The industry headlines from this week did not mess around. While the week started slowly, it sure as hell finished with a bang. There was no chitty in this week’s bang bang whatsoever.
It was hard to even know where to start, so we may as well start where we always start and with the topic readers love more than any other — Amazon and whatever the hell they decide to announce in a given week.
This week Amazon says, “Hello, Chicago!”
#1) Amazon to open two more cashier-less stores in US (New York Post)
Say it isn’t so, Joe, but it is true, folks. As I feared in my Amazon Go is more like Amazon Uh Oh piece, Amazon announced this week that it is expanding its Go concept. Not surprisingly, and, as we also discussed in our Amazon Go video breakdown last week, it is the exact right move from a company that always seems to make the exact right move.
The choice of expansion cities is stellar — San Francisco and Chicago.
The tech will kill in San Francisco. Having lived there previously, the convenience store experience across the city is horrible. It’s filled with long-lines, dirty stores, and unhelpful sales staff, and the city’s inhabitants have the desire and the money to pay the premiums for the Yuppie Nirvana experience that is Amazon Go.
In fact, I think “Go” might soon become yogi for “Don’t mess with my flow, give me my banh mi sandwich, and get the hell out of my goddamn way because I have deals to slay and pictures of my food to post.”
Chicago, on the other hand, is an even more interesting choice than San Francisco.
Because who else is in Chicago?
Oh shit. That’s right, Walgreens.
I imagine Walgreens right now feels much like Rocky Balboa felt as he watched his good friend Apollo Creed get pummeled to death by Ivan Drago in Rocky IV — Rocky wanted to throw in the already bloodied towel, but just could not do so, despite the great Tony Burton’s urging.
But, one has to wonder, is this the beginning of Seattle Jeff Bezos’ latest attempt to put his foot on the throat of yet another competitor — in this case, Walgreens?
It would be the beginning of a shrewd plan. Amazon could ask Prime paying customers for the capital to build more Go stores, then leverage those stores to destroy the convenience side of Walgreens’ business, then force Walgreens to say “uncle” on a low-ball acquisition offer, as Walgreens realizes they have no other options, and then Amazon is suddenly in the pharmacy business.
I wouldn’t put it past him. Chicagoans, everywhere, may soon be saying . . .
#2) Kroger Bets on Robots with Ocado Deal (Investopedia)
This announcement is big. If you recall, Ocado, the online grocery delivery company out of the United Kingdom, stole the show at Shoptalk this year.
Ocado appears to be light years ahead of the competition in terms of automation and understanding online grocery fulfillment best practices. Take one look at this video of their warehouse operations, and you will see what I mean.
Seeing the potential in Ocado’s capabilities, Kroger secured a 5% stake in Ocado and the exclusive rights to license Ocado’s technology in the U.S. The article above also claims that Kroger is already looking to build 20 new automated warehouses across the country over the next three years as well.
It is a smart move by Kroger. It gives them access to technology that could help them compete for the online grocery business in the U.S. and also gives them a cut of the pie internationally as Ocado looks to take their capabilities beyond the U.K.
#3) (Tie) Macy’s thinks it has a ‘winning formula’ as it crushes Q1 (Retail Dive) and Walmart e-commerce growth rebounds (Retail Dive)
Earning reports abounded this week. Walmart was roughly on expectations. Macy’s was ahead of expectations. Others, like JCP and Home Depot, were below what the market expected.
I am going to sound like a politician here, but go through the list and how many retailers, based on their recent announcements, can you say have a better or worse future outlook than they did three months ago?
In fact, how do we make heads or tails of any retailers’ announcements right now?
Everything seems irrational and quite short-sighted. Macy’s beat expectations, but so what? Do we really know anything more than we did a few months ago?
Walmart met expectations, and their e-commerce growth picked up again, but what does that really tell us? Despite the growth, gross margins also fell for the fourth consecutive quarter, so how do we know Walmart did not buy the e-commerce growth for the quarter to avoid getting more egg on their face after their dismal performance the previous quarter?
We don’t. It is too hard to tell. So many of these earnings reports are like Fletch charcoal.
But, glad to know Macy’s thinks their VR displays in store are driving “significantly increased” transactions in furniture. I am sure that is true . . . for the four people that probably tried it. Though we will never know if I am being unjustifiably glib because not Macy’s, nor anyone else, ever tell us anything material about the size and scope of their initiatives — they are all just PR window dressing.
More great reporting here from Matt Boyle at Bloomberg — Walmart has ended their “Mobile Scan & Go” program, citing its customers were ‘leery’ of the technology.
As Joaquin Phoenix, as Commodus, exclaimed in Gladiator, “I am terribly vexed” by this announcement.
I want to go to the Commodus just reading it.
First, Walmart, your customers are ‘leery’ of it? Who cares? Let the ‘leery’ still check out the old way. Scan-and-go isn’t about the customers of today. It is about the customers of tomorrow.
Scan-and-go experimentation is important because it makes mobile the apex triangulation point of the new operating system of retail (cloud commerce, mobile applications, and location tracking) which turns retailer salesfloors into the analytical equivalents of web commerce browsers. It is the most cost effective solution to bridging online and offline data and to creating new levels of understanding of our consumers.
Second, this announcement just smells of old guard thinking. In fact, the announcement came from Brett Biggs, Walmart’s current Chief Financial Officer, and a nearly 20 year Walmart veteran. Another example of why I am short on legacy retail — it is just tough to teach an old dog to ride a reverse-engineered bicycle.
Killing scan-and-go is a bad move, Walmart. You need to at least experiment with it and to offer it to your customers. If some people don’t want to use it? So what?
Some people will want to use it, and you just may learn something unexpected along the way — oh, I don’t know, like how to beat Amazon GO down the line when visual recognition technology is way too expensive for you to deploy right now.
What do I know though, Walmart’s soon-to-be-released digital Lord & Taylor web mall is probably a much better long-term idea on which to hang one’s hat.
#5) Aldo updates app to streamline trying on shoes in store (Retail Dive)
Finally, this announcement made the cut because I got a little more feisty than usual this week, and I felt I needed to end on a comic high note to lighten the mood, especially after Walmart sent us back to the retail stone age with their scan-and-go announcement.
Aldo announced that they are updating their app to streamline how customers try on shoes while in store.
The two most annoying and ridiculous friction points within today’s retail world are having to ask someone to bring you a pair of shoes and the deli counter. Why I go into a store and have to wait for someone to bring me out a size 10 is beyond me.
But even more concerning — the deli counter.
Seriously, have you seen this thing? It is the bottleneck of bottlenecks. I have to stand at a counter and wait in line while some dude pulls out a “chub” (that’s what they call it) and then slices bad-for-us meats and cheeses to arcane levels of specifications.
There has to be a better way.
Every time my wife makes me go to the deli counter for a half-pound of Genoa salami, it’s a minimum of five to ten minutes of my life that I want back, combined with the horror of watching a man gyrate heavy machinery back and forth, and then ask me, “Too thin?”
Someone, for the love of god, please figure this the hell out.
Be careful out there,
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P.P.S. We also made a big announcement this week. In case you missed it, Red Archer Retail and Omni Talk have formed a new partnership with the O Alliance and its founder Andrea Weiss. We are excited to partner with Andrea and the O Alliance to create new and exciting ways to do retail and that incorporate the very best of human, digital and physical design.
P.P.P.S. I also plan to send out soon the written transcript from my fireside chat with Microsoft’s Mariya Zorotovich last week at the GMDC Retail Tomorrow Immersion series. Stay tuned!