Three Technologies that are Disrupting (Online) Retail

Retail is changing fast and it’s part due to some new, disrupting technologies that we can see at work with companies such as Amazon, eBay or Walmart. Here are three of these technologies:

1. Print on Demand

Long gone are the days when self-published authors needed to spend a small fortune to get their novels printed, when refused by publishers.

If you wonder what exactly is print on demand here’s the basic info: say you’ve written a book. You’ve designed the book covers, you you’ve checked your beautiful work of art for grammar errors and now you wanna sell. If you’ve heard about print on demand you know you have to upload the document in PDF format, sign up for a free or premium service and companies such as CreateSpace or Lightning Source will print that document whenever someone orders your precious book. They keep a share of the revenue, the customer gets your book and you get to brag to your nephews that you are a self published author.

Anyone can sell print-on-demand (POD) books, without publishing large numbers of books, keeping them stored and dealing with the hassle of distribution and marketing. All they have to do is choose one of the larger print on demand services, upload an already fully designed book (complete with book covers, headings, table of contents and all the other things typically reserved to book designers).

Amazon’s Create space

Create Space, an Amazon Company
Create Space, an Amazon Company

Amazon’s CreateSpace features one of the best services reserved for upcoming authors that need to publish their works as fast and cost-effective as possible.  Although anyone can theoretically publish their book by themselves, a certain amount of help with book design, copy editing and of course marketing is usually needed. CreateSpace offers a wide array of services to those willing to pay for it.

The big plus: with CreateSpace the conversion to Kindle format and distribution in Amazon’s market is fast and easy so new authors can enjoy being published on the worlds biggest book market and its new prodigy – the Kindle ebook reader.

Once the user sets up its basic account he or she can start selling. Of course, Amazon will charge 20 to 60% plus a fixed printing amount. No one said writing is necessarily profitable.

Lightning Source

Lightning Source
Lightning Source

Create Space’s biggest competitor is Lightning Source, a subsidiary of Ingram, a company that deals with connecting publishers to stores and libraries. I mentioned that because if you want to see your book in a real library shelf you are most likely to choose Lightning Source.

The company has a remarkable distribution operation with libraries and stores, unlike Amazon, who is still not really in the friendliest terms with libraries, stores or publishers.

Other companies that provide print on demand services are Blurb, a bit more expensive and usually oriented to photo books, and HP’s MagCloud, featuring reasonable prices and fairly competitive printing.

2. 3D printing

iPhone case
iPhone case

We can print books on demand  but what about other things? What if you could shorten your supply chain to just a big 3D printing machine, without any need for factories, suppliers or stocks that might or might not sell?

Right now the 3D printing revolution seems to be more of tech subculture than a real business. But you know what? So did the PC market back in the 60’s.

Here’s something Ebay just launched: a new product called Ebay Exact, a partnership that brings together three leading 3D printing companies (MakerBot, Sculpteo and Hot Pop Factory). Ebay’s users can now browse to a set of products from these companies, choose from a wide selection of materials, colors and options and create their personal favorite product.

This is just a small step into creating better products with faster delivery time and the 3d printing market will soon evolve to a popular solution for online and offline retailers. If you balance production, shipping and import taxes soon enough we will be better off printing, say, a chair than purchasing it from a factory overseas.

3. Robotic Warehouse Management

Kiva Robot
Kiva Robot

Although we haven’t been overrun by sentient robots as SF books and movies predicted – we did shift a lot of work to these machines. With ever growing online retail operations – humans just don’t fit in anymore in the warehouse, as their jobs and responsibilities are shrinking by the days.

Kiva Systems is a company that deals in fulfillment automation. It provides technology and robotic warehouse management to the likes of Amazon.com.

Have a look at how they manage to put their little orange robots to work:

[youtube=http://www.youtube.com/watch?v=lWsMdN7HMuA&w=420&h=315]

Higher Education can’t Keep Up: Online Retailers Need to Hire Experience, not Diplomas

It’s pretty hard for anyone to admit it but it’s true: universities can’t keep up with the times. They cannot deliver qualified individuals for the growing online retail segment because there is nothing to be qualified on. Of course, there are some courses that cover some successful business models but truth be told there is no use in knowing Amazon’s business model as long as there is already one Amazon on the market.

