The goal of every consumer products company is to earn the ultimate trust – which is loyalty – with the end user. 
     It is the grand prize in marketing.
     And Amazon is on it’s way to earning the ultimate marketing bogie – Customer Trust.
     The approach Amazon has taken is multifaceted but with a very clear vision.  There are several platforms that standout in my mind that are real and some in late stage development that will continue to widen the e-commerce gap in favor of Amazon.
    
Delivery to Where Customer Wants It
     Certainly; Amazon and other online retailers have mastered the delivery of orders to home and business addresses. 
     With the rash of “porch poaching” thieves taking the deliveries before the rightful owner can retrieve, is gaining national attention.  I have been the victim of this.  Not once, but twice within a two-week period during the holiday season with Amazon a couple of years ago.  The orders were more expensive electronic goods, so not a cheap replacement.  Amazon customer service didn’t bat an eye, and replaced the order without any hassle.  I feel certain any other e-commerce retailer would have done the same.  Amazon is taking a step ahead. . . 

Amazon Lockers are brilliant.

1. Delivery to where the customer will be, not where they have to be.  No need to be home, and no longer have to navigate the business mail room to find your shipment.  Designate the Locker location of your desire for the deliver to address.  The text updates are terrific, and the retrieval of the shipment is simple.  Speaking for myself – I have no desire to lug something needed in a business trip when I can have it shipped to a location that works for me.  Or to check additional luggage to transport holiday gifts to Grandma’s house, when I can have them shipped to an Amazon Locker near Grandma’s.
2. The Lockers solve many problems – delivery theft and convenience of receiving shipment when the customer is ready are just a couple.

           This concept is going to the next level.  Consider large, multi-unit condos / apartments.  Some of these larger developers are negotiating with Amazon to BUY the lockers (brilliant) and the “Lockers” becomes a marketing feature of the complex knowing shipments will arrive, be secure and tenant does not have to be at the “office” hours of operation to get a delivery.  In turn, this must save the management staff lots of time for being a package handler where there is little to no value. 
     Providing options and solutions for delivery is part of an e-commerce value chain proposition.  Amazon is taking it to the next level.  It provides end-to-end trust – Purchase of Product, at Price offered, Delivered on-time, and secured that the shipment is available for the customer to receive.
     When the trust factor is fulfilled seamlessly, that is where loyalty is created.  That loyalty enables great things and momentum to happen in gaining share of wallet.  New products, some pricing latitude, and much more.

​Knock Knock. . . I’ll Let Myself In
Amazon’s latest venture / offering is Amazon Key.  This will truly test the amount of trust the consumer will allow Amazon.

• Amazon Key is the ultimate and most streamlined means of delivery.  It allows for the shipment to be delivered INSIDE of the consumer’s home.
• The service is only available in select markets today.  That has limitations of making it a broad-based marketing advantage.
• Also requires a $250 investment (The Kit) in Amazon camera and compatible lock for the privilege of “in-home” delivery.  “Key” is also being marketed for other service providers to gain access the home when you are not there.  Repair service, cleaning, laundry service, etc.

     I can’t get there on this service – yet.  Our homes are our safe-haven and we guard them carefully.  Without a doubt, thousands of consumers will invest in the hardware and welcome Amazon in to their homes.  Time will tell how this may change, it’s adoption, and it’s success.
     The dynamic at play is huge.  It is the continued evolution or dimensional shift to how consumers will purchase and receive products into their homes. 
     Think about it – Amazon is a service provider of transactions of selling products to the end user that have disrupted traditional supply chain mentality with the use of technology.  Once in the home, that seems like mecca for consumer engagement and countless other products and services they could provide through the single marketing platform.
     Very exciting times and look forward to what comes next as the continuum of consumer products method of reaching the end user will continue to change and shift!
 
Just for a Smile.  Have to pass this along.  Courtesy of the Reddit community….
“It kinda makes sense that the target audience for fidget spinners lost interest in them so quickly.”

Hope you have a great week!

Starting a few months ago with Amazon announcing the purchase of Whole Foods, I have been taken by the blood-letting Wall Street has bestowed across the industry.  In fact; the financial punishment for most in the retail space since this announcement.
     My personal disclaimer on this post:  I am not a retail operator, nor an investment banker.  But I am a successful supplier of consumer goods to retail.  Durable goods, not consumable goods (drinks, chips, etc.).  My thoughts are not to claim supreme answers, but more to offer thoughts from a 10,000 foot view with 3 thoughts.
​
 1.  Stick To Your Knitting    
     Kroger Co. (KR) has become the poster-child for what Amazon could do to the grocery industry by acquiring Whole Foods.  Kroger could do itself good by focusing on making their business (stores and digital) the top-of-mind consumer destination.  With 2,800 stores, multiple store front brands, spanning 35 states, Kroger has a great platform to do mind-blowing things. Amazon’s Whole Foods has some 470 stores and at some point will leverage the power of the digital platform.  I believe Kroger could make some very progressive moves to not only hold share, but grow dramatically.
   I do not discount the power and prowess in operational and supply chain proficiency Amazon has proven.  They meet the consumer “right where the customer wants to be”.  Amazon will certainly carve out their fair share of the grocery market. 
     About a month ago, Kroger announces they will launch a restaurant business called Kitchen 1883.  Hmmm.  Is it me, or does that seem like a lack of focus?  The first prototype is a stand-alone store.  But even if the thought is to integrate a restaurant into stores, is that what the consumer wants?  Another restaurant, particularly one inside of a Kroger?
     Kroger should stick to grocery and take advantage of building a compelling digital model and enhance the in-store experience to serve the consumer.
 
