This year’s holiday shopping season is not new (by definition), but there will be salient differences and revelations this season. The past year has seen lots of retail innovation as the industry looks to counteract the cautionary tales of late-adopting counterparts in the “retailpocolypse” graveyard.
It’s those innovations and integrations that will be exposed when put to the stress test of the holiday shopping blitz. After reading and writing about them in the pages of Street Fight all year, we’ll now get a look at how a lot of these implementations perform (good or bad) with greater shopping scale.
From Black Friday and Cyber Monday to back-to-school sales, retail holidays may be arbitrary, but they have become a core component of successful sales and marketing strategies. As a result of their success, these holidays are becoming expected, fixtures of the retail industry embedded in its collective psyche. Companies must innovate to keep them fresh. Brands need to monitor competitors to see what works and what doesn’t work and tweak their strategies appropriately.
Data on successful “holiday” campaigns reveal how to make the most of holidays, whether long-established or freshly innovated.
It will be key to see if the pace of Amazon’s overall and search ad revenue slows down in the next few years as it exhausts. For now, its ad success is just one more sign, like the news that it will likely sell its Go tech to retailers, that Amazon can find and dominate new businesses beyond its core identity as the Everything Store.
Amazon has a knack for moving into new vertical segments and then applying its logistical mastery and economies of scale to carve out margins and undercut incumbents. Then, it doubles down by scaling things up to its signature high-volume/low-margin approach. As Jeff Bezos ruthlessly admits, “Your margin is my opportunity.”
The latest place for this to unfold is retail. No, we’re not talking about Whole Foods, though that’s part it (more on that in a bit). We’re talking about Amazon’s transformation of the in-store experience — upending and streamlining logistics just like it’s done in shipping and cloud computing.
Here are some predictions for how Amazon’s disruption of retail via licensing of its Go technology will upend the industry.
On this week’s Location-Based Marketing Association podcast: Skoda announces in-car voice assistant Laura, Philadelphia bans stores that don’t accept cash, Kochava teams with CubeIQ, GOAT let’s you try on exclusive sneakers in AR, Olo powering restaurant orders from Google search and maps, Amazon to roll-out hand recognition payment at Whole Foods.
During the holiday shopping season, it’s Amazon’s world — or is it?
Outside the digital sphere, brick-and-mortar holiday sales at big-box shops like Walmart and Best Buy continue to be buoyed by bullish shoppers willing to hit the streets in search of timely deals during consumer-focused quasi-holidays like Black Friday. As a result, shoppers are spending more during the holidays than ever before.
And then there’s the independent, local retailer. How is a small shop supposed to compete with the ease of mobile e-commerce or the allure of big-box doorbuster deals? Turns out, they have an ace in the hole: last-minute shoppers.
On this week’s Location-Based Marketing Association podcast: Verizon Media goes AR, Pared app for restaurants, Veeve re-invents the shopping cart, Uber testing milk/bread delivery in Australia, Albert Heijn piloting their own Amazon GO, Apple quietly adds UWB to iPhone 11.
This time, it’s not Amazon Web Services, the cloud underpinning Amazon’s operations and those of other companies around the world, but Amazon’s Go technology that is being peddled to new clients. Bezos’ e-commerce behemoth is in talks to sell the flashy cashierless solution to movie theaters and airports, CNBC reported.
If Amazon is successful, the play to sell Go to other businesses may some day turn what now appears a revolutionary technical advance (with potentially devastating consequences for cashiers) into a commonplace asset. Just as AWS, the B2B play partially financing Amazon’s low-margin retail biz, supports thousands of businesses unbeknownst to their customers, Go-as-a-service could come to change all of retail without many consumers even realizing Amazon is behind changing checkout norms.
The fact that this was an open practice that at least some consumers simply did not understand they were either opting into or automatically participating in points to calls for greater transparency and regulation. Google says it “fell short” of its “high standards” on the issue, but legislation like Europe’s GDPR, CCPA, and legislation in some 10 other US states indicates those standards may be imposed on tech companies by government agencies going forward.
