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Category: RestaurantRevolution

RestaurantRevolution

  • Shopify Evolving Into World’s First Retail Operating System

    Shopify Evolving Into World’s First Retail Operating System

    “Shopify is evolving into the world’s first retail operating system,” says Shopify COO Harley Finkelstein. “We think the future of retail is retail everywhere. A brand that’s going to be successful in 5, 10 or 15 years from now needs to sell across any platform and across any channel where they have customers. The idea is that it all feeds back in one centralized back-office, the retail operating system, which is Shopify.”

    Harley Finkelstein, COO of Shopify, discusses how COVID has dramatically sped up the timeline for commerce moving online and has also moved Shopify closer to its goal of becoming the world’s first retail operating system:

    Shopify Evolving Into World’s First Retail Operating System

    Most people assume that Shopify is an ecommerce provider. We have more than a million stores on Shopify. If you were to aggregate our stores in the US we’d be the second-largest online retailer in America. Of course, we’re not a retailer but we’re a platform. But we now have these great economies of scale that we’re using to level the playing field for entrepreneurs and small businesses. That being said, what really Shopify is evolving into is the world’s first retail operating system. 

    What we’re trying to figure out is what do brands and entrepreneurs and retailers need, not just now but in the future? We think the future of retail is retail everywhere. A brand that’s going to be successful in 5, 10 or 15 years from now needs to sell across any platform and across any channel where they have customers. This idea of enabling Shopify merchants to very easily push their products to the Amazon Marketplace or the eBay marketplace or now the Walmart marketplace, that gives them access to a new set of consumers. The idea is that it all feeds back in one centralized back-office, the retail operating system, which is Shopify. 

    Then we’ve gone ahead and asked what else can we do for these merchants? Can we do capital? We’ve now given out about a billion dollars worth of cash advances and loans to small businesses. We’re doing fulfillment and we’re doing shipping. We’re increasing the scope and the relationship that we have with the million stores on Shopify. This is allowing them to become category leaders.

    COVID Speeds Up The Ecommerce Revolution

    From our view, it seems like the commerce world that would have existed in the year 2030 has really been pulled into the year 2020 (as a result of the COVID crisis). We’ve seen ecommerce as a percent of total retail go from 15 percent to 25 percent in the last three months. That’s the same growth rate that we’ve seen over the last 10 years. What really has emerged here is sort of this tale of two retail worlds. On one side you have these resilient retailers that are doing great, they’re pivoting, and they’re expanding their businesses. On the other side, you have these resistant retailers who have not made it. In many ways, it’s probably the most exciting time for retail in a very long time. 

    We talk a lot about these direct to consumer brands that are becoming category leaders. The Allbirds and the Gymsharks who started on Shopify when they were very small and have grown to become the incumbents in their industry. Every 25 seconds a brand new entrepreneur makes his or her (products) for sale on Shopify. We talk a lot about those new startups, those new DTC brands. But actually, what we’re also seeing on Shopify are companies like Lindt Chocolate or Heinz ketchup or Chipotle. They are signing up for Shopify and basically from like five days from contract to launch they are completely changing their businesses. 

    This resiliency isn’t simply in the hands of just the smallest of brands. Big companies are also beginning to think a lot more about how to stay resilient in this time. They’re moving well beyond ecommerce or thinking about offline commerce now. They’re thinking about how do they sell across social media? How do they sell across different marketplaces? So no, I don’t think it’s too late (to enter ecommerce) but I do think they have to rethink their strategies.

    Shopify Evolving Into World’s First Retail Operating System Says Shopify COO Harley Finkelstein
  • Yum Brands Hit by Ransomware, Hundreds of Restaurants Close

    Yum Brands Hit by Ransomware, Hundreds of Restaurants Close

    Yum Brands, the parent of KFC, Pizza Hut, and Taco Bell, was hit by a ransomware attack, leading to hundreds of locations closing.

    Yum Brands acknowledged the attack in a statement Wednesday, saying its IT systems were compromised.

    On January 18, 2023, Yum! Brands, Inc. announced a ransomware attack that impacted certain information technology systems. Promptly upon detection of the incident, the Company initiated response protocols, including deploying containment measures such as taking certain systems offline and implementing enhanced monitoring technology. The Company also initiated an investigation, engaged the services of industry-leading cybersecurity and forensics professionals, and notified Federal law enforcement.

    The company says the overall impact was relatively limited. Most important, Yum Brands says there is no evidence any customer data was stolen.

    Less than 300 restaurants in the United Kingdom were closed for one day, but all stores are now operational. The Company is actively engaged in fully restoring affected systems, which is expected to be largely complete in the coming days. Although data was taken from the Company’s network and an investigation is ongoing, at this stage, there is no evidence that customer databases were stolen. While this incident caused temporary disruption, the Company is aware of no other restaurant disruptions and does not expect this event to have a material adverse impact on its business, operations or financial results.

