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%.
On this week’s Location-Based Marketing Association podcast: U.S. Army #InOurBoots VR recruiting, Transport for London using WiFi tracking, Havaianas shoppable boardwalk, McDonald’s Sweden’s QR picnic blanket, Zeta Global takes over PlaceIQ’s ad business, Amazon’s employee incentive for creating delivery start-ups.
In a recent column, Recode founder and New York Times columnist Kara Swisher cut to the core of what would seem to be concessionary calls for regulation from Big Tech firms, summarizing their attitude like this: “We make, we break, you fix.” She’s right, and with Google, Amazon, Apple, and Facebook doubling their combined lobbying spending from 2016 to $55 million in 2018, it is worth taking a closer look at the kinds of arguments the companies are trotting out to avoid responsibility for the outcomes of the technology they produce and sell. We should be particularly concerned about the arguments tech firms are making about AI, which is already remaking our society, replacing steps in crucial human decision-making processes with machine-generated solutions.
For an example of how tech firms are attempting to get away with peddling potentially dangerous AI-based tech to powerful entities like law enforcement agencies while accepting minimal accountability, consider Amazon’s Rekognition.
The blurring lines among search, social, and e-commerce only muddy the water when it comes to determining the customer’s journey to conversion. So, how can advertisers accurately attribute their marketing dollars to customer wins? Increasingly, marketers are turning to a multi-touch attribution strategy that includes both online and offline conversions, thereby moving away from simplistic last-touch attribution models.
The other day, Uber Eats announced a new service that struck me at first as a little surprising but, once I absorbed the idea, seemed strangely inevitable. In select cities like Austin and San Diego, you can now order food ahead of time, monitor your order status, and arrive at the restaurant just in time to begin dining, your table ready and waiting for you. This on-demand dine-in service is meant to remove time and effort from the experience of eating out, and it may also help restaurants fill empty tables during off-peak times by enabling special time-based incentives.
When I say it seems inevitable that an app would eventually “solve” waiting for your food at restaurants, I have two things in mind. The first is a quote from Twitter co-founder Ev Williams that, to me, strikes at the root of contemporary trends in innovation. The second point I want to observe here is that the highly representative user experience created by Uber Eats is taking place on a mobile phone.
Amazon’s success comes at a cost for publishers. Its growth means that retail and CPG brands are shifting digital spend away from publishers, siphoning off a key source of revenue. How can publishers compete? Their survival may come down to better ways of monetizing existing channels like email, as well as more effective use of their greatest asset: first-party data.
The hope for publishers lies in email and the power of the email address. With email, publishers have a logged-in channel that’s virtually fraud-free. Email represents a direct relationship with the consumer and one that is detached from platform intermediaries that have unfairly claimed revenue and attribution from the rightful influencer: the publisher. And contrary to popular belief, email is still a channel where people spend over five hours a day. What’s more, email is impervious to subtle shifts of an algorithm that force a publisher to buy the right to reach people, as opposed to owning the relationship with those who have requested a publisher’s content in the first place.
Unlike other shopping “holidays,” like Black Friday and Cyber Monday, Amazon Prime Day is specific to a single retailer. But as the event grows, other retailers—both online and offline—are finding ways to leverage the anticipation that consumers are feeling.
Last year, 63% of Prime Day shoppers said they visited competing websites to compare prices. This is a major opportunity for online retailers to capitalize on the spike in traffic and provide consumers with personalized and targeted offerings and exclusive deals.
Long lines of shoppers snaking around retail stores used to be commonplace on the morning after Thanksgiving. So was the tradition of picking up a print newspaper for an early look at the Black Friday ads. But with retailers like Amazon, Nordstrom, Alibaba, and Flipkart creating their own shopping holidays, the frenzy around Black Friday and Cyber Monday has been tamped down. Is this a sign of the times or just a blip in retail’s evolution?
To find the answer, the mobile app marketing firm Liftoff and the mobile measurement company Adjust teamed up and took a deep dive into the consumer activity on shopping apps throughout the calendar year. In a new report, the firms found that with excuses to shop year round, traditional shopping holidays, like Black Friday and the New Year period, are waning in significance. These events are gradually becoming less vital for online and offline retailers, even if they remain important moments.
Jeff Bezos likes to say, “Your margin is my opportunity.” Like with Whole Foods and grocery, Amazon moves into new verticals and applies its logistics-first approach to carve out margins, then undercut competitors. It is even getting into shipping, in a move to own its delivery infrastructure.
The next local conquest could be restaurants. For Amazon, it’s not just about serving food, but doing so in a way that aligns with its forte: delivering things to your home. The biggest clues and synergies lie in its established delivery and logistics playbook as well as its recent $575 million investment in Deliveroo.
Enter the cloud kitchen.
Despite Amazon’s high-profile acquisition of Whole Foods in 2017, grocery is the bastion of brick-and-mortar shopping proving unusually resistant to a takeover by digital channels. At least, that is the vision of consumers, only 15% of whom say they are excited about the technical “revolution” in grocery, according to a new report on the future of retail by Walker Sands.
Street Fight is rolling into July with the monthly theme Disrupting Retail: a look at how retail continues to transform, driven by competition from Amazon and key trends like “retail-as-a-service.”
But why is this important to Street Fight (and to you)? As we continue to evolve the definition of “local,” one key component of its market opportunity is offline brick-and-mortar shopping. After all, about 90% of all U.S. retail spending, to the tune of about $3.7 trillion, is completed offline in physical stores. And that’s usually in proximity to one’s home (thus, local).
Two steps forward, one step back. That’s what it can feel like to be a technology provider in the location marketing space right now, struggling to strike a balance between the demands of brand marketers and growing concerns over consumer privacy and data regulation.
That push and pull is challenging vendors in the location marketing space. At the same time their firms should be seeing exponential growth, data regulations—including the European Union’s General Data Protection Regulation (GDPR) and California’s forthcoming Consumer Privacy Act (CCPA)—are establishing new rules for innovation.
But some companies are embracing the regulation as a challenge to innovate in its own right.
Headlines about retail closures suggest it’s Amazon’s world and we’re all just living in it, but there’s more to the story. For local businesses, in particular, there’s ample reason to be optimistic that the retail apocalypse doesn’t have to spell end times. In fact, exactly the opposite could be true. Let’s walk through a few of the reasons for optimism.
The increasing popularity of smart speakers, digital assistants, and podcasts means we need to begin thinking differently about voice and marketing. That includes tailoring online content to users and how they engage with it, making voice functionality a part of the sales funnel, and creating podcasts or partnering with influencers to reach audiences in a new way. With the right approach, a creative brand could get a considerable head start in this new but quickly developing marketing landscape.
On this week’s Location-Based Marketing Association podcast: Wrangler Jeans + Old Town Road, The North Face + Spotify, SingleCut Beersmiths plays trivia, Amazon’s StyleSnap, Coca-Cola’s summer wrist bands, ProYo + InMarket. Special: 2019 LBMA Global Location Trends Report.
Pundits have speculated that loyalty is becoming less and less important as mobile and especially voice search drive the consumer toward the most convenient purchasing options. That may be true, but the report indicates loyalty remains a powerful factor, with 53% of consumers saying they are more likely to buy from a retailer they know and trust.
A freshly released report from SMB software firm Broadly uses data from a survey of 300 SMB leaders to paint a picture of the American SMB in 2019: gradually embracing mobile-first communication, skeptical of innovation that undercuts human connection, and ambivalent toward large digital marketplaces like Amazon and Etsy.