Ged Carroll

Category: retailing | 零售 | 소매업 | 小売業

Looking back to when I started this blog, it would have been reasonable to expect an inevitable march of retailing from offline to online. Amazon was on a tear and search advertising volumes were increasing year on year. By the time I was at Yahoo! search advertising (focused on online retailing) counted for about half of all revenue for the company.

At that time Yahoo! had a Spotify-like subscription streaming music service that was viewed as a threat to Apple’s iTunes download only offering. When I worked there Yahoo Music was the number one online music site in terms of audience reach and total time spent by consumers on the site. Also display advertising was much bigger for brands than it is today and Yahoo! was guaranteed a good share of the online marketing spend from any movie launch at the time.

The reality of online retailing, was slower than our expectations. While COVID drove an increase in online retailing there has also been corresponding innovations in retailing as well.

Amongst the pioneers in this change have been luxury brands like Burberry and Nike, who brought digital into their stores to provide a superior customer experience.

Adidas brought manufacturing into its stores with its speedfactory experiment, allowing for fast time to market and customisation.

Supreme changed the cadence of retailing with the Thursday morning ‘drop’  which saw queues outside stores. Every Thursday became a launch day as far as their customers where concerned. The queue has moved from Apple’s annual cadence, to every week.

  • Workampers

    The Wall Street Journal had an article that introduced me to the idea of workampers. The article was on the seasonal workers that Amazon.com uses in the US to help it with the surge in demand in the run up to Christmas.

    Who were these elves to Amazon’s Santa Claus?

    The article describes them as workampers. Older retired people who live a transient lifestyle by choice in an RV (recreational vehicle) for at least part of the year.
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    Their motivations were diverse in nature. Some of the workers are similar to their ancestors during the Great Depression, who moved across the country following work were it was available.

    For others the reasons are diverse, from money to help with expenses to camaraderie with similarly nomadic peers or proving to themselves that they could still hack a task. A mix of forced earlier retirement and improvements in health mean that many seniors still have decades of potential work still in them that they want to take advantage of.

    A mix of ageism and globalisation have meant that there is a growing body of workampers. Future workampers might be in a worse financial state due to less generous pensions and health insurance, higher personal debt and automation. The move to a lower carbon economy will also impact the ability of a workampers to live out of an RV and transverse large distances at a reasonable cost.

    Workamper futures

    With an aging population and the decimation of working class communities due to the opioid epidemic we are likely to see more demographics like workampers as companies adapt to tap into an older work pool. With Amazon in particular, one has to wonder if more of their warehouse and logistics work can be automated and how it will be affected by a low carbon future.

    More explanations of of jargon terms can be found here.

    More information

    Seasonal Amazon ‘Workampers’ Flock to Remote Towns for Temporary Gigs – WSJ.com (paywall)

  • Extreme couponing

    Extreme couponing – is a phrase that I came across in the Knowledge@Wharton newsletter to describe the way hard-pressed value conscious consumers in North America are using offline vouchers and online resources including comparison shopping and coupon websites to make their grocery spend to go further. Having worked on FMCG programs rolled out in North America, the continued power of local newspaper and electronic coupons are famous.

    Coupons and extreme couponing were historically associated with thrifty older consumers who carried on family traditions developed during and post the great depression.

    Some US supermarket retailers built up a reputation for being ‘coupon friendly’ stores. But that might present its own problems. The average basket value might be much lower. Also the productivity of cashiers might be lower as they have to process all the coupons submitted. If the coupons aren’t valid for that supermarket that might result in a customer stand-off that needs to be resolved with the help of store management.

    The more astute of you may remember seeing coupon clipping and usage in historic episodes of Roseanne (what then become The Conners).

    Which begs the question what’s new that’s driving extreme couponing now? The answer seems to be a combination of food price inflation, low-to-no wage growth and an uncertain economy with high unemployment has led consumers to change their shopping. Pharmacy chains like Walgreens have benefited from business previously done as a one-stop shop in the supermarket since they will accept coupons for personal hygiene and cleaning products. The big issue is for the major brand companies like General Mills, Unilever and Procter & Gamble who are seeing brand loyalty eroded.

    Alongside an increase in coupon adoptions you are seeing bulk buying to hedge against inflation, rather than consumers trying to save the money itself in bank account. More retailing related content can be found here.