  • Walmart Explores Streaming Deals With Top Platforms

    Walmart Explores Streaming Deals With Top Platforms

    Walmart is reportedly exploring deals with top streaming platforms with a view to adding them to its Walmart+ bundle.

    Walmart has been working to take on Amazon, most recently launching Walmart+ Weekend to rival Amazon Prime. The company appears to be trying to combat Amazon Prime Video by partnering with streaming services, according to The New York Times.

    The Times’ sources say Walmart has spoken with execs from Comcast, Disney, and Paramount. At this time, there is no indication if a deal will be reached, and none of the companies involved would provide a comment.

    If Walmart is able to strike a deal, it will give the retailer a major advantage in its battle with Amazon. As the Times points out, companies across industries are increasingly looking to bundle streaming services in an effort to be more appealing to customers. T-Mobile and Verizon are two such companies, striking deals with streaming platforms to help build customer loyalty and reduce churn.

    A Walmart+ membership currently costs $12.95 per month. Should the retailer succeed in striking one or more deals, it will likely have to raise the price of its membership bundle unless it plans on maintaining the same price as a loss leader.

  • Walmart is the Roman Empire of Retail

    Walmart is the Roman Empire of Retail

    Walmart is the Roman Empire of retail, says Burt Flickinger, Managing Director of SRG. Walmart announced an impressive earnings and revenue beat that told the story investors want to hear. Walmart is winning the retail wars, especially against arch-rival Amazon. “Like Hannibal and the Carthaginians, Amazon is starting to go the wrong way.” says Flickinger. “Big win for Walmart today and they will accelerate that in the next two to seven years.”

    Burt Flickinger, Managing Director of SRG, a consumer industry business consulting firm, discussed how Walmart is winning the retail wars in an interview on Fox Business:

    Walmart is the Roman Empire of Retail

    This earnings report just reinforces its winning. Amazon is going sideways. This is a reenactment of the Punic Wars, Rome versus Carthage. Walmart is the Roman empire of retail. Like Hannibal and the Carthaginians, Amazon is starting to go the wrong way. Big win for Walmart today and they will accelerate that in the next two to seven years.

    What’s doubly impressive, we talk to a lot of vendors and shoppers around the world, what the vendors are saying is Walmart is reinvesting all the PPA (price and promotional allowances) in lower prices. Lower prices normally mean lower margins and lower revenue. But in this case, the shopper is shifting to Walmart.

    Walmart strategically saw all the land-based businesses like Payless and all the retailers from toys to sporting goods going out of business. They had great sales on land and not so good online. Walmart is winning both ways. Amazon, with all the trouble they’re having with Whole Foods, can’t capitalize. Walmart is running the table.

    This Says it All for US Retail

    This says it all for US retail. The well capitalized highly capable retailers are winning and if it’s a one man show, like Bezos running the show, you could be Alexander the Great, you could be Hannibal out of Carthage, but one general isn’t going to win a war. Recent (lower) retail sales numbers were a combination of a couple things. One is Jerome Powell scared the market, especially high to mid-end, didn’t spend as much. Also, consumers were a little bit scared toward the end of the year. Walmart, off price, low price, did very well, but full price full service struggled and that’s why the numbers were bad.

    Walmart comp sales increased 4.2 percent, just like Steve Jobs and Apple with their great campaign Think Different with Muhammad Ali, Walmart is thinking different with Doug McMillon. It’s evolved from a company of family management to professional management. Walmart had 40 percent growth online.

    Walmart Ads Are Really Connecting

    Before, Walmart looked at advertising as an expense. But as Jerry Della Femina said, most of the Super Bowl ads were pretty pathetic. Walmart was one that stood out because it advertised Walmart online and Walmart in-store. The Walmart ads are really connecting with consumers, a United Nations of consumers.

    They’re reaching everybody around the world with better prices and better service. Doug McMillon has invested in inventory and has invested in store staffing, first to raise wages with some push from the UFCW. They are hitting on all cylinders. The biggest problem now is they can’t handle all of the volume they are seeing on the weekends.


  • We Are a Marketplace That Sells Demand Generation, Says Grubhub CEO

    We Are a Marketplace That Sells Demand Generation, Says Grubhub CEO

    “We are a marketplace that sells demand generation,” says Grubhub CEO Matt Maloney. “We sell growth. That’s what our primary product is. We’re not a logistics company. We do logistics because we know that’s an end to get to restaurant growth and make money off our logistics. The gross margins on the logistics are not fabulous. The gross margins on the demand generation are fabulous which is why I differentiate between a logistics company and demand gen company. If you’re selling consumers, you’re selling growth, and you can charge a lot for that.”

    Matt Maloney, CEO of Grubhub, discusses with Jim Cramer on CNBC how Grubhub is in the business of driving growth for restaurants and is not just a logistics company:

    The American Public Has Just Adopted Digital Ordering

    This is our fifth anniversary of our IPO. The market now is ten times what I thought it was five years ago. It’s because the American public has just adopted digital ordering as their preferred way to engage with their local restaurants. We are not just marketing to Millennials. We are marketing on national television across all channels, all time zones, and hitting all segments. We just see that people realize that digitally ordering on their app or on their desktop is just easier.

