#InnovationQuest

Walmart’s rapid e-commerce landgrab

Whether Walmart is going through an identity crisis or strategically ousting Amazon, there are many insights to takeaway from Walmart's e-commerce acquisitions. Let's recap:

Each of these small acquisitions serve as a battle victory in their war with Amazon. Although skeptics will argue there might not be much of a payoff with these digital sales considering e-commerce still represents less than 10% of all retail sales. Consumers are beginning their research onlinebut finishing their purchase in store. This however, could be a huge advantage for Walmart who has the physical manpower on the fields but lacked the digital footprint.

Walmart's rebranding journey has a high chance of success. For one, each of these brands will stand alone from Walmart and two, it opens the door to a whole new customer base.

Third, the acquisitions provide Walmart the engineering, marketing and product development talent it needs to offer a more personalized and unique experience. As of a result, Walmart's e-commerce sales grew 63%. Store sales increased 1.4% and traffic to store rose 1.5%.

But it took Walmart a few tries to get the equation right. In 2005, Walmart placed ads in Vogue magazine and sponsored a NYC fashion show to highlight new, higher-priced apparel lines. The result was a disaster. It's second attempt was in-house. It launched Walmart's Project Impact designed to improve the quality of its apparel and home furnishings. The result was a disaster.

Takeaway

Changing the composition of a large store and a large number of stores without losing your core customers and your underlying business is hard. Retail is hard. But retailers have to choose to #innovateordie.

Alexa, is Amazon a threat to my brand?

All eyes are on Amazon as the e-commerce giant moves to brick-and-mortar while brick-and-mortars struggle to go digital. In 2015, retail sales through digital channels increased by a huge 23% and no surprise, Amazon was the biggest beneficiary accounting for 26% of all online retail sales.

According to a study of 46,000 customers during a 14 month period from June 2015 to August 2016

The common theme of omnichannel customers is webrooming (#BuzzWord Alert), especially among Millennials.

Webrooming: extensively searching online but purchasing in-store.

Findings suggest that webrooming leads to greater in-store purchases and increased brand loyalty. Within 6 months after an omnichannel shopping experience, customers had logged 23% more repeat shopping trips to the retailer’s stores and were more likely to recommend the brand to family and friends.

Artificial Intelligence and Augmented Reality Will Change the Retail Industry

Retailers are incrementally feeling the pressure to innovate or die. Most people think of augmented reality as adding something to the real world that isn't there (think Pokemon Go) but augmented reality can also be used to subtract items from view and help consumers focus on specific objects that normally would cloud their visual perception.

Take Google Lens. By 2025, an anticipated 500 million headsets will be sold. Using big data and machine learning, retailers can get better insights into what their consumers are looking at and then adjust product positions and store layouts accordingly to each individual.

By better understanding consumers’ in-store decision making, savvy retailers can reduce unnecessary waste, grow sales and improve overall margins.

AI's Transforming Gift Giving

According to a survey commissioned by the University of Oxford and Yale University, AI researchers see a 50% chance that AI will be able to perform all human tasks better than humans by 2060. AI will transform the retail industry in more ways than imaginable, including gift giving.

Gift giving in the US is a $131 billion market but it’s overly painful and time-sensitive. Token.ai is one of the first players addressing this problem of gift giving using AI. 1-800-Flowers first introduced gift giving through AI when they launched Gifts When You Need, powered by IBM Watson.

In March 2017, an IBM Survey showed 80% of customers using GWYN on 1-800-flowers.com had a positive experience and wanted to use it again.

What To Do

Brands and retailers should leverage big data and third party services to prepare their omnichannel sales this holiday season.

Share some retail knowledge

Email Facebook Google LinkedIn Twitter
Sign up for our newletter