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We are at the peak of our civilization in terms of economic development, social cooperation and global communication. Though conflicts still arise and will probably exist for the foreseeable future, we are witnessing a historic moment: for good and for bad we are on top of our game.
This change has been made possible by a lot of factors including recent destructive conflicts and potential conflicts (nuclear destruction), improvements in communication technology, improvements in transportation and more.
But if we were to point out a specific factor in the emergence of this globalized society, that must be the fast evolution of organizational management tools and techniques.
Whether we are talking about multinational corporations, governmental or military organizations, they have all evolved due to technological and know-how management advancements.
Companies can now grow bigger than ever and governments extend their influence farther. Military organizations are now stronger and can perform better than ever in terms of logistics and operational management. According to prof. J. Bradford DeLong from UC Berkley, the estimated GWP (Gross World Product) is at its highest and growing the fastest:
So basically we are working better, faster, more productive and yet it seems the world stumbles from one financial crisis to another. Many theories have been put forward regarding as why this happens. These theories range from pure economic theory to sociology, psychology, geopolitics and more. Don’t be fooled – we don’t for sure know why this happens. It’s a paradox that we are more productive, fare better in terms of conflicts and have a more connected world and still we deal with inequity and financial strains in the form of huge debt.
But there is hope. Whenever humankind dealt with seemingly insurmountably issues, we appealed to metaphors to change our perspective. The metaphor I’m proposing today is the computer hardware – software ensemble as a way of thinking of human organizations.
In this metaphor we have the human nature and human nature as the hardware and management acting as the software. With a combination of these two we were able to reach our present position.
Most of management theory and lingo are adapted from military procedures. As the military has been the single most enduring form of human organization throughout history (seconded only by religious organizations), it seemed logical to approach civil management in a similar way. The largest companies known are organized and behave just like armies. Top down command with intel going upstream and orders going downstream. The multinational companies “conquer” markets, “target” customers and “secure” market share.
As companies need effectiveness to stay profitable, strategy is designed by a small group of people (the board of directors) and implemented top-down by an executive staff. To do so – the executive staff uses company process design and procedures that are followed by those lower on the hierarchy.
This same principle was also used in the beginnings of computer programming. Programs were fed into computers to compute differential equations for things such as the trajectory of a shell, a blast radius or weather predictions. These programs were fed into a general purpose machinery (the computer) and based on these instructions computations would be made.
But as the computer industry grew, so did the computers’ capacity to run programs. With the digital revolution computers became more than simplistic machinery built to output specific data. Programs could be now written to answer mathematical questions but also to output imagery, sounds, allow users to play games and more.
To make this possible, a new paradigm in computer programming changed the way programs were written. Instead of the previous functional (procedural) programming, the concept of building a program started working with the concept of “objects”.
Technically, objects are a collection of data and functions. Conceptually they are the bridge between machine processing and human conceptual thinking. We are able to tell a fork from a spoon and still see the resemblance between those because we think in terms of “objects”. Previously programs were working mostly on concepts of functions. Simply put: If this, than that.
That made writing complex programs extremely hard. It also made maintenance even harder. Without becoming too technical, OOP (object oriented programming) allowed for even more complex programs to appear and made it easier for software teams to build, update and maintain these programs.
The difference, if you will, for those programs is the difference between the old DOS versions and today’s Windows OS or Apple’s iOS. It’s worlds apart and today we are in a DOS world trying to build video games.
Though it may seem strange to use software development lingo when it comes to managing organizations – it makes sense in the metaphor proposed earlier. Human organizations (the hardware) may yield a lot more than they do today. As robotics may soon take over menial jobs, they have to.
The problem does not lie in the hardware (human intellect, creativity and production) but rather in software (the ability to manage this creativity and productivity).
We are not fit to deal with this level of complexity in the way we do today. Think about the basic organizational challenges. They are not production or infrastructure related, but rather human complexity related. Someone from the headquarters of Uber may devise an absolutely brilliant software and business model, but they still have to deal in terms of organizational management with the fact that Paris taxi drivers hate competition. And the fact that the french government will not allow the company to function without the right permits.
