Controlling the search position of your brand is very important to your business. However, this has become increasingly difficult due to changes in Google brand policies that have opened the door to competitors stealing (or buying) your brands traffic and business. Puneet Vaghela, Head of Paid Search at PHD UK, a global communications planning and media buying network recently spoke about these important challenges:
Why is brand search difficult to control in PPC?
With brand search, you are expected to get most of the traffic. However, what we are seeing increasingly is more and more competitors entering the market in our brand space. Back in the day, it was there but you could just get them kicked off by Google or Bing. Nowadays, it’s a lot more difficult with all of the policy changes. What this actually means is that they are not only cannibalizing our traffic but they’re also pushing up our CPCs and our CPAs.
As a brand, you are always looking for ways to get people to your website and get them to convert more. It used to be just interest-based keywords on generics related to your own brand. Now you can cannibalize other peoples brands and get those incremental gains. The problem then is competitors coming into our brand space and pushing our ads down or increasing the CPCs on our ads. It’s not just direct competitors either, you have resellers, aggregators, etc. In the automotive space you have dealers and many automotive brands are having issues with trying to control how their dealers are bidding because dealers don’t have as much experience.
What we are seeing now is traffic is being lost from our brands’ brand-related search terms onto our main website and it’s going away.
This is even more important on mobile
As you know with mobile there’s a lot less space on the SERP, and usually with the size of the ads above the fold takes up most of the space and not many people are going to scroll down all the way to the bottom. Also, with mobile, it’s when people are actually looking for stuff at the moment and they’ve got less attention span, so it’s even more important that we actually pick up this traffic. Chances are that whatever they click on they are going to then stick with that. This is especially the case for retailers and automotive businesses who have local offerings and people looking for local specific information.
On mobile, the lower your ad position is the higher (negative) impact it has on your clickthrough rate.
On tablet and on desktop the actual CTR decrease as your ad position goes down isn’t as significant as it is on mobile. This goes to show that on mobile we need to make sure that our ad positions are up there at the top.
How valuable is your brand space?
Once you have the data and you know about your brand space it’s about analyzing the data and finding out how valuable is your brand space to you? Years ago you could just log into Google Analytics and look at the value per click of your organic brand and the value per click of your paid search brand. As long as the value was more than your cost per click it made it viable to bid on your brand. It was a pretty simple analysis.
Then seven years ago Google took away the ability to see organic keyword data and analytics have become harder. What we are seeing now is that’s it’s a lot more difficult to access this data and so people are having to think of different tests that they can come up with.
I like to use standard deviation to get the validity of the data in the beginning in order to measure the success of the ad test. The reason for this is that gives a much better data set to work with so once you actually have the data in you can use a range to look at the changes we see if we then turn the brand off. If it fits within this range then fine, we don’t need to work on brand PPC. If it’s outside of the range then we know that PPC needs to be turned on because it’s having a significant impact on our business.
Successful internet entrepreneur Gary Vaynerchuk recently spoke about how so many people continue to underestimate the amazing power of the internet to change their lives. Don’t miss the part about Facebook and Instagram about half way down below. Hint… this is the part that can literally change your life and your business.
Here are the highlights:
I think that everybody in here is underestimating how special this era is.
Whether you’re a young kid and never knew a non-internet world, whether you’re my age, 42, or above and you understood it because we grew up without it, even the people that can appreciate it because we grew up without it, I don’t think are really understanding that this internet thing is no question the biggest change in the human race, ever. It just is.
All the things we’re thinking about, whether it’s political or social or financial things, they’ve just started. Everything that’s changing has just started.
In my adulthood, not even in my childhood, Best Buy rose and was eliminated because of this environment. I’ll be honest with you, I mean, it’s tough to say but I actually think Target is remarkably vulnerable in an Amazon/Walmart battle world. I actually predict, pretty aggressively, that Target will be bought by either Amazon or Facebook or Apple or Google because I think the internet companies have to buy retail to compete with Amazon.
There’s a real, real disconnect between the reality of what’s happening, all the opportunity.
What I think is happening is this extremism. Much like our social issues where we’re starting to really go in opposite directions. There’s this extremism, yes, there are hundreds of 11-year-olds making a million fucking dollars a year, making slime, selling it on Instagram, yet 99% of people that raise $2 million in capital for their start-up to make the Uber a fucking pizza delivery are going to fail.
I think the thing that’s grounding me is in this ridiculous change in our society, things like 15 years ago, if you dated on the internet and dated somebody you met on the internet, you were weird and a loser and it was taboo, and now every single person dates through the internet and swipes left and right 24/7, or slides into the DM.
Do you know how crazy Uber is as an early investor? Uber’s insane. Uber, or Lyft, or whatever you want, literally, if I stood up here and said guys, in 15 years you’re going to wan your 13-year-old daughter to go into a stranger’s car, because you’re going to think that’s safer than her driving with her friend. Parents actually, and probably correctly, think it’s safer for their 16-year-old daughter to go into strange 40-year-old men cars multiple times a day. I mean it.
But I would have never been able to sell you on that if this was 10 years ago and I’m like, let’s do start-up ideas and I pitched you on that, you would have laughed me out of the room. I know because I laughed the founders of Uber out of the room when they were like, what if everybody could get a limo on their iPhone? I was like, yeah, 1% of rich people. I never saw it playing out the way it did.
I think it’s a very interesting time.
What’s interesting to me about it is as the world’s changing, as people watching video games, more people watch people play video games than watch people play baseball. That’s just real. ABC, NBC, and CBS are finished. They’re done.
Remember when four years ago you had one show on Netflix that you liked but then you watched cable? Now you have Netflix and there’s one show on cable or regular TV. Do you understand when all the sports go to Netflix and Amazon? Amazon has bought the rights to English Premier Football, you know, proper football, soccer shit.
Tennis, Amazon’s going to be bidding for the NFL. Hulu’s going to have hockey. Google and Apple are going to have basketball. You’re never going to turn on two, four, five, or seven. Ever.
In this world, think about nothing we believe in or use, YouTube, the iPhone, Netflix, Facebook, none of that existed 15 years ago. Nothing that our entire society is running on. Everything we run on, guys, almost everybody her remembers the world pre-smartphone. You couldn’t, it’s just five minutes ago that you were like the internet on your phone! We struggle with things.
Parents all the time, when SnapChat blew up three or four years ago, parents were like, Gary, but I don’t want my kid on SnapChat. I’m like, you do know your son has Safari and can type in JizzHut.com, right? You’re worried about the one floozy 13-year-old in the fucking state and the dude’s got porn at his fucking fingertips.
That’s what I think a lot about.
Nobody here has actually quantified what’s really happened here.
For example, there’s a term in start-up land or in the business world called the last mile. It’s this big debate of how we’re all going to get everything delivered to us within an hour. Is it going to be Amazon, is it going to be Uber, is it going to be Postmates?
What I don’t think people understand is 7-11 is actually out of business in the next 15 years because of the last mile. You need deodorant or a fucking 20 ounce Mountain Dew you’re going to press a button and it’s going to be in your fucking house or office in a second.