The original college drop-out overachiever.
The original college drop-out overachiever.

How did it come to this? When did this pillars of economic evolution start to lose ground? Let’s have a look at some of the potential causes and some answers on how to hire and develop the right individuals for the online retail segment.

Universities teach rules. On the internet rules are meant to be broken.

The whole concept behind higher education was that one might benefit from (1) a few extra education years, (2) access to some very experienced professors and most important although not usually talked about – (3) a network of like minded, probably successful colleagues. These three factors don’t really apply to online business in general and online retail in particular:

  1. with wonder kids such as Mark Zuckerberg and the Google Duo, dot-com entrepreneurs are expected to be successful before their early thirties. Spending too much time in the academia is not really the best choice if you are an aspiring young millionaire. Have a look at this M. Zuckerberg’s interview back when Facebook was Thefacebook.com. The thing you should be thinking about – how can someone driven, ambitious and aware can stay in college for 4 years when he feels ” ‘near future’ being like anytime in the next seven or eight days.” Remember – this guy is a Harvard drop-out.
  2. as for the “very experienced professors” – there is no way they can actually be that experienced unless their name is somewhere along the lines of Jeff Bezos or Jack Ma. The high education fees and the time spent in conventional education facilities are not really that useful when it comes to innovation. Professors are not really the most adaptable types. Most of them are still trying to understand and explain the Dot.com Bubble. They are historians rather than explorers. Of course, understanding our past can save us from some trouble but it can also lead to a certain lack of innovation, a thing the internet thrives on.
  3. the network of like minded, probably successful colleagues is not really spending that much time in the classroom. They are studying, alright, they are building networks and they are building stuff. Just not where you would expect them to do that. They hang out in technology hubs, they read books on their Kindle and their laboratory is probably a Macbook.

Unfortunately a college diploma shows only that the individual can remember some things and can obey rules. That’s great for middle management and below but what do you do when you need to hire talent? Where can you find people that can turn Brick and Mortar stores into online retailers?

How to attract talent that can develop Online Retail Companies?

No matter how big your company is – you will be always faced with recruiting issues. How to look for the right candidates, how to attract them and how to keep them are always distinctively  difficult issues.

Some of the larger companies, such as Walmart, have chosen the path I believe works best: buying entrepreneurs. When I say buying  – think more than cash. The large pay check is one type of incentive, but not the only one. The right kind of people need a purpose, a direction and the freedom to choose their own teams. They will be motivated by a large vision, a goal to strive to and a team that can help them achieve that goal.

Here’s how Walmart CEO Mike Duke managed to lure ex-eBay engineer Jeremy King, now CTO of Walmart. Notice how Mike Duke had already decided that although ecommerce is not really the biggest piece of the pie – it is the key to continue Walmart’s development in the future.

After years of seeing his company lag online, Duke swore that digital was now a priority for Walmart. Duke had restructured the company, placing e-commerce on equal footing with Walmart’s other, much larger divisions. He had made serious investments in high-tech talent, acquiring several startups.

Hire experience – any kind of experience.

Remember – what did you do when you first tried to ride a bike? Chances are that unless you were an unusually talented  child or a late learner you got a few bruises out of your first try. However, due to those slightly annoying incidents, you managed to learn what to do and what not to do.

As an online retail business owner or manager you should be looking for experience. Experience doesn’t come easy. As I said earlier in the article – there is no one there to teach young professionals what to do and what not to do. So far, at least. As such you will be dealing with people that failed, struggled, tried again and again and eventually learnt a thing or two about online retail.

In time, education will adapt to this changing landscape and it will offer better suited courses. In the same time online retail will develop into a mature industry and things will start to get rusty again, just as it had happened to classic retail. Then you will be able to hire diplomas again. Until then – keep you eyes open for experience.