| As you know, we are sometimes critical of those that implement bright shiny object technology too quickly or without strategic planning (check out the article below from Raconteur), but we love when companies use technology to solve real problems and optimize operations. This week we saw articles about how Wayfair and Amazon are using AI and data analytics to improve decisions around delivery, and we’re here for it. While AI and data analytics aren’t bright and shiny anymore, you do still need to be strategic about their implementation, which can be a bit daunting. We can speak from real-life experience about how to do this well (and how to do this not so well…) so let us know if you’re looking for some support.
Also this week, more news about ChatGPT implementations, a story as old as time about the unthinkable strategy online-only brands are embracing, and how a small strategy can mean bigger results. As you read this, we are currently at ICSC. Are you here in Vegas too? DM us on Twitter or LinkedIn — we’d love to meet up! |
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| Amazon Plans to Add ChatGPT-Style Search to Its Online Store [Bloomberg] Amazon.com Inc. plans to bring ChatGPT-style product search to its web store, rivaling efforts by Microsoft Corp. and Google to weave generative artificial intelligence into their search engines. The e-commerce giant’s ambitions appear in recent job postings reviewed by Bloomberg News.
The LVMH Approved Web3 Tech That Really Works For Retail [Forbes] If 2022 was the year of Web3 test and learn for retail, 2023 is about building on those learnings and using them to add real value to business. Indeed, according to Carol Hilsum, Senior Director of Product Innovation, Farfetch, “the level of maturity and progress of the ecosystem has taken a significant step forward.” |
| Online prices continue to drop: Adobe [RetailDive] Online prices fell 1.8% year over year in April, the eighth consecutive month of price declines compared to the previous year, according to Adobe’s Digital Price Index powered by Adobe Analytics. Compared to the month prior, prices dropped 0.7% in April.
Would you fall for the next digital transformation fad? [Raconteur] Fads are a constant theme in business. Just as the consumer world gets hooked on tulip bulbs and yo-yos, hacky sacks and Crocs, corporate execs can be suckers for a popular mania. “Fomo is totally a thing at an executive level,” says Tom Grogan, founder and CEO of emerging technology strategy consultants MDRxTech. He rattles off examples of poorly thought-through fad-chasing. |
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| Micro & Last Mile Fulfillment |
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| Wayfair improves data analytics to trim last-mile costs [RetailDive] Better data analytics is helping Wayfair figure out the most effective way to deliver items that straddle the line between its small and large parcel categories, saving last mile delivery costs in the process. It’s just one piece of the online furniture retailer’s $500 million operational cost reduction effort amid a drop in net revenue, active customers and orders delivered. |
| Walmart-backed DroneUp is cutting jobs as drone delivery market struggles [CNBC] Drone delivery startup DroneUp is laying off some employees. The company confirmed the job cuts and said in an email that the layoffs hit “a small percentage of the team,” which now totals 418 people. DroneUp has been fulfilling some orders for Walmart, and is one of several companies vying to make delivery by drone a reality. |
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| Amazon is focusing on using A.I. to get stuff delivered to you faster [CNBC] Amazon is focusing on using artificial intelligence to speed up deliveries — by minimizing the distance between its products and customers. Amazon has been focusing on a so-called “regionalization” effort to ship products to customers from warehouses closest to them rather than from another part of the country.But doing so requires technology that is capable of analyzing data and patterns in order to predict what products will be in demand and where. That’s where AI comes in. |
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| Restaurants & Ghost Kitchens |
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| The Restaurant Service Charge Isn’t Going Anywhere [The New York Times] To deal with a host of challenges, including inflation, labor shortages and an expectation that workers get better wages and benefits, an increasing number of restaurants across the country, from fast-food chains to fine-dining destinations, have in recent years added service charges of up to 22 percent, and sometimes more. |
| Ghost Kitchens Are Dying and Nobody Noticed [The Washington Post] There are a few pandemic habits we’ve embraced IRL: Zoom meetings, QR codes, hand sanitizer. Not so much the ghost kitchen, an innovation that promised to change the world, but has shaken out to be more a thing of quarantine folklore than a reliable business. |
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| By streamlining their menus, restaurant operators do less with more [Nation’s Restaurant News] Anyone who has worked in menu development for very long is probably familiar with “menu creep,” the tendency of restaurateurs to offer new items based on prevailing trends or gut instinct that don’t really fit with their brand. Experimentation with items such as avocado toast or birria tacos might succeed at getting customers’ attention for a little while, but they can also gum up operations, confuse customers, and keep workers from focusing on the food and beverage that they do best. |
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| Online-Only Startups Adopt a Bold New Strategy: Opening Actual Shops [The Wall Street Journal] Warby Parker’s business plan was to cut out the middlemen and sell directly to customers. That included avoiding landlords and their demands for long, expensive leases. Selling online was the cheapest way to reach as many customers as possible, as quickly as possible. But the company is very different these days. Warby Parker had 200 stores in 36 states, Washington, D.C., and Canada at the end of 2022, which generated 60% of the company’s total sales. This year, it plans to add 40 more locations. |
| Footwear retailers are using concept stores to drive localization [ModernRetail] Concept stores are becoming footwear retailers’ testing grounds for localization. As part of its new Lace Up strategy, Foot Locker is planning to expand its community-focused concept stores located in areas where people are drawn to sneakers. Nike, on the other hand, opened a new Nike Unite retail store concept in Harlem, which is designed to reflect the local community and help people in the area connect with sports. Similarly, The Athlete’s Foot debuted a concept in Atlanta featuring hyper-localized product offerings. |
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| Century 21 and Macy’s Embrace Inventory Lightness as Premium Label Stores Downsize [PYMNTS] Inspired by Macy’s, Century 21, the department store chain celebrated for its deeply discounted designer clothing, is staging a comeback following its closure in 2020. With a renewed strategy, it is embracing a more streamlined approach to retail as it strives to reclaim its prominent position in the market. |
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