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Category: EcommerceTrends

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  • How to Turn Seasonal Shoppers Into Year-Round Customers

    How to Turn Seasonal Shoppers Into Year-Round Customers

    The outlook is pretty rosy for retailers this year. The high consumer confidence and low unemployment rates mean that people have more money to burn. Deloitte’s yearly forecast for the holiday shopping season also showed that retail sales are expected to grow from 5 percent to 5.6 percent from last year. Sales could even hit $1.10 trillion.

    While the numbers look good, companies should consider that many of those shoppers are seasonal ones—people who won’t make another purchase from them for months (or ever). That is a massive missed opportunity as it costs more to catch the eye of a new customer than retaining the interest of an existing one. So make sure you take advantage of this upcoming holiday season to try and turn a seasonal shopper into a loyal customer.

    After all, a strong and loyal customer base means continued profit for your business. You have to think in terms of your client’s lifetime value (LTV). This is how much the customer will invest or spend in your store for his or her entire life. You should know how to calculate a customer’s LTV to ensure that you’re spending money on the right demographic and marketing strategy.

    There are also other ways to turn seasonal shoppers into year-round ones. Here’s how:

    Email is Still King

    Email marketing remains a very powerful marketing tool. It’s easy to use, convenient, and affordable. It also has a better response rate than direct mail and banner ads. And if used correctly, you can start developing loyalty in a seasonal shopper.

    • Send Your Thanks with an Incentive: A thank you email is one of the best ways to improve your conversion rates. Improve your open rate odds by including an incentive that will make a seasonal shopper want to visit your site again. Add a discount coupon or a freebie.
    • Add Value by Cross-selling: Use your knowledge of the shopper’s purchase history to upsell or cross-sell products. Suggest items that complement their previous purchase to start establishing a relationship with them.
    • Request Feedback: Ask your customer for their opinions on your product and service. This tells them that you value their thoughts. Plus, you can also use these feedback as social proof for future customers.

    Inspire Loyalty with Great Service

    Make customer service a priority in your business and you have a higher chance of getting that seasonal shopper to come back. Show them that you care by personalizing their shopping experience. Recommend products based on what they have viewed or placed in their carts. A 24/7 live chat is also a worthwhile option since it provides them with the customer support they need without the hassle of calling or waiting for a reply.

    Great service also means taking positive action and making amends when mistakes happen. The best brand takes care of every customer all the time, and when things go wrong, they want to see that you’re taking steps to address it. The way Starbucks handled the controversy when two of their guests were arrested is a good example. The company quickly posted a statement apologizing for what happened and stated what they’re doing to correct their policies.

    Offer Exclusive Deals or Loyalty Programs

    A loyalty program can also turn seasonal shoppers into year-round customers. It helps to engage customers and keep their attention through freebies and discounts. Design a program that will keep your customer active and in the loop. For instance, award points for every purchase made. Once they reach a certain number of points, they can redeem them for a reward or a discount. To make your brand stand out more, offer a 15 percent discount instead of the standard 10 percent.

    Reach Out to Your Customers Again

    Don’t relax just because you already made a sale. Retargeting seasonal shoppers will get them back in your shop. Remember that people are busier than usual at this time of year so you might need to remind them of the wonderful experience they’ve had with you. Send them a reminder to restock on the supplies they bought after a few months. Or email an exclusive offer to try out a new product they might like based on their past purchase.

    You can transform seasonal shoppers into regular ones. Convince them to return to your store. Send them incentives via email and enroll them in a loyalty program. Reach out to them and show that you value them. In turn, they will value and be loyal to your brand. And if you do your job well, they could even become your best brand evangelists.

    [Featured image via Pexels]

  • Former Walmart CEO says Amazon is “Predatory” Almost by Definition

    Former Walmart CEO says Amazon is “Predatory” Almost by Definition

    Former Walmart CEO Bill Simon says that Amazon has been “predatory” by selling goods below cost subsidized by profits from their cloud and advertising businesses. Simon says that this strategy put major competitors like Circuit City and Toys R Us out of business allowing Walmart to then raise the price of Prime without losing their customers.

    Bill Simon, a former Walmart CEO, discussed Amazon, Walmart, and Alibaba in an interview on Fox Business which can be watched below:

    Amazon Behavior Has Been Predatory by Definition

    I’ve not been an advocate of breaking Amazon up. I’ve been an advocate of really looking at them hard and maybe having them report more details in segment reporting. They just sort of smush everything up into one number and report and I don’t think that gives clarity to the investor. If you really think about it their behavior has been predatory almost by definition. In 2014 they took the price of Prime up right after Circuit City and some others went out of business. They took another price increase to $129 for Prime and Toys R Us is gone.

    The consumer loves them, it’s awesome, I use them all the time, it’s really great to have the stuff delivered. But you see them putting people out of business and raising their price, and then again putting people out of business and raising their price, and that’s just not right.

    Didn’t Walmart Put Competitors Out of Business? Walmart did it for years and years by being a good retailer, not by selling below cost and subsidizing it from income from the cloud and from advertising. Walmart just bought well, moved it well, shipped it well, sold it well, and did it better than anybody else. That’s a different play. It’s sort of like if Exxon decided to get into the restaurant business and used oil revenue to drive restaurant companies out of business.

    How Does Alibaba Compare to Amazon? I love Alibaba. I’ve been in their stock for a while and it is just a terrific business. They’ve got a little bit of a different business model than Amazon. They built it differently because they have much more population density across their key markets than Amazon does other than the main metro’s in the US. I think they have a better opportunity to move the product and eventually, one day make money. I don’t think Amazon has that.

    Walmart Successfully Went After Digital Business

    Walmart stated a couple of years ago that they were really going to go after the digital business and they’ve done that. They have done it really well. They bought Jet, they just invested in Flipkart, they bought Bonobos, and they’ve bought a lot of other things. It sort of puts some juice back in the business.

    On the other hand, three years ago they delivered $29 billion in operating income, last year they delivered $20 billion, and they have already sort of warned that they are going to be below that this year. It’s come at a really steep price but they are doing exactly what they said they are going to do and if you are an investor who likes that strategy you’re buying.

    People Don’t Want Their Groceries Delivered

    Grocery is hard, it’s really hard. It took Walmart 20-25 years to get average at it, nevermind good. When Amazon bought Whole Foods, they not only bought a grocer, they bought a premium fresh grocer. That’s really hard to deliver and to deliver consistently and I think they are finding that out. Part of the problem is that people generally don’t want to have their groceries delivered.

    Most cities, other than New York and San Francisco and older cities, were built in and around the time and grew with the interstate highway system. So people in Dallas commute to and from work and they pass 20 grocery stores. They don’t need it delivered to them. They don’t want it sitting on their doorstep but it would be really nice if they could pick it up on their way home and not have to shop for it. That’s the theory behind Click and Collect and I think that’s a winner.

  • Scott Kennedy of CSIS: China Amex Approval is #fakeopening

    Scott Kennedy of CSIS: China Amex Approval is #fakeopening

    Scott Kennedy, who is the Deputy Director, Freeman Chair in China Studies at Center for Strategic and International Studies (CSIS), said on Twitter that Amex finally winning Chinese market approval is not a breakthrough for China market access. He labeled it as a #fakeopening. “NOT a breakthrough for China market access,” noted Kennedy. “Amex still at least year-plus away from operations. And why should it be required to operate in a joint venture? #fakeopening.”

