Tag Archives: amazon

Is digital retail a sustainable opportunity?

 for the Guardian Professional Network

I was on a panel this week to launch BT’s Retailtopia, a study event which examines the immense impact that information technology is likely to have on shopping over the next 10 years. On current trends, online shopping will account for over half of all purchases in a decade, with Amazon set to overtake Walmart as the planet’s biggest retailer. And although UK companies are currently world leaders in online and digitally-enabled shopping, I think that very few of the big retail players are really prepared for the scale of the changes to come.

We are likely to see not just more online shopping, but a blurring of the online and physical experience, with shoppers at home able to visit virtual changing rooms and shoppers in store able to access a cloud of information about products.

We are likely to see the arrival of the “internet of things” with every product given a digital identity, every movement mapped, and every preference logged. Information will overlay all areas of our lives. This will produce a rich seam of data to be mined, and analysing – and acting on – those data patterns will be key to retail success.

We are also likely to see a whole load of new players enter the game – peer-to-peer sellers, small independents or online farmers’ markets – as new technologies democratise the market and bring down barriers to entry for smaller players.

When people do visit stores, it will be for entertainment and the leisure experience, so expect to see chef demonstrations, children’s entertainers and food tastings.

What could this all mean for sustainability? On the one hand, people will be presented with more opportunities to consume. By 2020 the store will come to the consumer, via whatever handheld device we are using then, with personalised offers to entice us to spend. There will be few physical, technological or geographical boundaries to making purchases. We certainly won’t need to carry cash. We’ll just click for what we want.

On the other hand, this cluster of new technologies does offer the opportunity to reduce the environmental impact of consumption.

Shopping may become way more efficient. With intelligence embedded in everything, retailers can use that intelligence to cut the waste they produce and reduce energy and water use. Logistics will be smarter, and adjustable in real-time. Retailers will probably start to share more infrastructure. And the higher volume and density of home deliveries should allow for efficiency savings.

Shopping could be dematerialised. There will certainly be fewer journeys to physical shops, as more people buy online. And we can also expect a far greater proportion of the nation’s wealth to be generated digitally rather than physically, with many more goods and services to be provided virtually. Just think about how the MP3 file has almost completely replaced record shops or how the Kindle is currently becoming a serious rival to bookshops.

Shopping could be more informed. The new technologies, and the information that they generate could help customers make wiser choices. There will not only be total transparency around products in terms of their ingredients and provenance; but that information can be packaged and communicated in ways that make sense to the individual shopper. The climate-change conscious could get a carbon score for their weekly shop, with suggested adjustments; people with health issues might receive nudges to ensure their purchases fit their dietary plans; while people who care about fair trade will be able to click to watch a live video feed of the farm or factory on their smart phone before buying.

The technological changes are likely to come thick and fast. The consumer experience will probably be more seamless, more personalised, more ubiquitous. And if these technologies are applied in the right ways, I hope that it might just also be more efficient, more informed, and more sustainable.

via Digital retail: A sustainability opportunity? | Guardian Sustainable Business | guardian.co.uk.

Online shoppers welcome home grocery delivery

Though few retail grocers offer home delivery of web orders, a survey from the Food Marketing Institute, a grocery industry trade organization, suggests that consumers respond more to web grocers that offer to deliver online orders compared with grocers that require pickup at their stores.

In 2010, 32% of consumers responding to an FMI survey said their primary grocery store offered online ordering, and 28% said they had done at least some online ordering at those grocers. 4% said they shopped online at those grocers one to three times per month, and 2% said at least once a week. But 22% said they shopped online at those grocers less than once a month, with another 73% saying they never shopped there online.

By comparison, the FMI survey showed that only 17% of respondents said their primary grocery store offered home delivery—but 13% said they ordered home delivery one to three times per month, and 5% said they did so at least once a week, higher figures than for when home delivery was not an option. 17% said they ordered home delivery less than once a month, leaving 65% saying they never did.

Regardless of the demand for it by consumers, however, home delivery of groceries isn’t for all retailers, experts say. “Home delivery is only going to work for really big folks with profitable online grocery operations offered in places where the retailer has a reasonable density of customers,” says Jack Horst, a retail strategist at retail industry consultants Kurt Salmon.

The category of “really big folks” surely includes Amazon.com, the largest web-only retailer, and Wal-Mart Stores Inc., the world’s largest retailer and the leading U.S. grocery merchant. Both Amazon and Wal-Mart are experimenting with home delivery of groceries.

Amazon’s program, dubbed AmazonTote, has been tested by the company’s employees in Seattle for the past six months or so. In its infancy, the service entails weekly delivery of groceries and other items to the user’s home, with the groceries bagged in reusable tote bags, all free of charge.

According to The Financial Times, the service is linked to Amazon’s Fresh grocery delivery service, which currently only operates in the Seattle area but is available to all consumers in that area.

Fresh offers fresh produce and meats in addition to non-perishable grocery items; the service goes beyond food, too, ranging from pet supplies to beauty products and other Amazon.com categories. Granted, the convenience is reflected in the price — would you pay $2.50 for a single grapefruit under any other circumstances? — but you get what you pay for, which in this case amounts to a lot of time and energy saved.

On the other side, the “Walmart To Go” test , just launched in California last Saturday, allows customers to visit Walmart.com to order groceries and consumables found in a Walmart store and have them delivered to their homes, a company’ spokesman said. Products include fresh produce, meat and seafood, frozen, bakery, baby, over-the-counter pharmacy, household supplies and health and beauty items. Wal-Mart also offers a Pick Up Today service, which is limited to select electronics, video games and appliances.

What Amazon also needs to fear is a new initiative from the company called @WalmartLabs.  According to GeekWire, this new Silicon Valley-based arm of the company is stating it has pretty lofty goals: “Walmart plans to expand the @WalmartLabs team and expects this new group will create technologies and businesses around social and mobile commerce that will support Walmart’s global multi-channel strategy, which integrates the shopping experience between bricks and mortar stores and e-commerce.”
In other words, exactly what Amazon does, except with the integration of brick and mortar stores.

Walmart seems to be turning its collective eyes towards technology more and more as of  late, the only real question is what took them so long.  If the discount store giant starts pouring its massive resources into more technology integrations, releasing its own products and taking on the likes of Amazon, we could see the company slowly take over eCommerce just as it did with the retail world.

The majority of grocery retailers still prefer store pickup of online orders, as MyWebGrocer* CEO Rick Tarrant says. But if the Wal-Mart and Amazon test will prove to be successful, we are pretty sure that at-home delivery will be the next big trend.

*MyWebGrocer, a provider of e-commerce and digital marketing technology and services to more than 110 grocery retailers, has supermarket clients including ShopRite that offer home delivery in some markets