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Amazon Disrupts Again: Here’s what you need to know

BY Bridget Johns

Ever since the announcement of Amazon Go and its promised checkout-free shopping experience, retailers have been left wondering, “what does Amazon Go mean for the rest of retail?”

There is no doubt it’s an exciting time to be in the business of delivering technologies that move the needle on physical store shopper experiences and this announcement fast-forwards the need to make the investments that drive a new kind of retail. But should every retailer be thinking about a cookie cutter approach to what Amazon is doing? Probably not. Should retailers be panicking? Maybe.

True to its character, Amazon has done a very smart thing, choosing, as it did with books over 20 years ago, a category ripe for disruption.

Americans buy groceries pretty much the same way they have for the past 100 years, and there isn’t much that has changed about the physical grocery store environment. The biggest disruption that has stuck to date in the grocery space has been the self-checkout, and even that is fraught with friction.

With all the technology available to retailers, the devil is in the details. The notion of a check-out free grocery store has been around for ages, but the technology hasn’t really been available until now – and it’s still an open question whether those technologies are ready for prime time. If you employ self-scanning, for example, you still need to have a compliance check, which requires a person ensuring no mistakes were incurred in scanning – so, only marginally easier than self-checkout. But, with the advancements in IoT and other sensor technologies, the ability to create a technology-powered experience eliminating one of the biggest points of friction from the shopper experience is closer and closer to reality.

The ability to measure in parallel product movement – with RFID, for example – and human movement – through video analytics – opens a whole host of opportunities to service customers in new ways. Both technologies have come a long way.

With video, retailers measure very precise movements of customers through large environments. With stereo cameras, retailers measure very precise tracks with high degrees of accuracy and an ability to segment tracks by age, gender, employee vs. customer, etc. that provide a tremendous amount of information about what is happening in-store.

The advancements in RFID reader technology, particularly in fixed readers, gives a very good view of where all tagged product is at all times. Embedding video into sensor platforms goes a step further to give, for the first time, the ability to bring shopper and product movement together in one place at the same time. Software then takes all of those tracks and gives insights into what is happening within a store, and from that data retailers like Amazon can get really creative about what that means from a customer-facing application perspective.

Amazon chose to tackle grocery and to eliminate the checkouts, but this is probably not the path that all of retail will take. While it lends itself to the somewhat soul crushing experience of grocery shopping, other categories like apparel will need to evolve in other ways. Smart fitting rooms are already becoming a must-have for many retailers, and there is still a tremendous amount of opportunity to further evolve and better that experience. With different categories of retail, each has their own unique challenges and opportunities to evolve. While the go-forward strategies won’t all look like Amazon Go, they will likely look much different in five years than they do today.

Below are eight top tips for retailers that are asking, “What does Amazon Go mean to me?”

1. Don’t Panic. Amazon isn’t going to build thousands of stores overnight, and until real shoppers pressure test the experience, it’s hard to know exactly what the impact will be. There are other unknowns like accuracy and compliance that will need to be well-vetted. It’s one thing to inadvertently give away an occasional can of soup, but it’s more damaging to charge for a can of soup that isn’t in the basket. Moreover, other categories have more potential for real customer dissatisfaction and inventory shrink issues if the product and the charges don’t line up perfectly.

2. Panic. Amazon has a proven ability to change how customers consume products. Remember, it started with one simple thing – and not only did it disrupt how customers buy books, it changed how they consume the written word altogether. That’s big.

3. Make a plan. If you aren’t thinking about how you collect, analyze and action data in your stores, you are definitely behind.

4. Focus. Start with your shoppers’ biggest pain points and work from there. Don’t try to boil the ocean, but do try to remove some of those points of friction from their experience.

5. Be bold. Part of having an effective plan is being willing to go way outside of the box. Will all of the technology work? Probably not, but you will learn a tremendous amount and you may even find a big, disruptive idea of your own.

6. Engage. Bring your business partners into the conversation and try to find ways to leverage data and information across silos – or better yet, tear those silos down.

7. Educate yourself. Understand some of the in’s and out’s of the technologies available – even if you aren’t a “technology person.” Understanding the technology even to a certain degree will make it much easier to think about how to solve the problems of today.

8. Go shopping. Many retailers will admit they spend almost no time in stores other than their own. Learn from the digitally native or otherwise innovative brands or that are all disrupting in their own way – Warby Parker, Lolli & Pops, Rent the Runway, etc. are all great places to start.