    He was also asked, How many American jobs will it create? Zero? Kenney replied, “Far more than 0, but difficult to calculate for financial services firms. AMEX activity in CH which requires job support in US + Repatriated profits that AMEX invests directly, puts in banks which lend to others + Chinese users that increase consumption US products.”

    Kennedy then added, “Other cross-border commercial activity that emerges out their business. + Same when Visa, Mastercard follow. + Marginal improvement in efficiency of China’s own firms, permits smarter investments, greater consumption. Lesson: Liberalization benefits diffuse, but exist.

    American Express getting market approval in China is being widely reported in the media as a promising development in light of the current trade war. Philippe Roy, Director Global Client Group Europe for Amex, reflecting on the news said, “American Express just became the first US credit card company to get the green light to start building its own payments network in China.”

    Earlier this year Scott Kennedy spoke about US-China relations:

  • Venture Capitalist Kyle Lui: Next Generation of E-Scooters are Coming

    Venture Capitalist Kyle Lui: Next Generation of E-Scooters are Coming

    Venture capitalist Kyle Lui says that there are a lot of exciting innovations coming to the world of e-scooters. Lui says that there will be larger batteries that will be swappable and where there will be ride-sharing style incentives for people to charge and relocate the scooters.

    Companies like Lime and SPIN, which was recently acquired by Ford Motor Company, are actively working on innovations that will improve the customer experience and e-scooter ecosystem.

    Kyle Lui, early-stage VC at DCM Ventures, recently discussed the evolution of e-scooters in an interview with Investor’s Business Daily:

    Exciting E-Scooter Innovations

    I think there are a lot of exciting things happening, both innovations that the scooter companies are creating themselves and then working with third-party manufacturers. On the battery side, it’s a combination of larger batteries, we know that in the most popular markets they don’t last through the day, so we’ll see batteries that have longer charges. I think you’ll start to see things like swappable batteries. You’ll start to see things where the charging of the battery is embedded into the scooters themselves that allow anyone to be able to charge them and not have special parts.

    I also think you’re going to see a lot of innovations beyond the battery to really improve the user experience. As people are riding this on a daily basis, there’s been a lot of feedback that’s been given on how to improve the consumer experience, how to make it safer, how to start to add autonomous features, how to have places for a helmet, and places to put a phone dock as you’re navigating. I think all of those will be coming in the next generation.

    Taking a Playbook Out of Traditional Ride-Share

    I think at the end of the day the business model is actually quite simple because the companies are very focused on driving revenue, driving number of rides, revenue per ride, and then the other side, the operational cost. So instead of having a large on the ground operations team, to be able to leverage third party, potentially even the riders themselves, to be able to charge them, make sure that they’re in the right place, and really take a playbook out of the traditional ride-sharing guys to make this an opportunity for people to make additional money.

  • UNCS CEO: It’s an Amazing Time To Be a Consumer… Every Day is Black Friday

    UNCS CEO: It’s an Amazing Time To Be a Consumer… Every Day is Black Friday

    The CEO of United National Consumer Suppliers, Brett Rose, says that it’s an amazing time to be a consumer because every day is Black Friday. Rose predicts that this is going to possibly be the biggest Q4 in our history.

    Brett Rose, CEO of United National Consumer Suppliers, discussed Amazon and ecommerce in an interview on Fox Business:

    Amazon Has Huge Competitive Advantage

    All things considered, consumers want free shipping, not quick shipping. However, if all levels are equal with Amazon, Target, and Walmart, the one competitive advantage that Amazon has, that Target and Walmart can’t, is that Amazon has millions of these third-party resellers constantly filling their coffers with products. Target and Walmart are limited to what they have in stock that’s ready to go.

    There is no denying that Walmart has made some massive strides. But to come after Amazon is hefty. Like I said Amazon has a constant supply of products where their not just limited to what they’re curating on their own. They’re limitless in regards to what everybody is sending to them to go right to the consumer.

    Every Day is Black Friday

    Interesting times with tariffs. If you read everything that came out Chinese imports are up 15 percent over the same time last year. They’ve all front-loaded in preparations for the President’s tariffs which are now in full effect. All of these retailers pushed up orders in what might have otherwise taken months. It’s yet to be determined, but consumers still need goods. There’s always going to be a need, the price is just going to fluctuate.

    If numbers are indicative, everything these retailers are curating and everything the street is saying, it’s going to be one of if not the biggest Q4 in our history. Even if you look at Black Friday announcements, Black Friday is out already. Amazon has released their Black Friday items. BlackFriday.com, Macy’s, went live the other day with their sales. Retailers are vamping up to stay competitive. You go online now and you can figure out what retailers are selling for Black Friday.

    It’s an amazing time to be a consumer. Every day is Black Friday. Right now it really is. They’ve already released what the doorbusters are going to be.

    Still a Major Value in Having a Physical Presence

    There’s always going to be the consumer that likes to go to the store, likes to feel it, touch it, get the treasure hunt, but now with real-time shipping, free shipping, real-time inventory, it’s a great time to be a consumer. It’s certainly competitive. While Amazon is making strides they are still going after brick & mortar. Buying Whole Foods and some of the other retailers they are looking at, says there is still a major value in having that physical presence.

  • Billionaire Ron Baron: By 2030 Tesla Could be a Trillion Dollar Company

    Billionaire Ron Baron: By 2030 Tesla Could be a Trillion Dollar Company

    Billionaire investor Ron Baron says that by 2030 Tesla could be a trillion dollar company. He says it’s clear that Tesla will be at $60 billion in sales within the next 3-4 years. Baron added, “It’s remarkable what Elon Musk has done.”

    Ron Baron, Founder of Baron Capital, discussed his bullish opinion of Tesla on CNBC:

    By 2030 Tesla Could be a Trillion Dollar Company

    It was a good quarter for Tesla. They had $6.8 billion in sales versus $4 billion, so it’s up 70 percent. They made a billion for cash flow in the quarter before they spent on investing. That means they’re at an annualized rate of $5.5 billion of cash flow before they spend them investing. The company is valued for $60 billion, so it’s 11 or 12 times earnings, that’s not bad.

    In addition to that, they are growing at 50 percent a year. I think that this year they did sales at $20 billion. We started in 2014 when they were doing $3.7 billion and this year it’s $20 billion, next year is $30 billion. I think that in 12 to 13 years, by 2030, this could be a trillion dollar company. I think it’s clear they’re going to be $60 billion in three or four years. This could be a really big company.

    Cash Flow Doesn’t Appear to be a Problem

    As the cash flow goes, when I look at the numbers it doesn’t appear to be the problem. Elon Musk says it’s not a problem, I take him at his word. He could have sold equity a year and a half ago at $370 to $380 a share, people were scrambling to buy, he chose not to. You have these businesses that they invest and when they’re investing they penalize profitability.

    When you build a faith factory and you spend $300 million on the factory and it’s built for 250,000 cars a year and you’re doing 20,000 cars a year or 30,000, you’re not going to be profitable with that. But all of a sudden, you get it to 250,000 cars a year, you’re making $150 million on a $300 million investment, then you can double it. You’re at the point now where incremental investments are going to be incredibly profitable. They are now doing 5,000 cars a week, they’re going to be able to do Model 3 for virtually no additional investment. They’re going to get to 7,000 cars a week.

    It’s Remarkable What Elon Musk Has Done

    They told Wall Street this quarter that just ended that they were hoping to produce a gross profit margin of 15 percent on the Model 3 and it came out over 20 percent. Internally, they were hoping for 20 percent and he kept calling meetings, you got to cut costs here, you’ve got to watch that. When you’re building something from the ground up it’s not easy, it’s not easy doing what he’s done, remarkable what he’s done.

