Hello everyone on this fine Friday morning!
Omni Talk has a number of exciting announcements this week before we get to what was a heavy retail news week.
First, the Robin Report published a signature piece I have been working on for the past couple of months, entitled Retail’s Mid-Year Physical Exam.
One might ask how a reputable retail magazine would allow some yahoo to compare current day retailers to the likes of Tom Cruise, Keanu Reeves, and George Clooney, but somehow, against what is probably the Robin Report’s better judgment, it did.
Second, I just signed on to be a contributor for Forbes.com as well. We will keep you updated on all our Forbes.com activity and hope you check it out. We will be experimenting with different types of content across the Forbes.com and Omni Talk platforms, so please let us know your thoughts as we go forward.
Ok, enough updates, let’s get to the big headlines from the week.
Please enjoy this week’s Fast Five!
Thursday the Supreme Court ruled in favor of South Dakota in its case against Wayfair, saying that e-commerce retailers are no longer protected from a previous ruling in 1992 that prevented states from collecting sales tax on e-commerce sales to customers within a state’s borders.
This issue has been in the media for some time now. On the surface, the ruling would appear to help legacy bricks-and-mortar retailers and hurt the e-commerce industry. But, dig deeper, and the company most likely to benefit from this ruling is, yes, you guessed it — Amazon.
Amazon already pays sales tax in the states it sells products directly to consumers. Bigger players, like Wayfair and others, do not. Neither do Amazon’s third-party sellers.
But, it has to hurt Amazon’s third-party sellers, and, therefore, Amazon too, right?
Not necessarily. This ruling could hurt some third-party sellers in the short-term, but eventually the market will stabilize.
Meanwhile, I would bet my bottom dollar that Amazon has been prepping for this day for awhile now and that Amazon already has a plan (via software) to help third-party sellers record and pay their taxes in the future (I don’t know this. Really, I am only guessing. But would you be surprised?).
It is a great sales pitch for Amazon — “Not capable of managing the onerous burden of recording and paying sales tax within every state you do business, third-party seller? Come on our marketplace and we will give you all the tools you need.”
The ruling may have just made Amazon’s marketplace even more desirable (and more profitable) than it already is.
Think Google isn’t a retailer? Think again.
Google’s recent investment in JD.com (Alibaba’s main e-commerce competition in China) signals that Google is more than serious about retail.
Google Shopping, if you have never tried it, is the same as Amazon’s marketplace. It is another way for retailers and third-party sellers to distribute their products to consumers. This partnership gives Google the ability to leverage JD.com’s online prowess as well as JD.com’s fulfillment capabilities as Google tries to increase the size and scale of its own Google Shopping marketplace.
Why do this? One, there is money to be made. Two, according to Survata, 49% of all first product searches begin on Amazon. Google both sees the threat this poses to their paid search revenue over time and also sees the opportunity in a landscape that is not yet fully formed either (don’t forget about Facebook too).
Staying on China, JD.com is also an important piece of something super cool out of Walmart this week. Walmart has opened its first small-format Walmart Supermarket in China in partnership with JD.daojia, an affiliate of JD.com.
Similar to Google, Walmart is leveraging JD for fulfillment, and Walmart is also partnering with WeChat for the store’s scan-and-go mobile payment and checkout experience. Already, Walmart estimates 20% of its customers are using the scan-and-go checkout feature.
A scan-and-go world is coming soon (even Dollar General announced this week they are piloting scan-and-go in 10 stores).
The benefits of scan-and-go are real — customers no longer have to stand in line to checkout, they can see a rolling total of their spend against their budget and apply digital coupons seamlessly as they shop, and they receive a digital receipt of their activity forever on their phones.
What’s not to love?
While I still do not agree with Walmart canceling its scan-and-go pilots within the United States, it is reassuring to see their experimentation in China (and in Sam’s Club too).
With so many big headlines this week, I wanted to go off the beaten path a little bit. I could have gone with the new partnership between CVS and USPS, but loyal Omni Talk readers deserve deeper level insights and . . . quirkiness.
Instead, we are going with gymnastic freak shows (ever seen Zumanity?).
Cirque du Soleil plans to open a 24,000 sq. ft. experience in Toronto next year called Creactive. It will come replete with bungee jumping, trampolines, and, of course, mask design.
This headline is yet another sign of the growing trend towards experiences as the reason we leave our couches.
I love this.
It’s creative, and partnerships like this one, between a mall developer and a Vegas show act, demonstrate how 1 + 1 can equal 3.
Now, if only some retailer would finally get its act together with KinderCare. That could be goddamn life altering.
Finally, and again from the desk of Amazon, Amazon now wants to be a part of our vacations and work trips too.
Amazon this week announced a new program that it is calling Alexa for Hospitality in partnership with Marriott.
The gist: Alexa will act as a hotel guest’s in-room concierge. Sign me up. You had me at “in.”
Alexa will be able to control in-room functions, like curtains and thermostats, and also be able to book things like spa appointments.
My question though — what else will Alexa listen to in this environment?
Be careful out there,
P.S. If you have yet to check it out, be sure to give Part II of my series with Uberall on location marketing and mobile retailing a good look. The post is entitled The New Mental Gymnastics of Mobile Retailing, and I would love to know if you agree or disagree with my argument
P.P.S. What’s the deal with Patagonia hats? I am seeing them everywhere. And, while we’re at it, does the rain in Spain fall mainly on the plain? This has stumped me since high school.
P.P.P.S. If you enjoyed this content and would love more of it, be sure to subscribe here for future updates from Omni Talk.
Chris Walton is an accomplished Senior Executive with nearly 20 years of success within the retail and retail technology industries. He is well-versed in merchandising, store operations, inventory management, product design, forecasting, e-commerce, pricing and promotions, and tech product development.
Chris was most recently a Vice President with Target, where he led the retailer’s Store of the Future project and also ran the Target’s home furnishing division for e-commerce. He previously worked for GAP, Inc., as a Distribution Analyst and Manager.
Chris holds a BA in Economics and History from Stanford University, and a MBA from Harvard Business School.
He likes to dress as Darth Vader for Halloween, and his wife also frequently asks him to ask Alexa, "to turn off the music."