China state-affiliated media says that the Chinese government will not approve the current TikTok deal with Oracle and Walmart. The editor of a communist party paper, Global Times, tweeted this:
Based on what I know, Beijing won’t approve current agreement between ByteDance, TikTok’s parent company, and Oracle, Walmart, because the agreement would endanger China’s national security, interests and dignity.
Based on what I know, Beijing won't approve current agreement between ByteDance, TikTok's parent company, and Oracle, Walmart, because the agreement would endanger China's national security, interests and dignity.
For instance, American citizens will take up four of the five board seats for TikTok Global and only one can be Chinese. The board of TikTok Global would include a national security director, who will have to be approved by the US.
Oracle will have the authority to check the source code of TikTok USA and updates. As the TikTok and Douyin should have the same source code, this means the US can get to know the operations of Douyin, the Chinese version of TikTok
TikTok Global will control the business of TikTok around the world except China. It will block IP from the Chinese mainland to access it. This means the Americans can take control of the global business of TikTok and reject Chinese to access it.
Source: Global Times
The Global Times editor says that “the US suppresses it with all its national strength and forces it to sign a deal under coercion.” The editor added that “China, also a major country, will not yield to US intimidation and will not accept an unequal treaty that targets Chinese companies.”
The deal to keep TikTok running in the US is headed for another impasse over control of the new company.
According to TheStreet, TikTok Global will be a new company created to handle operations outside of China. Oracle, along with Walmart, will take a 20% stake in the company. This is a big win for Walmart, as they originally had tried to partner with Microsoft in their failed bid. TikTok’s CEO was insulted by Microsoft describing the social media platform as a security risk, torpedoing Microsoft’s involvement in the company’s future. Walmart, however, was able to avoid the fallout and jump onboard with Oracle’s successful bid.
Unfortunately for the companies involved, there appears to be some disagreement about who will have majority ownership. President Trump had claimed that TikTok’s ownership would “have nothing to do with any outside land, any outside country. It will have nothing to do with China.”
ByteDance, on the other hand, has said TikTok Global’s technology, majority ownership and the bulk of its executive board would be based in China. According to International Business Times, however, Trump has vowed to block any deal that leaves the new company under Chinese control.
It remains to be seen if the involved parties will be able to work out a resolution.
Walmart launches Walmart+ a subscription service that competes directly with Amazon Prime and costs only $98 a year or optionally $12.95 a month. Walmart’s membership option is now available to customers across the country. Membership includes free 15-day trial period.
“We can’t wait for customers to use Walmart+ as a way to keep more time on their calendars and money in their pockets,” said Janey Whiteside, chief customer officer, Walmart. “We designed Walmart+ to be the ultimate life hack for customers, pulling together benefits they told us would be most helpful to them today and in the future. Its usefulness will only grow from here.”
The initial list of Walmart+ benefits is below. The company says that the list of benefits will continue to grow over time:
Unlimited free delivery: In-store prices as fast as same-day on more than 160,000 items from fresh produce, to milk, eggs and bread to tech and toys to household essentials. This service was previously known as Delivery Unlimited – a subscription service that allows customers to place an unlimited number of grocery deliveries for a low, flat yearly or monthly fee. Current subscribers will automatically become Walmart+ members.
Scan & Go: Unlock Scan & Go in the Walmart app – a fast way to shop in-store. Using the Walmart app, customers can scan their items as they shop and pay using Walmart Pay for a quick, easy, touch-free payment experience.
Fuel discounts: Fill up and save up to 5 cents a gallon at nearly 2,000 Walmart, Murphy USA and Murphy Express fuel stations. Sam’s Club fuel stations will soon be added to this lineup.
Bill Simon, former CEO of Walmart, discusses the launch of Walmart+ designed to take on Amazon by combining free delivery of groceries and general merchandise within a paid subscription service:
Walmart+ Goes Head To Head With Amazon
Walmart has long coveted a subscription service to go head to head with Amazon. They tried three or four times but this one is different. Walmart+ combines both their grocery and their general merchandise strength which is really trying to recreate the supercenter online through a subscription service. If they can use the frequency of their food business to also help sell their general merchandise line they can mix it out better and hopefully get to profitability sooner.
Retail has actually been better (this last quarter) than most people have expected. It’s not been even. There have been categories and retailers who have struggled. By and large, its help up pretty well. The pandemic accelerated digital ecommerce development by five to ten years. If you were not up to speed on that or didn’t get up to speed very quickly you would be behind. As we head into the fall it will be really interesting to see how it goes.
Holiday Selling Season Uncertain
Typically, Black Friday and Cyber Monday, that weekend has been really critical to the selling season. If you missed that it would be very difficult to have a really good holiday selling season. With the delayed openings now and Thanksgiving not on the line, the focus is going to be online and there won’t be as many in-person Black Friday deals. It’s going to be difficult for retailers to make up all that volume online. The holiday selling season is going to be a bit uncertain.