To make such a global organization work, there have to be some type of new management technique in place. One that can use the managerial basics but still be able to develop specific procedures to handle cultural differences.
That’s exactly what OOP (object oriented programming) works for. Handling complexity through object manipulation.
So how would such an organization look like?
To help you glimpse into the structure of a potential OOO (Object Oriented Organization) I will use the basic characteristics of a software object and translate those into organizational concepts:
The term (data) encapsulation points to objects being self-contained in terms of both data and functions. The object keeps the data and functions protected from outside (potentially harmful) interventions.
If you’d like to think of objects in terms of organizational objects I’d advise you to look beyond the usual “department” paradigm and rather into specific teams. Think of the product design team at Apple. That is an organizational object, that stores both specific data (things such as product specifications and test results) and functions (builds product demos, designs usable products etc.).
The organizational object could, in theory be self sufficient and usable in any part of the organization or even within external organizations.
The idea of polymorphism may seem complicated but it actually solves a lot of complexity issues. Simply put, it allows for contextual responses.
Take the previous Apple design team for example. If the iPhone development team were to ask it for a design it would probably forward the team the specs they are working on and receive a few sets of product designs. If the iMac team would ask for a new design, they would also forward the iMac specs. They will however, receive another type of design, one fit for their product.
The idea of polymorphism, in the organizational sense is that decisions based on context would happen within the design team object. Both the iPhone and the iMac team, or any other product design team could ask for a product design and receive something that’s fit for that specific product.
But let’s take that a little further: what happens if the marketing team needs a specific page covering the new iPhone. Wouldn’t the product design team be the one best fit to output such a page? Probably so, but some upgrades may be needed and this is where the third object oriented organization principle comes in:
This term shows that one object can be the prototype for another object. In our example we need Apple’s product design team “upgraded”. So far they have been doing product design so they may not be able to output iPhone’s webpage so well.
By building on their expertise, we may assign a new member to the team, a member that is specialized in designing web pages. By working with his or her team peers we will have built a new organizational object on top of the previous one. The marketing team will request a specific design, by forwarding some specifications. At this point all three external teams (iPhone product development, iMac product development and marketing) have basically done the same thing: asked for design-related work, by forwarding specifications to the the design organizational object. The work was done within the object and results were output successfully.
Notice also that there is no absolute need for management. Objects interact with one another thus leaving management in charge of developing these organizational objects and the overall purpose of the company.
The one big reason is complexity management. We have not put a man on the moon using the abacus. We have upgraded our tools to reach further. Object oriented organizations can be a new breed of organizations in different sectors where effectiveness rather than hierarchy is important. These areas can range from business to NGO’s to governmental agencies to banking and more.
Basically each organization that deals in large numbers of either employees or “customers” can benefit from a networked object oriented organization approach.
Why do that? Think about how today’s concept of having a job feels. Most employees report their bosses are awful. But it’s not that simple – it’s not that the boss just wakes up one day and thinks … “hey, I’m going to act terrible to my fellow colleagues”. Today’s managerial concepts and techniques are outdated and provide managers with poor tools.
This results in “less than perfect” working conditions, poor performance, organizational ineffectiveness and overall social tensions. With our current management system the world has grown more productive yet more indebted. Productivity has risen yet poverty stayed the same or increased.
The fact is we need a new type of leadership and chances are this too is a human problem with a software solution.
The Beauty and Cosmetics category is one of the fastest moving digital commerce areas. It is a highly competitive and innovative market with large brands quickly adopting digital models and challengers innovating their way to the top.
The emergence of the ecommerce sales channel for beauty brands has seen a long wait. The time has come for beauty retailers to align with the customer’s demand and specific requests. For example, a recent AT Kearney study showed 28 percent of online shoppers use the digital media to get informed on products. They carry this information in stores where they are sometimes more knowledgeable than the store assistants, which may pose a real challenge for beauty brands.
