my top priorities,” says Unilever’s new CEO Alan Jope. “How we digitize marketing. How we digitize working with our customers. Digitizing our supply chain. Digitizing our people processes. You are going to see a strong digital emphasis in my agenda for Unilever.”

    Alan Jope, CEO of Unilever, discussed Unilever’s growth in Asian markets and his priority to digitize the company in an interview on Bloomberg Markets and Finance this morning:

    Digitizing Unilever is One of My Top Priorities

    In China, all of our ecommerce partners are very important to us. That’s where a lot of the growth is. That’s because that’s where consumers are choosing to shop. That integration between ecommerce, search, social, and other digital platforms is also happening in the west. Digitizing Unilever is one of my top priorities. How we digitize marketing. How we digitize working with our customers. Digitizing our supply chain. Digitizing our people processes.

    You are going to see a strong digital emphasis in my agenda for Unilever. We are hiring people with good digital skills like crazy at the moment. We are bringing in digital natives and at the same time reskilling the Unilever team.

    China Has Become a Stable Part of Our Business

    China is a special place for me, I lived there for five years quite recently. I’m delighted to share that China has become a stable part of our business actually. We are seeing good growth year in and year out. Consumers are engaging with the type of brands we are selling and increasingly we are developing products in China for the Chinese market. In amongst all that volatility, it seems like the consumer products segment is one of the stable parts of the Chinese economy.

    We have a tremendous global footprint. We are very globally diversified. We are used to dealing with geopolitical shocks and movements. At the moment that is certainly not a significant impact on our business. We are seeing overall Asia doing very well. In particular Central Asia. The markets in India, Pakistan, and Bangladesh are really doing extremely well. As I mentioned China has been a stable source of growth. Also, that important part of the world where people are really moving into the consumer products markets Southeast Asia. We are starting to see a recovery led by our big business in Indonesia.

    https://youtu.be/dw8K4PF70_s