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Target Testing Next Day Delivery

RIS News – Under pressure from e-commerce giants Amazon and Walmart, Target is testing a next-day home delivery service called Target Restock. Amazon, which offers rapid delivery services like Prime Now and Amazon Pantry, recently said it cut the threshold for free shipping to $25 from $35. Walmart previously dropped its free-shipping minimum to $35 from $49.

Target plans to pilot the new service with shoppers this summer in the Minneapolis area. Once the pilot is live, Minneapolis area shoppers that have a REDcard will be eligible to access thousands of household essentials online. They will be able to fill a box with multiple items and have their orders shipped to their homes for a low, flat fee, although there are no reports yet on what that fee will be. Target said it will be able to fulfill orders placed before 1:30 pm by the next business day.

“Today’s consumers expect everything right now!” Ken Morris, Principal, Boston Retail Partners (BRP) told RIS News. “Amazon and Walmart are raising the bar by continuing to offer faster delivery options – even same day. This move by Target to offer next day delivery is a direct response to competitors’ offerings – they need to do it. Target will also need to add fresh, refrigerated or frozen foods categories to next day delivery to be on par with Amazon and Walmart.

Target said the items for Target Restock orders will be packaged at a nearby store, essentially turning local stores into omnichannel  warehouses.

“Target seems to be playing catch-up instead of leap-frogging the competition,” said Morris. “Perhaps moving to same day within a reasonable proximity of their store locations and adding auto-replenishment services for products that are purchased regularly might be a better strategy. Another good strategy would be to offer an enhanced loyalty program, similar to Amazon Prime, that offers compelling benefits like free delivery and premium benefits that increase customer loyalty for products they can purchase from many other sources.

“While this is a good move for Target, competitors are upping the game which will continue to put pressure on Target and others to find ways to offer faster delivery services and other conveniences that make shopping and buying easier,” said Morris. “Retailers selling commodity items have a challenging road ahead.”

Read Full Article: Target Testing Next Day Delivery

Finding Win-Win

Frozen and Refrigerated Buyer – What makes a good trading partner? Manufacturers can start by taking a more customized approach to each retailer.

Unlike those youth sports competitions where everyone gets a trophy, the grocery game often produces clear winners and losers. Thanks largely to consolidation that’s created increasingly powerful retailers, suppliers are the ones that usually take a licking. But so-called “partnerships” that keep one company on the verge of bankruptcy aren’t good for anyone — even retailer winners. In order to succeed in an increasingly competitive marketplace, they need strong partners that can help them get ahead.

In fact, says Ken Morris, principal at Boston-based Boston Retail Partners, when they make an initial pitch to a new buyer, smart manufacturers will focus more on the benefits of the business relationship and less on product attributes. “While making the product compel- ling to the retailer is important,” he explains, “it’s even more important to demonstrate how you can add value to the supermarket’s business or make their operations more efficient and easy.”

“Good suppliers share insights that help retailers improve product forecasts and make smarter decisions around purchase volumes,” says Morris. “They also help retailers minimize out-of- stocks with insights into delivery schedules, the impact of the manufacturer’s advertising and promotions calendar and enhanced forecasting data.” An extranet that enables efficient data sharing between retailers and manufacturers is an invaluable tool, he adds. And manufacturers would be smart to stay on top of RFID technology.

Already prevalent at the carton and pallet level, RFID will eventually move to item level as well, allowing real-time visibility of inventory, reports Morris. What better way for suppliers to help their retailer partners reduce labor costs and improve inventory planning?

Another increasingly important manufacturer role revolves around food safety. Recalls are costly not only in terms of dollars and cents but reputation, so more and more chains are looking for suppliers that have not only taken steps to prevent them in the first place but also have a well thought-out, immediate action plan in the event one is required.

“In addition to improving their own production and distribution processes,” continues Morris, “Manufacturers can help retailers by providing guidance on food safety practices and technology that can track products and monitor temperatures to ensure the cold chain isn’t broken.” Because no matter which company is at fault, a recall hurts both partners.

Read Full Article: Finding Win-Win (page 36-39)

Walmart looks to dominate overseas with grocery-delivery app investment

Mobile Commerce Daily – Retail behemoth Walmart has invested $50 million into local Chinese logistics and grocery delivery platform New Dada in a move that will proliferate the company’s reach overseas and help corner mobile delivery.