    Of course, our ad campaign is working. I wouldn’t have it on TV if it wasn’t working. You think about it this way. You know your LTV, your lifetime value of your customer, once they start ordering we know that they’re lifers. They’re on forever. We can make that revenue model and then we know how much it cost to put the ad on there. So yes, over time, as people see the ad, more and more it becomes less and less effective. But we’re nowhere near our LTV.

    https://youtu.be/qpyVP-JhToc
    Grubhub National TV Commercial

    I have always been willing to be extremely aggressive investing in the future. Historically, I was bound by the amount of money I could invest. The reception of these communications just weren’t hitting the public and they weren’t working as well. Then around the third quarter of last year, we saw that we could spend way more than we had historically. I’m just talking about effectiveness. Spending it effectively. We came to the street on our third quarter earnings call and said we see opportunity and we are going long in the fourth quarter.

    Yum Made $200 million Investment – They Believe in Our Story

    People are going to say where’s the beef, the old Wendy’s commercial. They’re like show me the money. (We don’t have Wendy’s) but everyone talks to everyone in this industry. I think over time exclusivity is just not going to happen. (We have Yum) and Yum is the biggest restaurateur in the world. YUM is an incredible brand which includes Taco Bell, KFC, and Pizza Hut. They are very forward-thinking. They invest in technology a lot and they wanted to make a fundamental partnership and we wanted to understand what the brands needed from a partner.

    Yum made a $200 million investment because they believe in our story. We didn’t need the investment because we have a very healthy balance sheet. What it did it was really bringing the support of the young brand and the franchisees into Grub. As a tight partnership, we’re able to execute on technology and growth for them in a way that nobody else in the industry is doing right now. I totally disagree (that we aren’t making money from this partnership).

    We Are a Marketplace That Sells Demand Generation

    We are a marketplace that sells demand generation. We sell growth. That’s what our primary product is. We’re not a logistics company. We do logistics because we know that’s an end to get to restaurant growth and make money off our logistics. The gross margins on the logistics are not fabulous. The gross margins on the demand generation are fabulous which is why I differentiate between a logistics company and demand gen company.

    If you’re selling consumers, you’re selling growth and you can charge a lot for that. That’s the profitable side. Everyone else in my industry is a logistics company which has razor thin margins. One of my competitors said they’re the next FedEx. Do you really want to be the next FedEx? There’s the multiple that we can get as marketplaces and there’s the multiple that logistics companies can get.

    Everyone Would Prefer to Order Digitally

    I think that everyone in the country would prefer to order digitally than order on the phone. That’s why we acquired Tapingo. It’s an incredible acquisition because it gives us further scale on campuses. Tapingo is a pickup focused product. So here’s what you need to think about. We sell growth, we sell orders. I don’t care if that’s a pickup order, a delivery order, a self-delivery order, or a catering order.

    Everyone else in my industry only does delivery facilitated by that platform. Because we partner with the restaurants (which means) the restaurants are subsidizing part of our transaction fee, we are always cheaper. That’s what people don’t understand. There’s a lot of bait and switch pricing going on (from competitors).

    We Are a Marketplace That Sells Demand Generation, Says Grubhub CEO


  • Why Does Going Contactless In Restaurants Mean More Profit And Safety For Restaurateurs?

    Why Does Going Contactless In Restaurants Mean More Profit And Safety For Restaurateurs?

    Modern technology has made running a business more manageable for business owners, especially during this challenging time. The use of a QR code for digital menus is one of the most recent restaurant trends to adapt to the new normal setting. 

    No one wants to touch anything during the COVID-19 outbreak. Small and large businesses are looking for ways to provide a touchless experience to address the new consumer need. Also, one of the new guidelines for many countries is to use a contactless option whenever possible.

    Restaurants have discovered that QR codes are one of the most effective ways to limit physical contact and lessen the risk of contamination. The advantages of QR codes are numerous; they provide guests with an easy and efficient way to order, pay, and more.

    The days of lingering over a menu at a table or in front of a restaurant are long gone. After scanning a menu QR code to order, you can sit down and watch a movie or talk to anyone on your phone.

    What is a menu QR code? 

    A menu QR code is a digital menu that allows customers to browse and purchase menu items immediately from their smartphones.

    Restaurants can add visuals to their menus.  It is also an environmentally friendly, contactless, and safe solution for the food industry. A contactless restaurant is safe because it restricts physical interaction with personnel, menus, etc. 

    Diners can use their cell phones to display and view menus, order, and pay for meals. Users don’t need to use other devices to access your menus; they need a smartphone camera.

    Restaurant owners do not have to reprint their menu, as they can edit the QR code content. Unlike the traditional handheld menus where you have to reprint them when adding new menu items, you don’t have to reprint them in the menu QR code. 