    More information

    Brand Disloyalty: Recession-weary Consumers Take Discounts to the Extreme

  • Invisible birdcage + more news

    Invisible birdcage

    China’s Internet: The Invisible Birdcage | Sinocism – interesting article on the business factors driving the Chinese internet. Linguistic and cultural difference has created a vibrant domestic internet scene. The invisible birdcage in question is the Chinese eco-system of sites and services that mean China’s netizens need not stray far. Inside the invisible birdcage we see an active, lively online environment full of the kind of social activities one would expect on western platforms. The invisible birdcage confounds expectations of a censored internet experience.

    Feds to Launch Probe of Google – WSJ.com – but is this good for consumers, or just companies like Microsoft who have consistently been lobbying Washington and Brussels? The ironic aspect of this is that social search could finally shake things up

    High-tech venture capitalists to Congress: The PROTECT IP Act is bad for America – Boing Boing – which is why Silicon Roundabout turning to Silicon Britain is a pipe dream

    Luxury

    Chinese Media Giants In War Of Words Over Luxury Consumption « Jing Daily – interesting that this is on CCTV around about the same time as discussions on reducing luxury goods tax. Rui Chenggang is the Cheryl Cole of Chinese newsreaders

    FT.com – No longer a Cinderfella – fashion as a real-world attention economy. Luxury brands having to step up and provide decent men’s products

    From Alley To Airport: Beijing Urban Brand NLGX « Jing Daily

    Boutique Supermarkets Flourishing In China, But Is The Demand There? « Jing Daily

    Breaking Down China’s Booming Luxury Watch Market « Jing Daily

    In China, Women Begin Splurging on Luxury Items – WSJ.com – interesting change in purchasing power, much more egalitarian than North America or Europe

    Business of Luxury summit: Amex discovers a new luxury consumer | FT.com – gen-x new fashion buyers: electronics, home furnishings, holidays

    Media

    “Brands are over-obsessed with fans,” says Facebook adsales chief | FT.com

    Online

    Geosocial networking: The secret sexism of social media | The Economist – this feels a bit lazy. Whilst I agree that security and competition plays a role; its also probably because this stuff is early adopter in nature and that tends to skew male anyway

    Underpinnings of the Internet Shift – NYTimes.com – interesting the way governments are subverting the freedoms of citizens in developed countries. This is probably the most lasting legacy of Wikipedia, the wisdom of mobs and the lobbyists of the media industries who see UGC as akin to communism

    Retailing

    Jack Ma: we’ve got this covered | FT.com – interesting how the Baby Taobaos are specialising to combat competition, if Steve Ballmer had done this with Microsoft; they’d have been dangerous

    Security

    Hackers publish claimed Tony Blair contacts | FT.com

    Danish police proposal: Ban anonymous Internet use – Boing Boing

    Software

    Nokia’s Stephen Elop is still over MeeGo, even if the N9 is a hit – Engadget – this isn’t strategy its dogma

    Technology

    Gartner follows IDC’s PC sales cut forecast for 2011 and sees change ahead | guardian.co.uk

  • Walmart

    Today some of the most successful companies out there are ones that have a key technology platform and Walmart looks like it will be joining them:

    • Retail: Amazon, eBay, Alibaba
    • Office productivity: Google, Microsoft, Zoho
    • Telecommunications: Microsoft (Live Meeting and Skype), Cisco (WebEx)
    • Consumer services: Baidu, Google, Netease
    • Entertainment: Netflix, Amazon, Apple, PPLive

    I think we’ll soon see Walmart added to this list. At the present time the average consumer view of Walmart is likely to be that of a large, malevolent, low-class retailer in the US; the weird Yanks that bought ASDA in the UK and a trusted supermarket in China.

    What these perceptions don’t tell you is that Walmart has innovation in its corporate DNA. In 1987, they set up a satellite network connecting stores with headquarters over voice and data. When I was in college Walmart was associated with the ‘beer and diapers’ urban legend precisely because the company had a reputation for pioneering and pushing supply chain management and data-mining to the edge in order to maximise returns from its stores.