The investment is a continuation of a larger partnership with Chinese electronic commerce company JD.com and New Dada, and will give all 25 million users on New Dada’s network access to two-hour grocery delivery from Walmart via the JD Daojia Dada app. The maneuver is part of Walmart’s long-term global growth plan and will act as a case study in the variety of mobile infrastructure that will be necessary for expansion into foreign markets.

“As Walmart perfects the platform and process for 2-hour grocery delivery in China, it will make it easier for it to expand this service to other international markets,” said David Naumann, vice president of marketing at Boston Retail Partners.

And when looking at relevant mobile use statistics, it looks as though the Chinese consumer is more than ready to leverage this partnership.

 “Chinese online users are more frequent users of smartphones than U.S. online users and they spend more time per day on their smartphones,” Mr. Naumann said. “The pervasive use of smartphones and mobile apps in China probably played a role in the strategic investment in the Dada local on-demand logistics platform.

“Consumers rely on their smartphones for most of their Internet usage and retailers need to make sure everything is mobile friendly.”

Read full article: Walmart looks to dominate overseas with grocery-delivery app investment

Gap Between Online and Offline Commerce Is Shrinking

eMarketer – 2016 will see the deepening of several ongoing trends that are shrinking the gap between ecommerce and physical retail. This year, retailers will look to leverage better fulfillment options, local advertising tools, offline attribution and omnichannel tools, as explored in a new eMarketer report, “US Holiday Ecommerce Preview 2016: Mobile to Fuel Explosive Ecommerce Growth” (eMarketer PRO customers only).

Mobile is increasingly bridging the divide between physical and digital commerce, a trend that should accelerate this holiday season. Some 45% of shopping trips include some mobile shopping, according to a Facebook IQ study of US internet users conducted in September 2015.

Many retailers have improved their inventory systems and fulfillment options over the past year. This has allowed for better and more varied pickup and delivery options for online purchases. Most large retailers now offer the option to buy online and pick up in-store, although fewer than half (42%) of retailers overall surveyed by Boston Retail Partners in April 2016 offered it, and only about half of those reported delivering a decent experience.

2016-unified-commerce-chart

Read Full Article: Gap Between Online and Offline Commerce Is Shrinking

Are You Ready For This Disruptive Technology?

The Daily Reckoning – Midea, a Chinese appliances company, sees a big future for robotics on the production line. In July, it became the largest shareholder of Kuka, German robotic company that produces robotic systems for a wide range of production line tasks.

Perry Kramer, vice president of the Boston Retail Partners consulting firm, sees heavy investments in warehouse automation.

Showroom tech will follow while customers become used to robots that recognize them by name, know their purchase preferences and lead shoppers to their usual products. The retail workforce will shrink in number, Kramer says, but will be paid better for the required technical expertise workers will need to keep the digital showrooms running smoothly.

Glimpsing that future, Google in recent years has bought seven robotics companies with specialties in gripping, lifting and moving things.

Staples, The Gap and other retail chains already rely on sophisticated robot integration in their warehouses.

Take a look at Amazon’s distribution centers. Instead of humans wandering aisles picking up a book here and an electric toothbrush there, robots are doing the lifting and sorting. They hoist racks of goods containing products, order and trundle them to the person packing the shipment, who then selects the needed items.

Read full article: Are You Ready For This Disruptive Technology?

Walmart pilots mobile delivery, circumvents risk with Uber, Lyft partnerships

Mobile Commerce Daily – Walmart is stiffening the competition in mobile delivery by partnering with Deliv, Uber and Lyft to provide grocery drop-offs for customers within test markets, in a low-risk test that may produce high reward.

Partnering with outside sources such as Lyft, Uber and Deliv takes away a considerable amount of risk from Walmart compared to the retailer creating its own delivery service. With delivery and on-demand services on the rise thanks to mobile, Walmart needs to continually spearhead mobile integrations such as this to stay relevant.

“Partnering with Lyft and Uber offers Walmart a low-risk and easy way to implement delivery services without investing in more employees and vehicles,” said David Naumann, vice president of marketing at Boston Retail Partners. “As consumers’ preferences and expectations continue to evolve, retailers need to find ways to quickly ramp up these flexible fulfillment options and with minimal disruption and cost to their operations.