    That is why you can update or change any items on your menu; you can edit your menu file behind your QR code anytime. The changes will automatically reflect in the QR code even after printing or distributing it.

    How to create a menu QR code

    1. Create your menu and save it as a PDF or in a Jpeg file.
    2. Go to an online QR code generator with logo software. .
    3. Upload your PDF or Jpeg file in the Menu feature.
    4. Generate your QR code and personalize it. You can add a call to action tag to increase scans and prompt your customers what to do.
    5. Do a QR code scan test and download it.
    6. Print and place the QR code on any corner of your dining table. You can print it like a sticker or display it as a table tent for your customers.

    Advantages of using a contactless dining solution in a restaurant

    1. Brings greater customer satisfaction

    Because contactless dining speeds up the entire ordering and payment process while offering customer control and autonomy over their orders, it increases customer happiness. 

    With contactless ordering, diners can assure that precisely what they ordered will be prepared in the kitchen. Special instructions, add-ons, dietary preferences, and allergies are all examples of this. 

    1. It keeps everyone safe and healthy.

    Another significant advantage of digital contactless ordering is its potential to improve building occupant safety. It is absurd to expect restaurant patrons to eat while wearing a mask. 

    Consider how many lives could be saved by helping to minimize the transmission of infections on physical surfaces by allowing customers to view menu options and place orders from the convenience of their own homes. 

    1. Digital ordering increases customer loyalty.

    Digital ordering improved frictionless ordering, converting and retaining customers through personalized offers, loyalty points, and rewards. As a result, guests are more likely to return to the restaurant again.

    1. Improve the efficiency of your operations

    Table turnover is one of the essential indicators, as it affects operational expenses and efficiency. 

    The more tables you can set and the more things you can offer, the faster you can turn tables.  

    Guests can send orders directly to a kitchen display system using a contactless dining solution, then split the bill amongst the table when it’s time to pay. The entire process avoids a few low-value procedures for staff and is sure to save minutes at every table. 

    In Conclusion

    Using a digital contactless ordering mechanism is also a step to pursue further foodservice expansion prospects. 

    Restaurants with digital technology sound futuristic, and they are.  Digital kitchens are the pinnacle of foodservice innovation, combining technology, people, software, and guided workflows to streamline and smooth restaurant operations. 

    With the use of a QR code generator online, restaurants can have a complete integration between old and new technologies like QR codes to succeed and adapt to this new normal.

  • DoorDash Now Delivering Alcohol in 20 States and DC

    DoorDash Now Delivering Alcohol in 20 States and DC

    DoorDash has announced its alcohol delivery service is expanding to 20 states, as well as DC.

    DoorDash is a popular food delivery service, but the company has been expanding into the lucrative alcohol market as well. The company attributes the expansion to various cities and jurisdictions relaxing regulation during the pandemic.

    “Over the past year, many cities where we operate evolved their legislation in order to permit the delivery of alcohol to residents’ homes. Over that time, we worked tirelessly to build a trusted alcohol ordering and delivery experience for merchants, customers and Dashers,” said Caitlin Macnamara, Director, Alcohol Strategy & Operations at DoorDash. “We’re committed to providing new earning opportunities for merchants and Dashers, a safe, high quality experience for customers, and being a responsible leader in compliant alcohol delivery.” 

    The company says it has implemented “rigorous ID verification prior to checkout and multiple ID check points along the delivery to ensure customers are of legal age.”

  • Robots Are Saving Understaffed Restaurants

    Robots Are Saving Understaffed Restaurants

    Robots are helping restaurants deal with staff shortages, taking over some of the easier, but critical, day-to-day duties.

    Just days ago, we wrote about the impact robots are having on service industries, an area once thought to be safe from robots and automation. According to CNN, restaurants are one industry that is particularly benefiting.

    Espartaco Borga, owner of Dallas-based Latin restaurant La Duni, is renting robots for $15 a day. The robots have been a game-changer for Borga, who was struggling to meet the uptick in demand, with only a third of his staff returning after the pandemic slowdown. In spite of the smaller staff, Borga says their business was 50 to 100% higher than ever, including pre-pandemic levels.

    The solution was robots from American Robotech.

    “The very next day they showed up, they mapped the restaurant, and they assigned the tables numbers within 45 minutes,” Borga said. “After a day, the girl at the expo line was in love with this because her arm didn’t hurt after carrying 60 trays in a day.”

    Borga says the robots greet customers, deliver orders and even sing “Happy Birthday” to customers. He’s also not worried about concerns of robots taking jobs, since his whole problem sprang from no one wanting the jobs he had available. Even more, with the money he’s saving using the robots — at a mere $15 a day — he’s able to pay his remaining workers more.

    The robots are also a hit with customers.

    “They don’t even see them as what they are, which is a tablet on wheels,” he said. “They see them as part of the service experience because these robots have a personality, they can interact. If you touch them, they giggle and they tell you things.”