I’m really speaking from the consumer perspective when I say that digital ecommerce accelerated by five to ten years in the last six months. It accelerated at that pace and people had to head in that direction. That is likely where retail is going to head but it is going to still be a mix. The vast majority of retail will remain brick and mortar but ecommerce will take a larger role in the facilitation by online pickup in store. Customers are now completely blending the omnichannel retail experience.
The Amazon Effect: Digital Sales Rule!
There’s also been really a change from an investment standpoint. This has been really more the Amazon effect than anything I can think of. Five years ago, it used to be, grow your profit faster than your sales and your share price would move forward. Now, if you’re not growing digital sales at a hyperactive rate it’s really hard to get a good valuation on your company. Walmart is a great example of a retailer employing this strategy.
They’ve invested a ton of money, almost a third of their operating income they’ve given up in order to build an ecommerce business. Yet, investors have rewarded them by buying their stock. It’s near historic highs.
In a surprise move, Oracle has emerged as the frontrunner to be the US partner for TikTok.
The Trump administration instituted a ban on TikTok that goes into effect mid-September, unless a buyer could be found to take over US operations. Microsoft, partnering with Walmart, emerged as an early prospect before Oracle also threw its name in the mix.
Before a deal could be finalized, however, the Chinese government changed its export rules governing what technologies could be exported. It’s believed the new rules directly impact the algorithm TikTok uses for recommendations and engagement. As a result, potential buyers had to start looking at alternative ways to make a deal happen.
According to CBC, ByteDance has rejected Microsoft’s bid in favor of Oracle. None of the involved parties are commenting, so it remains to be seen what a potential deal looks like.
Walmart has partnered with Zipline to deliver health-related products directly to customers. “We are teaming up with Zipline to launch a first-of-its-kind drone delivery operation in the U.S.,” says Tom Ward, Senior Vice President of Customer Product at Walmart. “The new service will make on-demand deliveries of select health and wellness products with the potential to expand to general merchandise.”
Walmart will begin testing drone delivery early next year near their Arkansas headquarters. Zipline specializes in delivering medical supplies and other critical products for businesses via its unique drone technology. So far the company has made 58,436 commercial deliveries so far.
“Zipline will operate from a Walmart store and can service a 50-mile radius, which is about the size of the state of Connecticut,” said Ward. “And, not only does their launch and release system allow for quick on-demand delivery in under an hour, but it also eliminates carbon emissions, which lines up perfectly with our sustainability goals. The operation will likely begin early next year, and, if successful, we’ll look to expand.”
“As we continue to build upon the foundation of innovation laid for us by Mr. Sam, we’ll never stop looking into and learning about what the next best technology is and how we can use it to better serve our customers now and into the future.”
As the TikTok negotiations run into trouble, President Trump has indicated he has no intention of extending a ban deadline of September 15.
TikTok has earned the ire of US officials with repeated accusations of privacy and security violations. As a result, officials have repeatedly labeled it a threat to national security and Trump announced a ban that is scheduled to go into effect September 15.
Microsoft and Walmart joined forces and emerged as early frontrunners to buy the social media platform’s US operations. Oracle also expressed interest, with Trump speaking favorably about a possible deal. Unfortunately, for the first time in years, the Chinese government altered its export rules to prohibit selling technologies that include AI, impacting TikTok’s algorithm.
It’s unclear if a deal will be able to be reached, although Trump has made it clear there will be no extension granted.
The Trump administration is looking at banning additional Chinese apps as negotiations over TikTok have nearly ground to a halt.
The US banned TikTok over national security and privacy concerns. The social media platform had gone from one privacy and security issue to another, leading many agencies and companies to ban their employees from using it. The nationwide ban is set to go into effect on September 15, unless a buyer can be found to take over US operations. Microsoft emerged as an early contender, buoyed by Walmart joining the tech giant in an effort to purchase TikTok. Oracle has also expressed interest, supported by Trump.
Ultimately, however, Beijing instituted new rules governing which technologies can be exported, rules that covered the type of algorithm TikTok relies on. ByteDance has said it plans on following the new export rules, all but killing a deal in its current form. One other possibility is to sell the platform minus the algorithm that makes it what it is, leaving a buyer to create a new one.
Now it appears the Trump administration may be looking at banning even more Chinese apps, according to CNBC. It’s a safe bet that the longer this tit for tat goes on, the more companies, services and apps will be caught in the crosshairs.
Walmart is getting in on the TikTok action, joining Microsoft’s bid to purchase the beleaguered social media platform.
TikTok has gone from one privacy and security scandal to the next, culminating in the Trump administration instituting a ban that will go into effect on September 15, unless a buyer can be found. Microsoft has emerged as a frontrunner, although Oracle has also expressed interest.
Now it appears that Walmart is joining Microsoft in its bid, seeing a unique e-commerce opportunity.