The AT Kearney study shows that only 16% of all online shoppers are online enthusiasts. The rest either use the digital media for information or for shopping for products they are already familiar with:
Online shoppers are more inclined to shop for particular products, such as skin, personal and hair care. Products such as beauty tools and nail care are less likely to be purchased online, unless is a very specific product, one the customer is already familiar with:
In this post we’ll get a glimpse of the eight most important type of beauty brands that engage their users through digital commerce (also). We’ll have a look at a selection of global champions with different backgrounds and different models. From digital pure-plays to established brick and mortar brands, let’s have a look at some of the most interesting approaches to beauty and cosmetics digital retailing:
As expected, Amazon leads the way when it comes to online beauty retailing also. Customers are delighted to almost 2 million products, including luxury brands.
Its Beauty category is the go-to place for most of online enthusiastic shoppers, where Amazon is available. And with Amazon’s shipment policies, that’s basically everywhere.
Amazon’s secret weapon lies in its free-shipping policy (for orders above 25$), a great motivator for online shoppers and a better threshold than challengers Sephora and Beauty.com.
Another great asset Amazon will use to gather shoppers around its beauty retailing section is the fact that more customers use Amazon (30%) than Google when doing online product research.
Sephora is generally seen as the actual leader in the digital beauty commerce. Though it lacks Amazon’s ecommerce strength, the company is part of the largest
luxury high quality goods (ahem…ahem) group, LVMH, packing a lot of beauty retailing know-how.
The company has developed a great omnichannel model that focuses on mobile as a bridge between online and offline.
One of the best things Sephora.com has implemented in its web store is the content marketing and digital assistance features. I’ve previously covered the subject and praised Sephora’s efforts to offer quality content, as praised are due.
The curated content customers find is a great choice to build loyalty. So is the Community where customers can browse among the knowledge base or post questions and interact with professionals.
As mentioned, one of the greatest assets Sephora has is its focus on digital rich content. Users are treated to:
Some other touches make Sephora a great choice for beauty products customers, not the least of which are the three free samples with each order (a great way to drive future orders) and the mobile apps that make us of barcode scanning to offer price info and customer reviews.
Beauty.com is an online retailer so it has no apparent need or intention to leverage offline or omnichannel sales. It has developed specific filters and features to cater to customers that either know what they want and want the best price or they can quickly decide.One of the features that really stands out (they have a pop-up to insure it stands out) is “Auto reorder and save” option. Simply put, the online retailer has noticed the habitual purchase beauty customers take and leveraged it.
Customers can set an auto-reorder flag for certain products, which can be shipped each 30, 60 or 90 days. Before the order is shipped, customers receive an email notifying them and they can pause, skip or cancel the auto-orders. The customer incentives are savings and free shipping.
Another great feature that lets customers reach the right product is the filtering option which is set not only for product features but also customer concerns and specific needs. In the Make-up section, the eye category, one can find brand and ingredients options, but also filters such as concerns (acne, dryness or oiliness), benefits (curling, hold or smooth) and skin type. Unfortunately, the filters are not usable on the smartphone version of the web store.
Just like its direct online competitor (Sephora.com), Beauty.com offers free samples, free shipping for orders $35 and above, free returns and 5% back through its loyalty program. It also features great content areas, such as its Beauty Blog, with Romy Soleimani, The Latest Trends section reviewing product news and a Beauty Videos section, ranked according to customer reviews. A great no-no on the video section is the fact that videos embedding is restricted to affiliates only, leaving a lot of marketing potential untapped.
Consumer demand is the one thing that can decide whether a retailer is successful or not. Of course, there is a whole field of marketing studies to determine how we can influence consumers to purchase. But a really important aspect of how good retailers fare in the market is their ability to “sense” demand, not just influence it.
In a recent study, IHL Group claims Overstocks and Out-of-Stocks cost retailers almost $1.1 trillion world-wide. To put it in perspective, that figure is the size of Australia’s GDP.