What I think I’ve done really well in my career by launching a wine business on the internet in 1996 when people told me the internet itself was a fad. Or buying Google Adwords when nobody even knew what a search engine really was. Or when I started a wine show on YouTube in the first six months it existed. Or went all in on social media when everybody shit on social media, I was there.
I remember what everybody thought about Twitter and how stupid it was. Or that Facebook was a college thing. Blah, blah, blah, blah, blah, blah.
We put the past on a pedestal. We demonize the current and the future.
In all these changes, in all of this stuff that is going on, the thing that is most fascinating to me and the thing that I want to talk to you about is that this, doing the right thing and gratitude and honor and all this propaganda that I push, is actually more valuable than ever because let me tell you what the internet’s going to do.
I’ve been saying this for a long time and I feel like people are finally starting to believe me. I had this woman yelling at me over dinner about how this internet thing is scary and it sucks and this and that. And she’s an incredible activist for all women’s rights and all these other things. I’m like, you do understand that your media that you’re putting on a pedestal, the New York Times and NBC, is the reason all this bad stuff was able to happen?
When five or six old white guys control the media, a lot of stuff doesn’t hit daylight. When we control the media it gets a lot harder. Let me give you a news alert. Russia didn’t make you do anything. It didn’t, it didn’t. Meaning, if you’re a good person, a bad person, voted Democrat or Republican, you do you.
I have zero interest in debating politics with anybody these days because everyone’s on tilt. I just want everybody to know, the Russians didn’t hack your fucking brain. You didn’t go in saying I’m going to vote for Hillary, and vote for Donald, or the other way around. That’s not what happened. What happened is, you believe in what you want to believe.
Technology’s exposing us, it’s not changing us. What’s happening, where does this all go? What I want you to do more than anything is understand the following.
It has never been a better time in the human race ever to actually just go all in on you.
We are in a remarkable time. For all the things you may be worried about, left, right, up, down, there has never been a better time to be alive in the human race than right now.
Medicine, life expectancy, poverty, every issue we have, better. The best people to talk about what’s going on in America are 90-year-olds. They shit on everybody. They’re like, she thinks it’s bad? Ah, fuck!
This like 92-year-old woman stopped me in the street, she’s like, keep doing what you’re doing, I’m like, I mean, she looked like 190. I was like, thank you. I got to talk to her for a second and she’s like, by the way, these women, and she’s wrong but it was still funny, these women, fuck, if I didn’t have somebody grab my ass everyday in the office, I was pissed!
I was like, I get it. I was like, don’t say that in public. She’s like, fuck public! I was like, man, 92 is some gangster shit. I’m obsessed with practicality. People think I’m a destructor, I’m practical.
Facebook and Instagram ads are grossly under-priced.
If you go how tonight and Google how to run Instagram story ads, and learn how to do that, and then make a video or picture and run Instagram story ads for whatever you’re trying to do in life, become the mayor here, sell some peanuts, kombucha, get people to sign up for your fucking track team, I don’t care what, An Instagram story ad will work better than anything else you can do if you care about people 15-45. If you care about people 30-75, Facebook works better than anything.
If you sit here tonight and you are not completely fucking pumped completely pumped about your life, it’s up to you to change that.
I can’t implore this audience enough to realize that Facebook and Instagram right now is so remarkably under-priced in its ability to change the outcome of your business, your dreams, your mission. If I could do anything today, it would be to encourage people to go home and Google how to run Facebook ads, how to run Instagram ads, because that will absolutely change your game.
I think about this all the time. The ROI. The ROI of a basketball for LeBron it’s a billion dollars, for me it’s zero. Just because you didn’t have a successful ad campaign on Facebook or Instagram doesn’t mean it doesn’t work, it means you suck.
If you don’t run a successful ad campaign right now on Facebook and Instagram in the way that it’s so under-priced, you actually really suck. Now, here’s the good news. A lot of people run ads that are self-serving. The reason so many things aren’t working for people is that it’s good for you, not for the other person. Nobody wants your $897 bullshit e-book. That’s why your fucking Facebook ad didn’t work. That’s the problem, not Facebook.
I really, really, really want to implore people to understand that I sit here with a lot of business regret because when my dad’s business grew from $3 to $60 million, it should have been from $3 to $250 million. But I didn’t run enough Google ads.
I hit hard on Google when it first popped but I didn’t spend enough because I was a kid and I didn’t realize how special that moment was. That moment went away. Buying the word cabernet and Merlot and pinot grigio and Bordeaux and Napa Valley and wine and wines and wine gifts and this and that, they were five and 10 cents a click. I bought them all and nobody knew what the fuck was happening.
There were millions of people on Google and I got bigger than Haskell’s and Sam’s and Sherry Lehman’s and Wine Club and everybody was confused why. That’s what’s happening right now on Facebook and Instagram.
I’m telling you the fucking truth, I’m giving it to you, and 98% of you will not do anything about it.
We have to understand what’s going on. Why is Toys R Us going out of business? Why are all these things happening? It’s happening because the internet is eating up our society.
Why do we have such big opportunities?
Because everybody here can start a competitor to Coca Cola, which used to take $50 million because you had to buy into Albertson’s and to Safeway and Target and you had to make it and you had to fucking market it on television and now it costs $200,000.
You make something, you slap it on Amazon, 3PL, you run some Instagram influencer ads, and you’re in the game. It’s crazy.
What’s crazy about the internet, unlike what we grew up with whereas if you wanted to open up your store, your dream store, you had to be there so by the time you got home at seven, you couldn’t do that. The fact that you can do this from 7PM to two in the morning until it means something, enough to give you the courage to jump off the other thing, this is just practical.
The dream of being happy and living your life has actually become practical.
You’re sitting on the information but because it wasn’t like that for last 300 years, you can’t wrap your head around it. And because it seems so crazy, the idea of doing it and nothing happens for six months, makes you feel like it wasn’t meant to be and you get out. Because you were built and groomed within a school environment.
The only reason I’m successful is because I got Ds and Fs and I didn’t listen. I mean it. It’s how I see things differently. You need somebody else to have already done it. You need to see the path. I don’t like paths. I need blank slates. This is a blank slate.
I can’t wrap my head around it. That so many people here can build a $50,000 to $500,000 a year business on Amazon just by going on websites in China, buying something, and then relisting it on Amazon. That, my parents and I had dinner in New York and we had this nice dinner and we were coming out and our waitress ran out and grabbed me and said, thank you so much. She said, my fiance was out of a job for 19 months, depressed, doing drugs, saw one of your Instagram videos and a year later on Amazon is making $1.3 million a year. To me, this is fucking nuts.
So I am super excited about the time that we’re living in. I love what’s going on, I love that the big companies are losing, I love that the establishment is in trouble. I love it because I think it’s going to be better. I think we’re all going to be happier. I really do.
When Best Buy goes out of business, I don’t see that as a negativity.
I see that as an opportunity. I love that people are like, oh, Best Buy shouldn’t go out of business. Best Buy put people out of business. Everyone’s like, this is unfair, Walmart, like Target, Target put people out of business.
How are you confused by this? All of a sudden this was the moment to stop capitalism? Because Target’s here? Target put people out of business. Ironically, if you really play out my thesis, the people that are going to put Target out of business are back to the small people.