“The way TikTok has integrated e-commerce and advertising capabilities in other markets is a clear benefit to creators and users in those markets,” reads the company’s statement. “We believe a potential relationship with TikTok U.S. in partnership with Microsoft could add this key functionality and provide Walmart with an important way for us to reach and serve omnichannel customers as well as grow our third-party marketplace and advertising businesses. We are confident that a Walmart and Microsoft partnership would meet both the expectations of U.S. TikTok users while satisfying the concerns of U.S. government regulators.”
It will be interesting to see what Microsoft and Walmart can make of TikTok, should a sale be successful.
Sprint customers now have full access to T-Mobile’s banking solution, T-Mobile Money, following their merger.
T-Mobile completed the integration of Sprint’s stores and assets in early August, retiring the brand August 2. Since then, the company has been working to bring all the benefits of being a T-Mobile customer to former Sprint users.
The latest benefit is full access to T-Mobile Money, the carrier’s banking service. T-Mobile Money is an online banking service that offers a number of options not usually available from brick-and-mortar banks.
One of the biggest benefits of the service is 4.00% Annual Percentage Yield (APY) on balances up to $3,000. Once a balance goes over $3,000, it yields 1.00% APY. In addition, T-Mobile Money accounts have Got Your Back overdraft protection, no fees and account holders can get paid up to two days early. Because there are no physical bank locations, users who want to deposit a physical check can do so at participating 7-Eleven, CVS, Walgreens and Walmart locations.
“Today, more than ever, it’s absolutely critical that people keep more of their hard-earned money in their pockets. T-Mobile MONEY customers get an industry-leading return on their money with zero fees, so they keep more and grow more, the way it should be,” said Mike Sievert, CEO of T-Mobile. “This is just one more way we’re welcoming legacy Sprint customers into the T-Mobile family, and I’m not even close to finished yet.”
“We had to learn to work in different ways to become more digital and to put data to work in different ways,” says Walmart CEO Doug McMillon as he reflected on the release of their blowout financial results. “Basically, to create a seamless experience for customers. We don’t want them to sense any difference as it relates to our brand whether they are shopping inside a store, picking it up, or having it delivered. All of those differences and channels that we might have thought about in the past need to be erased and taken away.”
Doug McMillon, CEO of Walmart, discusses how the company has changed to become more digital over the last couple of quarters in response to the pandemic:
Ecommerce Was Very Strong
I would like to say thank you to all of our associates around the world and here in the US. They did a great job. You can imagine how challenging it is in this environment to go to work everyday and serve customers and keep the supply chain moving. Whether it’s in our stores, our Sam’s Club’s, or our distribution centers they have done a great job.
Customers have been responding in waves as we’ve gone through the first and second quarters. Not surprisingly, they got really focused on things they needed to stock up to be at home for a long time at first. Over time, as we got through the second quarter and stimulus checks came in to play and people were at home, we certainly saw them buy things like laptops and tablets and fishing equipment and bicycles. Things that were related to home decor as they were at home thinking about their environment inside and outside the house we certainly saw them respond with what they were buying. Ecommerce, in particular, was very strong.
Technology Phenomena Happening Around the World
I’ve been in retail for almost 30 years and it’s really exciting when so many things can be done using technology. We can save customers time and expose them to so much more choice than we could previously. Our ecommerce assortments are broader as retailers and that’s certainly true at Walmart. We sell first-party owned inventory as well as through our marketplace. Now they can pick up their phone or be at home and open up their laptop and shop in so many different ways and have access to so many different things. It’s a lot of fun to be able to try and serve them in that way. That phenomena is happening around the world.
You can use your app to do pickup and our stores. You can use your app to have the product brought straight to your house. Obviously, you can come in the store and we are learning how to use technology inside the stores in different ways to save you time. It boils down to access to assortment and an ease of shopping here in the US and around the world that people haven’t experienced before. That’s happening in Mexico, Canada, China, India, and all over the world.
We Had To Become More Digital
There have been a lot of changes inside the company. We had to learn to work in different ways to become more digital and to put data to work in different ways. Basically, to create a seamless experience for customers. We don’t want them to sense any difference as it relates to our brand whether they are shopping inside a store, picking it up, or having it delivered. All of those differences and channels that we might have thought about in the past need to be erased and taken away. Our teams have been doing a great job doing that.
The outcome of that is this ease of shopping that’s unique and different. In our case, we’ve got so many stores so close to customers around the country it gives us a big advantage especially in being able to deliver quickly. We’ve got an express delivery system here in the United States that commits to delivering orders from our stores in less than two hours. That’s now in more than 2,000 stores and coming to stores all over the country. We are actually delivering a lot faster than two hours so far. That’s a great experience.
We believe that this is something that we can build on along with having great stores where you want to come in from time to time, stock up, and experience what’s new. Really, we think that this omni world of retail is what will end up being the winning strategy over time.