What that means is that Overstocks and Out-of-stocks, collectively defined as Inventory Distortion, are a problem that cost retailers world-wide 7.5% of their gross revenue.
The figures translate into poor performance, decreased customer satisfaction, decreased sales and increased costs of inventory warehousing and inventory spoilage. Basically there are two really simple outcomes:
Either way, one thing is for sure: Inventory Distortion leads to poor retail performance.
Demand Sensing is a concept and set of technologies that make use of analytical and prediction models to estimate … well … demand. Imagine a retailer that runs a network of 10 stores, one online store and has a mobile app that drives sales also, along side a call center.
Said retailer probably has an inventory management system, an warehouse management system, a sales reporting tool and probably some type of integration with suppliers and manufacturers.
Let’s imagine this retailer selling a type of red shirts that is available in one of the 10 stores and that inventory is not available online. If a customer will visit 3 of the stores in search of that particular red shirt and then search for it online and still not find it, it will probably consider it to be out of stock and the retailer would lose a sale opportunity.
You probably see where the problem lies: even though the product was available, it was not available to the customer and opportunities were lost. The same thing goes for products that are not exposed to the customers, or they are, say, unreachable on the shelf or unfindable on the web store if the search engine is not fit for the job.
The opposite situation, where demand is not correctly estimated and out-of-stocks become a reality, are just as bad as sales opportunities are lost.
The solution lies in gathering enough data across all sales channels, compiling this data and using models to predict demand. That easier said than done because …
As you are reading a blog on omnichannel retail, the term was bound to appear somewhere along the line. So here it is. You can’t have Demand Sensing without a connected sales operation and inventory transparency. All inventory sources have to be connected and data should be generally available. So should sales data across channels.
The picture below shows an example of omnichannel supply chain, one where all the operational pieces work together and share data. When such a structure is implemented, demand is easily “sensed” and estimated and thus inventory distortion can decrease.
So now we have the data. Implementing omnichannel retail can lead do a better demand sensing and therefore improve inventory distortion, a small glitch in the global retail system costing “only” $1.1 trillion.
Where does a 800 pound gorilla sit? Anywhere it wants to.
That 800 pound gorilla is Apple and today it introduced what is probably the biggest change in music business since 2001, when it launched the other big change in music business, iTunes.
Though some might undermine the impact Apple Music will have, that would be a mistake. Apple Music is a huge change for music and it will by a serious blow to Spotify and other streaming services.
Last year Horace Dedieu of Asymco tweeted this chart, comparing the number of Amazon and Apple accounts:
Compare this to Spotify’s 60 million.
The biggest asset Apple has is its software-hardware platform. And I’m not talking about iTunes only. I’m talking about iPhones, iPods, iPads, Macs, OS, iOS, Watch OS etc. Anyone willing to compete against Apple, has to compete on Apple’s turf, with its hands tied.
Why is this so important? Say Apple decides to optimize its streaming process for certain apps and also decides not to share this info with outside app developers. Such developers may be left in the dark regarding optimum hardware usage for a better sound or longer battery time. By the way – iOS 9 comes with a better battery time. What a coincidence.
Even more, Apple Music will be available on Android too, coming this fall. So there you have it. It’s spreading.
But this is just the cherry on top of more than 14 years of continuous business development with global labels. The fact that Apple Music will be available in 100 countries is an extraordinary business feat. Anyone knowing just how complicated licensing is, knows how hard it is to stream, collect fees and distribute revenue to and from 100 countries.
Apple unveiled more than just a streaming service. Just like when Steve Jobs launched the iPhone, today Apple launched a product that never existed before.
Apple Music is a music streaming service, a video streaming service, a social network, a global radio and most of all, a curated music experience.
Let me just emphasize the “video streaming service” area. If you didn’t know this already, iOS alone dominates online video streaming. So Apple is already king of the hill on lots of user behaviors and now it just collected them all into one big service. Maybe that’s why Google never could pull a decent Youtube streaming experience on iOS.