    Walmart like Amazon already has a large logistics footprint; some of the moves it has been making over the past 18 months make me think that the company is going for a big platform play – building a big box retailer online. Bear with me, while I run you through a few selected highlights:

    • Vudu – purchased in February 2010 by Walmart. The company provides stream on demand content that home audiences can pay for. The technology can be integrated into a variety of consumer electronics. It’s a digital content supermarket by another name
    • Kosmix – move forward to April 2011 and Walmart buys a social media platform that organises content by topic. Lots of smarts for social commerce, product reviews, marketing insights, customer services
    • Yihaodian – Walmart buys a minority stake in an e-commerce company with logistics in the high growth coastal areas of China. Due to the nature of the Chinese marketplace, that minority stake is the same level of commitment as acquiring a US business outright. The sale of physical goods in China maybe more attractive than the digital media market because the media industry is disrupted and alternative monetisation models are already well in place
    • Walmart is also starting recruit rock-star web tech talent with a particular focus on improving the mobile experience of their online properties

    More retail sector related content can be found here.

  • Big content + more news

    Big content

    “Big Content” Is Strangling American Innovation – Harvard Business Review – ‘Big content’ is an interesting turn of phrase. It has a lot of negative connatations like ‘big tobacco’, ‘big food’ or ‘big pharma’. While ‘big content’ doesn’t kill people with its actions, it does capture the malignancy on society and on the economy. But big content is also soft power. The article points out how badly big content is in adjusting with technological, societal, social and economic change. Part of the problem seems to have been the ability of big content to use lobbying as a crutch. Secondly, big content does a lot of work oppressing its creators ability to earn and looking after the needs of authoritarian regimes like China – Innovation has emerged as a key means by which the US can pull itself out of this lackluster economy. In the State of the Union, President Obama referred to China and India as new threats to America’s position as the world’s leading innovator. But the threats are not just external. One of the greatest threats to the US’s ability to innovate lies within: specifically, with the music and movie business. These Big Content businesses are attempting to protect themselves from change so aggressively that they risk damaging America’s position as a world leader in innovation. Many in the high technology industry have known this for a long time. Despite making their living relying on it, the Big Content players do not understand technology, and never have. Rather than see it as an opportunity to reach new audiences, technology has always been a threat to them. Example after example abounds of this attitude; whether it was the VCR which was “to the American film producer and the American public as the Boston strangler is to the woman home alone” as famed movie industry lobbyist Jack Valenti put it at a congressional hearing, or MP3 technology, which they tried to sue out of existence. In fact, it’s possible to go back as far as the gramophone and see the content industries rail against new technology. The reason why? Every shift in technology is difficult for them. Just as they work out how to make money using one technology, it changes.

    Consumer behaviour

    Television Ownership Drops in U.S., Nielsen Reports – NYTimes.com

    Why the Rich Envy the Super-Rich – WSJ – interesting keeping up with the Jones’es phenomena going on

    Gallup: Chinese People See Themselves Struggling – WSJ – I think that the points made about Gallup’s sample size and methodology are interesting

    Schumpeter: The status seekers | The Economist – status moving from goods to virtue-related experiences in developed world

    Culture

    Night Flight (TV series) – Wikipedia, the free encyclopedia – I found Night Flight eerily prescient of a YouTube play list

    Finance

    Domestic disaster, overseas losses put pressure on Nomura’s profits | The Japan Times Online

    Innovation

    New Iron-based Cathode Material Extends Life of Li-ion Batteries — Tech-On!

    Asahi Glass to Roll ‘World’s Thinnest’ Glass Substrate for Touch Sensors — Tech-On!

    Japan

    Convenience store Lawson creates portable convenience store to reach earthquake stricken customers – the convenience store in Japan plays as big a part in people’s retail lives as Tesco or Sainsburys does in the UK. Retailer Lawson has managed to cram a convenience store in a small van to reach quake-stricken areas.

    Groklaw – Prior Art, Anyone? Anyone? Barnes & Noble? Google? Motorola? – Updated – Microsoft and Paul Allen patents in trouble?

    Media

    The BBC Is Struggling to Tighten Its Belt – NYTimes.com

    Online

    Google’s China market share: declining | FT.com – its not just Baidu who is gaining

    Retailing

    Discounters boom in UK: News from Warc.com – makes sense as a way of ducking inflation

    Analysis: Why Did Walmart Buy A Social Media Firm? – I spoke to Arun as he was writing this piece whilst grabbing a hot dog with my old friend David Ingle. I see this as Walmart reclaiming their heritage in innovation: in supply chain management – they drove the move to ‘Made in China’, new retail formats – the big box store that nuked independent retailers and data-mining personified in the ‘beer and nappies’ urban myth

    Security

    Sony suffers another major security breach | BGR

    Wireless

    FT.com / Technology – Instant messaging forecast to hit texting – not terribly surprising however Disco may change this