2.  Meet The Competition Head On    
     Things change.  Consumer likes and dislikes change.  Technology has proven to be a great enabler.  Grocery competitors are making moves to prepare for the future. 
      Walmart buys Jet.com in 2016, and recently Parcel, which has a model for rapid delivery to consumer’s front door.  Both significant in Walmart’s goal to compete with fury in the digital retail space.
  In the pure play grocery space, Albertsons announces the purchase of the meal-kit delivery service, Plated.  This is very logical for grocery to have a hand in the meal kit business.  Experts expect this food home delivery service sector to grow more than 70% in the next 5 years.
   With all of this recent activity, Kroger showing no signs of making a correction in course.
 
3.  And, It’s Not Going To Get Any Easier    
     The slim margins in the grocery business make things tough, no doubt about it.  As competition heats up margins will be under increased pressure.   
     Add to the mix the entry and expansion in the US market of two powerful German grocery retailers - Aldi and Lidl.  The pressure on traditional grocers will be intense.  These are serious competitors and have the balance sheet and competitive will to gain significant market share.
 
The evolution of how the grocery industry is going to take shape will be interesting.  There will be winners and losers.  I am not convinced Amazon will rule the world, but they will put points on the board in grocery.  The losers – some will falter.  I have visions of how Kmart could not shift to compete with Walmart in the early days.  Where is Kmart today?

​The 2017 holiday season is shaping up to possibly be a real winner for retail in North America.  Consider the much-improved economic climate, stellar stock market performance, low unemployment, and favorable consumer confidence sets a pretty good stage. The battle-lines of where and how the consumer will choose to make holiday purchases is most intriguing. I believe this holiday season will begin to etch a meaningful shift in what retail will look like for years to come.
 
2017 Holiday Expectations
     Predictions, expectations and estimates are all to the upside vs. last year according to numerous organizations that track this information. 
     Generally, there is a consensus that holiday sales (excluding travel and event purchases) will increase in the range of 3.6 to 4.5%.  That is particularly good news, as the last couple of year’s growth has been quite dismal.
     That is the broad swath of retail market predications.  And that should bode well for all.  A rising tide lifts all boats, as the saying goes.
    Not surprising, growth in e-commerce retail sales for the coming holiday season are estimated to be somewhere between 11 and 21% (2016 online sales grew roughly 14% over prior year).  I am in the camp of closer to the 20% growth for 2017. 
     Where there is momentum, there is growth.
 
The e-Play of e-Commerce
     The digital era is in full swing and promises to only gain in momentum.  Amazon is certainly the bell-weather for online shopping and the e-commerce segment in retail.  It will be the focus of the overall direction of e-commerce as we step into the holiday season.
     Consider some of the market analysis published by Fung Global Retail and Technology –

• 83% of holiday shoppers will buy something from Amazon
• 77% will shop brick and mortar retailers

    In other research, it is projected that 75% of all holiday shoppers will purchase from Amazon. That is powerful.  It gets better – 9 out of 10 Amazon Prime members will purchase from Amazon over this holiday season.  The power and leverage of the Amazon loyalty program is second to none!  For holiday 2017, considering the online market growth, Amazon will easily add an incremental $5 billion in sales this year.
     At the root, convenience and ease remain the two most significant advantages of e-commerce shopping.  The advancements in smartphones, wearables and other wireless technology will keep us constantly connected.  That brings the essence of convenience and ease within a fingers touch.  In fact; 40% of holiday purchases this year will be made on mobile apps.  That is nearly double from 2016.  The next evolution (and coming quickly) will be the technology of the truly “connected” Smart Home, that will go beyond the Google Home, Apple HomePod and Amazon’s Echo devices we know today.
 
Brick and Mortar Retail Play
     It is important to keep in mind; the e-commerce segment includes the online sales of traditional brick-and-mortar retailers too.  There are exciting initiatives underway. 
     There are many very well managed retailers, and although playing catch-up, great strides are being made for developing the integration of online into their operational platform. 
     The baseline advantages for traditional retailers are quite clear.

1. The Now Factor.  The truth is (and has been aided by technology), we are a consumer society of wanting it now.  Retail provides that option.  Buy it now, use it now.
2. The Personal Experience.  This is the single most relative and richest advantage for traditional retail. . . today.  The ability to touch product, evaluate alterative options in style, functionality, price, brand and many other influencers.  Not to be overlooked, the fulfillment of today’s demanding consumer to have it “now” is a powerful advantage. I am convinced that those of us supplying product and services to retailers can have a huge influence on the experience.