And it’s not just Youtube Apple is going after. Facebook should be a bit worried also. Artists get a little more reach on their Facebook pages than, say, commercial brands. But if they want to share their news with all their Facebook fans, they still have to pay.
Apple Music makes a point by letting artists and fans connect in a seamless way. And this should send some chills up Mark’s spine. Once the artists are gone, there is also a big gap left within the social network.
Let’s face it. Technology can be boring and frustrating. The best thing Apple has done so far is teach the world that great products happen when technology meets the arts. And its Music service does just that. From curated lists to making sure artists get an way to connect to improving the battery time so users can have a better experience, it all ads up to a human experienced enhanced by technology, rather than the other way around.
This is where most of the recent tech companies have failed to understand their place in the world. Maybe Google can get away with being the Lovable Borg, but Spotify can’t. Facebook can’t. The lesson Apple Music will teach to the tech world is that technology is just not enough anymore.
Say what you will but one thing is for sure. Apple has deep pockets. With more than $194 billion in cash it can survive the end of the world on champagne and cigars (that’s not really a great combination, is it?).
Even more, it just reported it paid out $30 billion to its app developers. I’m not exactly sure how much it paid to record labels, but I can bet it’s a liiiiitle bit more than Spotify’s $3 billion.
Today marks the start of the 10th annual edition of GPeC Summit, one of the most important ecommerce events in Central and Eastern Europe.
With a strong focus on growth, the region sees fast innovation and lots of opportunity.
(Photos courtesy of GPeC Summit / Resp. owners)
The event is held in Bucharest, Romania, a country with a 55% internet penetration and a high ecommerce growth potential. The ecommerce market in Romania grew from EUR 600 million in 2013 (~$668.7 million) to approximately EUR 1.1 billion (~$1.22 billion) in 2014.
With such high growth rate, the event was bound to attract regional and international market leaders and speakers.
Among the speakers at the GPeC Summit you’ll find regional and international entrepreneurs, digital marketing experts and ecommerce professionals.
Among the highlighted conference panels, the audience can tap into insights provided by the likes of:
The full list of speakers on the summit’s website, alongside other data regarding the event.
Whisbi is a tool for the omnichannel customer support. It bridges online, offline and phone-call experiences to provide a type of support fit for today’s and tomorrow’s merchants.
What Whisbi does is create a rich connection with the customer. It does that by streaming a live interactive screen from the sales support and at the same time it synchronizes this screen with a live phone call.
The great thing about the technology is that customers can effectively be “teleported” within the store or a specially designed sales support space. For example, if a retailer were to provide support for big-ticket products, such as cars, high-end electronics or maybe a designer items, the customer should effectively “feel” these products. For now, the general consensus among consumers is that such a feeling can only be attained in a real store. Two of the most important factors for in deciding to visit a brick and mortar store are the sensory experience and human touch.
Whisbi fulfills these two needs quite admirable. First of all it provides a smooth connection between the sales person and the potential customer. This is done either through a “click to call” function where the customer requests a call, or through a direct call to an inbound number. While the phone connection is established, customers also start a digital interaction with the sales consultant. This stream of information can be in the form of co-browsing, assisting in data-filling, showcasing product videos and photos, but most importantly, it can come in the form of a live product demo, from the store.
The sales consultant effectively streams live video to the customer through a mobile app, a laptop camera or even … wait for this … Google Glasses.
So while the two discuss on the phone, the customer can experience touching and discovering the product, as if he or she were in the store. This type of assisted purchases are the perfect fit for omnichannel retail.
The customer sees the sales assistant while they discuss but to insure the customer’s privacy, it doesn’t work the other way around.
The fact that the video stream and the phone call are synchronized may seem trivial but keep in mind that data is streamed through two very different infrastructures. The fact that the customer can see and hear the sales assistant at the same time gives a pleasant sense of human interaction, mimicking the experience one would have in a real store, with a trained store assistant. In fact, one of Whisbi’s four patents, and in my opinion the most important, is a patent to synchronize phone calls to online experiences.