  • Panera CEO: Ecommerce Pivot Sparks Dramatic Growth

    Panera CEO: Ecommerce Pivot Sparks Dramatic Growth

    “Close to 60 percent of our sales are coming from e-commerce,” says Panera CEO Niren Chaudhary. “By focusing on servicing customers through our off-premise channels, leveraging e-commerce, and then rapidly innovating we’ve seen a very smart recovery on our brand and also a stronger business model emerging from the pandemic. What’s clearly playing out is the off-premise channel is seeing dramatic growth.”

    Niren Chaudhary, CEO of Panera, discusses how the company has focused on ecommerce and the “off-premise channel” to drive dramatic growth:

    Panera’s Ecommerce Pivot Sparks Dramatic Growth

    Panera is actually emerging quite strongly through the pandemic because we’ve been completely focused on what we have control over. By focusing on servicing customers through our off-premise channels, leveraging e-commerce, and then rapidly innovating we’ve seen a very smart recovery on our brand and also a stronger business model emerging from the pandemic. What’s clearly playing out is the off-premise channel is seeing dramatic growth.

    To give you a sense, our delivery is growing by over 100 percent, drive-throughs are growing by over 60-70 percent, and rapid pickup is seeing strong growth. The off-premise channels are growing very strongly and in some ways compensating for the decline in business on-premise. Pre-pandemic we were probably about 60-40 in terms of off-premise versus on-premise. Now it is predominantly off-premise convenience for our customers as we’re moving in that direction.

    Close to 60 percent of our sales are coming from e-commerce. Brands that are able to leverage their e-commerce strength and pivot very sharply on providing convenience and off-premise are beginning to see a smart recovery.

    It’s All About Convenience, Ecommerce, and Innovation

    There are three levers that we’re working on to get our business back on track: convenience, e-commerce, and then meaningful innovation. Included in that are cool foods, a coffee subscription program, and most recently the flatbread pizza launch. We’re very excited about this because it’s the launch of a new food category at Panera, one that we haven’t had before. It’s a bullseye innovation in terms of what the customer is looking for at this time. Customers are looking for a warm shareable at-home meal solution for their families. The flatbread pizza fits perfectly for that.

    We’re doing it in a uniquely Panera way as you would expect. We’re leveraging the credibility of our breads. We have unique ingredients that are all clean, they’re fresh, we have double blend cheese, bold flavors of our sauces, and it’s stone-baked. Think of this as a pizza that customers love but done in a very unique Panera way. That’s why we’re so excited.

    Panera CEO Niren Chaudhary: Ecommerce Pivot Sparks Dramatic Growth
  • Former Walmart U.S. CEO Sees Virtual Reality As Future Of Retail

    Former Walmart U.S. CEO Sees Virtual Reality As Future Of Retail

    Former Walmart U.S. President and CEO Bill Simon sees technology, such as virtual reality, having a big impact on traditional brick-and-mortar retail, according to CNBC.

    Simon served as President and CEO of Walmart U.S. from 2010 to 2014, giving him a unique perspective on the retail industry. Rather than predicting doom-and-gloom for traditional retail, Simon believe technology has the ability to transform the industry and open all new possibilities.

    Even something as simple as trying on clothes may be revolutionized by technology, such as virtual reality.

    “Could we have virtual changing rooms so that you can just scan an item in a store with your phone and try it on yourself without actually having to go try it on?” Simon said on CNBC’s “Squawk on the Street.”

    Simon believes successful retailers will combine online sales with a brick-and-mortar presence, and cites Target and Amazon as two examples of companies that are making it work.

  • Is Amazon Destroying Retail?

    Is Amazon Destroying Retail?

    “A set of facts could be put forward that would support that (they are destroying the retail landscape),” says former Walmart CEO Bill Simon. “They’re going through another cycle of it where their CFO in the (earnings) call said we’re reinvesting to drive one-day Prime shipping. That’s going to put more pressure on retailers and give them this Sophie’s Choice. Do I want to go out of business because I’ve lost my sales by not matching them on price? Or, do I want to go out of business because I’ve matched them on price?”

    Bill Simon, former CEO of Walmart, discusses how Amazon uses profits from AWS to prop up operating losses in online retail while in the process, destroying competing retail businesses, in an interview on CNBC: 

    Is Amazon Destroying the Retail Landscape?

    They’re running their business model and they’re just doing a fantastic job of it. Who doesn’t like stuff shipped to their house for free? It’s an awesome business model. It’s going to be increasingly challenging for them though because nearly 70 percent of their operating income came from Web Services. If you filter out the operating income from web services and if you take out the operating income for advertising, then there’s a chunk of it that is made in brick and mortar through Whole Foods, or at least there was because they don’t report that anymore, their worldwide retail business is operating break-even or at a loss. 

    Their international business loses money on $16 billion this quarter in sales. It’s really no wonder that regulators internationally are starting to look at them. A set of facts could be put forward that would support that (they are destroying the retail landscape). Think about it, in North America, they priced at or below cost for many years and didn’t make money. It’s arguable today whether their online business makes money in North America. 