That is the most interesting shit to me of all time.
This internet thing is big. It’s real big. It’ll be bigger than we all thought. To me, the fact that you’re not doing Facebook or Instagram or YouTube out of a social point of view, to the detriment of your business and happiness and opportunity, is nuts. Because you’re mad that people aren’t talking to each other in real life, you’re leaving opportunity on the table for yourself is not a good idea.
One of the most powerful ways for a business to drive sales is via video reviews on YouTube. Earlier this year, Google made that even more effective by combining the power of video on YouTube with Google Search. Nicky Rettke, YouTube Group Product Manager for Video Ads spoke to an audience at Search Marketing Expo 2018 (SMX) and explained exactly how easy it now is for businesses to make use of this marketing one-two punch summarized below:
As you know we’ve been we’ve been working on direct response video formats for ad promotion for quite a while now, but we haven’t had a comprehensive solution for driving web conversions until now. I’m going to share some of our newest innovations that help you harness the combined power of search and YouTube together.
I want to start off by just having everybody take a minute to think about the things that you bought last week and how you decided what to buy. If you’re like most people, 86% to be exact, then you know you turned to Google for help where we have the world’s information at our fingertips when we’re shopping. We can read reviews, we can search product details, and we can even watch videos to help us make the best decision possible.
What that means is that even small everyday purchases like a toothbrush can kick off a big research project. Did you know that mobile searches for toothbrush reviews have more than doubled in the last two years? Whether it’s a car or toothbrush, we want to literally see things in action before we buy them. This is why people are increasingly turning to YouTube in addition to Search for help with their purchase decisions, and we can see this trend in YouTube search data.
Over the last two years, review videos on YouTube have had over 50,000 years worth of watch time on mobile alone. That’s over 438 million hours!
It’s not a hard jump to go from review to purchase. We’ve seen 100 percent increase in online conversions coming from YouTube ads globally over the last 12 months. That’s showing that consumers are coming to YouTube not only to research but to take action.
3 Features Helping Brands Harness Commercial Intent on YouTube
1. Custom Intent Audiences – Find People Who Recent Searched
Remarketing lists on search used to be the only way that you could re-engage users who did not immediately convert with custom intent audiences. You now have a second chance at winning them over using the most persuasive tool in the world… video.
Custom Intent Audiences allow brands to reach people who searched for relevant keywords on Google. All you have to do is create a keyword list, or you could just repurpose the keyword lists that you’re already using on your search campaigns.
Purple, the online mattress retailer, used Custom Intent Audiences to sell mattress protectors. Targeting YouTube viewers who had recently searched for queen bed sheets, they were able to lower the cost per visit by over 30 percent and they saw a 3x increase in the number of people searching for Purple on Google.
2. TrueView for Action – Make it Easy to Take Action!
Once you have found the people with the strongest intent, the next step is to make it really easy for them to take action. TrueView for Action is YouTube’s new format optimized to do exactly that. You can use it to drive whatever action is most important to your business, like clicks to your website or new signups.
It’s most powerful if you combine it with Custom Intent Audiences, that way you can reach people who are just on the brink of making that purchase decision.
3. Target CPA Bidding – Auto-Optimize for Results
TrueView for Action campaigns use target CPA bidding to automatically optimize bids using Google’s advanced machine learning technology. Simply put, you can now bid and buy for your video campaigns just like you do on search today.
Combining Video with Search Improves KPIs
This suite of features makes YouTube more actionable and early adopter brands are seeing it in the KPIs that matter most to them. Whether it’s the investment startup, Betterment, who increased their return on ad spend by 6x or the online education platform Masterclass, who grew class signups by over 140 percent, or travel giant Kayak, who reduced their CPA by 80 percent, brands around the world are using YouTube to drive meaningful and efficient business results.
Over the past decade, there has been an exponential rise in the integration of artificial intelligence in many areas of our daily lives. You encounter it every time Amazon recommends a product for you, or when Google predicts what you are looking for before you’re done typing it in the search box. AI is also likely to be the first thing you talk to when you call your bank to check your account.
Because of AI’s efficiency and ability to give consumers a one-to-one experience, its use will continue to grow. A Gartner Study predicts that by 2020, as much as 85 percent of all customer interactions will be done without humans.
If you own an eCommerce store, it’s essential to make yourself aware of these trends and decide on how you will apply them to your business.
Take a look at some of the ways AI is changing eCommerce:
Provides More Personalized Customer Experience
One big advantage of using AI is how much it canpersonalize a customer’s shopping experience. A good example is The North Face’s collaboration with IBM to assist customers in finding the right jacket.
[Image of user interface via TheNorthFace.com]
When customers visit The North Face website, IBM’s Watson pops up to ask where and when the jacket will be used. The AI will also ask follow-up questions based on the answers the customer gives. Once it has enough data, it will scan The North Face’s inventory and recommend several jackets based on its relevance to the client’s answers.
Boosts Customer Trust and Exposes Fake Reviews
Online reviews have a big impact on whether a consumer will make a purchase. Unfortunately, not all reviews are made by people who legitimately bought a product. This can affect a site’s algorithms and result in mistrust between buyers and sellers. AI can combat this dilemma. Let’s take Amazon’s example. Its AI puts more weight on verified customer purchases while also taking into account reviews that are marked “helpful” or new.
Making sure that the reviews consumers read on your site regarding your products are trustworthy is essential to building your reputation and brand loyalty. Customers will also be more willing to return and buy more if they know the reviews they’re reading are genuine.
Makes Search Easier and More Customer Focused
As a consumer, you’ve probably experienced seeing something that you want but have no idea what it’s called, who makes it, or even if it’s on sale. AI is now making it easier for you to find the information you need, thanks to its enhanced capabilities to interpret, classify, and understand images.
Pinterest has already been making use of AI technology with its enhanced visual search tool. Now, if a cool pair of shoes catches your eye while looking at Pinterest, you’ll be shown items that are visually similar to it.
The tool reduces the time a consumer will spend searching for an item. It also boosts conversion rates and retargeting options for businesses that market their items via the platform.
Improves Inventory Management
AI is also making a big difference in how companies manage their inventories. People who work in retail understand how difficult it is to keep shelves stocked, track everything accurately, and ensure that inventory is up-to-date.
Inventory management traditionally utilized a hindsight perspective, something that doesn’t work in today’s dynamic online marketplace. AI technology uses predictive analysis to assess what demands will likely rise and gathers key information about factors that are driving this demand.
AI’s machine learning feature also means that the longer the company uses it, the more it learns about the business, its customers, and site visitors. It will then get better at accurately predicting what items the company requires in its present inventory and what it will need in the future.
AI is becoming a driving force in how businesses cater to their clients’ interest and needs. With it, eCommerce platforms can give more personalized services, provide better recommendations on products and improve trust between the customer and the brand.
Jeff Bezos is the founder and CEO of Amazon, a company that only sold books online when it launched in 1994. Today, Amazon sells virtually any consumer good you can think of, and under Bezos’ leadership, has become the world’s largest online retailer with a valuation fast approaching $1 trillion. The visionary also owns The Washington Post and established Blue Origin, an aerospace manufacturer and spaceflight service. In July, Bezos added to his many achievements when he surpassed Microsoft founder Bill Gates to become the world’s richest person.