Scale Can Sometimes Be A Disadvantage
Scale can sometimes be an advantage and sometimes it’s a disadvantage. Speed also matters a lot. Creativity matters a lot. What I’m proud of is how our team is responding to create new solutions for customers. Ultimately, whether Walmart grows or not is all up to them. We are serving families, moms and dads, and customers that have a lot of different choices. Even during the pandemic period with ecommerce and all the chains that were open there was still a lot of choice.
We’ve got to compete to earn their business everyday and that’s the approach we take. Our team has really stepped up during this period and even before the pandemic to drive change and to create more solutions for customers.
Walmart CEO Doug McMillon: We Had To Become More Digital
Walmart has announced it is rolling out its Express Delivery service in nearly 1,000 stores.
Walmart has been piloting Express Delivery in 100 stores since mid-April, but has accelerated the development of the program in an effort to meet customers’ needs in the midst of the pandemic. Express Delivery will let customers order some 160,000 items from stores and have them delivered to their doorstep within two hours.
“We know our customers’ lives have changed during this pandemic, and so has the way they shop,” said Janey Whiteside, chief customer officer, Walmart. “We also know when we come out of this, customers will be busier than ever, and sometimes that will call for needing supplies in a hurry. COVID-19 has prompted us to launch Express Delivery even faster so that we’re here for our customers today and in the future.”
The service will debut in nearly 1,000 stores in early May, reaching nearly 2,000 stores in the coming weeks. This is good news for shoppers around the country, as they endeavor to stay safe during the pandemic.
“Foot traffic has been the secret,” says Tim Lesko of Granite Investment Advisors. “Walmart a couple dozen years ago moved into grocery and that move, which was widely panned at the time, has really led foot traffic to stay steady. You’re still seeing same store sales growth in a retail industry that is really really under a lot of pressure. Stores that are able to maintain foot traffic, people that are going for grocery and then buying other goods, really creates a strong backdrop against other retailers.”
Tim Lesko, partner at Granite Investment Advisors, discusses how foot traffic driven by their grocery business is key to Walmart’s continued growth in an otherwise difficult retail sector:
Grocery Foot Traffic is Walmart’s Secret
There are two things that are most important to us. One is that Walmart a couple dozen years ago moved into grocery and that move, which was widely panned at the time, has really led foot traffic to stay steady. You’re still seeing same store sales growth in a retail industry that is really really under a lot of pressure. So pretty happy to see that even though same store sales were a little light compared to street estimates, they were still positive.
Second is the online business. They continued to spend a lot of money and have done a really good job of growing that online business. People fail to recognize that they’re the second largest online retailer in the US.
Foot traffic has been the secret. Stores that are able to maintain foot traffic, whether they be stores that are people hunting for bargains in the TJ Max’s of the world or people that are going for grocery and then buying other goods really creates a strong backdrop against companies like Pier 1 which went bankrupt over the weekend. You’re seeing bankruptcies all over the landscape. You have to drive foot traffic.
Multiple Revenue Streams Makes Amazon a Difficult Competitor
Multiple revenue streams is why Amazon is such a difficult competitor. They have businesses outside of their core retail business that really drive the profits and they continue to sell goods at a loss online. But interestingly, you have Amazon that’s moving from being a virtual merchant to now a bricks and mortar merchant, getting into grocery, getting into daily distribution of goods to people.
Walmart’s been doing that for years and has all of the goods in your geography. In the future world of same-day delivery and next day delivery, Walmart’s very well-positioned to provide that service. It’s almost like they’re both heading towards the same way but with Walmart at a much better valuation.
Grocery Foot Traffic is Walmart’s Secret, Says Analyst
Walmart and Nuro have partnered to bring driverless grocery delivery to Houston, Texas, according to an announcement Nuro posted on Medium.
Nuro is a robotics company specializing in electric, self-driving vehicles. The company already operates a delivery service in Houston for Kroger. In their blog post, Nuro emphasized the benefits of working with Walmart, a company that revolutionized the supply chain and retail experience.
The service will be available to a select group of pilot customers at first.
“Nuro’s self-driving technology and fleet will power this pilot with Walmart to provide customers in Houston with another innovative, accessible option for getting the groceries they need day-to-day.
“To start, self-driving deliveries will be available to a pilot group of participants who have opted in to try the service, teaching us more about how to best serve those customers. Through the pilot, we’ll gain insights that will enable us to further develop and refine our service, while helping Walmart create the best end-to-end customer experiences.
“At Nuro, we believe in the power for self-driving technology to support and improve local commerce, and see this technology as a key part of our future. We’re working to expand our footprint in Houston, to maximize the impact of our delivery platform for the community at city-scale. Throughout 2019, we’ve been building toward this objective, and this partnership represents another step forward.”
Should the Nuro/Walmart venture prove successful, it’s a safe bet communities around the country may start getting their groceries delivered this way.
“We’ve got 4,700 stores within ten miles of 90 percent of the US population,” says Walmart Ecommerce CEO Marc Lore. “In those locations, we’ve got about 100,000 products including fresh and frozen. We’ve started doing pickup a couple of years back and now same-day delivery to the door. We decided to take it a step further and actually deliver it directly into customers fridges and so far so good.”