    When he started making the Model S and Model X, those cars initially, when they were selling for over $100,000 a car, they had gross profits of 20 percent. Now they’re in the 90s for the car and the gross profits are 31 percent. Gross profits keep going up even though the price has gone down. The same thing is going to happen with this car. I think the gross profits on the Model 3 are going to be as good as they are on the Model S and X and I think the Model Y is going to be the best one they’ve ever had.

  • Blippar CEO: AR Will Be as Ubiquitous as the Internet

    Blippar CEO: AR Will Be as Ubiquitous as the Internet

    The co-founder & CEO of augmented reality platform company Blippar, Ambarish Mitra, told an audience at the Web Summit in Lisbon, Portugal that within 5-7 years AR will be as ubiquitous as the Internet itself.

    Blippar Co-Founder & CEO, Ambarish Mitra spoke about the future of AR at the Web Summit:

    What is Augmented Reality?

    When you see the world with your eyes and through the eyes of a camera and something is recognized for the camera and you see some content that appears in the field of view, that is augmented reality. It is the enhancement of reality. Do not confuse it with virtual reality. Virtual reality has almost nothing to do with your immediate reality, it’s almost like escaping from reality.

    It’s important to note why this industry is really relevant. Computers themselves are continuously evolving. You can see in the very early days it was all about the touchpad and the keyboard and it wasn’t a very natural behavior. Then the whole AI wave came along. What’s the role of AI? Besides artificial intelligence, I always call it IA, which is intelligent assistance. It’s here to serve us. We are not here to serve the AI.

    Then touch, which is a very human function, touch computing came into play. In 2010 we saw the first birth of natural language processing. We humans talk and we want the computers to talk back at us. Then the final frontier which is vision. Vision is very important because vision is a large part of what makes us human. A lot of our cognition growing up comes from this sense which we call eyesight. Computers will one day, and beginning to already, will see and understand the world. Computer vision is very relevant.

    AI and AR are Deeply Linked

    We are already starting to see how computers are beginning to understand. It’s a very important branch of artificial intelligence and in a way augmented reality and AI has been positioned as very separate industries, but they’re very deeply linked. Augmented reality cannot scale until computers understand reality. It’s not just about gimmicky dinosaurs walking down a path. At one point we will see almost the entire Internet transform into an AR medium where everything in the field of view could come to life. It’s very relevant. You may not realize that even though the history of the Internet has been very words driven where you type some words and you get a response, but there are so many so many things in your everyday life which you cannot describe with words.

    The next generation of computing is massively going to be vision based. AR promises to be a very lucrative industry because it is connected to the world we see and also a lot more possibilities with devices. Almost everybody has some form of an AR device because you have a camera on your phone. VR is an incredible and equally promising industry but still is a slightly niche utility because of how it moves you away from scaling or moving around the wider world.

    This is the famous Gartner hype cycle which it has been applied to augmented reality as well. We started Blippar literally when it was in the very very earth early stages innovation trigger. We’ve actually been through the whole peak of inflicted expectations. We’ve raised a bunch of money and now it’s reaching a point where AR is under the scrutiny of whether it is going to deliver on its true potential.

    AR Will Be as Ubiquitous as the Internet

    The timing is great, five of the world’s biggest companies, not just in tech but the most valuable companies have invested in augmented reality. We are predicting that from five to seven years down the line it is really ready to be comparable and as ubiquitous as the Internet is today.

    Facebook has launched an ad-based platform on AR. Snapchat has the famous face filters and of course, now Google with ARCore and Apple with ARKit are supporting the medium and making their phones compatible with it. So we believe AR is already having a positive impact.

    About Blippar

    Blippar is a seven-year-old British company operating out of Silicon Valley, New York, and London. Our mission was to create this ubiquitous AR platform which works on any camera device and brings the world to life. It’s been incredible the last two years with several large players coming into AR. It’s really validated the space.

  • Former ESPN President Says Streaming is the Future of Sports Viewing

    Former ESPN President Says Streaming is the Future of Sports Viewing

    Streaming is going to be the primary way people consume sports content according to former ESPN President John Skipper. Skipper is now Executive Chairman of the Perform Group, which considers itself the digital leader in global sports media and is, in fact, one of the fastest growing sports media companies in the world.

    John Skipper, currently Executive Chairman of Perform Group and previously President of ESPN talks about how streaming will be the future of sports viewing in an interview with CNBC at the Web Summit in Lisbon, Portugal:

    Streaming is the Future of Sports Viewing

    There’s very little doubt that the way fans are going to get their sports in the future, in the near future in some places, and in the medium future, other places are through a streaming service. It’s a superior technology. It does not have to be linear. You can do multiple games. You can have a one-on-one relationship with your customer. As the infrastructure gets built out it’s a superior video experience. It’s the future of sports viewing.

    It takes a lot of infrastructure and that infrastructure is not there right now. The ability to stream concurrently to large numbers of people can only be done by a few services including services that we own. We have the ability to stream up to 10 million live concurrent viewers, which as far as I know there are only two or three companies in the world that can do that.

    Live Sports is the Most Valuable Content in Media

    Our biggest competitors are anybody who’s bidding for sports rights. Ultimately, we have a very simple business, unlike the business of entertainment where you have to invent new dramas and comedies or talk shows, reality shows, or game shows. We simply have to get the rights to the sporting events that people care about.

    What I brought is not the new world of data. What I brought is the understanding that live sports is the most valuable content in the media universe because people care passionately about it and because they are unique events that cannot be replicated. If you have the game they want to watch you’re in business. I am learning at the Zone about the technology of how to deliver that and then the advantage of having a one-to-one relationship and data on your customers.

    About John Skipper:

    John Skipper was named Executive Chairman of the Perform Group on May 8, 2018. Skipper previously served as President of ESPN Inc., where he worked for 20 years across all areas of the business.

  • How eCommerce Businesses Can Prevent Fraud in 2018 Holiday Season

    How eCommerce Businesses Can Prevent Fraud in 2018 Holiday Season

    Given the dynamic nature of the internet, it’s not surprising to also see frequent changes in consumer buying behavior, which online retailers try to predict and cater to on various digital platforms. Convenience and revenue growth of eCommerce businesses, however, come with a price in the form of fraud.

    Sales transactions from online merchants are on an uptrend, but attacks on eCommerce businesses have alarmingly increased as well. Based on the first-quarter report by ThreatMetrix, 210 million cyber attacks were prevented in real time from January to March 2018 – up by 62 percent from prior year. Some of these attacks have cost the eCommerce industry a whopping $58 billion in losses in 2017, according to the Global Fraud Report done by PYMNTS and Signifyd.

    Image result for threatmetrix fraud report

    Image source: ThreatMatrix (2017 Cybercrime Report)

    With the upcoming holiday season, incidents of digital fraud are expected to further rise in the eCommerce industry. Avoid the pitfalls of fraud by proactively taking steps to detect its forms and prevent them from hurting your bottom line, which can be significant for some eCommerce businesses. Fraudulent purchases can translate to chargebacks from affected online retailers, resulting in financial losses.

