February 27 – March 5, 2023
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| News about non-warehouse-based fulfillment just keeps coming and we’re not mad about it! This week we heard that Walmart’s store-based fulfillment delivery sales nearly tripled in three years (i.e., during the pandemic.) And while Walmart stores might feel like warehouses compared to the footprint most retailers are dealing with, that’s why they stand to benefit from additional space near their store within the same retail center. As we discussed two weeks ago in our newsletter, the point is to be close(r) to the consumer and easier to access for the retailer. Having inventory across a hallway is a heck of a lot closer than storing it across the country. And not surprisingly, another related headline this week is about Amazon canceling or closing warehouses, while investing more in their same-day sites, which are warehouses a fraction of the size of its more typical large fulfillment centers and are specially designed to prep items for immediate delivery.
This week we also saw some reports about retailers moving off-mall or out of city centers (yeah, yeah…we’ve heard that one…), more about ChatGPT and AI in fashion and retail, and read about some nostalgia from the infamous mall food court. As always, you can find us on Twitter or LinkedIn too! |
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| More than ChatBots: How Artificial Intelligence is Being Used in Fashion, Retail [The Fashion Law] ChatGPT appears to have taken the world by storm. Within the first week of the initial release of the artificial intelligence (“AI”)-powered chatbot on November 30, 2022, it had amassed over 1 million users; fast forward two months and the OpenAI-developed tech boasted 100 million active users, making it the fastest-growing consumer application ever launched.
Want to go from direct-to-consumer to retail? This startup has a platform for that [TechCrunch] While the global pandemic was still in full force, Dipti Desai, who had been building data platforms at Uber at the time, started working with a nonprofit selling masks on Shopify. As she helped them build out their digital storefront, Desai began talking to other brands about their challenges with regard to data. |
| 3 pandemic retail tech trends that have lost their luster [ModernRetail] Almost three years after the pandemic, some retail tech innovations have hit their expiration dates. Instagram said earlier this month that it is ending its live shopping feature that lets users tag products in livestreams beginning in March. Around the same time, Walmart also announced that it was closing down its last two pickup-only stores — ending nearly a decade-long experiment. Months earlier, in October, Amazon said that it is putting the brakes on the tests of its home delivery robot Scout.
Target rolls out drive-up returns [Chain Store Age] Target is adding a significant new feature to its Drive Up curbside service. Following a successful pilot launched in February 2022, Target will begin enabling customers to make drive-up product returns at its stores this spring, with plans to offer the service at all of its nearly 2,000 U.S. stores by the end of summer 2023. |
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| Micro & Last Mile Fulfillment |
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| The top priorities of last-mile delivery providers are…[Chain Store Age] A new survey reveals that larger and smaller logistics providers have different areas where they are focusing performance improvement efforts. According to a new study of retailers and logistics providers from delivery management platform provider FarEye, logistics respondent priorities for last-mile delivery (the end stage of delivery from a pickup point or sortation center to a package’s final destination) vary by annual revenue.
Amazon Expands Same-Day Delivery, With Fees, While Battling Slow Growth [The Wall Street Journal] Amazon is expanding ultrafast delivery options, a sign that it remains committed to pushing its logistics system for speed as it scales back plans in other areas. The tech giant is continuing to devote resources to facilities and services structured to deliver packages to customers in less than a day. The expansions are happening at a crucial point for Amazon, which faces competition for fast-delivery options while it puts a renewed focus on profits. |
| Save Mart automated ‘dark store’ drives Lucky Now online grocery service [Winsight Grocery Business] The Save Mart Cos. has transformed a closed Lucky supermarket in Mountain View, Calif., into a micro-fulfillment center (MFC). Technology partner Fulfil Solutions Inc., a Mountain View-based robotics startup, said Monday that its automation powers a “dark store” opened several months ago that fills same-day delivery and pickup orders for a new Save Mart online grocery service called Lucky Now. DoorDash also is a partner in the Lucky Now service, according to Fulfil’s website.
Amazon closes, cancels more warehouses as cost-cutting persists [RetailDive] Amazon’s fulfillment network cuts have bled into 2023 as the e-commerce giant continues to slash operating expenses, according to data from a consulting firm tracking the company’s logistics footprint.Amazon has canceled, closed or delayed 99 U.S. facilities, impacting nearly 32.3 million square feet of active or planned ground-level space in 30 states. |
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| Walmart’s store-fulfilled delivery sales nearly triple in two years [RetailDive] Walmart’s store-fulfilled delivery sales have nearly tripled over the last two years, and the company is now seeing more than $1 billion a month in that category. The retailer has been expanding its store-based delivery capabilities in recent years amid the e-commerce boom. More than 3,900 Walmart U.S. stores now offer same-day delivery, out of 4,717 locations overall, per an earnings presentation. |
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| Restaurants & Ghost Kitchens |
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| Restaurant Chains Make It Cost More to Be Loyal [The New York Times] Recent changes to rewards programs at places like Dunkin’ and Starbucks mean customers must pay more before perks kick in. The companies blame inflation. |
| New Tech Helps Restaurants Digest Their Delivery Data [Restaurant Business] Tools from ItsaCheckmate and Nextbite allow operators to see their third-party sales all in one place. The companies say it will save hours of wrestling with spreadsheets. |
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| All the Mall Food Smells, Ranked [Eater] Strip away any nostalgic feelings about mall food, and what you’re left with is just… an overwhelming collection of scents. Here, we rank them. |
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| Should retailers open stores in malls or look outside for better results? [RetailWire] Does the growth opportunity for traditional mall-based chains still appear bigger off-mall or is the view of enclosed shopping malls overly pessimistic? How would you grade the pros and cons of mall and off-mall locations for retailers that have traditionally operated stores in malls?
Another Blow to City Centers: Retail Stores Move Outward [Bloomberg] It’s part of a pattern among US retailers that are abandoning malls and large-format stores in city centers in favor of neighborhood locations that aim to serve the work-from-home generation. And while retail presence is shrinking in many big cities, apparel retailers’ brick-and-mortar locations are growing overall. They’re just moving outward, with smaller footprints in residential neighborhoods. |
| From McDonald’s to Ralph Lauren, U.S. Companies Are Planning China Expansions [The Wall Street Journal] Large American companies from fast food to high-end fashion are increasing their bets on China’s consumers in anticipation of a post pandemic rebound for the world’s second-biggest economy. McDonald’s Corp. and Starbucks Corp. are opening hundreds of new restaurants, while retailers Ralph Lauren, Coach, and Kate Spade brands, are launching new stores.
Touting off-mall success, Macy’s mulls acceleration of small-store strategy [RetailDive] Macy’s move to exit declining malls and open smaller stores in strip centers and other off-mall locations has been so successful that the department store may accelerate that shift sometime next year, CEO Jeff Gennette told analysts. |
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