The feeling you get by using Whisbi as a customer is quite impressive. By synchronizing multiple sensorial experiences, the solution works far better than either the phone-call option or the live chat.
In fact, the company claims a 15-30% conversion rate for customers interacting with the brand through this technology. While this might seem outrageously high, I think this might be an accurate figure. The feeling of (almost) complete immersion may be an even better experience than the one customers would get in a real store. The reason is “whisbi-ing” is an experience brought up by the customer’s demand, in the safety and comfort of a familiar place. By taking out stressful elements that brick-and-mortar stores sometimes have (crowds, un-involved sales reps), this omnichannel experiences works as a type of “concierge” service.
If you’ve read this far, you’ve probably noticed that Whisbi sounds too good to be true. The fact is that it actually IS too good to be true. The usage of Whisbi is limited by the potentially high cost of hiring qualified personnel to handle incoming customer demands.
Indeed, forms and chat have a low conversion rate. However they are great for low to median cost products where margins are low and the cost of specially trained sales reps is not justifiable.
But there are some cases where Whisbi can be a great fit:
1. Big Ticket omnichannel sales: Think of cars. A car should be seen, experienced and felt. It is an expensive purchase, one that has a lot to do with the rational but more to do with our emotional decisions. While purchasing and paying for a car is far from mainstream, a sales rep using Whisbi can offer a great display of the car’s features and teleport the customer to the dealership, before a visit is made. One of those using Whisbi is Fiat, and the ad below showcases a potential customer journey:
Its not just cars, either. I think Whisbi can work great as an omnichannel support for other big ticket items such as designer fashion, jewelry or maybe art.
2. High customer acquisition cost: Several industries have high customer acquisition costs. Telco is one of such industries. Voice and data subscriptions, especially for customers switching from one operator to another, as well as those that decide on their first subscription, have a high customer acquisition cost. This is due to increasing competition, large marketing budgets and extensive offers from competitors.
But such high-acquisition cost industries also tend to be profitable because of a certain aspect. That is the large lifetime customer value.
3. High lifetime customer value: The lifetime customer value expresses the long-term value a customer has for the company. Simply put – it means how much will the customer spend on the company products during his lifetime as a customer. For example, due to a high lifetime customer value, Goldman Sachs estimates that Apple’s customer’s base value at $295 billion. The point is that retailers estimating high customer lifetime value should use omnichannel customer service to acquire customers. Even if costs are high.
4. Personalized service for the loyal customers: Maybe not all customers can be served through an Whisbi experience. But such great support can be a great incentive for your loyal pack. Concierge support for loyal customers and high-spenders can go a long way in keeping your friends close.
5. Address to impress: Let’s face it. Whisbi’s technology is awesome. The experience of a live demo convinced me to write this review. The experience is great. Google Glass, mobile apps, live streaming and phone calls – arent these impressive? More so – teleporting users and showcasing products in real time directly in the store and letting customers purchase online and receive at home? This is impressive and impressive is an asset on its own.
In conclusion Whisbi may not be perfect for all ecommerce or omnichannel operations but for some – it is an impressive and must-have technology. The results in conversion rate improvement shows the need for better customer support within omnichannel operations. And Whisbi delivers.
Ever thought what happens behind the curtains before a new product hits the shelf? Or what makes customers decide they love product A but definitely hate product B, although they are almost identical? Or what makes great products … well … great?
Many have and there is no clear answer to these questions. What works when Apple launches a music player may not work when Microsoft does it (Remember Zune?). There are many variables involved and no matter the size of your R&D budget, sometimes things are not going to go right.
But there’s only one way to see if the product is really fit for the market. That way used to be simple and a bit risky. Teams including marketing, product development, engineering and manufacturing experts would dream, design and build products. They would test the products on selected customer groups and if the results would look good, they would push the product to the market.
However even involving budgets, experts, consumer insights and marketing bucks, sometimes products flop.