    Pay particular attention to these three kinds of eCommerce fraud:

    Types of eCommerce Fraud

    1. Identity Theft

    Among the most common type of fraud, identity theft has been a long-running scheme of cybercriminals. Identities, along with credit card information and addresses, are stolen using the latest techniques on data hacking, malware, and theft of mobile devices, which are then used to purchase from online merchants. Aside from stolen identities of actual individuals, fraudsters can also fabricate fictitious or manipulated personalities and use these instead during transactions.

    2. Friendly Fraud

    Sometimes called “chargeback fraud,” friendly fraud happens when customers call their credit card issuer and dispute the charge. While some fraud incidents are due to misunderstanding, others are done with malicious intent. Dishonest consumers will claim that they never received the item, heavily damaged, or not as described, requesting refunds from the online retailer after getting the package.

    3. Phishing

    This type of fraud is rampant and requires technical capability, as fraudsters pretend to be a company or eCommerce platform to trick customers into typing in personal information on a rigged form. Phishing emails often contain a warning to customers that their accounts have been compromised and need to input details like user ID, password, and personal information as proof of their identity. Armed with an individual’s stolen details, fraudsters can use these to make online purchases or transfer money to another account.

    How Online Merchants Can Protect Against Fraud

    To minimize the increasing risk for eCommerce fraud, there are a few things that you, as a business owner, can do. A proactive approach, rather than a reactive one, is more effective in preventing fraud from happening and taking a cut of your profits, especially during the holiday rush.

    1. Have a good fraud protection system in place.

    Before the buying frenzy of the holidays begins, ensure that your business has fraud prevention and chargeback protection systems set up. There are numerous tools available on the market, so choose one that fits your business needs. It’s a cost-effective solution that’s well worth the investment in the long run.

    2. Use a prevention system that combines human and artificial intelligence.

    While machine learning can effectively analyze patterns of fraud based on millions of transactional data, it still takes human intelligence to know something is off with a transaction.

    3. Take advantage of the verification process as well.

    To mitigate eCommerce fraud, make use of a good address verification system. This will confirm whether the bill-to and ship-to addresses are similar, along with email address and location as part of a customer’s identity verification when the transaction happened. An extra layer of protection helps by employing the card verification value to ensure that the customer holds or has access to the actual credit card.

    Image result for ecommerce fraud 2018

    Image source: Amasty

    4. Use email authentication.

    Even though email fraud is a far-too-common occurrence, you still need a good authentication system for your business. Authentication systems with Domain-Based Message Authentication, Reporting, and Conformance will give you a heads up if an email contains dubious links or potential threats. Aside from protecting your eCommerce business against fraud, email authentication assures your customers that what you send is trustworthy.

    5. Determine transaction origins.

    Each electronic device has a particular fraud profile and depending on what was used for the transaction, you can gauge and screen for potential eCommerce fraud. Device assessment assists online merchants in identifying transactions made by bots, flagging anomalous purchases through account takeovers, and highlighting malicious intents. 

     

    When consumer spending picks up during the holiday season, it is expected that eCommerce fraud will gain momentum as well. Ensure that your business is not losing money from fraudulent transactions by beefing up your prevention and authentication systems and keeping them updated with the latest patches. 

    [Featured image via Pexels]

  • FedEx CEO Says Amazon’s Own Delivery System Will Take Business From USPS, Not FedEx

    FedEx CEO Says Amazon’s Own Delivery System Will Take Business From USPS, Not FedEx

    Fred Smith, founder, and CEO of FedEx told Bloomberg this morning that they don’t see any negative impact from Amazon doing more of their deliveries themselves. Smith says that the biggest entity that will lose business as Amazon implements its own delivery force is the US Postal Service:

    “I don’t think it (Amazon’s split HQ announcement) has too much to do with FedEx,” said Smith. “You’ve got to remember that Amazon is delivering things from their fulfillment center to customers. We’re picking up, transporting, and delivering things from every person and business in the world to every other business. The biggest single provider of delivery services to the Amazon fulfillment network is not us, it’s the US Postal Service. They’re the ones that Amazon’s proprietary or indigenous delivery system will take the most volume from.”

    “Amazon’s a good customer” Smith added. “We think they will be a bigger customer in the years to come if they continue to grow and they certainly should, but they are going to do some of their deliveries themselves for many reasons. The biggest single entity that will lose traffic as Amazon puts out its contractor delivery force is the US Postal Service.”

    Amazon is actively marketing their Amazon Delivery Service Partner program, seeking independent contractors to deliver packages from their fulfillment centers to customers. They are literally encouraging people to start their own business:

    We are looking for hands-on leaders who are passionate about hiring and coaching great teams. With low startup costs, built-in demand, and access to Amazon’s technology and logistics experience, this is an opportunity to build and grow a successful package delivery business. Join a community of Amazon Delivery Service Partners in one of the fastest-growing industries in the world.

    Amazon is also hiring drivers directly as part of its new last-mile shipping program according to Business Insider:

    For the first time, the company is planning to hire and manage thousands of full-time drivers to transport packages to customers from Amazon delivery outposts across the US, the company confirmed to Business Insider on Monday.

    Amazon will manage these drivers directly, meaning the company will set their wages, provide them delivery vehicles, and schedule their routes. The drivers are seasonal but will have the option to apply to continue their employment with Amazon following the holiday season.

    “Seasonal employees have long been utilized to supplement capacity during peak shopping periods,” an Amazon spokeswoman said. “This holiday, thousands of full-time, seasonal Delivery Associates will deliver to customers during the busy retail shopping season.”

  • Western Union CEO on Amazon Partnership: Buy Globally and Pay Locally

    Western Union CEO on Amazon Partnership: Buy Globally and Pay Locally

    Western Union has partnered with Amazon to white label their cross-border money transfer platform. “Amazon engaged us to use our platform to service their customers in a better way in order to give access to the millions of customers who don’t have an access today to buy online and pay,” said Hikmet Ersek, the CEO of Western Union. “In the future, they will have the capability to buy globally and pay locally.”

    Hikmet Ersek, President, CEO, Western Union, recently discussed the new partnership with Amazon, competition with Zelle and Vinmo, and the overall health of the business:

    Western Union Digital Business is Growing Very Well

    Our digital business is growing very well year over year. We are now in 50 countries with our digital business sending money to over 200 countries. We pretty much cover the world with digital. Our digital growth is very strong. Our retail money transfer business has been stable. In some countries, we have been a little bit slower like in the Middle East, but we had very strong growth in Europe and US outbound business. Our US domestic business has been a little bit slower than we thought. Generally, I would say that we had a very stable solid quarter and we are very excited about the future.

    You Can’t Send Money From Your Mobile

    US to Domestic there has been some competitive environment. Nothing changed like last quarter. We have certain customers that like to pick up cash immediately. Nobody can beat that. You can’t send (cash) money from your mobile. We pay out in cash immediately. There are also competitors like Zelle and Vinmo who have been capturing some market share there with their zero fee environment. That has definitely been US dominated but is only a small part of our business, seven percent of our revenues. We are more focused on the outbound business, global cross-border business. That has been growing very well.

    Western Union is White Labeling Platform to Amazon

    Amazon has engaged us, over the years we have been building a cross-border platform, which is unique. We are moving transactions in 132 currencies globally and we do about 32 transactions every second. We have a network of 550,000 locations. We are reaching out to about 4 billion accounts globally. This is a unique platform where today we serve our customers with this platform.

    Companies like Amazon engaged us to use our platform to service their customers in a better way in order to give access to the millions of customers who don’t have an access today to buy online and pay. In the future, they will have the capability to buy globally and pay locally.