    This Quarter Is the Poster child For Anti-Competitive Behavior

    All the while, Circuit City went out of business, Linens N Things went out of business, Toys R Us went out of business, and then Prime is the driver of it. It went from $79 to $99 to $119. That’s sort of the definition of anti-competitive behavior and anti-competitive pricing. Price below the market and when your competitors start to go out of business you ratchet up your price. This quarter is really a poster child for that. Their North American business grew $6 billion and lost money. Their operating income went down in North America. 

    They’re going through another cycle of it where their CFO in the (earnings) call said we’re reinvesting to drive one-day Prime shipping. That’s going to put more pressure on retailers and give them this Sophie’s Choice. Do I want to go out of business because I’ve lost my sales by not matching them on price? Or, do I want to go out of business because I’ve matched them on price? I’ve not been able to make any profit because they support their retail business with web services. It’s tough to compete with them when they’re not making money and pricing below cost with online retail.

    It’s Not Possible To Do One-Hour Shipping and Make Money

    Who doesn’t love stuff free shipping to your house in two days or one day or in an hour? That’s awesome. I use it all the time. Everybody does. But there are consequences to it. As the expenses go up and the price goes up, eventually, Prime has been going up in price sequentially and has to continue to go up. It’s not possible to ship things to your house in one hour and do it at the same price or cost that can make money in retail. It’s just not possible. The packaging alone, the delivery person walking from the street to your front door, start adding up the cost of all that and you can’t make money on a $3 box of breakfast cereal. 

    So it’s going to be tough. I don’t know that regulators will take that on given the consumers love for it. But if the retail landscape keeps getting impacted and the weaker keep dropping out and it gets down to this battle between the behemoth on the online side and Walmart on the physical side, it gets to be a complicating factor. I think then regulators have to look at it. When that happens it’s hard to tell but this quarter has really kind of the poster child for that.

    Is Amazon Destroying Retail? – Bill Simon
  • Uber Now Offers Grocery Delivery in Over 400 Cities and Towns

    Uber Now Offers Grocery Delivery in Over 400 Cities and Towns

    Uber has announced a major acceleration of its grocery delivery service, now available in more than 400 cities and towns in the US to Uber and Uber Eats customers.

    The global pandemic saw a dramatically increased demand for grocery delivery services, demand Uber and Uber Eats has benefited from. The company’s recent expansion is its first major one in the US, and more than doubles its footprint. Part of the expansion is a 1,200-store partnership with the Albertsons grocery chain. Albertsons also includes, Safeway, ACME, Jewel-Osco, Randalls and Tom Thumb.

    “This past year has been one of incredible growth for grocery delivery,” Raj Beri, Uber’s Global Head of Grocery and New Verticals “Today nearly 3 million consumers order groceries and other essentials each month through Uber and we’re just getting started. By adding thousands of beloved grocers to our selection this year, we are fast-tracking our efforts to help Americans get everything they need from their favorite supermarket, delivered to their doorsteps.”

  • McDonald’s Testing Automated Drive-Thru Technology

    McDonald’s Testing Automated Drive-Thru Technology

    McDonald’s is testing automated drive-thru ordering technology in 10 Chicago locations.

    Restaurants are increasingly looking for ways to revolutionize their processes and streamline operations. Drive-thru operations, in particular, are ripe for change, with many companies implementing mobile ordering.

    McDonald’s is taking it a step further, testing automated voice-ordering tech, according to CNBC. So far, the pilot program is seeing 85% order accuracy, with only a fifth of orders needing to be handled by a person.

    “Now there’s a big leap from going to 10 restaurants in Chicago to 14,000 restaurants across the U.S., with an infinite number of promo permutations, menu permutations, dialect permutations, weather — and on and on and on,” said CEO Chris Kempczinski.

    If McDonald’s is able to make a go of automated ordering, it would give the company a major competitive advantage over competing fast-food chains. Relying on automated ordering tech could help the company cut down on cost. It could also serve as a template for other companies looking to do the same.

  • McDonald’s Impacted by Data Breach

    McDonald’s Impacted by Data Breach

    McDonald’s now joins an ever-growing list of major companies impacted by data breaches.

    On the same day that VW announced it was impacted by a data breach, fast-food leader McDonald’s announced it too has suffered a breach. The company says private information was accessed for both employees and customers in South Korea and Taiwan.

    According to CNN Business, McDonald’s says it’s cybersecurity investments were to thank for helping the company identify the breach as fast as it did, preventing additional harm.

    “These tools allowed us to quickly identify and contain recent unauthorized activity on our network,” a spokesperson told CNN Business. “A thorough investigation was conducted, and we worked with experienced third parties to support this investigation.”

    It seems the damage could have been far worse had McDonald’s not contained the breach so fast. According to The Wall Street Journal, the hackers also gained access to some US employees’ business contact information, as well minor logistical information on some US restaurants, such as seating capacity. No sensitive or personal information was leaked for US employees or customers.