Two things changed this: crowd-sourcing and crowd-founding. Together they’ve formed a type of customer experience previously unknown: the pretail.
In the past, teams were involved in trying to guess what customers would want. Now we can just go ahead and ask the them.
Pretailing is a term describing any activity introducing customers to brands or products, before the retail process. It assumes that using crowd-founding sites such as Kickstarter, inventors and innovators can test their concept before involving big budgets. Essentially they are asking potential buyers to invest their dollar-power in their product.
This, in turn, creates an experience previously unknown to the consumer. The consumer is effectively buying into a vision. Pretailing creates a new type of sales channel that works before the product is even manufactured. Unlike traditional retail, this type of commerce can shed light on what the market wants at any given time.
Online stores such as Quirky, Threadless or Japan-based Muji have one thing in common. They use their communities to find the right ideas and products to design and develop. Quirky is focused on inventing cool gadgets, Threadless leverages its designer community to create t-shirts and Muji sells home&deco products designed by the consumers.
They all engage in pretailing. By tapping into the collective minds of their communities they can ask for the type of products most customers would purchase. Before they manufacture and sell, they ask what to manufacture and sell. This in turn creates a sense of belonging to the community for the customer. For the retailer, it decreases the risk of manufacturing and stocking up on lousy products.
Crowd-founding is another way of tapping into the market and pretailing. We all know Kickstarter but other, more product-oriented crowd founding platforms fare even better for this concept.
CrowdSupply and OutGrow.me are just two places where you can see what customers have backed before manufacturing. The products we can see there range from open source toothbrushes to one-wheel skateboards.
The results are amazing. With unlimited creativity comes an unlimited supply of innovation. And by tapping into a large market of early-adopters, only the products that are really fit for distribution get funded and survive.
Big retailers have picked up on the trend and are now using pretailing to test new products and improve their logistics to fit the estimated demand. Apple, for example is one of the companies that showcases products before they are available in retail stores, interacting with developers and customers to improve the experience.
Beyond the crowd-founding and crowd-sourcing, pretailing can come from anything involving large numbers of potential customers. By tapping into online traces, retailers can get insights on potentially succesful products.
Pretailing can start with a simple research with Google Trends. It can be an analysis on the search trends on your own web store.
It can just as well be an overview of the most popular trends on Instagram. For example Crane & Canopy releases new high quality duvets basing their decisions on Pinterest and social media trends.
The conclusion is that in this highly competitive market, retailers need to engage their customers before they start the retail process. Pretailing means tapping into the wisdom of the crowds and extracting the perfect products before competitors do. It is not only a matter of product development but a matter of understanding the customer and providing the best experience on the market.
We expect historic changes to be a bit dramatic. We think of “Evrika!” moments when inventors discover new technologies that make our lives better.
The reality, however, seems to sneak up on us. We now know how important the Internet is but few would have guessed it when it was used to exchange short bits of information between academics. Same for Google – it is now easy to see how important having the global stream of information at your fingertips actually is. But it was a lot harder when the concept was still in its infancy.
Not even Steve Jobs could have predicted the impact the iPhone would have on the world. And I believe Elon Musk will look back on these days and be surprised by the changes Tesla brought to the world.
When Elon Musk announced the Powerwall, the world shook a little bit. Its beautiful design and promise of energy independence seemed almost dreamlike. But the Powerwall shows a far larger vision than just making the home energy independent.
It is a promise that we could harness the virtually unlimited energy of the Sun and store it. Storage, you see, is the real problem. The complex systems we use are powered by energy that is consumed almost instantly. Our cars, our electronics, our planes – they feed on streams of energy as it is formed. Even the best energy storage systems fail after a short while.
The promise that one day a company (could it be Tesla?) can find a way to harness and store the sun’s energy (or any type of green energy for that matter) has an impact we can hardly predict.