Needless to say, Bezos is a wildly successful businessman. And when he shares his thoughts on business, people listen. Over the years, the mogul has given many interviews sharing his experience and offering advice on how entrepreneurs can become more successful in business.
Here’s a compilation of seven of the most powerful business lessons he learned along his journey.
1. There’s no shame in being stubborn and flexible.
It might seem like a conundrum, but it is possible to be both stubborn and flexible. As a matter of fact, being stubborn in the pursuit of your goals (but flexible in how you go about it) has helped the 54-year-old Bezos to succeed. Heexplained in a Fast Company article that “If you’re not stubborn, you’ll give up on experiments too soon. And if you’re not flexible, you’ll pound your head against the wall, and you won’t see a different solution to a problem you’re trying to solve.”
2. Only hire the right person for the job.
Amazon is infamous for having very high standards when it comes to hiring personnel. Only the people who would fit the company to a T are hired. This is because Amazon’s president believes that to keep your culture of success intact, you have to be very careful about the people you bring in. The same Fast Company article claimed that the Amazon chief once told a colleague that he’d “rather interview 50 people and not hire anyone than hire the wrong person.”
3. Don’t rush growth.
A lot of people want success, and they want it now. However, making a mark in an industry or transforming your startup into a profitable one in under a year is next to impossible. Take it from Bezos. It took him more than six years to turn Amazon into the money-making venture it is now. His slow but steady approach might have delayed his success, but it allowed him to keep product prices low while he funneled revenue back into Amazon. This strategy is even incorporated in theprinciples Amazon wants from its leaders — “ They think long term and don’t sacrifice long-term value for short-term results.”
4. No one is more important than the customer.
Amazon is known for its customer-first approach. Every innovation the company introduced was aimed towards providing better service to their customers. Bezos had emphasized in his1998 letter to shareholders the importance of focusing obsessively on their customers. Companies who put their customers first will reap big dividends, especially in this age when word of mouth reviews can quickly spread across all social media platforms.
5. Keep evolving.
If there’s one thing that Bezos is afraid of, it’s to become stagnant. The CEO’s inclination to break barriers by pushing the envelope has led to innovations that have helped Amazon. For instance, the company started out as an online bookstore. It then moved on to develop its own products. Now it has evolved into an empire that sells over 12 million products, not including books, media, wine, and services.
6. Listen to your employees.
After your customers, your employees are the second most crucial people in your business. It’s very important that you listen to them and that you allow them to give suggestions and feedback. It’s how Amazon came up with ideas like the Gold Box and Bottom of the Page Deals. Feedback is particularly crucial to those in management. Company owners and CEOs oftenend up in a protective bubble, surrounded by people who are either wary about giving them information because they believe the boss doesn’t want to hear about it or who only tell the boss the things they think he or she wants to hear. Bezos said that he had to invent ways to get out of this bubble and get the feedback he needed.
7. Learn from your competitors.
It’s a good idea to keep a close eye on your competitors. In a speech he gave at Lake Forest College, Bezos admitted that Amazon watches its rivals in order to “learn from them, see the things that they were doing for customers and copy those things as much as we can.” After all, if something isn’t broke, why fix it? It’s better to build on something that’s already proven to work and put your own twist to it.
These tips have helped Jeff Bezos reach the pinnacle of success. Which ones resonate with you most? Share your thoughts in the comment section.
In June of 2017, Walmart announced that it wanted to tap its massive workforce of over 2 million people to bring online orders directly to the front doors of its customers. The retail giant planned to have employees make the deliveries on their way home after ending their usual work shifts. According to Marc Lore, head of Walmart’s eCommerce operations, the strategy would make the company’s deliveries more efficient, a move that would help it fend off rival Amazon. But before launching the employee “last-mile” delivery service nationwide, it was first tested in New Jersey and Arkansas. Walmart reeled employees into the program by offering additional compensation to cover labor and fuel expenses, but the experiment flopped. As it turned out, the last-mile program had more drawbacks than benefits for its workers.
In January of this year, Walmart quietly shut down the pilot program and is now testing employee deliveries on a smaller scale.
But exactly why did its last-mile delivery fail? Employees who participated in the program spoke to Reuters about their experience and explained some of the issues they had with it.
President Donald Trump once again attacked Amazon and the Washington Post in some of his recent tweets.
In his latest Twitter rant against the company, the President railed that the Washington Post “has gone crazy against me” since Amazon lost their Internet Tax Case in the Supreme Court. He also jibed that the Washington Post is losing a fortune and described it as “nothing more than an expensive lobbyist for Amazon.”
Trump alsoblasted Amazon for using the US Postal Service as a “delivery boy” for its packages at only “a fraction of real cost.”
The Amazon Washington Post has gone crazy against me ever since they lost the Internet Tax Case in the U.S. Supreme Court two months ago. Next up is the U.S. Post Office which they use, at a fraction of real cost, as their “delivery boy” for a BIG percentage of their packages….
….In my opinion the Washington Post is nothing more than an expensive (the paper loses a fortune) lobbyist for Amazon. Is it used as protection against antitrust claims which many feel should be brought?
Trump’s latest tirade came on the heels of a Washington Post’s report that was critical of how he handled North Korea. The paper claimed the president was frustrated with how long it was taking to see some progress after his talk with North Korea’s Kim Jong Un. Trump tweeted the country had not launched a rocket in 9 months and that “all of Asia is happy.” He also said what the “Fake News” is claiming is wrong and said that he was “very happy” with the way things with North Korea were proceeding.
Amazon’s shares dipped slightly after Trump’s tweets. However, the loss was minuscule when compared to the company’s 55 percent gains since the start of 2018. Trump’s tirade also did little to harm Jeff Bezos’ standing as the world’s richest man. The owner of Amazon and the Washington Post has a net worth amounting to about $150 billion.
This isn’t the first time that Trump attacked Bezos and Amazon regarding the e-retailer’s use of the USPS. In a tweet last December, Trump questioned why the USPS was charging the online store so little when they “Should be charging MUCH MORE!” He also tweeted in April that the Post Office was losing a fortune but that this will change.
It is true that the Post Office is losing money. The USPS reported a loss of $2.7 billion in 2017. Increasing the rates of shipping packages is one way to resolve the situation. However, the USPS’ main function is not to generate profit but to serve civilians. This is why the department’s shipping rates are very low.
Amazon also isn’t the only company using the US Postal Service. FedEx and UPS also drop off packages and utilizes the USPS as their “last mile” delivery. If the postal service does raise prices, it wouldaffect all companies that ships packages, including small businesses that may find it difficult to cover increased shipping costs.
This is not a good week for eBay. The company’s stocks took a massive tumble a day after revealing that it was slashing about 300 jobs in the Bay Area.
eBay informed the Employment Development Department of California of its move to cut about 300 jobs in the area by Friday, July 20. The affected employees were reportedly notified last month that they were being laid off.