    The Amazon partnership is for us very exciting because now suddenly we are opening our platform to new customer segments, white labeling to other organizations like Amazon. Today, we are serving our existing customers with our branded transactions. In the future, we will be able to serve huge organizations like Amazon, or Amazon will engage us with other organizations, to engage our platform and to use our platform to serve their customers.

    Paying Amazon Has Been a Real Obstacle for Some

    “There are people in the world who want greater access to Amazon’s huge product selection but paying for those purchases has been a real obstacle for many customers,” said Hikmet Ersek, president and CEO of Western Union. “We’re leveraging our money movement platform to make it easier to shop global and pay local. By facilitating the complex foreign exchange and settlement process, we’re opening up more consumer choices and access to online shopping for tens of millions of potential new Amazon customers.”

    Forrester Research estimates that cross-border shopping will make up 20% of e-commerce by 2022, with sales reaching $630 billion. Choice, quality and cost are the main motivations for consumers to shop online from overseas, but there are challenges and concerns about the lack of payment options for consumers who prefer to pay in person or consumers who are not comfortable using online payment methods.

  • Analyst: Can You Have a Healthy Apple if iPhone Sales Decline Going Forward?

    Analyst: Can You Have a Healthy Apple if iPhone Sales Decline Going Forward?

    Analyst Toni Sacconaghi at Bernstein says, “The issue is all about if units are weak on iPhone what is that saying about the sustainability and health of that business and the sustainability and health of the growth of the installed base?

    Toni Sacconaghi, Senior Technology Research Analyst at Bernstein, recently discussed investors reaction to Apple’s latest earnings report on CNBC:

    iPhone Sales Decline Concerns Investors

    The real issue is that if you work from Apple’s guidance they’re saying effectively, or we impute, that iPhone units are going to decline five to ten percent in the December quarter. That is really the key controversy going forward. Can you have a healthy Apple if iPhone units are gonna decline going forward?

    You may say, well they’re getting price increases and revenues are still going to increase this year. However, if units do go down this cycle, and it looks quite likely that they will, the market is effectively saying… we’re not sure that we can take price increases from you anymore Apple. If iPhone prices don’t go up and smartphone units are down this year and will likely continue to be down then all of a sudden you’re talking about 60 plus percent of the revenues of the company that are going down. If units aren’t fuelling the installed base, installed base drives services growth, then all of a sudden you have a different story.

    Are Weaker iPhone Sales a Result of Price Increases?

    That’s really the controversy. It’s not so much that they withdrew units. People really view the withdrawal of unit information as a validation that units are going to be weak this year. The issue is all about if units are weak on iPhone what is that saying about the sustainability and health of that business and the sustainability and health of the growth of the installed base?

    I think there will be an investor debate and that’s what you’re seeing in the market’s reaction today about whether lower unit growth this year is portending something more structural going forward. It’s not black and white. The market was expecting units to be flat and ASPs to be strong. ASPs are going to be strong but units are going to be down, so the markets recalibrating that. Really the core strategic question is what is weaker unit growth saying about how consumers are responding to Apple’s prices and what does that mean about future unit growth and its implications for services growth?

  • Peter Lorimer: “Stay Here” Netflix Show is Helping People Get More ROI From Airbnb

    Peter Lorimer: “Stay Here” Netflix Show is Helping People Get More ROI From Airbnb

    Peter Lorimer, co-host with Genevieve Gorder of the Netflix show “Stay Here” which helps people successfully rent their homes on Airbnb. “To succeed in the world of short-term rental you have to offer more than just a comfortable place to sleep,” said Lorimar in a promo for the show.

    “Stay Here” co-host Peter Lorimer recently discussed the show in an interview on Fox Business (full interview below):

    Helping People Get More ROI From Airbnb

    We call it the ‘junk drawer’ kind of philosophy. I think it is changing, the business is evolving now, but it used to be Granny’s old apartment or the garden shed, you just throw a little bed in it and it was full of rotten old furniture and horrid flowery sheets. Too much stuff… and too much old stuff. But now people are looking at it as a business and our show is one of the first out there helping people get more ROI.

    People Making Massive Income on Airbnb with Minor Modifications

    There are a fraction of people right now that are making a massive income with just minor modifications. The worst thing people can do is leave their Airbnb rental in kind of a soulless vacuum to fend for themselves. If I’m flying into Frankfort, Germany and I want to stay in an Airbnb I want to experience Frankfort through the eyes of a local. I don’t want to roll up with my three screaming kids wondering what the wifi is, no snacks, and the place being a little bit dirty.

    Dirty is the Worst

    Dirty is the worst. What I try to do with my clients in Los Angeles, and I’ve been doing Airbnb before it was even cool, I say remove your head and pretend this is not your home. Pretend you are walking in for the first time and what you don’t like and then I have to point it out. Too much clutter is number one. Bad taste is number two. There is a little bit of bad taste in L.A. and all over the country. Then number three is to anticipate what the guests want before they want it.

    Why Are People Renting on Airbnb?

    Some people are getting extra houses and some people are flipping into extra properties. I have a client and a friend who is the marketing director of a big Fortune 500 company and he said, “Pete, I’m taking off to Bangkok, I’m going  to stay there for nine months, can you rent out my place, I’m just going to be on the beach banging away on my laptop and I want to make a profit to cover my travel, all of my expenses, and have my mortgage paid.” And he’s doing it.

    Millenials Embracing the Shared Economy

    I wanted to forge my own flavor of real estate which was very kind of rock and roll and that seemed to work really well with the newer generation, the Millenials and younger who embraced the shared economy.

  • Chipotle CEO Going Digital to Create a ‘Frictionless Experience’

    Chipotle CEO Going Digital to Create a ‘Frictionless Experience’

    Chipotle is moving in a digital direction, with their digital business up 48 percent over last year. The company has introduced a new app, digital lines, digital pickup shelves, and a mobile pickup window in an effort to create a “frictionless experience” for its customers, according to Chipotle CEO Brian Niccol.

    Brian Niccol, Chipotle Mexican Grill CEO, discussed their digital strategy this morning on CNBC:

    Chipotle App Creating a Frictionless Digital Experience

    What we’re trying to do is remove any friction and get people more access and we’re having a lot of success with that. Our digital business is now up to 11 percent, which is up 48 percent over last year. What’s really exciting is we’re seeing people continue to adopt the utilization of the app and then all the new access channels that we’re creating, whether it’s these digital pick-up-shelves or delivery, we’re just getting a tremendous response from our customers.

    Introducing Digital Lines and Shelves

    One of the things that are really powerful for our company is we’ve got what we call a Digital Make Line and it is completely separate from the Customer Facing Line. When you come into the restaurant and you go down that Customer Facing Line if you’ve placed a digital order it doesn’t get in the way of that experience. We’re also putting in place these Digital Pickup Shelves so that when you order ahead, you literally can walk in grab your food and go, a completely frictionless experience.

    Our digital line requires fewer people to run it versus the front line. The thing that’s great is what we’ve seen is this digital business is highly incremental, so the additional labor necessary to support the incremental sales it works really well for us.

    Testing a New Mobile Pickup Window

    We’ve got the new mobile pickup window in four restaurants right now. The way it works is you order ahead and you pick your time and then you know you literally come right by the restaurant, we’ve got a window, your food comes out the window and off you go. We’re seeing tremendous response to that and it’s in a market in Ohio and a market in Texas. We’re gonna start adding more restaurants in 2019, so you’re gonna see us building more restaurants that have the ability for that mobile pickup.