The implications range from pollution reduction to geopolitics to economics. Especially economics. To understand how much we could save by switching to green energy, have a look at this estimate for an average Tesla car compared to one running on fossil fuel:
Think that’s a lot? That car “only” logs 120 000 miles. Compare that to the 397.8 billion miles logged by all trucks used for business purposes (excluding government and farm). In the US alone.
Now mix the numbers and add the savings Tesla’s technology can bring.
Add something else: sun-powered electricity. Think of trucks and ships that can move goods around without any need for refueling.
Because that’s where the real change comes in. When products are manufactured and shipped at a tiny fraction of what they are today, everything changes.
When we take out the distribution costs, the energy costs and any other costs associated with energy from our current commerce paradigm, everything changes in the world.
The products we buy would have costs that would be driven to the ground. Without costs associated with energy consumption and storage, goods would be manufactured cheaper and faster (instant energy), shipped cheaper and faster and consumed by more. We could have cheaper products, consumed by more and believe it or not, more profitable to sell.
There is only one thing stopping this: the current transportation and energy system. Musk’s vision has already stirred things a bit with car dealers. What happens when the company will go against the global leaders in energy and transport companies, the ones still relying on fossil fuels? These companies would have to change or fight the change. The former is what one might expect.
That’s where the Uber concept comes in. Uber connects, as you know, smaller professionals that provide transportation services. Right now this is limited to personal transportation. Uber, today’s Uber, acts as a glorified cab dispatcher.
But tomorrow’s Uber may have bigger ambitions. Somewhere behind the scenes, investors know that there’s more to Uber than meets the eye. The reason the company landed a $41 billion valuation is that it has the potential to change the global transportation system. Not just personal transportation but all kinds of transportation.
That includes making sure goods are quickly moved from manufacturing to storage to the consumer. Don’t take my word for it. Uber has been experimenting time and again with logistics. And if Uber won’t, there are other companies that will.
So you have virtually unlimited power. You have storage. You have the a system that makes sure goods are sent to the right destination by the optimum freight. This means the kind of change we now can’t fully comprehend.
It means that good is now in motion.
The term “robot” essentially means “worker”. It was coined by Czech author Karel Čapek in his science fiction work R.U.R. and since then it has become the standard term to define semi-autonomous machines.
It really is hard to define what we actually think of when we say robot. It may be an anthropomorphic fun figure such as Honda’s Asimo or a somewhat creepier animal version of it, such as Boston Dynamics’ Big Dog.
But it can also be a simpler and more applied machinery. Robots can be built to handle some of the most menial and repetitive tasks, including those that have to do with ecommerce fulfillment.
In terms of operations, fulfillment means everything that has to do with getting ordered merchandise to the customer. It includes picking and packing and let’s face it – it’s boring and repetitive. The robots below do just these things. Robots, unlike people, require no pay and are available 24/7. Whether using robots is effective or not, moral or not, it’s up to you to decide. But no matter your view on the subject, you have to admit they look awesome.
Not longer than two months ago, Fetch Robotics was non-existent as a company. Than they’ve got $3 million in founding and started working on a mysterious warehouse robotics project.
Today they’ve unveiled not one, but two robots aimed at helping warehouse staff make it through the long corridors. Their names are Fetch and Freight. Below is Freight, my favorite, a little guy following around picking staff and going back to base when orders are finished picking:
You would think that farming and ecommerce fulfillment don’t have too much in common. Maybe they don’t but they do have the Omniveyor robots from Harvest. The company was founded by former iRobot executives, the company that brought you house cleaning wonder-robot Rumba.
The company developed a fulfillment robot, called TM-100, which will be available spring 2016. Here’s TM-100 in action:
In 2012 Amazon paid $775 million for Kiva Systems, a Seattle based company manufacturing warehouse robots.
In just two years Amazon has fully digested the technology and now has 15 000 Kiva robots doing the picking and packing job twice as fast as humans could. Inventory moves twice as fast and products are delivered to packing stations in just under 15 minutes, faster than any human could.
Here are the little Kiva robots plotting to take over the world, while picking orders:
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