Bridget Johns is head of marketing and customer experience at RetailNext.

Through its centralized SaaS platform, RetailNext automatically collects and analyzes shopper behavior data, providing retailers with insight to improve the shopper experience real time. More than 300 retailers in over 70 countries have adopted RetailNext’s analytics software and retail expertise to better understand the shopper journey.

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Party City tops estimates; to launch new marketplace

BY Marianne Wilson

Party City on Tuesday announced earnings and revenue that topped expectations, and said it would launch an online marketplace for party services.

The party supplies retailer and wholesaler reported a loss of $4.7 million in its first quarter, which included a $9.2 million one-time charges associated with company restructuring, and primarily represents related severance charges. Earnings, adjusted for one-time gains and costs, were 5 cents per share. The results surpassed Wall Street expectations. Total revenue rose 4.2% to $477.00 million in the quarter, ended March 31.

“2017 is off to a solid start with first quarter results that were in line with our expectations,” said James M. Harrison, CEO. “A compelling assortment, good in-store execution and strong holiday performance were all positive contributors in our retail business. We made significant progress on the acquisition front, strengthening our vertical model, expanding our company-owned footprint and increasing our global presence. We are building on our successful track record of making highly accretive acquisitions, and we have a robust pipeline of further opportunities.”

Party City said it has entered into an agreement to design and launch an online, easy-to-use digital marketplace for party-related services. The site would connect suppliers and consumers, and allowing a shopper to select, schedule and pay for party services, including entertainment, activities, food and decorations, from various screened vendors, according to the company.

Party City’s retail operations include over 900 specialty retail party supply stores (including approximately 150 franchise stores) throughout North America operating under the names Party City and Halloween City, and e-commerce websites, principally through the domain name PartyCity.com.

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Struggling department store chain to replace CEO

BY Marianne Wilson

There’s been a shakeup at Bon-Ton Stores.

The department store retailer announced that Kathryn Bufano, president and CEO, will leave the company when her contract expires on August 25. She will be succeeded by William Tracy, currently the retailer’s COO. He will be Bon-Ton’s fourth chief executive since 2012.

Tracy has served as COO of Bon-Ton since July 2015. He previously held various management positions at Hudson's Bay Company, including executive VP of supply chain, logistics & omnichannel fulfillment, and global sourcing. Tracy also served as COO of Fortunoff Brands LLC and Nine West Corp.

Bon-Ton Stores operates 261 stores in the Northeast, Midwest and upper Great Plains regions under the Bon-Ton, Bergner's, Boston Store, Carson's, Elder-Beerman, Herberger's and Younkers banners. The company, which has been unprofitable for the past six years, posted a $63.4 million loss in 2016, up from a loss of $57 million the previous year.

The executive shakeup comes days after longtime Bon-Ton chairman Tim Grumbacher announced his decision to retire, effective May 13. Grumbacher, who will serve as chairman emeritus and advisor to the CEO, will be succeeded by his wife and board member, Debra K. Simon. Grumbacher is the Bon-Ton’s largest shareholder. He is also member of the family that founded the company in the late 1800s.

" Bill (Tracy) is a proven leader with more than 40 years of retail experience in the areas of operations, supply chain management and logistics for national department stores,” said Grumbacher. “We are confident that Bill will be a successful leader based on his in-depth knowledge of the retail industry, his operational expertise and his understanding of the Bon-Ton business.”

The retailer also announced that Chad Stauffer, currently a general merchandise managers, has been named executive VP, and chief merchandising officer.

Bufano was named CEO of Bon-Ton in the summer of 2014. She will remain with the company as CEO through a transition period to ensure an orderly and effective leadership transition. Prior to Bon-Ton, she served as president and chief merchandising office of Belk Inc. She also held positions at Macy’s, and Lord & Taylor.

“Bon-Ton has a long and successful history as the hometown store for consumers, and I am proud of the accomplishments we made during my tenure as CEO," she said in a statement. "I look forward to working with Bill to ensure a smooth transition, and wish Bon-Ton and the entire team the best of luck in the future.”

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R.Mader says:
May-10-2017 02:22 pm

Tim Grumbacher is one of the nicest gentleman on this earth, just not tough enough to avoid bad influences and manage a 2+ billion dollar company. Sell company if they can find a buyer.

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