“Outsourcing services that are not a retailer’s core competency makes sense, as long as it doesn’t make it too expensive.”

Read full article: Walmart pilots mobile delivery, circumvents risk with Uber, Lyft partnerships

Amazon Needs A Walmart History Lesson

Forbes – Amazon’s investments in trucks, planes, cargo boats and drones continue to drive speculation on whether the company is building a full-scale delivery platform. But an RBC Capital Markets analyst has drawn attention by likening the moves to Walmart’s shift to tighten supply chain costs three decades ago.

“At the core, we think the decisions Amazon is making today parallel those made by Walmart during the 1980s, as the company began to integrate itself more fully with its suppliers to aggressively reduce costs across all aspects of its business, especially the supply chain,” wrote John Barnes in a note last week. “This can accomplish two things: reduce costs in any way possible and ensure that customers receive goods in a timely manner year round.”

The analyst, who covers UPS and FedEx FDX -0.92%, said building freight transportation capacity will reduce costs, “create deeper customer relationships,” and keep carriers “honest” around pricing and service. He sees a medium-term risk for freight forwarders and truckload carriers since Amazon’s computer prowess may enable them take over these tasks. Parcel carriers may face a longer-term risk because “a full-blown Amazon parcel delivery operation would likely take years to complete.”

With a wealth of insight into Walmart’s early history, the industry insiders of the RetailWire BrainTrust debated just how close Amazon’s current moves are to the brick-and-mortar giant’s supply chain of bygone days.

“Amazon’s move to vertically integrate its supply chain to reduce costs and improve control of distribution, is driven by the same objectives as Walmart’s initiatives,” said Ken Morris, principal at Boston Retail Partners. “Beyond the potential cost savings, greater control of the delivery network will also enable Amazon to better manage delivery commitments and keep its customers satisfied.”

Read full article: Amazon Needs A Walmart History Lesson

Consumers run into trouble with in-store pickup

Business Insider – Retailers in the US are increasingly offering in-store pickup options, but shoppers are finding the service lagging. Of the 35% of consumers who buy online and pick up in-store, half of them have encountered problems while collecting their orders, according to a survey from JDA Software Group Inc. And for a service meant to provide convenience to consumers, this is an alarmingly high rate of contention.

The biggest advantage that brick-and-mortar retailers have over e-commerce is the value of in-store assistance. It is likely that many consumers utilize in-store pickup services in order to retain this value, expecting store associates to know about product value, quality, and reliability. However, merchants may not be taking this into account and allocating the correct resources needed to smoothly complete the process.

More retailers are implementing this service to reach customers with various needs — 27% of retailers across North America already use in-store pickup, and 39% plan to implement it within the next two years, according to a recent survey conducted by Boston Retail Partners.

Read full article: Consumers run into trouble with in-store pickup

6 Reasons Why the In-Store Pickup Trend Will Continue to… Pick Up

DealNews – Although it’s not more efficient than buying right in-store, pickup is a retail trend on the rise. A big reason why? It benefits both companies and consumers.

For consumers, in-store pickup combines the ease of shopping online with the promptness of purchasing from a local retailer.

But while it’s been revealed that this method isn’t any more efficient than just buying in-store, that hasn’t stopped brick-and-mortar shops from adopting and promoting this service — nor has it dissuaded customers from using it. According to a recent survey conducted by Boston Retail Partners company, 78% of retailers plan to implement in-store pickup service within the next three years; currently, 41% already do.

So what’s the deal? Why is this trend growing?

Read full article: 6 Reasons Why the In-Store Pickup Trend Will Continue to… Pick Up

Why Retailers Should Offer Buy Online, Pick Up In-Store

eMarketer – As retailers have increased their focus on creating an omnichannel experience, buy online, pick up in-store has emerged as one way to bridge the physical-digital divide. Based on research, consumer demand for such services is huge, meaning retailers that don’t provide this purchase option risk getting left behind.

A December 2014 polling by Boston Retail Partners found that just 24% of retailers in North America had implemented buy online, pick up in-store and said it was working well.

Read full article: Why Retailers Should Offer Buy Online, Pick Up In-Store