— San Francisco Chronicle (@sfchronicle) July 18, 2018
The retail giant later reported its second-quarter earnings to its investors. The company secured a net profit of 64 cents per share, which was above what analysts projected. However, its warning that the present quarter’s revenue would go down resulted in a selloff that saw eBay’s stocks fall by 10 percent, ending in $34.11 per share.
eBay also reported that its expected full-year profit will be around $10.75 billion to $10.85 billion, down from its previous estimate of about $10.9 billion to $11.1 billion. The company alsolowered its expectations regarding its third-quarter earnings per share to somewhere between $0.54 and $0.56.
eBay stock has worst day in nearly two years after weak growth, lowered revenue forecast https://t.co/ZbLHNkZngM
News of the layoffs and the drop in stock prices is typically something to be worried about. Conventional wisdom dictates that cutting jobs should lead to a boost in share prices. After all, reduced cost means better profits. eBay certainly looks at it that way, as the company stated that the savings it made the previous quarter will provide them with additional funds to spend on marketing.
eBay has been relatively quiet the past few years, particularly when compared to rival Amazon. But despite losing its luster, the company has been performing steadily. Its stock prices even reached a high $36 per share last January. This capped a 139 percent gain of the past five years. Unfortunately,shares have dropped 27 percent since then.
Some Wall Street analysts have said that this drop in shares is puzzling, as the company continues to make progress with its key initiatives. They noted that the company is still “losing market share at a time when eCommerce, in general, is thriving.” One analyst even said that this could be due to eBay customers not bringing in new buyers to the platform.
Amazon has concluded its record-setting online shopping event this year. Called Prime Day, the 36-hour shopping period that ran from July 16 to July 17 was said to have surpassed Cyber Monday, Black Friday, and last year’s event. In a recentpress release highlighting its success, the company didn’t disclose sales growth or exact figures but reported that Prime members bought more than 100 million products during the sales event.
According to CEO of Worldwide Consumer Jeff Wilke, Prime Day was an opportunity to reward its members with the best deals and exclusive access to Amazon’s new products. In fact, two of the bestsellers during the worldwide event included Amazon’s Fire TV Stick with Alexa Voice Remote and Echo Dot.
Aside from Fire TV devices, other Amazon products that made a killing were Kindle e-readers and the kids’ versions of the Fire tablet and Echo Dot.
Other than electronics, members also purchased millions of toys, beauty care, computer accessories, apparel, and kitchen products. Since it’s back-to-school season, buyers also stocked up on school supplies and household essentials, taking advantage of the convenience of buying online with low shipping rates. After all, Amazon Prime members enjoy same-day delivery and free shipping on millions of products.
Prime Day also put the spotlight on small and medium-sized businesses that sell on Amazon’s platform. During the event, total sales from these businesses surpassed $1 billion, which reportedly exceeded sellers’ expectations.
Despite its successful run, Prime Day actually began with a glitch that prevented customers from checking out their purchases during the first few hours of the sale. Amazonrecognized the problem but skirted disclosing the reason for it. Others pointed out that it was probably due to the unusually heavy traffic on Amazon’s site as the sale began.
July is considered a slow month for retail, but with Prime Day, Amazon upped the ante and spurred shopping activity. Taking advantage of the bargain hunting hype, some of the larger retailers, like Walmart, eBay, and Macy’s, also ran their own sales campaigns and offered a few bargains online.
Target, for instance, had a couple of promotions on July 17, which generated this year’s highest single-day traffic and sale on its website, Target.com. The retailer even took a jab at Amazon Prime’s $119-membership fee, saying that buyers don’t have to pay to enjoy the site’s deals.
With the upcoming holiday season, large retailers are bracing themselves for faster sales growth as more buyers turn to online shopping for convenience and experience. Until other retailers catch up with the online giant, Amazon will likely break its Prime Day 2018 record.
In its bid to overtake its largest rival, Walmart announced astrategic partnership with Microsoft on Tuesday. According to the biggest US retailer, the company inked a five-year deal with the tech giant to speed up its digital transformation for a faster shopping experience online. Walmart will be utilizing an array of Microsoft’s cloud solutions as its preferred provider.
It’s no secret that Walmart and Microsoft are two of Amazon’s closest rivals in retail and cloud computing, respectively. In an interview with The Wall Street Journal, Microsoft CEO Satya Nadellasaidthat the battle against Amazon was “absolutely core” to his company’s teamup with Walmart. He further stated, “How do we get more leverage as two organizations that have depth and breadth and investment to be able to outrun our respective competition?”
‘The shared rivalry with Amazon “is absolutely core to this,” Microsoft CEO Satya Nadella said in an interview.’ https://t.co/w2BJEpf2jZ
Under the deal, Walmart will use Microsoft’s machine learning and AI technologies to optimize the retailer’s entire supply chain and improve its delivery system. With the Internet of Things platform on Microsoft’s Azure, the retailer can better manage which products should go on the shelves from the ones that go into the refrigeration units. This is one way to reduce costs in operating its physical stores.
Utilizing technology to assess operations seems to be one of Amazon’s strong suits, one that Walmart appears to lack. Over the past few years, the online retailer has developed its cloud computing business, Amazon Web Services, to become the leading cloud service provider. Microsoft, however, remains second in terms of market share with Azure, but still a worthy alternative for other companies.
Although Walmart has developed its own cloud computing operation, it wasn’t as extensive as Amazon’s or Microsoft’s. The retailer only began using Azure recently when it acquired Jet.com, whose operations ran entirely on Microsoft’s cloud platform.
Walmart has been more open to the idea of working with tech firms to enhance its systems and improve shopping experience. Last year, it teamed up with Google by adding some of its Walmart.com products onGoogle Express to allow for voice-ordered purchases, directly competing with Amazon’s Alexa. And for its back-to-school offering, Walmart has also launched itsapp for faster location of items in-store.
Microsoft, on the other hand, has been teaming up with other brick-and-mortar retailers, such asMacy’s andMarks & Spencer, for better retail experience using artificial intelligence.
Despite the strategic alliance, Walmart won’t be using the tech giant’s services for its planned cashierless stores – another area where Amazon has taken an early lead with its Amazon Go store in Seattle. Microsoft, however, is still keen on developing hardware and software solutions for automated grocery stores, even if it’s not for Walmart.
Snapchat is seeking to expand its horizons and utilize its camera to go beyond social media with a new visual search feature. This novel search capability and a team-up with Amazon could open a new revenue stream for the company.
According to reports, a new Snapchat version for Android smartphones includes a secret code for a new “Visual Search” feature. This new feature, dubbed Project Eagle, can allegedly utilize Snapchat’s camera to send a barcode or product image scans to Amazon. The retail powerhouse will then display the results of the product search.
The secret code was reportedly discovered by Ishan Agarwal, an app researcher. Agarwal then tipped off TechCrunch about his discovery. On their end, the company was quick to spot a source code in Snapchat that had a pop-up text with the lines — “Press and hold to identify an object, song, barcode, and more! This works by sending data to Amazon, Shazam, and other partners.”
The discovered code doesn’t really explainhow the visual search feature will work. However, the application’s code enumerates the capacity to bring “reviews” and “sellers” to the surface, “Copy URL” of a specific product as well as “Send Product” or “Share” it with friends. These actions could be done through Snapchat Stories or simple Snap messages.