Marc Lore, CEO of Walmart Ecommerce U.S., discusses In-Home Delivery and Next Day Delivery in an interview on Bloomberg Technology:
Walmart Now Delivering Groceries Directly Into The Fridge
This (delivery to a customer’s fridge) is a great opportunity for Walmart to leverage this unique asset to do things that only Walmart can do. We’ve got 4,700 stores within ten miles of 90 percent of the US population. In those locations, we’ve got about 100,000 products including fresh and frozen. We’ve started doing pickup a couple of years back and now same-day delivery to the door. We decided to take it a step further and actually deliver it directly into customers fridges and so far so good.
I do think this is a great step change in the value proposition. Imagine going to work and coming home and having all the groceries stocked in your fridge. We just saw (in a previous trial using a third party) a really big opportunity to use our own Walmart associates to do the delivery. Their W-2 employees. They’ve been with Walmart for at least a year. We feel like that’s a big advantage.
Can Deliver All Purchases Into Your Home Without Packaging
We don’t actually need to have cameras in the home. The actual associate will have a camera on their vest. You could actually as a customer track on your app the associate going into your home, putting groceries into the fridge, and then leaving. You can look at it in real time or you can go back and look at it anytime you want. It’s very safe for customers as well.
There are lots of possibilities (that will stem from in-home deliver). For example, being able to do a return. Imagine just leaving something on your kitchen table. That’s it, going to work and coming home and we’ll just take it away from you. Also, being able to deliver general merchandise into your home without any packaging. I think there’re lots of opportunities for services and health and wellness and all sorts of opportunities. We’re thinking them through now. We have some ideas.
One Day Delivery Actually Costs Us Less Than Two Day
Next Day Delivery has been great so far. It’s down in the LA region right now. By the end of the year, we’ll have about 75 percent of the population will have access to Next Day Delivery. Typically, the cutoff time is around 3 p.m. If you order by 3 p.m. you will get it the next day in a single box. That’s the other great thing too. A lot of times now you might receive it in multiple packages. It’ll be overnight in one box. We are really excited about that.
It actually costs us less than Two Day Delivery. The big reason is that we’re able to get it in a single box. All this inventory is now mirrored or replicated close to the customer. If it’s close to the customer and it costs us less to ship it. If it’s one box it costs us less to ship as well. So yes It’s actually cheaper. We’re just being very measured in how we roll it out. By the end of the year, three-quarters of the country will have it. It’s gonna be moving pretty fast. About 40 of the top 50 metro areas will have access to it. So it’s about four or five areas a month that we’re adding.
Dramatically Improved Contributed Profit Margins
Right now, we’re in a really good position (regarding online profitability). Over the last year, we’ve dramatically improved our contributed profit margins. We’re starting to drive more mix into the higher margin categories like fashion and home. So feeling really good about the momentum we have. We have some dates in mind that we’re not obviously sharing. But we feel good about where we are right now. We feel really good about where we are and where we’re going.
Walmart Now Delivering Groceries Directly Into The Fridge – Walmart Ecommerce CEO Marc Lore
“I’ve been watching Walmart since 1968, they only came into existence in 62, they’ve done the same thing to the rest of retail,” says Jan Kniffen of J. Rogers Kniffen Worldwide. “They kept making a new step every time and the rest of retail had to follow and they won the game, they got all the market share. They can’t let Amazon out Walmart Walmart (when it comes to free one-day shipping). Walmart will fight this battle to the bitter end.”
Jan Kniffen, CEO of J Rogers Kniffen World Wide, discusses Walmart’s likely reaction to Amazon’s free one-day shipping announcement in an interview on CNBC:
Walmart Tweets One-Day Free Shipping…Without a Membership Fee
Walmart is going to get to same-day delivery and so is Amazon. They’re just making the steps down. I would have come out with that tweet because they can say we’ll give it to you maybe same-day and no membership fee. They’ve been tit for tat for with Amazon right along. I think that Walmart with its 4,500 stores that are many distribution centers can keep up with Amazon on delivery. Can anybody else? Maybe not, but those two certainly can.
One-day free shipping…without a membership fee. Now THAT would be groundbreaking. Stay tuned.
Walmart can do same day and they should do it. The real question is what’s the cost to them to do this and what’s the cost to Amazon? They’ve already told us, it’s hundreds of millions of dollars. But what’s the cost to everyone else? Because market shares are what it costs everyone else. Walmart’s got to do this if Amazon does. They can’t give Amazon market share just because their deliveries are not as fast. But can anyone else keep up and pay the price that it takes to be able to do it? It’s really hard to imagine other people can. Amazon and Walmart both can.