     Although not being leveraged with significance today, the personal experience is being redefined and requires brick and mortar retailers must move beyond just price, assortment, and merchandising.
     I am excited for what will come from the traditional retail sector for true deployment of an integrated, omni-channel build out.  The power of what a seamless consumer purchasing platform of the physical store and online experience.  The true merging of the personal touch, convenience and ease.  Here are just a few things that will shape the next advances in retail as we know it.

• Video – it is all about the message and done properly, the manufacturer can (and is best suited to do so) deliver what that message.  The power of visual and audio is a powerful marketing tool.  This is low hanging fruit and more is needed.
• Artificial Intelligence – the possibilities of what AI will do is incredible.  The advantages of how it will shape how we purchase, shop, and anticipation of our needs is mind-blowing.
• Algorithms - not suggesting a “Big Brother” theory, but it is utilization of big data is a game-changer.  Consider the power of harnessing the data from our internet searches, browsing of goods and services, those we “follow”, the “likes”, and of course purchase intent / history.

     There are great things happening and taking shape today for the evolution of retail.  This will be exciting.  The advantage for the supplier community is how we can provide and deliver that value that will be a competitive advantage in our respective categories.

            Some strange things have happened since Amazon announced the acquisition of Whole Foods in June.  In my opinion, it opened the idea that Amazon will rule the retail world.  Initially, grocers took the market valuation hit, but soon spread to other retail segments.
            Really?  Is the traditional retail fear of Amazon really warranted?  I believe the answer is both MAYBE and MAYBE NOT. 

MAYBE:

• Tough Year for Traditional Retailers:  2017 has produced some alarming stats.  Numerous store closings, new store openings at the lowest rate in nearly a decade, and bankruptcies seem to capture the headlines on a weekly basis.
• The Strong Survive:  there is a long list of retail bankruptcies:  Payless Shoe Source, Aerosoles, Rue21, Perfumania, HH Gregg, Gander Mountain and most recently Toys ‘R’ Us. . . just to name a few.  Some have closed their doors forever.  Others are on the brink of “filing”.

     I contend those retailers that are dying have failed to have a solid vision of the future to their customer’s expectation.  Other retail venues have stepped in and filled that void.  In some cases, poor financial maneuvers to put the business in a perilous situation.
     The retail landscape has, is changing, and will continue to change.  And it should be changing.  From a macro view; The Home Depot was the game-changer in the hardware / building materials segment, Walmart redefined mass retail, Best Buy created the mecca for the consumer electronics experience, and Costco created the retail membership venue.  And without a doubt, Amazon is bringing a new dynamic force to retail.
 
Is Amazon the reason for the reshuffling of the retail environment?  Not entirely.  Keep in mind Amazon is only 5% of retail sales (that is excluding food products).  Has Amazon created or filled a void to meet consumer shifts in buying habits?  Certainly yes.  At the same time, there are numerous brick & mortar retailers making a big impact on meeting consumer demand through emerging and developing meaningful, high impact strategies.
 
 
MAYBE NOT
     With approximately 70% of the United States GDP being consumer driven and retail being a significant part of that number, brick and mortar retail will survive and thrive.  But will rely on the strong and nimble retailer.
    I personally believe this is a “golden age” for retail and those of us marketing consumer goods.  For the record, this is not a suggestion to shun digital or web-based retail.  In fact; just the opposite - it will grow and is / will be a formable platform connecting with the end-user of our goods and services.  This is a simple, straight-forward way that we should be supporting brick and mortar retail.

1. If you are not thinking Omni-Channel, You’re Not Thinking – a go-to-market strategy has got to think about the engagement of how the purchaser could interact with the product and the ultimate buying decision.  In-store, social media, or web.  This has become hugely important in our mobile world.
   • Brick and Mortar retail has an advantage for the most rounded personal experience.  The ability to touch product, compare most popular alternatives, logical add-on to product that might otherwise not have been considered.  Powerful and fundamental to buying experience.  The personal experience has not been fully replicated with the online retailer.  The ever-increasing use of video will be a big advantage for the online retail world.

      Seeing this as “the advantage” for brick and mortar will fail.  The competition is simply too fierce.  A woven strategy with digital marketing venues does create a strong platform.

1. Mandate to Think Differently – the merchant with progressive retailers is totally open to new ideas on how to reach the end-user’s purse.  A well-conceived and solid plan is required.  This requires thought, preparation, strategy and ultimately results (top line sales, gross margin, solid supply chain to serve the business demands).
2. Innovate – there is nothing more exciting that new products that improve the user experience.  Those marketing to retail must have a solid plan to bring change to their respective product lines.  Failure to do so, opens the doors to competitors…. And they will come.

 
In conclusion, traditional retail is not dead.  In fact; very much alive and the opportunity to leverage products and services has never been greater.  Retailers do not have all the product & merchandising answers.  They look to seasoned, mindful, experienced marketers to bring solutions to complex challenges.  The ultimate WIN-WIN outcome is at hand.

David Kearsley
Business leader and continuous learner in consumer durable products sold through various partner channels; retail, capital goods, infrastructure product lines.
   Recent life relocation to Denver, CO.  Seeking senior leadership role with a company to champion growth and innovation for creating sustainable enterprise value.   My Website  |  My Blog