  • Domino’s Testing Autonomous Pizza Delivery Robot

    Domino’s Testing Autonomous Pizza Delivery Robot

    Domino’s is testing Nuro’s R2, an autonomous delivery vehicle, in Houston.

    The Nuro R2 is a fully autonomous, on-road delivery vehicle that has regulatory approval by the US Department of Transportation. Domino’s will use R2 in a pilot program in Houston.

    Customers who place an online prepaid order from the Woodland Heights location may have their pizza delivered by R2. If so, the customer will receive a text message containing a PIN number and will be able to track R2’s progress via GPS. Once the robot rolls up, the customer will input the PIN and R2 will open its door to allow access to the pizza.

    “We’re excited to continue innovating the delivery experience for Domino’s customers by testing autonomous delivery with Nuro in Houston,” said Dennis Maloney, Domino’s senior vice president and chief innovation officer. “There is still so much for our brand to learn about the autonomous delivery space. This program will allow us to better understand how customers respond to the deliveries, how they interact with the robot and how it affects store operations. The growing demand for great-tasting pizza creates the need for more deliveries, and we look forward to seeing how autonomous delivery can work along with Domino’s existing delivery experts to better support the customers’ needs.”

    “Nuro’s mission is to better everyday life through robotics. Now, for the first time, we’re launching real world, autonomous deliveries with R2 and Domino’s,” said Dave Ferguson, Nuro co-founder and president. “We’re excited to introduce our autonomous delivery bots to a select set of Domino’s customers in Houston. We can’t wait to see what they think.”

    Autonomous delivery vehicles are an important step in the transformation of the restaurant industry, and could provide a safe way for restaurants to adapt and expand their operations in the midst of the pandemic.

  • Dinner and a Drink — Uber Buying Alcohol Delivery Service Drizly

    Dinner and a Drink — Uber Buying Alcohol Delivery Service Drizly

    Uber is acquiring alcohol delivery startup Drizly, in a deal worth $1.1 billion.

    Drizly is the nation’s leading alcohol delivery service, operating in over 1,400 cities around the country. The company’s reach is an impressive accomplishment given the patchwork of alcohol laws and regulations among various states.

    Uber sees an opportunity to round out its food delivery service, offering the full dining experience in-home.

    “Wherever you want to go and whatever you need to get, our goal at Uber is to make people’s lives a little bit easier. That’s why we’ve been branching into new categories like groceries, prescriptions and, now, alcohol. Cory and his amazing team have built Drizly into an incredible success story, profitably growing gross bookings more than 300 percent year-over-year. By bringing Drizly into the Uber family, we can accelerate that trajectory by exposing Drizly to the Uber audience and expanding its geographic presence into our global footprint in the years ahead,” said Uber CEO Dara Khosrowshahi.

    “Drizly has spent the last 8 years building the infrastructure, technology, and partnerships to bring the consumer a shopping experience they deserve. It’s a proud day for the Drizly team as we recognize what we’ve accomplished to date but also with the humility that much remains to be done to fulfill our vision. With this in mind, we are thrilled to join a world-class Uber team whose platform will accelerate Drizly on its mission to be there when it matters—committed to life’s moments and the people who create them,” said Drizly co-founder and CEO Cory Rellas.

    The deal is expected to close in the first half of 2021.

  • Deliveroo CEO: COVID Has Accelerated Food Delivery Adoption by 2 to 3 Years

    Deliveroo CEO: COVID Has Accelerated Food Delivery Adoption by 2 to 3 Years

    While many businesses are struggling as a result of the COVID-19 pandemic, the food delivery industry is booming.

    Deliveroo is a London-based food delivery service that operates in a number of European and Middle Eastern countries, as well as Australia, New Zealand, Hong Kong and Singapore. According to CNBC, Deliveroo’s Founder and CEO Will Shu told the Web Summit conference how COVID-19 has transformed the industry:

    Our initial analysis suggests that Covid-19 has accelerated consumer adoption of these delivery services by about two to three years.

    That, in turn, as been good for Deliveroo’s business:

    We saw this incredible increase in new customers joining the platform. We also saw our existing customers looking to order more often, also ordering for the family more frequently, we saw average basket sizes increase, and also ordering a wider range of products.

    Shu’s statement is an indication of the deep-seated changes occurring in business, as well as society at large, as a result of the pandemic.

  • McDonald’s Gets Into the Plant-Based ‘Meat’ Market

    McDonald’s Gets Into the Plant-Based ‘Meat’ Market

    McDonald’s is the latest fast-food company to offer plant-based meat alternatives with its McPlant lineup.

    Plant-based meat alternatives have been growing in popularity as a healthy alternative to traditional meat. Burger King, Dunkin’, Carl’s Jr., Qdoba, Subway and White Castle are just a few of the chains offering plant-based alternatives.

    McDonald’s is now joining that growing list of restaurants with its McPlant, based on Beyond Meat.

    “Beyond Meat and McDonalds co-created the plant-based patty which will be available as part of their McPlant platform,” a Beyond Meat spokesperson said, according to CNN Business.