At the heart of the shift in gift-giving culture is the rise of online shopping. While previous generations would take to their local shops or markets to find the perfect gifts, today the process is infinitely simpler thanks to online retail giants like Amazon. At the click of a button, Internet users can purchase a present to be sent directly to their (or, even better, the recipient’s) door. Indeed, this is how the majority of people appear to be approaching gift giving today; approximately three quarters of consumers in the UK say they now buy more than half of their Christmas presents online.
Apple execs told the Times that the company’s apps show up so frequently in searches not because it tips the scales but because its apps are already very popular and are designed to please consumers. But that logic is in itself concerning: A company with nearly unparalleled power and insight into what consumers are looking for in terms of apps uses its understanding of consumer desire and vast resources to create apps that will defeat rivals (especially startups or young companies) in the App Store it owns. Even if there is no foul algorithmic play, the competitive advantage is clear. The question is whether it’s enough for antitrust action.
Amazon already uses its most valuable weapon — its own internal data — to compete with its own suppliers. It analyzes customer behavior around noted CPG brands, key market sectors, and private-label offerings from brands that sell on its platform to make decisions about where to launch its own private labels.
What can CPGs do to make it a win-win?
On this week’s Location-Based Marketing Association podcast: SpotHere raises $50M, Israel’s Shufersal serves the visually impaired, Jibestream acquired by Inpixon, Amazon rolls its Treasure Truck, Comscore + PlaceIQ launch MovieLift, TomTom releases APIs for EV developers.
It’s that factor, consumer data and Amazon’s vast store of it, that stands out most in Jason Del Rey’s reporting on Recode’s new podcast series, Land of the Giants. Specifically striking is the episode on Alexa, in which Amazon employees openly speculate about a future in which smart microwaves will hook up with Amazon’s growing healthcare ambitions to tell you when it’s time to stop making popcorn and smart countertops will join the intelligent kitchen conversation. As Del Rey notes, Amazon execs talk about this future openly, dropping tidbits about customer obsession along the way and appearing truly unperturbed by the thought that such interventions into our domestic lives may go too far or generate unintended consequences. Optimism for the quality of Amazon products and a fervent belief in the company’s benefit to consumers—without due consideration for products’ risk and would-be limits—seem to pervade the corporate culture.
On this week’s Location-Based Marketing Association podcast: PreciseTarget, Pinterest, Pokemon Go in NYC, Amazon killing Dash button, Walgreens using Theatre, MediaMarkt rolls out Signify indoor navigation, RevealMobile adds Canadian data.
For FedEx as for the many other companies and industries Amazon has decimated over the past 20 years, the problem in confronting Amazon may turn out to be one of margins. While FedEx needs a profitable delivery business to survive, Amazon can afford to lose money on delivery and make it up with relatively free-flowing profits from Amazon Web Services and its booming ad business.
In fact, Amazon can afford, thanks to the faith and generosity of investors, to make no profits at all. No easy task, competing with that.
There’s a renewed push in Silicon Valley to tackle last-mile delivery. The use of autonomous vehicles, drones, and artificial intelligence is what more and more vendors are pushing for. Last-mile delivery is the most expensive part of shipping, and increasing fees mean prices are only going higher. The company that can get goods from a transportation hub to the customer’s doorstep in the shortest amount of time will win the retail game, and technology firms are hoping that their innovative solutions will be the answer that retailers are looking for.
Here are six examples of companies that are working to innovate in the last-mile delivery space.
Amazon wasn’t the only retailer to see high purchase intent during its two-day event. Competing retailers saw similar successes piggybacking on Amazon’s newest shopping holiday with their own discounts and limited-time deals. This year’s Prime Day event drove a 14% spike in U.S. traffic on its first day, compared to baseline traffic from the month of June.
According to data collected by Constructor.io, an AI-first SaaS provider for ecommerce sites, among the non-Amazon companies having sales during Prime Day, search volume increased an average of more than 500%.