    Second Lines in All 2,500 Stores in 2019

    The thing that is happening right now on a broad scale basis are these second lines. We’ve digitized them, we’re in about 750 restaurants we’ll have all 2,500 restaurants done by the end of 2019. To accompany that we’re putting in these digital shelves so that literally you can skip the whole process.

  • Kynetic CEO Michael Rubin: We Owe All of Our Success to Amazon

    Kynetic CEO Michael Rubin: We Owe All of Our Success to Amazon

    Kynetic CEO Michael Rubin says that they owe all of their success to Amazon. “I owe all of our success to Amazon because we are such a big believer in what they were doing, a completely differentiative business model,” Rubin said. “What we’re doing is really all about vertical commerce.”

    Michael Rubin, CEO of Kynetic which also owns Fanatics, Rue Gilt Groupe, and ShopRunner and is one of the largest privately held companies in the United States, recently discussed how his companies have become so successful in an interview with Jim Cramer of Mad Money:

    What I See is How Much Opportunity There is In China

    What I see as an entrepreneur is how much opportunity there is in China. When I went there it’s one of those things you had to see to believe it. We had 45 million people watch our preseason basketball game. Think about that, 45 million people watching a preseason basketball game! That’s like half of a Super Bowl rating. That’s home rabid the basketball fans are in China.

    So for me, I think we have nothing but growth opportunity in China. We’re just launching Fanatics there. It’s a massive opportunity and we think we could build a multi-billion dollar business there. I couldn’t be more bullish on the opportunity.

    I Owe All of Our Success to Amazon

    Fanatics is a really exciting business. I’ll break this down really simply for you. I had a core belief that Amazon and Alibaba we’re going to control ecommerce everywhere in the world. So if you have that belief, you’ve got two options, completely differentiate yourself or go out of business. I’m not a guy who wants to go out of business so you’ve got to completely differentiate yourself.

    People say all the time, “How do you feel about Amazon?” I owe all of our success to Amazon because we are such a big believer in what they were doing, a completely differentiative business model. What we’re doing is really all about vertical commerce. We design, develop, and sell directly to the consumer most of the products that we have, so it’s a completely different business. Think about it like an H&M or a Zara, but in the sports license business and mostly online.

    Kynetic is All About Verticality

    We’re designing the jersey, well actually in the case of the jersey, Nike designs the jersey, but going forward we’re actually gonna manufacture the jersey and sell directly to the consumer. But I’ll tell you, just over the Super Bowl specifically, we sold two and a half million units of Eagles merchandise. Two and a half millions units of Eagles merchandise within a few weeks after the Super Bowl and we design those products, we manufacture those products, we ship them directly to the consumer.

    Because of the verticality, the consumer gets a wider assortment of merchandise, they get anything they want, they get it more quickly, and the leagues and teams make more money. We are also using that data to better communicate with the fans, so it’s a win-win for everyone.

    If you really think about the sports license business and if you think about the sports leagues, what a league wants and what a team wants is to have the best marketing brand in the world. Nike is this incredible brand, but they don’t wake up every day and go to bed every night thinking about how do I maximize every sale in the licensed sports business. So what the leagues did was smart, they said let’s split this from one set of rights to two sets of rights. Let’s work with Nike to be this incredible marketing partner and then really use it to drive the Nike brand and the NFL brand. At the same time let’s work with Fanatics to drive transactions. Now you’ve got two companies instead of one really growing the business as much as possible.

    We Made the Businesses What They Are Today

    For us, the truth be told and people ask this all the time, “Was eBay smart for selling the businesses? First, eBay was very focused, they didn’t want to be in the owned inventory business. Number two, these were teeny companies. When I bought Fanatics back from eBay it was a 250 million dollar company. It’s going to do $2.3 billion dollars this year. It has a completely different strategy. When we bought back Rue la la from eBay it was a $200 million business, then we bought Gilt and now it’s close to a billion-dollar business. ShopRunner didn’t have $100 million in transactions and next year it’s going to do three or four billion dollars in transactions.

    We took these businesses, we’ve developed the strategies, we’ve evolved them, and we’ve made them into what they are today. And Here’s the most exciting thing, we’re just getting going.

    My Loyalty is All About Who Makes Us the Most Money

    Other than the Sixers my loyalty is all about who makes us the most money, so I’m very easy to swap teams. If I own the Panthers I would be rooting to destroy the Eagles. I mean I love Jeffrey, he’s my buddy, but business is business and sports is sports. You’re there for one reason which is to win. I actually always laugh when people come up to me before a game and say, “Hey good luck.” I wish I could tell them good luck, but I’m like for the next three hours I hope you die. I love you before the game and I love you after the game, but there’s no love during the game.

  • Hilton CEO: We’re Not Gonna Have Robots Cleaning Rooms Anytime Soon

    Hilton CEO: We’re Not Gonna Have Robots Cleaning Rooms Anytime Soon

    Hilton is the most iconic hotel brand in the world, owning or managing over 5,400 hotels with over 880,000 rooms in 106 countries. Hilton is also the world leader in hotel innovation and technology launching the Connected Room and the Digital Key and even experimenting with the use of robots.

    Christopher Nassetta, President & CEO, Hilton & Chairman, recently discusses Hilton’s technological innovation and it’s innovating and pioneering spirit at the Africa Hotel Investment Forum:

    We Invented the Airport Hotel

    We invented the airport hotel. We all laugh but somebody did it first. Somebody figured out maybe you could put a hotel near an airport for those that get stranded, etc. So we were the first to do it at San Francisco Airport a long long time ago, way before my time.

    We’ve had both a pioneering spirit and an innovative spirit and that spirit is alive and well inside the company with our product, with our service, food and beverage, and with loyalty. We are trying to figure out how do you not have loyalty just be about points and creating real experiences are things that differentiate us where the customers just can’t get from anybody else or get on their own.

    We’re Not Gonna Have Robots Cleaning Rooms Anytime Soon

    And then technology. There is a huge element of technological innovation that’s really important. It’s not to get the people out of the hotels. A core element of what we are and what we stand for at Hilton and I think as an industry is about being a business of people serving people. That’s never gonna change.

    We’re not gonna have robots cleaning rooms or doing any of those tasks anytime soon. I’m not saying it won’t happen someday, but I doubt it in my lifetime. But there are a bunch of things and we’re doing them that is more mechanical and that the machines can do better than humans. Importantly, it can free up humans to think about how they can have a more direct relationship with a customer and how they can personalize the experience with the customer.

    Digital Check-In, Digital Room Selection, Digital Key

    I’ll give you some examples of things that we’re doing, a couple of big ones. Digital Check-in, Digital Room selection, and Digital Key. Not everybody wants to do that in every market in the world but a lot of people do and the bulk of our customers, when you get down to it, our road warriors. They come in like I did last night. You’re tired and it’s nice to get an email coming in from the airport, pick your room, here’s your key, and you don’t have to do anything.

    The bulk of travelers really want that. It means that in the end you probably need fewer people at the front desk if that really gets adopted at a mass scale, which I certainly hope it does, but that means you can have people instead of behind a desk, they can be out in the lobby, they can be out figuring out what they need to do to curate and personalize the experience.

    The Connected Room

    Another example is the connected room, which is not here on this continent yet (Africa) but will be coming soon, it’s not substituting for people but the reality is we all have content with us. We have our Netflix account or our Spotify or whatever kind of music. We all have these things now we can carry around in our device. We all have different needs in terms of temperatures and rooms and what we want from in audio-visual and what pillows we want, how we want to interact and order room service and all these things.