Project Eagle will undoubtedly change the way people see Snapchat. Instead of being just a social media app, it could become a clever tool for navigating retail. It can also provide the company with a new revenue source if it works out an affiliate referralsdeal with Amazon.
This is something that Snapchat desperately needs at the moment. The company has suffered a loss of $385 million in the previous quarter, with its missing revenue pegged to be at $14 million. Snapchat’s stock also closed Monday at $13.65 per share, way below the $17 offering price.
Amazon is so far keeping mum about Snapchat’s visual search feature. It should be pointed out that there’s no definitive proof to indicate that the retail giant is working with Snapchat or if it’s just the end destination of the search results. As for Snapchat, mother company Snap Inc. just issued a “no comment” when asked about the rumored visual search.
One thing is certain though, a solid visual search feature could turn Snapchat into something more than a selfie aficionado’s favorite app. It could usher in a groundbreaking way for consumers to search for products to purchase.
As an entrepreneur, time is your most valuable resource, especially when you’re in a highly competitive market. Shopify is now helping businesses maximize their time with a new app that manages customer conversations across multiple messaging platforms.
The company recently rolled out ‘Ping,’ for iOS devices. The standalone app can streamline customer interactions from SMS, Facebook Messenger, or a company website.
A free mobile app that brings customer conversations, marketing workflows and more together in a single place. Shopify Ping is available now on iOS. pic.twitter.com/vJ2oNmBw1f
Shopify is putting more focus on mobile solutions for businesses as half of its estimated 600,000 retailers are already using its mobile application. Most of these merchants currently use the shopping platform to process their business needs and handle their payment system.
Communicating with Ping
The Ping app will enable retailers to communicate directly with clients and respond quickly to their requests. All conversations a company has with their clients on any messaging app can be accessed using Ping.
The fast response time is a great way to assist companies in delivering excellent customer service and building better relationships with clients.
Shopify explained in its blog that the company developed Ping as another means for online merchants to run their company. With the app, retailers “can spend less time shuffling between separate tools” and spend more time on essential things like serving clients and expanding their business.
What Can Kit Do
Ping comes with a built-in virtual assistant dubbed Kit. This little helper can help you conceptualize, develop, launch, and manage your marketing plans. Shopify explained that Kit is designed to run your Instagram and Facebook ads, manage your email marketing campaign, retarget clients, and more depending on the information collected from customer messages.
Kit can also implement complicated workflows, like touching up product images and searching for new products to expand your inventory.
The marketing bot was purchased by Shopify in 2016 and an upgraded Kit Skills API is slated to be released later this year. Some improvements expected to be introduced is a natural language processing system that will provide business owners with more insights and the capacity torepresent their company in a chat environment. The built-in assistant will be able to respond to frequently asked questions and shipping inquiries. Of course, there will still be instances when human intervention is needed, like when dealing with a large order from a client.
The Ping app and Kit will also be able to do other AI processes like flag conversations that could lead to big deals or alert the owner of a customer complaint regarding an order.
Retailers big and small can now download Ping for free on iOS. However, it’s not clear just when the app will become available to Android users.
Online shoppers will soon be shelling out more money for their purchases now that the US Supreme Court ruled that states can demand e-businesses collect sales taxes.
The case, which will have a profound effect on the consumer economy, saw the country’s Supreme Court justices voting 5 to 4 that states have the right to impose taxes on online sales even if the retailer does not have a warehouse or a physical store in their jurisdiction.
Brick-and-mortar shops have been blaming online stores and the apparent tax break they enjoy for slow sales. Meanwhile, eCommerce businesses have claimed that their success was because of the convenience they offer, not the sales tax (or lack thereof).
Doing Away with Years Worth of Laws
The surprisingruling ended years of legislative battles as it overturned a 1992 decision. It also answered the question of whether the law had fallen behind the digital economy. According to the Supreme Court ruling, the requirement that sales taxes are bound to retailers with a “physical presence” in a state was “unsound” and outdated.
South Dakota is a clear winner in this ruling. The state had petitioned the court to uphold recently passed legislation imposing a sales tax on online retailers. Marty Jackley, the state’s attorney general, defended the law by claiming that South Dakota was “losing millions for education, healthcare and infrastructure” and that the unfair playing field was hurting its citizens.
The ongoing issue that eCommerce businesses had an unfair advantage over brick-and-mortar shops was pushed to the forefront again when President Donald Trump tweeted in April that online retail giant Amazon was paying “little or no taxes to state & local governments.” It should be pointed out, though, that Amazon has been collecting sales taxes from customers in 45 states since April 2017.
Impact of Supreme Court Ruling on eCommerce
The decision to levy sales tax on online retailers had traditional retailers celebrating while the stocks ofecommerce companies took a dive.
Wayfair, an online furnishings retailer, saw its shares drop 3.8 percent while Overstock.com and eBay fell 2.5 percent and 2 percent respectively.
Amazon’s shares also took a hit, going down 1 percent. However, the retail giant’s situation is more complicated. While the company enjoyed the tax exemption for several years, a policy change in 2012 has seen it collecting tax on its own sales in the District of Columbia and 45 other states. But its third-party sellers haven’t been required to do so and thus will feel the impact of the court’s decision.
President Trump has declared the Supreme Court ruling as a “big victory for fairness” in the US and a “great victory for consumers and retailers.” However, consumers would be paying more once this ruling is implemented.
Big Supreme Court win on internet sales tax – about time! Big victory for fairness and for our country. Great victory for consumers and retailers.
There’s no telling yet how the new ruling will affect the retail landscape as this will largely depend on how states choose to exercise their authority regarding online sales. Some experts have noted that the emphasis placed by the justices on South Dakota’s law provides small online businesses with some protection as only sellers that engage in transactions of 200 or more or those that deliver goods worth more than $100,000 will be taxed.
However, the numbers could vary as $100,000 can be considered quite low from a company income tax perspective. But it’s safe to say that states will try to implement these tax sales, whether via existing or new legislation.
Microsoft is reportedly taking on Amazon, as the company ventures into retail territory. The company is said to be looking into checkout-free shopping, an innovation that Amazon has pioneered.
Reuters reported that at least six people have talked to them about Microsoft developing technology that will give retail companies the option to have cashier and checkout-free shops. Microsoft is said to have partnered with fellow Redmond-based company AVA Retail. The company develops systems that can collate information about shoppers. This time around, it will be working with the renowned software company on innovations that could be used on brick-and-mortar stores.
Interestingly, Microsoft will not be installing said technology in their own stores. According to the sources, it has instead reached out to Walmart about the possibility of a joint effort. If this pushes through, the two companies could give Amazon a run for its money.
Microsoft is said to have around 10 to 15 employees working on researching and developing their new retail technology. There aren’t a lot of concrete details at the moment, but one report said the research team has explored using cameras attached to shopping carts as a means to track the customer’s purchases.
If successful, this could potentially do away with the need for cashiers. It also means a store won’t need to put up hundreds of cameras the way that the Amazon Go pilot store did.
This approach suggests that Microsoft is looking to offer retailers a more cost-effective system. Stepping into the checkout-free store arena would alsopit the software company against retail giant Amazon. Heated competition between the two is nothing new. Microsoft’s Azure cloud service is second only to Amazon’s AWS.