Walmart Can’t Let Amazon Out Walmart Walmart
If you’re the investor I’m sure you’re going I don’t want this to happen. If you’re Walmart you’re saying I don’t really have a choice if Amazon does this I have to be competitive. Amazon caused Walmart or Walmart’s competitive nature caused it to spend a fortune over these last five years to be competitive with Amazon. When Doug (McMillon) came out and talked about it the stock went down a lot. Now it’s all come back and it’s all paid off and Walmart’s winning the game versus all of the other retailers. They’ve got to continue to do that.
I’ve been watching Walmart since 1968, they only came into existence in 62, they’ve done the same thing to the rest of retail. They kept making a new step every time and the rest of retail had to follow and they won the game, they got all the market share. They can’t let Amazon out Walmart Walmart. Walmart will fight this battle to the bitter end. The question is do you still want to own the stock? My answer is yes you do just like you still want to own Amazon stock. These two win the game.
Target is the Third Man Out in This Three-Horse Race
I’m not pushing Target. I think Target is the third man out in this three-horse race. Target has done a great job. They’re a much better retailer than they were three or four years ago. They were the best retailer in the country in 2006. Now we’ve reached the point where it is sort of a three horse race and I just don’t see how they continue to win the game.
I understand the call (by Barclays) and they are doing a much better job in apparel than they’ve done in years. But they’ve still got to fight this battle on things like same-day delivery with Walmart and Amazon. I don’t see how they win.
Walmart has just announced the first of its kind technology aimed at speeding up online grocery orders.
The Alphabot system was created specifically for Walmart by Alert Innovation and is set to help Walmart launch its first pilot program in their Salem, New Hampshire supercenter.
Alphabot is designed as a high-speed automation system that significantly speeds up the process of collecting and preparing an online grocery order. The systems uses autonomous carts to retrieve the items and send them to workstations where associates “pick, assemble and deliver orders to the customers,” as well as check the final order for accuracy.
As part of the Salem store’s re-grand opening, “a 20,000-square-foot extension connected to the store houses the new system and will serve as a dedicated grocery pickup point with drive-thru lanes for customers. When completed, automated mobile carts will retrieve ordered items – stored warehouse-style in this new space – then deliver them to our associates at one of four pick stations.”
According to the company, “the vast majority of grocery products we offer in-store will be fulfilled through this system, though our personal shoppers will still handpick produce and other fresh items.”
Walmart plans to have Alphabot running by the end of the year and hopes to roll it out across the U.S.
According to FierceWireless, Sprint is finally killing off Virgin Mobile and moving its customers to Boost Mobile.
Virginia Mobile was founded in 2001 as a joint venture between Sprint and Sir Richard Branson’s Virgin Group, before Sprint became sole owner of the carrier in 2009. In recent years, however, Sprint has been letting the brand languish. The most recent nail in the coffin was in October when Sprint terminated Walmart’s distribution rights, the last place Virgin Mobile could still be purchased outside of its online store.
T-Mobile and Sprint are currently in the process of trying to merge and are defending their proposed merger in court against a coalition of states trying to stop it. As one of the concessions to win FCC and DOJ approval, the two carriers agreed to divest Sprint’s prepaid services and sell them to Dish Network. This would, of course, include Boost Mobile.
The timing of this decision is not particularly surprising. On the one hand, if T-Mobile and Sprint win their court case, consolidating prepaid customers under a single brand will no doubt make a hand-off to Dish Network that much easier. On the other other hand, if the two companies lose their case, Sprint has made it clear it would likely not have the resources to compete nationally as it has in the past. In that scenario, consolidating its brands to conserve resources makes sense.
A spokesperson told FierceWireless via email: “We regularly examine our plans to ensure that we’re offering the best services in line with our customer needs. Beginning on the week of Feb. 2, we will be moving Virgin Mobile customer accounts to our sister brand Boost Mobile – consolidating the brands under one cohesive, efficient and effective prepaid team.”
“Our partnership with Walmart is a huge validation that commercialization and scalability of autonomous vehicles will happen in the B2B short or logistic space,” says Gatik AI CEO Guatam Narang. “Our autonomous vehicles will be moving goods for Walmart from one of their dock stores to their neighborhood markets in Bentonville, Arkansas. Think of our solution as filling the gap. We call it the middle mile. It’s hugely underserved and it’s a huge business opportunity for us.”
Guatam Narang, co-founder and CEO of Gatik AI, discusses their partnership with Walmart to test B2B self-driving delivery vans near their headquarters in Bentonville, Arkansas. Narang was interviewed on CNBC:
Walmart Launches Self-Driving Delivery Vans
Our partnership with Walmart is a huge validation that commercialization and scalability of autonomous vehicles will happen in the B2B short or logistic space. That’s what Gatik focuses on. Both of the companies are very excited about this. Gatik is focusing on scaling and commercialization of the autonomous vehicle technology. Think of our solution as filling the gap. We call it the middle mile. It’s hugely underserved and it’s a huge business opportunity for us.