    What we’ve developed is proprietary technology that allows you to control your whole experience when you’re in your room so that it’s much more personalized. It’s not taking away, it’s not robots doing everything, it’s machines creating a more personalized experience that give you more the comforts of home.

    The one thing we all know as a road warrior myself, boy it’s nice when you go somewhere just to have some of the comforts of home. Imagine walking into a room and your accounts are all loaded up, all of your content, audio-visual, what temperature you want the room, level of lighting, all of those things are preloaded. Your pictures of your loved ones or your dog are rotating on the TV.

    We can do all that before you get there because once you’re in the building and you’ve checked in with Digital Key we know you’re in the building and we can activate all that stuff.

    Personalizing the Experience with Technology and Cloud Computing

    That’s not really taking the human element out of it. It’s just personalizing the experience in ways that we can do very inexpensively with modern technology and cloud computing and we can do very consistently.

    It’s things like that, not put the robots in charge but things that will take friction out of the experience and add a little bit more delight to the experience, create a little bit more of the comforts of home for those that are not at home and that have some level of stress or strain typically associated with their travel.

  • Why Would I Want My Underpants Connected to the Internet?

    Why Would I Want My Underpants Connected to the Internet?

    There was a session at the recent GeekWire Summit on how the IoT explosion will impact retail stores where underpants were discussed. It’s humous but very illustrative of how every item in every store, electronic or not, will be tracked in order to provide personalized shopping experiences and to bring massive efficiencies to the supply chain.

    Below is a conversation with Hointer CEO Nadia Shouraboura and Impinj CEO Chris Diorio on the importance of all items, even underpants, being eventually connected to the internet:

    Hointer CEO Nadia Shouraboura – What is the Internet of Things?

    The Internet of Things is just one part of the puzzle and many things need to come together to make this puzzle happen. For example, in the retail space, product is very important, price is very important, but experience is very important too, so IOT is just one part of that puzzle.

    Impinj CEO Chris Diorio – Connect Every Item in the World

    Impinj builds products around a certain type of RFID technology called Rain for radio identification. Our vision is to connect every item in your everyday world to the Internet, everything. Every apparel item, every food item, just literally have connectivity for every item in the world. Impinj has connected more than 25 billion items to date and more than seven billion last year alone.

    We connect those items wirelessly and what we’re focused on delivering is for each item is its unique identity, its location, and its authenticity, and in so doing extending the reach of the Internet to everybody and to everyday items. For us, the Internet of Things truly means things, not just connectivity for powered electronic devices, but for everything, and in so doing bring benefits to industries and consumers.

    Impinj CEO Chris Diorio –   Connecting Underpants?

    When you go into the store and you want to find the ones that you want to buy in the right size and the right type if you’re like me you know exactly what you want to buy and when you go in the store you want it to be there. If it’s not there because the supply chain inefficiencies you’re probably not going to buy anything.

    Hointer CEO Nadia Shouraboura – IoT and Underpants

    The importance of IoT to underpants is to measure results and what IoT delivers in terms of results. One thing which is important when you think about Underpants is sex. To me, sex is defined by two metrics which is quantity and quality. What I discovered personally is, for example, IoT lights, beautiful lights.

    The experience is you come in and you’re tired and you don’t want to think about sex and suddenly the whole room turns to your mood in soft blue and it genuinely works. If you measure IoT devices and lights and its correlation with quantity and quality of sex in underpants there is a very strong correlation. That’s an example of the impact of IoT to your underpants.

    Impinj CEO Chris Diorio – Even Your Underpants

    There’s a retailer that we work within France that if you are a consumer and you walk into the store, there’s a kiosk you basically where you decide what you want and when you click the item within 90 seconds the item comes down in a little tube like they used to have in the banks. A little tube comes down with your little capsule with exactly what you want to buy. Just check it out right there just walk out of the store, even if it’s your underpants.

  • NYU Stern Professor Scott Galloway: Amazon is a Monopoly that Should be Broken Up

    NYU Stern Professor Scott Galloway: Amazon is a Monopoly that Should be Broken Up

    NYU Stern Professor Scott Galloway says that Amazon is a monopoly that should be broken up. “When one company can take down the price of any other consumer company, almost by a third, just with press releases, I would argue that the markets are no longer competitive. The key to this great system we call capitalism is that no one player has too much power,” stated Stern.

    Scott Gallowy, NYU Stern Professor, recommended that Amazon should be broken up in an interview on Fox Business:

    Jeff Bezos Lost the Value of Nordstrom Yesterday

    I believe that Amazon from an investors perspective is probably a buy. Essentially, you had a company whose valuation may have gotten a little bit over its skis. Rising interest rates, the threat of a slowdown, and also the specter of regulation took this stock down. I think Jeff Bezos actually lost the value of Nordstrom just personally yesterday, his net worth declined $9 billion. I would argue from a strictly economic, business, and shareholder standpoint, Amazon has never been stronger. Whenever they bump up against any big tech companies they’re winning.

    Amazon is Effectively a Monopoly

    My issue is that when you have one company that controls 50 percent of all ecommerce, that small companies never get out of the crib and large companies are prematurely euthanized, who tend to be better taxpayers and employers. While it’s great for shareholders to have shares in a company that is effectively a monopoly, in a growing economy I would argue that we have a proud history of moving in on companies in terms of antitrust regulation and we’re at that point in the economy with Amazon.

    Won’t the Markets Take Care of This?

    Walmart was hauled before Congress when they were at 11 percent of retail and Amazon was only at 6 percent. However, I think a more apt analogy would be railroads or Ma Bell or even Standard Oil, where we decided that effectively the markets were no longer competitive. You now have a company where if it just puts out a press release saying that it will address health care costs, and we don’t even know if that means they are giving employees gym memberships or that meant that they are starting an HMO, on opening bell the healthcare industry sheds $31 billion in value.

    Good for Shareholder, Good for the Company, Good For the Planet

    When one company can take down the price of any other consumer company, almost by a third, just with press releases, I would argue that the markets are no longer competitive. The key to this great system we call capitalism is that no one player has too much power. In addition, I think if you broke up Amazon shareholders might benefit. If you spun AWS, soon after the spin the two companies in aggregate might be worth more than the two companies combined. So good for the shareholders, good for the company, good for the planet.

  • Finery: A Hot Startup That Seeks To Be the Digital Wardrobe for Women

    Finery: A Hot Startup That Seeks To Be the Digital Wardrobe for Women

    Over 80% of the clothes women aren’t wearing is worth half a trillion dollars in the US according to Finery founder and CEO Whitney Casey. Finery, which was just listed in CNBC’s Upstart 100 list of promising young startups, keeps track of all your clothing purchases and creates a digital wardrobe and then helps style you in the clothes you already own.

    Whitney Casey, founder, and CEO of Finery discussed her company’s service and business model in a recent interview:

    Finery is a Digital Wardrobe

    Finery is a digital wardrobe. What we do is we find all of your purchases, from your e-receipts, from your browser history, from attaching your accounts, and then we instantly upload all of those items into a virtual closet so you can see everything you own. We have a bunch of tools on the site that can help you add items easily. You Google anything, you find the image, you push the little ‘F’ browser button and it uploads to your closet. That’s our tech. We go back ten years into your purchase history to find and call all those receipts and put it into this closet for you. The bigger picture of this is really about data and that’s the ethos that this company is built off of.