Walmart has declined to comment on the news and a Microsoft spokesman said the company “does not comment on rumors or speculations.”
There’s no question that Amazon leads the way when it comes to changing the face of retail. If Microsoft or other businesses want to get ahead of the company, or at least be on the same standing as Amazon, they better get a move on.
Amazon has already opened to the public its first cashier-less convenience store, Amazon Go, in Seattle early this year. Shoppers entering the store are required to swipe an app which enables computer-vision technology to monitor and track them and their purchases as they walk around the store. Once done with their shopping, consumers simply walk out and their purchases are charged via their Amazon app.
Instagram is allowing users to buy what they see on Stories without having to leave the app.
The photo and video sharing platform recently announced that stickers with the shopping bag icon are headed to Instagram Stories. Tapping on the shoppable tags that caught your eye in a Story will reveal more details about the product.
Instagram started testing out this feature in 2016 and offered it to about 20 select retail partners. It quickly proved to be a hit and has since expanded to include regular brand postings on the feed. Now the feature is all set to roll out, with retailers like Adidas, Aritzia, Louis Vuitton and The Kooples set to use it to tag and link straight to their products. While retailers who can use this feature is still limited, it’s expected to open to regular users in the future.
In case you needed another way to spend money online, Instagram is bringing shopping to Stories 🛍
In a press release, Instagram emphasized that they were a place of inspiration and a venue for action, which iswhy the company has added shopping to Stories. The company also pointed out that there are 300 million people on Instagram Stories daily, and most of them are on the look-out for new products from their favorite brands.
The platform’snew shopping feature has vast potential for selling products, especially with Instagram’s reported vision to have its own longer-length video series. This means that in the future, users might be watching an Instagram show, see a celebrity using a certain product and just tap on the link to make a purchase.
At the moment, the new Stories shopping feature is only available for businesses. These companies are also limited to selling only their own products, so third-party sellers will find no business here. The feature also does not permit audience targeting. This means that people who see the posts with shopping tags are those who are already following the retailer.
The eCommerce landscape is in constant flux, with Amazon becoming more like a search-ads platform aside from being an eCommerce venture while Google seems to be doing the opposite. That’s one of the key takeaways from Mary Meeker’s annual Internet Trends report.
Meeker recently presented her report at Recode’s Code Conference. Among the highlights of the talk was her observation that Amazon and Google are starting to evolve and converge.
While this convergence might seem strange to some, it’s inevitable that companies evolve as eCommerce continues to grow steadily every year.
Amazon the Search Engine
There’s no question that Amazon is lording it over in online sales. The company had a 28% share in gross merchandise volume (GMV) in 2017, a big jump from its 20% share in 2013.
The past few years has also seen Amazon becoming the start-off point for more product searches than Google. A reported 49% of shoppersbegin their product search on Amazon while 36% opt for other search engines. What’s more, Amazon shoppers are a loyal group. A PricewaterhouseCooper’s survey revealed that 14% of shoppers use this site exclusively. The company is also perfectly suited to take advantage of these searches with key features like one-click purchasing, which allows customers to purchase from Amazon once they find the results they want.
Amazon is also aggressively growing its advertising side. More marketers are investing in the company’s paid search products, with 82% of Amazon Marketing Services users purchasing sponsored products while 65% buy headline search and product display ads.
Google as an eCommerce Platform
Google and Facebook continue to dominate ad revenues; Amazon is currently in fifth place. But with Jeff Bezos nipping at their heels, the Alphabet group is not resting on its laurels and has started to develop ways toensure shoppers remain onsite. The company’s new AdWords feature – Shopping Actions – will ensure that happens.
Shopping Actions essentially turns Google Assistant and Google Search into marketplaces that retailers can tap into while also allowing users to make direct purchases. Shoppers can add what they find in their search to a common shopping cart and easily check out using payment data already filed with Google. What’s more, the program works across various devices. This can provide Google a major advantage, given the increasing popularity of voice search.
Home Depot, Target, Ulta, and Walmart are just some of Google’s retail partners. However, these partner retailers would have to sacrifice some of their sales and control of their customer’s online shopping experience to Google, it’s a small price to pay for being able to utilize the company’s vast resources, technology, and millions of potential customers.
Walmart has always been known to push boundaries. The company is continuing this innovative culture with its recent filing of patents for keeping track of inventory, a store drone and other technologies aimed at changing how customers shops.
Walmart is no stranger to filing patents. The company has reportedly filed 1,400 patents since 2009, all of which focused on technology that enhances their customers’ in-store experience. One of thenewly filed patents pertains to a sensing device designed to make smart shopping carts that can communicate with a mobile device. This can make searching for grocery items go more smoothly.
Meanwhile, several of the patents that were filed are geared towards sensing and managing inventory levels and one that can track customers via wearables.
Walmart has also filed two patents for autonomous technology. One is for tech that can detect items or products in containers while the other can gather vehicle information, like size, temperature, pre- and post-delivery weight, using an intricate system of sensors, an interface, and a processor.
One patent that could drastically change how things are done at Walmart is for adrone that could assist customers as they shop in the store. According to the patent outline, a customer can call the drone through a mobile device that’s either the customer’s own or one that’s been provided by the store. The drone can be used to navigate around the store or to verify product price.
The patent detailed how the device can control the aerial drone to guide the user to the location of the item in the store. The drone could also give a visual projection to show the shopper what direction they should take or provide audio instructions.
There’s also the possibility of Walmart utilizing a variety of drones to perform different tasks. Each drone will reportedly have its own distinct features based on its assigned job.
While the patents appear promising, there’s no guarantee that they will be realized. Most of the time, the patents companies file are never realized.
However, Walmart’s recent patent filing underlines just how serious the company is in its bid to compete against Amazon and other established retailers. It has already increased the prices of products bought online and has started producing and selling its very own meal kits. Walmart has also signed an exclusive deal with Rakuten, a Japanese e-commerce company, to sell Kobo e-readers.
Microsoft gained a lead over Google parent Alphabet for the first time in three years, becoming the third most valuable company following market close on Tuesday.
Over the past 12 months, Microsoft’s stock price continued its rally and surged by 40 percent to $98 per share. Valued at $753 billion, it finally surpassed Alphabet’s $739 billion market capitalization. It is still behind online retailer Amazon’s market value of $782 billion and Apple’s $924 billion as the largest publicly traded US companies.
Microsoft just surpassed Google’s parent company Alphabet in market cap for the first time in three years $MSFT$GOOGLhttps://t.co/1Li6LneJNI
— Business Insider (@businessinsider) May 29, 2018
More investors were willing to bet on Microsoft’s cloud-first strategy under current CEO Satya Nadella. When he assumed the top post in 2014, the tech company focused on cloud computing instead of manufacturing phones. Since then, its stock price has been on an uptrend but continued to trail Google’s after the latter’s restructuring in 2015.
Microsoft and Google continue to be direct competitors in several technological advancements, such as artificial intelligence and cloud computing. Second only to Amazon Web Services, Microsoft’s public cloud business under the Azure platform and Office 365 subscription remains relatively bigger than Google’s.