We believe that while operating the vehicles back and forth on known routes we can over-optimize our algorithms to perfect these routes. This is a much more constrained environment. The promise of autonomy can be realized sooner than B2C delivery applications or other applications of autonomous driving technology like passenger transportation. With our application, we are focusing on introducing these vehicles without safety drivers before a B2C delivery application or a passenger transportation application does the same.
Autonomous Vehicles Moving Goods From Docks to Markets
We are actually the first company that is working with Walmart for this particular use case. What that means is we are not delivering anything to the end consumer. Our autonomous vehicles will be moving goods for Walmart from one of their dock stores to their neighborhood markets in Bentonville, Arkansas. With some of the other companies that Walmart is working with the focus is more on B2C deliveries.
Our focus is to move goods between businesses in an urban environment. The whole idea is let’s not try to change end consumer behavior. Let’s try to bring the promise of autonomous vehicles to businesses and help them save on operating cost in the near-term future.
Gatik Is Focusing Their Driverless Tech On the Middle Mile
Gatik is focusing on the middle mile. It’s filling the gap between long-haul trucking and the smaller sidewalk delivery robots. The middle mile is the most underserved segment of the whole supply chain. It is also the most expensive part of the whole supply chain. The reason to focus on this middle mile is to help our customers, which are businesses, help them save a lot on the operating cost. In addition to that, there is a huge shortage of drivers in this segment. With our solution, our customers can help fulfill. For us, it’s a huge validation. Right now all the testing and all the deployment is with the safety driver. The aim of the company is to take the driver off, scale the solution, and commercialize this technology. At scale, we are talking about saving up to 50 percent for our customers. The focus is to operate the vehicles on public roads.
When we talk about operating these vehicles between businesses, there are a lot of constraints that we can introduce. For example, very famously, FedEx and UPS trucks, they mostly take right turns because it’s more fuel-efficient for them. If we have something similar for our solution what that means is we wouldn’t have to worry about changing lanes. We wouldn’t have to worry about solving a very tricky situation in our space, that is unprotected left turns. As a company and as the solution we have a clear go-to-market strategy by installing or introducing some of these constraints. Not taking left turns is just one example, even though the technology stack can handle left turns, lane change, intersections, and traffic light navigation today.
Walmart Testing Self-Driving Delivery Vans, Says Gatik AI CEO Guatam Narang
The demise of many retail chains is due to the rise of the internet and the inability of some retailers to keep up, says long-time retail executive Gerald Storch. “The proximate cause of the demise of chains like Charlotte Russe, Gymboree, Payless, Toys R Us, and Sears is the rise of the internet and their inability to keep up that environment,” said Storch. “It’s the decline in physical traffic to bricks and mortar stores and the mall.”
Retail Comp Store Sales Up 6 Percent During Holiday
Retail sales have been very strong this holiday. Of course, there are winners and losers. The winners are the people who are doing it right, who are mastering the internet and who are driving value to the customer. You see 4.2 percent out of Walmart, almost 6 percent out of Target, over 7 percent out of Costco, and about 18 percent in the US out of Amazon.
I put out an index called the Storch Advisors Index and the volume weighted comp store sales gain of major chains in the US was 6 percent for the holiday season. Of course, there were some poor performers but that’s because they are not keeping up with the consumer. Whether it’s JC Penny, Sears, Macy’s, Kohls, some of those are becoming yesterdays.
Gov. Report Showing Retail Sales Down is Absurd
I know the folks at the government work hard to collect that data but I think there’s something missing there. The world has changed. First of all the internet has happened and I think that makes a big difference. There is no way, if you look at those numbers it says the internet was down in December. Only a report from Washington could say that. That’s ridiculous. It says the internet underperformed department stores for December. Absolutely absurd.
Why can that be true? Actually, the raw data said that sales were up about 9 percent in December. But then they applied a negative 10 percent seasonality discount because it was December. I’m not sure that discount factor was correct. Among other things, both Cyber Monday and Black Friday fell in November this year and they were huge as we saw by all accounts. There is something a little wonky about that report. I choose to put it on the side and say it’s not typical about what’s really going on in retail right now.
Retail Demise Due to Rise of the Internet and Inability to Keep Up
The proximate cause of the demise of chains like Charlotte Russe, Gymboree, Payless, Toys R Us, and Sears is the rise of the internet and their inability to keep up that environment. It’s the decline in physical traffic to bricks and mortar stores and the mall. The origin though comes down to the fact that all of those companies have one thing in common, hedge funds and private equity put huge leverage on those businesses.
So at a time when the world changed and the internet happened, they had to invest huge sums in the internet and they had to make their stores more beautiful than ever. You can only do that with money. All these firms were leveraged right before, bang, this retail apocalypse happened. They had no money to make any difference. It didn’t matter if you had the best management in the world. The management at Charlotte Russe is pretty damn good. But they couldn’t do anything about it because they didn’t have the money to spend. Walmart did have the money to spend. They’ve been spending it and that you are starting to see in the results.