    We let you also take your account and upload your accounts such as Neiman Marcus, Target, or whatever. The data is really important and when we talk about data we tell women that we really think that your data should be working for you. It should not be working for Facebook. Women are the consumers with 85 percent of the consumer goods purchased by women. Yet, 91 percent of women say they don’t feel like advertisers or anyone really understand them.

    Why Do Women Need Finery?

    What’s great is we style you. A woman will spend eight years of her life shopping and two years getting dressed, we’re shaving the time off that. We also give you a return receipt. So think about this, you buy something and you have seven days left so you can no longer return, you need to know that so we ping you. Hey, it’s raining outside, here are five things you can wear from your closet. Hey, it’s Sunday, you have four interviews this week so here are five outfits for you from your closet.

    We have hundreds of thousands of users currently. But we have a big vision and it is around data because we really do feel like women need to have their data working for them. It’s very hard actually to get data from women because they don’t want this same purple boot following them around the internet like it does (via behavioral ads) for two years that they bought. Instead, they really want their data to be working for them and that’s what we’re doing.

    When you log in to a retail site why does it do you any good to log in with your Facebook account? It only does Facebook good so they can then advertise to you. What we want to do is create a login from your Finery account so that all of your data can come with you and then it could make your purchasing way easier.

    How Does Finery Make Money?

    We offer a rev share, we call it a knowledge tax. Companies pay us to give women a personalization lifeline. When you go to these retailers it’s not very easy, you sift through all of these pages. If you think about it, the service, the flywheel of giving women some utility and they give us more access to themselves and every time access makes the utility better.

    It’s crazy because 80% of the clothes you aren’t wearing is worth half a trillion dollars in the US. If we put RFID tags in all of your clothes we would we could know exactly where you’re wearing them and exactly the amount of time you’re wearing them and then break the cost. Via a consignment site, you could then just tap on any item in your wardrobe and then sell it. It all starts in your wardrobe, all of these all of these functionalities, re-commerce, commerce, rentals, it all has to start with the clothes that you own.

  • ThirdLove Leveraging Data and Tech to Successfully Compete With Victoria’s Secret

    ThirdLove Leveraging Data and Tech to Successfully Compete With Victoria’s Secret

    How does a startup compete with a huge brand like Victoria’s Secret which by some accounts has nearly a 50 percent market share? By being different and utilizing technology and data.

    That’s what Heidi Zak, co-founder, and Co-CEO of ThirdLove, says is key to their growth and success.

    Third Love co-founder and Co-CEO Heidi Zak recently spoke about how her company is competing effectively with Victoria’s Secret.

    ThirdLove Seeks to Be Different Than Victoria’s Secret

    We are a direct-to-consumer ecommerce vertically integrated brand that makes very comfortable bras and underwear. Our differentiation from Victoria’s Secret and others happens in a few different ways.

    One is really focusing on product quality and a range of sizes. We have 70 sizes while Victoria’s Secret offers about 36. We have more than double including half sizes. I always say that shoes have half sizes, so why shouldn’t bras?

    Another differentiator is our marketing where we use real women in our marketing instead of models with a lot of diversity. We also leverage data to help women find their fit online. What we have done is digitized that experience.

    ThirdLove Leveraging Data to Compete With Victoria’s Secret

    We created Fit Finder so that in under 60 seconds you can answer questions about your breast shape, body type, fit issues and we will recommend the size and style. Over ten million women have actually done the Fit Finder. We have a massive amount of data with over 700 million data points.

    We use the data for product development and design, for thinking about sizes and specs, we use it marketing and personalization, and we use it in inventory management. Across every aspect of the business we are using data day in and day out.

    ThirdLove is a Blend of Tech and Beautiful Products

    ThirdLove is a company that is a blend of apparel and tech, for sure. Absolutely, data and tech are at the core of what we do, but we also create really beautiful products.

    At Google, I really learned to push the boundaries and to think about new ways of solving problems and applied that at ThirdLove. Also, I had been in traditional retail in New York at Aeropostale after business school. So it was really that blend of retail and tech coming together in terms of my background that I think made me comfortable to start this company.

    We’ve been growing over 300 percent year-on-year since we were founded in 2012 so we have seen substantial growth. We have 1.5 million customers and we continue to take on more and more market share.

    Victoria Secret’s, depending on the numbers you look at, owns somewhere between a third to 50 percent of the market, so there is a substantial amount of market share to be taken given that they are the worst performing stock on the S&P this year. Our current market share is a few basis points, I would say.

  • What are Retargeting Ads and Why Should Your Business Use Them?

    What are Retargeting Ads and Why Should Your Business Use Them?

    Online retailers and small businesses understand how crucial advertising is in driving traffic to their websites. Unfortunately, 97 percent of first-time site visitors will leave without buying anything. There’s a big chance that they won’t ever come back unless you can find a way to convince them to return. One way to go about this is by retargeting them.

    What are Retargeting Ads?

    Have you noticed that some of the ads you see while browsing a site or checking your Facebook feed are from a website that you previously visited? That is retargeting. These ads either offer you customized deals on items you previously looked at or remind you of an abandoned cart. They can help your business re-engage consumers who visited your online store but didn’t push through with a purchase. These ads ensure that your brand is kept in front of bounced traffic even after your prospects have left your website.

    How Do These Ads Work?

    Retargeting is an ad technology that redisplays your company’s product or service to consumers who had shown an interest. If someone visits your product page or downloads your app, that’s a pretty good indication that they’re interested in your brand.

    Retargeting utilizes a simple Javascript code called a “cookie” that allows you to “follow” your audience. This inconspicuous, little code is integrated on your website. An undisclosed browser cookie is then dropped whenever a new visitor lands on your site.

    Image source: Hubshout

    Once the visitor tagged with the cookie starts to browse, the code informs your retargeting provider when to serve your ads. The prospective client will then see your ads popping up while they’re playing a game, listening to music, reading an article, or browsing another store. For example, if a visitor checked a product page for a blue blazer but didn’t buy it, an ad retargeting them would show the same blazer and maybe a deal slashing the price by 15 percent. Or they might see an ad showing similar apparel.

    Image source: RevLocal

    Your ads will remind them of their interest in your product and hopefully bring them back to your website. Site visitors who see retargeted ads are 70 percent more likely to make a purchase.

    Why Should Your Business Consider Retargeting Ads?

    You won’t be able to convince all your site visitors to buy your product or try your services. The best that you can hope for is to keep them interested while they decide whether they are willing to try your brand. In order to do this, you have to utilize more than one marketing channel. Google revealed that integrating retargeting with other marketing campaigns can help you close up to 50 percent more deals. That’s because most shoppers are more likely to notice the products that they had previously looked up. 

    Retargeting ads are also 10 times more effective than conventional display ads. The former’s click-through rate is close to 0.7 percent while the latter only has a CTR of 0.07 percent. It’s understandable that small businesses would typically opt for display ads. But a retargeting campaign is still relatively affordable and can complement any ad strategy.

    Here’s the Kicker

    Retargeting is a powerful and compelling conversion and branding optimization tool. However, this strategy is more effective when used in conjunction with a bigger digital marketing campaign.

    Strategies like AdWords, content marketing, and targeted display are good for driving traffic, but they’re not as effective when it comes to optimizing conversion. Meanwhile, retargeting helps boost conversions but can’t drive traffic to websites. It’s best to combine the tools that push traffic and retargeting ads. You’ll get the best of both worlds while helping your brand make its mark.

    [Featured image via Pixabay]