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Will the internet of things mean big things for retail?

Retail Wire Discussion: Will the internet of things mean big things for retail?

From a retail standpoint, TIoT (The Internet of Things) represents a play-to-participate opportunity for retailers (if not a play-to-win at this point), one that will further blur the lines between consumer electronics and other categories like white goods. That means that any retailer in the "consumer electronics" business will have some decisions to make regarding which categories to emphasize or add. For example, h.h. gregg decided to pump up its appliance business and reduce consumer electronics not long ago. Now they are becoming one and the same. Should Walmart carry white goods in the back of the store? Maybe online only, but with tie-ins to TIoT presented in stores? If the TIoT movement gains any traction (and it will if only because of the huge investments now being made in it by companies like Google), then retailers won't be able to sit on the sidelines.

In terms of security and privacy, I've been thinking a lot about the delicate balance that Google will have to strike (or at least consider) on the heels of its acquisition of Nest Labs. Google received quite a bit of flak earlier this year for linking its email service to social media, for example, upping the privacy quease factor already associated with the platform. If Google hopes to further penetrate consumers' homes, it can't afford to have a cavalier attitude or to assume that users won't draw connections between its various business units.

Read the article and discussion online at RetailWire.

If You Can’t Beat ‘Em, Eat ‘Em: Can Retailers Become Omni-Channel Omnivores?

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Last week, the retail world was abuzz over speculation that Walmart might take a shine to Family Dollar, on the heels of Credit Suisse analyst Michael Exstein’s recommendation to that effect. His argument followed the traditional eat-to-grow logic that has long dominated the conversation in retail, as well as much of the action. Getting hot and bothered by the possibility of a bricks-based buy, however, seems downright regressive at a time when the two platforms that are influencing retailers the most, Amazon and Facebook, are bent on defanging potential digital competitors.

Facebook’s acquisition of mobile messaging start-up WhatsApp for the astronomical sum of $16 billion understandably inspired much skepticism, as well as a spate of highly-entertaining other-stuff-you-could-get-for-that-crazy-amount articles. Through the acquisition, Facebook will be able to grab business intelligence on WhatsApp’s 450 million active monthly users, including what types of phones they are using to access the service, troves of keyword insights, and data on popular features. This is good stuff for sure, but doesn’t seem to justify the cost over the short term, at least using traditional metrics -- revenues, operating margins and risk. Facebook’s real bang for the buck comes from keeping WhatsApp’s global texting treasure out of Google’s grasping paws and adding another people-connecting competitor to its platform before it gets too big for its britches, as it did through its acquisition of Instagram last year for the comparatively-palatable sum of $1 billion.

Amazon’s purchase of reader review site Goodreads last year marked a similar preemptive move, as it kept a potential competitor out of the clutches of rivals like Apple and Barnes & Noble. It was Amazon’s acquisition of Quidsi in 2010 that first got the blocking ball rolling. Quidsi’s proliferating stable of category-killing spin-offs including soap.com and diapers.com, as well as its Amazon-in-a-bottle algorithms grew to become flies that were easier for Amazon to catch than swat.

Up to this point, digital acquisitions by traditional retailers such as Kroger, Walmart, Tesco, and others have focused exclusively on scale-building and adding complementary solutions. At the same time, future competitors are lurking in the cracks and crevices, and other digital platforms are prying them open before they become threats. Will traditional retailers soon have the confidence and foresight to do the same?

photo credit: Cathy Keifer

Will Same-Day Delivery Become a Retail Necessity?

UK-based Shutl  has set its sights on devouring the U.S. same-day-delivery market in big, bold bites. Retail Wire picked up on Carol Spieckerman's latest retailNXT interview with Shutl CEO, Tom Allason. In it, she  explores how the company's proprietary software and killer algorithms offer an agile alternative to its infrastructure-encumbered predecessors.


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According to Tom Allason, founder and CEO of the U.K. delivery service, Shutl, American retailers are freaked out" over the prospect of Amazon achieving nationwide same-day delivery because it removes one of the largest competitive advantages brick 'n mortars still have.

"Retailers realize that they have to do something because otherwise Amazon is going to offer a much better convenience proposition than they can," said Mr. Allason in an interview with newmarketbuilders. "At the moment, Amazon is competing and winning in two key battlegrounds where multi-channel retailers are structurally disadvantaged: price and range."

No multi-channel retailer can come near to competing with Amazon on product range because Amazon isn't limited by what it can fit in stores. Said Mr. Allason, "Its only limitation is what it can fit in its warehouses, which are huge and located in the middle of nowhere where land is cheap. By the end of this year, it will have 50 warehouses across North America."

By contrast, multi-channel retailers need stores located near consumers, where land is expensive. Amazon doesn't need many workers in its warehouses and will need even fewer in the future because Kiva Systems, the robotics company it acquired in March 2012, will make its warehouses more efficient.

Also, while "Buy Online, Pick Up in Store" may help retailers, the execution has been lacking. Not surprisingly, Shutl believes it offers a solution with its outsourced same-day delivery service recently debuted in Chicago, New York City and San Francisco, with more cities to follow. Founded in 2009, it currently operates in 60 cities in the U.K.

Shutl coordinates orders with local retailers and courier companies, a service "way outside" the core competencies of a retailer. It keeps costs down by working with established couriers, removing the infrastructure costs of hiring drivers or owning trucks. Shutl also arranges pickups only for customers who live within 10 miles of a store, another touted advantage over Amazon whose warehouses may be many miles further away.

"We're a software business, not a logistics business, and the advantage of our platform is that we leverage the volume of all of our retail partners to offer awesome pricing and really high-quality service," said Mr. Allason. "This just isn't something that any retailer can do."

In the U.K., Shutl offers delivery within as few as 90 minutes of the order at a cost of around $10 to consumers, although some retailers in the U.K. are willing to absorb the cost in certain cases in order to drive sales.

As far as demand, Mr. Allason said that once Amazon, Google, eBay and Walmart start pushing same-day delivery, consumers are going to expect it. Said Mr. Allason, "Of course, I'm slightly biased, but I see that as inevitable."

Check out the conversation among Retail Wire's brain trust panelists. 

Article by Carol Spieckerman for Retail Wire, 05/17/13.