TECHNOLOGY

A new video streaming network is launching—but not for traditional shows

BY Deena M. Amato-McCoy

Digital customers now have a new way to shop.

A new shoppable video streaming service, called Alecia, enables customers to watch original videos, browse content and buy products they see on their device’s screen. The subscription-free app is available to stream online, and via the Alecia app for mobile devices, tablets and smart TVs.

Based on an interactive technology platform, Alecia makes on-screen products instantly available for purchase to viewers as they continue watching. “Thousands of brands and products” are available, and can be purchased with the click of their smart TV remote or tap of the screen.

Here’s how it works: After downloading the app, users sign up and create a profile. They can watch videos and stream original shows, and shop right through their device’s screen. Purchased items are delivered to their front door.

Content is comprised of licensed TV shows and movies, as well as original content developed and produced exclusively for the network. During the day, videos range from cooking to fitness, parenting, and pets, among other topics. At night, content includes dramas, comedies, and thrillers, among other video. Users can purchase any featured items, according to the company.

Founder and CEO Alecia Vimala founded the company and created her first videos in 2016. She received her first round of funding in August 2017, and acquired additional funding in February. The platform launched in September.

“I want Alecia to be a network of the people with content built and created by them,” said Vimala. “This will become the new standard of reality television.”

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TECHNOLOGY

The reasons retailers struggle to attract digitally-savvy consumers are…

BY Deena M. Amato-McCoy

Markdowns, returns and out-of-stock merchandise make it difficult for North America retailers to lure new digital consumers.

This was according to “Retail Index: 2018 Analysis & Holiday Outlook,” a study from DynamicAction. The study, which tracked online purchases of general merchandise, home goods and apparel (excluding Amazon and grocery transactions), revealed that new customer orders are down 5% year-to-date compared to 2017. First- and second-time buyers are down 8% compared to 2017, and there has been no weekly increase year-over-year in new customer orders since April.

Retailers are relying on marketing in hopes of attracting new shoppers, but these costs are on the rise. There was an average 5% increase in marketing spend this year, investments that soared 60% just during the summer months (June-September). Similarly, orders that used a promotion are up 2% for 2018 so far, compared to 1% for all of 2017. However, margin impact due to promotions is also on the rise, up 3% year-to-date.

North American retailers have also held more inventory this year, with extra inventory increasing 21% between this year and 2017. A surplus of merchandise is also causing more markdowns. In fact, orders placed using a markdown are up 5% for 2018 compared to last year. The margin impact of these markdowns is up 27% year-to-date — and 18% in August alone.

Customers are eager to get their hands on this discounted merchandise, but they aren’t keeping everything they buy. Free shipping is up 13% year-over-year so far in 2018, but so are returns. In fact, the value of returns has jumped 36% so far this year.

In addition, there is a downward trend in the availability of products that customers are seeking online in North America. For example, there has already been a 3% drop in online product availability when a shopper was ready to make a purchase. Merchandise was out-of-stock 13% more frequently in the month of August, alone, according to the study.

“Pulling inventory levels into alignment ahead of the holidays will be paramount to driving profitability through the lens of ‘views availability,’ or ensuring specific products customers are seeking do not fall into fragmented or out-of-stock levels prior to the holiday season,” the study revealed.

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TECHNOLOGY

CSA Exclusive: Technology drives customer engagement across Ahold Delhaize USA

BY Deena M. Amato-McCoy

Supermarket giant Ahold Delhaize wants to get closer to its customers in North America, an endeavor that is being lead by the company’s retail business services division.

The Netherlands-based company created Ahold Delhaize USA in January, 2017, a move that brings Ahold Delhaize’s seven U.S. companies under one operating arm. The merger includes Stop & Shop, Food Lion, Giant, Hannaford, Giant/Martin’s and Peapod, as well as Retail Business Services (RBS). This U.S.-based shared services company, which is comprised of associates in various support groups within the organization, provides cost-effective, best-in-class support services that enable these retail brands to accelerate their individual and local strategies.

“Being able to capture the best that each group had to offer was one of the pieces of the merger that excited many of us,” said Dan Harriman, director of pricing and promotion services at Ahold Delhaize USA’s retail business services.

“Our six local retail brands are focusing on delivering to their customers, while the seventh unit, RBS, focuses on improving technology solutions and best practices around business processes,” Harriman explained. “We are also continually evaluating which areas will best enable our brands to effectively deliver pricing elements to our customers, while managing their business needs.”

Harriman discussed with Chain Store Age how technology solutions such as price forecasting tools, analytics and machine learning are helping Ahold Delhaize USA to better serve customers and even localize the shopping experience.

How does technology play a role in customer service and the overall in-store experience?
A core piece of the Ahold Delhaize USA restructure was to focus on the local brands, and how they could better engage the customer. It is a bit cliché to talk about leveraging technology for personalization, but that is truly the next step in this goal.

We need to move away from talking to groups [of customers] and to empowering our local brands to have a dialog with each person who shops in our stores. Our marketing departments and the newly formed Peapod Digital Labs will empower the brands to have those conversations. While I don’t know everything they are working on, these departments were formed with the goal of driving digital and e-commerce innovation, technology and experiences to meet the changing needs of customers of its local brands, regardless of when, where and how consumers choose to shop.

How does technology play a role in the company’s pricing strategy?
From a pricing perspective, technology needs to be transparent. My team’s goal is to allow the brands to think more about their message and who they are talking to, and less about the details of executing an ad, and how it to make it work. If we can make execution simple and more efficient, our merchants can focus on what is most important: serving the customer.

We currently use the Base Price Optimization and Markdown Optimization modules from Revionics. Base Price elevated our analyst from being a “logic engine” to being a true analyst, or as we say, “a trusted advisor to our merchants.” The technology’s abilities to influence decisions by offering reliable forecasts on scenarios that can be quickly turned around can help shape strategy and execution.

The systemic processing of competitive and cost data adds efficiency and consistency to strategies, and creates more predictable margin results. The markdown tool works efficiently because our merchants and pricers no longer have to focus on each item that leaves our assortment. A brand sets an overall strategy, and while markdown executes in a way that reduces margin spend and reclaim, the pricer and merchant get to focus on elements that can add more value.

What is Ahold Delhaize’s approach to artificial intelligence (AI)?
AI and machine learning has been making an impact for some time, and are always growing. In the pricing area, it is helping our team members make better decisions. By taking in data to create better models, we can better understand how customers will react; create scenarios and options for our merchants, and create dialog with other partners to understand the end results of decision we make.

My team and I look at a need and work on a solution. Sometimes AI is a benefit and sometimes it is not — it all depends on the requirements and nature of the project. In the next year, we hope to address a variety of projects, and I would say that about half would benefit from a solution that incorporates some type of AI or machine learning.

What is your take on fully automated stores when it comes to the future of food retailing?
Visiting the Amazon Go store in Chicago left me with several operational questions, including how to have a conversation or engage with the customer. In a traditional store, you will almost always have an opportunity for a team member to interact with the customer and be your brand ambassador. Online, your tools can collect data and make suggestions, present information, and otherwise interact. In an automated store however, you don’t have that opportunity in real-time so the question is how do you engage them in a meaningful way?

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