Walmart and Amazon Battle it Out
You have Walmart buying a lot these ecommerce companies to get stronger in ecommerce. Then you have Amazon buying the bricks and mortar. Why did they do that? One reason. To keep up with Walmart in grocery. Grocery is the ultimate perishable, food. It has a lot of waste. Grocery is already around the corner from everyone’s homes. You have to ship them from the stores. Walmart has the stores to do it and they are proving it now. Groceries is one of their best performers in the latest quarter.
Amazon was looking at how do we beat Walmart in grocery? Grocery is a huge market and one of the last ones that Amazon hasn’t conquered. They thought, well, we could try to ship it from wholesalers and centralized locations. They started that way and it does not work. So they bought Whole Foods so they could be around the corner from people’s homes. That’s why they are expanding Whole Foods. They may be the only grocer in the country that is adding locations, all so they can ship to your home.
Walmart is looking at delivering groceries right into your fridge says Walmart Ecommerce President and CEO Mark Lore. And the step after that Lore says is delivery without even ordering, presumably using IoT technology to keep track of your refrigerator inventory.
Mark Lore, President & CEO of Walmart U.S. E-Commerce and Founder and CEO of Jet.com discussed the future of ecommerce on CNBC’s Mad Money:
Our Stores are Hybrid Warehouses
This is very exciting and this is one of the reasons why I was so excited to come to Walmart. There are 4,700 stores within 10 miles of 90 percent of the population, fresh and frozen and every one of these stores just about, and we’re doing pickup free pickup on groceries in 2,100 stores and started rolling out same-day delivery as well. We should have 40 percent of the population covered by the end of this year and 60 percent of the population covered by the end of next year.
Our stores are hybrid warehouses. But what’s really interesting is that we’re moving stuff in full truckload quantities. If you think about it, these stores that are doubling as warehouses are already profitable before the first pick. So we have a lot of like good turning inventory and the food is fresh.
Stores Are a Huge Advantage with Same-Day Delivery
We’re charging for delivery and customers are paying for it so that’s sort of a wash. We’re picking product in the stores that already have a really good sort of marginal profit because the stores are already profitable and our fixed overhead is covered.
I think this is a big advantage (over Amazon) and one of the reasons why I’m so excited to be at Walmart. Stores give Walmart a huge advantage in this sort of like Omni approach to retail.
Walmart Planning Delivery Right Into Your Fridge
Think about the next level from that, delivery right into the fridge. Basically a one-time code, they come in with the camera on their chest, you can watch it on your iPhone and see them come in and put it in your fridge and leave. This will build confidence and trust in these Walmart associates doing the delivery. Imagine going to work and coming home and there’s the stuff in your fridge already. That’s the next step.
Take it a step further, not even having to order it. How about just being able to keep you in stock on everything you need and just not even having to think about it.
Mavatar CEO Susan Akbarpour says that their blockchain powered mCart system is helping retailers track influencer driven sales… forever. That’s right, using their decentralized marketplace/influencer marketing attribution platform mCart retailers can now determine exactly where sales are coming from forever. This enables manufacturers and retailers to engage and incentivize influencers to create even more organic content marketing on social media, apps, websites, and in video media.
Susan Akbarpour, Mavatar CEO talks about how her company’s blockchain powered mCart platform is helping retailers track influencer driven sales forever in an interview on Fox Business:
Walmart is Using Blockchain to Automate Inventory Management
Walmart is using blockchain in different capacities, for inventory management systems and tracking many things. There are many parties involved when we are talking inventory management from point A to B to C to D. If you are using Excel sheets or a traditional inventory management system it’s not efficient and it’s not cheap. Every one of these movements needs to be tracked and need to be recorded.
Blockchain is helping to make everything automatic and very efficient and fast without back-office services that cost retailers. There are barcodes and many parties involved so you really need to track all of these systems together and blockchain makes it fast and very cheap.
We’re helping Walmart to partner with traditional media companies and actually power their product sales with the power of content. This is helping two traditional industries that are affected today. They are bringing content and Walmart and other brick and mortars are bringing products and we are creating Amazon-like marketplaces fueled by the content of the media. So we are licensing our software to media companies to lend their content to promote the product sales. We’re tracking through blockchain everyone who is influencing those product sales.
I will give you a very nice example. Remember the JLo dress in Grammy’s 2000. It broke the internet. Eric Schmidt, the then CEO of Google, said that search inquiry is what made us think of doing image search. But no one, including JLo, CBS, Grammy’s, and the designer Versace, didn’t gain a penny out of that influence.
Even today, if you search that keyword in Google, you see that Google still shows an advertisement for the counterfeit and similar dresses online. Blockchain through our mCart technology is tracking that influence to every single influencer and distribute the value that they create and the commission that they could get from Versace between all of them forever.
And guess what, Fox and CBS and Disney and all of these guys are promoting millions of products every year. You guys don’t have to use push advertisement as a revenue model