    Initially, McPlant will be used for a burger, but the company may eventually expand to include plant-based breakfast and chicken alternatives. The company will be testing the burger in select markets beginning next year.

  • Chipotle Set to Open Digital Kitchen, First Digital-Only Restaurant

    Chipotle Set to Open Digital Kitchen, First Digital-Only Restaurant

    Chipotle has announced its first digital-only restaurant, potentially disrupting the restaurant industry during one of its most challenging periods.

    One of the more controversial COVID mitigation measures has been curtailing restaurants and bars. Around the world, customers and establishments have protested, and in some cases defied, closure orders. In spite of the unpopularity of such moves, however, experts have continued to warn of the dangers of dining in. In fact, a new study by MIT Technology Review has labeled restaurants “covid hot spots.”

    Although not necessarily the focus, Chipotle seems to have the answer to COVID challenges as it prepares to debut Digital Kitchen, its first digital-only restaurant. The new concept will not have a dining room, or a front service line. Instead, guests will place their order in advance using the Chipotle app, Chipotle.com or third-party delivery options. Orders can be picked up via the restaurant lobby.

    “The Digital Kitchen incorporates innovative features that will complement our rapidly growing digital business, while delivering a convenient and frictionless experience for our guests,” said Curt Garner, Chief Technology Officer of Chipotle. “With digital sales tripling year over year last quarter, consumers are demanding more digital access than ever before so we’re constantly exploring new ways to enhance the experience for our guests.”

    Chipotle’s new restaurants will likely be a big hit and help the company expand in locations where full-sized restaurants are not feasible. In addition, it should help the company weather any future COVID crackdowns.

  • Google Brings Free Retail Listings to Google Search

    Google Brings Free Retail Listings to Google Search

    Google has announced that it is bringing free retail listings to the main Google Search results page.

    The move follows Google’s decision to primarily include free listings on the Google Shopping tab. According to Bill Ready President of Commerce, that move resulted in a significant uptick in engagement between customers and merchants. This would seem to indicate that people are having better success finding what they’re looking for.

    “Sellers of all sizes are benefitting from this incremental traffic, particularly small and medium-sized businesses,” writes Ready. “And we already see that these changes will help generate billions of dollars in sales for retailers and brands in the U.S., on an annual basis.

    “Now, we’re bringing free listings to the main Google Search results page in the U.S., helping shoppers choose the products and sellers that will serve them best, from the widest variety of options.”

    Given the impact the pandemic has had on the retail industry, this move will certainly help small and medium-sized businesses connect with more customers online.

  • Luxury Online Retailer Farfetch Focusing on Technology to Improve the Consumer Experience

    Luxury Online Retailer Farfetch Focusing on Technology to Improve the Consumer Experience

    Luxury online retailer Farfetch, where product prices start at around a thousand dollars, had a breakout IPO on Thursday, raising $885 million while setting a valuation of $6.2 billion for the company. Then on Friday the stock surged 53 percent above their initial offering price and it’s up again this morning valuing the enterprise at $7.4 billion.

    Farfetch plans to use their IPO windfall to dramatically improve their technology which they see as the best way to improve the consumer experience.

    Farfetch Founder and CEO José Manuel Ferreira Neves recently discussed Farfetch and the online luxury brand industry on Bloomberg:

    Online Luxury is Growing 25 Percent a Year

    It’s a very unique opportunity. You have this amazing global industry. It’s $300 billion, the personal luxury goods industry and only 9 percent is online. There are two opportunities here really. One is the growth of online luxury which is going to grow to 25 percent a year for the next seven years. This is a $100 billion opportunity shift in online luxury.

    The big question is how is technology going to help brands and retailers really improve the consumer experience in the physical store. This is something at Farfetch that we are very passionate about.

    China is an Incredible Opportunity for Online Luxury

    China is a very exciting opportunity. Chinese citizens are at the onset of the luxury industry, whether they shop at home or when they’re shopping abroad. Online penetration is very low in China so this means that there is an incredible growth runway for Farfetch in the territory.

    That led to our partnership with JD.com where we have our own team. We have the Farfetch China app and website, we have local customer service, local payment systems, and local marketing. It’s a truly localized service. That is what’s driving incredible growth to the Farfetch brand in that region.

    WeChat is an amazing app with over 900 million users. It is the Instagram, plus WeChat, plus PayPal, etc. of China in one app. That is very powerful and very interesting. Now with our acquisition CuriosityChina we are powering the retail presence of 80 luxury brands. We think that is very interesting for the industry and we think that is probably something that we will see for the western world.

    Brands Now Using Social and Digital Marketing Extensively

    I think brands move cautiously and they choose their marketing channels very carefully. As these newer channels have developed the brands have adapted to them and their now using social media and digital media extensively to create desire, to drive discovery of new products obviously transactions as well.

    It’s a gradual pace but it’s really exciting that were at that inflection point where the brands see this as a tremendous opportunity.