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Study: One in four retailers feel paralyzed by Amazon

BY Deena M. Amato-McCoy

Retailers are eager to combat the force of Amazon, but they lack the strategy, marketing dollars and digital resources to do so.

Specifically, 44% of retailers do not know how to respond to the power of Amazon, according to “A New Path for Retail: Co-Existing with the Force of Amazon.” The report is from Bluecore, a commerce decision platform provider.

According to the study, 60% of retailers consider Amazon at least somewhat of a competitor. These companies also continue to grapple with free shipping, email communications and better access to customer data to mimic what Amazon does best: provide highly personalized and convenient experiences for customers.

Specifically, 63% of retailers believe free shipping for loyalty program members is one of Amazon’s most impactful consumer-facing technology initiatives. Yet, only 10% of retailers have significantly increased investment in technology to better compete with Amazon. Meanwhile, 29% of retailers haven’t even changed their data collection and analysis processes as a result of Amazon’s influence.

“Amazon exceeds at listening to its customers. Coming anywhere close to Amazon’s success in this area will require retailers to capture data on customer behaviors and preferences and analyze that data to fuel more intelligent decision-making and more personalized experiences,” said Jared Blank, senior VP of data analysis and insights at Bluecore. “The intent is fantastic, but many brands are severely limited in their abilities to obtain and digest this level of data. Even with an exceptional data and customer experience team, the risks are just too high.”

While better data and experiences are important, Bluecore’s experts have an achievable solution: accept Amazon as friend, not foe, and use the online giant as a distribution channel.

Some retailers have already embraced this opportunity and are selling products through Amazon — but not a majority. To date, only 30% of the retailers surveyed currently sell their products through Amazon. However, for 9%of those retailers, 50% of their sales come from this channel.

“Brands are at a crossroads. The choice is: compete against a company that spends more than $10 billion annually in R&D or leverage that incredibly powerful distribution channel,” said Blank.

With an increasing number of Amazon Prime customers and more consumers beginning their product searches on Amazon, “it’s simply ridiculous to think you’re going to succeed alone, Blank added.

According to Bluecore, the world’s largest brands are using Amazon as a distribution channel, and their revenue and earnings reports are seeing a sizeable uptick. “It’s not about failing to go it alone, it’s about learning to co-exist with this e-commerce behemoth – and embracing the right strategies for your own digital properties to continue to build brand awareness and loyalty,” he added.

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Five ways Walmart uses big data

BY Deena M. Amato-McCoy

Walmart is bullish on big data — especially when it comes to finding ways to better serve its shoppers.

Big data volume continues to grow, but Walmart is using it to the company’s — and its customers’ — advantage. By analyzing the robust information flowing throughout its operations, the discounter has gained a real-time view of workflow across its pharmacy, distribution centers, stores and e-commerce, according to a company blog.

Here are five ways that Walmart is using big data to enhance, optimize and customize the shopping experience:

1. To make Walmart pharmacies more efficient. By analyzing simulations, the discount giant can understand how many prescriptions are filled in a day, and determine the busiest times during each day or month. Big data also helps Walmart schedule associates more efficiently, and reduce the time and labor needed to fill perceptions.

2. To improve store checkout. While it is still only testing the process, Walmart is using predictive analytics to anticipate store demand and determine how many associates are needed to man registers. The data also reveals the best form of checkout at each store: traditional stations or self-checkout.

3. To manage the supply chain. The company uses simulations to track the number of steps from the dock to the store. The result: more optimized routes to the shipping dock. The strategy also pinpoints the number of times a product gets touched along the way to the customer. Big data also reveals transportation lanes and routes for the company’s fleet of trucks. This insight helps Walmart keep transportation costs down and more accurately schedule driver times, according to the blog.

4. To optimize product assortment. By analyzing customer preferences and shopping patterns, Walmart can optimize how to stock shelves and display merchandise. Big data also provides insight into new items, discontinued products and which brands to carry, the blog said.

5. To personalize the shopping experience. By analyzing shopper’s preferences, Walmart can develop a more consistent, tailored shopping experience. If a customer is shopping for baby products for example, Walmart can use data analytics to anticipate their needs then create personalized mobile rollback deals for these shoppers.

Whether it’s analyzing the transportation route for a supply chain or using data to optimize pricing, big data analytics will continue to be a key way for Walmart to enhance the customer experience, according to the company.

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Online giant explores ‘mobile’ drone launch pad

BY Deena M. Amato-McCoy

Amazon has lots of ideas about how drones can improve package deliveries, but they also need supportive facilities and operations.

In hopes of getting the ball rolling, the online giant has filed a patent application for “ground-based mobile maintenance facilities for unmanned aerial vehicles.” Simply put, these hubs would be dedicated to accommodating, loading, launching, receiving and maintaining the delivery drones.

According to a patent filing, which was recently published by the U.S. Patent and Trademark Center, intermodal vehicles could be linked to locomotives, container ships, road tractors or other vehicles, and equipped with systems for loading one or more items onto the aerial vehicle. These hubs could also launch or retrieve drones while the vehicle is in motion.

The application also defines how these hubs will help maintain the delivery devices. For example, drones may be loaded with replacement parts and/or inspection equipment. They could also be configured to conduct repairs, servicing operations or inspections on drones within the intermodal vehicles while the train, ship or another hosting vehicle is in motion, according to the filing.

Amazon is not the first company to explore the concept of mobile hubs or launch pads. In February, UPS tested a program in Lithia, Florida, that launched an “octocopter drone” from atop of a UPS package car. The device was programmed to autonomously deliver a package to a home, and then return to the vehicle while the driver continues along the route to make a separate delivery.

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