Although the tech giant has always been associated with the Windows operating system, Microsoft announced areorganization of its legacy Windows and Devices Group back in March. This prompted the company to reallocate resources from Windows to its cloud infrastructure and artificial intelligence businesses.
It looked like the gamble paid off asthird-quarter revenue increased by 16 percent to $26.8 billion compared to prior year, largely driven by the Microsoft Cloud segment. Net income amounted to $7.4 billion, 35 percent higher than 2017’s third fiscal quarter.
Back in March, investment bank Morgan Stanley gave abullish outlook on Microsoft’s growth forecasts, underscoring the increasing preference of several businesses for cloud computing over local network services. According to the analysts, the software company is on track to reach the $1 trillion market cap within a year’s time if it maintains its dominant position on the public cloud market. Furthermore, its stock price was expected to reach $130 from the previous forecast of $110.
Walmart delivered on the online sales growth it hinted at after its less than stellar performance during the last holiday season. With its eCommerce sales seemingly ready to bounce back, the retail giant’s stocks traded higher on Thursday. Business analysts also believe that Walmart is in a position to take advantage of a cyclical boom that will hit discount retail in the next few years.
Walmart recentlyreported its first quarter earnings and the numbers are positive. Earnings have reached $1.14 per share and on revenue of $122.69 billion. The numbers have exceeded estimates of $1.12 in EPS and $120.51 in profits. What’s more, profits are up 4.4 percent compared to last years. Same-store sales received a 2.1 percent boost, a bit ahead of Wall Street’s projection of 2 percent while WMT stock grew by almost 2 percent in pre-market trading on May 17.
— Walmart Newsroom (@WalmartNewsroom) May 17, 2018
More importantly, online sales growth have increased to 33 percent this first quarter. It’s a massive improvement after falling 50 percent and 23 percent in the third and fourth quarter respectively. The numbers have undoubtedly caused investors to breathe a sigh of relief.
Walmart’s Sam’s Club performed admirably in the first quarter, with the company reporting same-store sales boost of 3.8 percent and a commensurate 5.6 percent increase in traffic.
International sales were also robust, rising up to 11.7 percent to $30.3 billion. It’s not so surprising though, as the company has been aggressively trying to stake claims on high-growth regions like China and India through acquisitions and partnerships. Just this month, Walmart revealed that it’s taking majority ownership of Flipkart, a leading eCommerce company in India.
“Our investment will benefit India by providing quality, affordable goods for customers, while creating new skilled jobs and fresh opportunities for small suppliers, farmers and women entrepreneurs.” – Doug McMillon, CEO Walmart. pic.twitter.com/8izGoP3nYX
In a statement, Walmart CEO Doug McMillon said that the company has shown a solid start to the fiscal year and that they’reencouraged by the momentum Walmart has.
“ We are changing from within to be faster and more digital, while shaping our portfolio of businesses for the future,” McMillon added.
That’s clear from the improvements Walmart has been making. The company has recently revamped its website, acquired online brands like Bonobos and added known brands like Lord & Taylor. Walmart has also equipped more of its branches to handle grocery pickup for online orders and made changes to its app. The company is also using more sophisticated software to better manage their inventory. This has allowed Walmart to prevent stock shortages while also avoiding having a glut of merchandise in stores that could lead to a slow down of new stocks.
US companies Walmart and Amazon are competing to acquire a controlling stake in Flipkart, India’s leading eCommerce company. Walmart has completed an in-depth due diligence on its proposed majority ownership in the Indian firm. However, rival Amazon also wants to put in a bid and offers a ‘breakup fee’ of $1 billion to $2 billion, a penalty to be paid in case the deal fails to proceed.
Unnamed sources revealed that Walmart is willing to pay $10 billion to $12 billion for a controlling stake of 51 percent or more, valuing Flipkart at roughly $20 billion. But the deal isn’t sealed yet because Amazon is reportedly interested as well.
Insiders privy to the matter disclosed that Flipkart’s board recently discussed the competing proposals. They seem to agree that Walmart’s offer is better since the US retailer will face fewer regulatory hurdles. On the other hand, Amazon is considered as Flipkart’s primary competitor. It will face tighter scrutiny for possible monopoly since both companies control the majority of India’s online retail market.
Founded by two former Amazon employees, Flipkart is taking on the eCommerce giant to have a piece of India’s expanding online retail market. According to Morgan Stanley estimates, eCommerce in the country is predicted to grow annually by 30 percent and will be worth $200 billion by 2026.
Because of its vast potential, Amazon is investing heavily in the emerging market. The eCommerce giant has spent $5 billion for its India operations but is losing to homegrown startups like Flipkart that know the market well.
Flipkart announced recent plans to construct a 4.5 million sq. ft. logistics facility in Southern India. This is significantly bigger than Amazon’s largest warehouse measuring 400,000-sq. ft. in the country. But the US online retailer also has 62 fulfillment centers and delivery stations located all over India.
Walmart’s entry will give the startup its much-needed funds to compete head-on with Amazon. Flipkart will also benefit from the retailer’s unparalleled experience in logistics and supply chain management.
The largest US retailer’s stake in Flipkart will depend on which of its shareholders are willing to sell. SoftBank, Tiger Global, and Naspers are just some of its largest investors. Insiders said that SoftBank prefers a deal with Amazon because of its success in online commerce. Tiger and Naspers will likely sell their holdings to Walmart for the right price, according to sources.
As of writing, Walmart, Amazon, and Flipkart have declined to comment on the matter.
Alibaba is set to gain full control of Ele.me as it revs up on its plan to have a stronger foothold in China’s burgeoning market for quick delivery services.
A statement released by Alibaba hinted of an enterprise valuation for Ele.me pegged at $9.5 billion. However, the company has not given any exact figures on how much it’s paying for the startup. Alibaba Group Holding Ltd, its affiliate Ant Financial and Micro Financial Services Group Co. already have 43 percent of Ele.me’s voting shares. The onlineretail giant has reportedly paid for the deal in cash and has already acquired all of Baidu Inc.’s shares.
Ele.me, which roughly translates to “hungry yet?” operates a multitude of delivery personnel on motorbikes all across the country. The company is known for its 30-minute delivery commitment to users. Ele.me is also fighting for top spot in the local delivery service industry against Meituan Dianping, a fellow startup backed by Tencent Holdings Ltd., a fierce rival of Alibaba.
Delivery service isone of the fastest growing industries in China as more and more consumers are using their mobile devices to order food, purchase movie tickets, schedule beauty treatments or book hotel rooms. Capturing this market is also a strategic move for both Alibaba and Tencent as it also puts their payment services systems in the spotlight.
The idea was mostly confirmed in an internal email sent by Daniel Zhang, Alibaba’s chief executive officer to his staff. In it, Zhang emphasized how “food delivery is the single most important entry point in the local services sector because its one of the most commonly used applications.”
“We can already see that a vast, multi-dimensional local instant delivery network formed through a food delivery service will be an essential piece of the commerce infrastructure,” Zhang wrote.
Alibaba’s acquisition of Ele.me is just the latest in a series of moves aimed to help the company deal with an increasingly competitive environment. The company is also taking over delivery partner Cainiao and has recently invested another $2 billion in the Lazada Group.
