Wednesday, November 30, 2016

The 2016 Dive Awards for the retail industry

From in-store innovations to digital disruptions, we recognize the people, technologies and trends that defined (and redefined) retail.

These are trying times for retail. Store traffic is declining, merchants are struggling to deploy omnichannel technologies, fast fashion keeps stealing attention and market share from establishment apparel brands, and millennials are spending on seemingly everything but merchandise. But retailers keep pushing forward, rethinking in-store experiences and online interactions alike in an effort to meet and even exceed the expectations of today’s tech-savvy consumers.
In that spirit of innovation and disruption, we present the 2016 Dive Awards for the retail industry. These honors are the end result of months of work, research and dialogue: We began planning in January, solicited suggestions for nominees from readers in August, then consulted industry insiders to help us narrow down the pool of candidates. Retail Dive’s editors ultimately selected the winners in each category.
And the winners are…

Company of the year

Winner: Amazon
No brand better defines — and, more importantly, continues to redefine — the shape and scope of 21st century retail quite like Amazon, and in 2016, the company further established its dominance in e-commerce while also setting the stage for the next phase of its evolution.


Amazon has now logged six consecutive profitable quarters, defying critics who warned it would never achieve profitability. Amazon owes its momentum to its Prime subscribers, who pay $99 per year for a growing array of shipping options and multimedia services. Amazon continues rewarding their loyalty with new services and innovations, perhaps none more notable in 2016 than the voice-controlled Echo speaker, powered by company’s Alexa artificial intelligence technology. There's also the now-annual midsummer Prime Day shopping event.
Amazon is now moving its next frontier: Physical retail. In addition to its growing footprint of big-city bookstores, Amazon is developing plans for convenience stores, about 100 pop-ups in malls nationwide and as many as 2,000 U.S. grocery stores. Some question the wisdom of moving into brick-and-mortar, but Amazon has been proving doubters wrong for more than two decades, and it remains the retailer against which others are judged heading into 2017 — and, probably, beyond.
Other nominees: H&M, J.C. Penney, Macy’s, Wal-Mart

Executive of the year

Winner: Jeff Bezos, Amazon founder and CEO

 

More than two decades after Bezos founded Amazon, he remains the most innovative, ambitious figure in global retail. No other executive thinks bigger or pushes the boundaries further — so much so that labeling Amazon “just” a retailer ignores its massive achievements in other verticals.
Consider Amazon Web Services. The public cloud computing infrastructure division effectively finances the company’s unprofitable businesses and Bezos pet projects until they can start fending for themselves. “They were prescient enough to realize they were building extra capacity for their own growth and that they could monetize that capacity,” Mark Cohen, professor of retail studies at Columbia University, told Retail Dive earlier this year.
Bezos has also emerged as a Hollywood mogul of sorts as the Amazon Prime subscriber program has expanded past free shipping to encompass a multitude of services, most notably Amazon Prime Video, home to an expanding slate of award-winning original programming.
These seemingly disparate initiatives (and there are many more) align to make Amazon’s core retail business that much stronger and stickier. Prime membership increased to 63 million by mid-2016, representing 52% of Amazon's total American customer base. Prime subscriber annual spending now accounts for close to 60% of Amazon’s gross merchandise value, and subscribers spend an estimated $1,200 per year versus $500 for non-Prime members.
In the end, it doesn’t matter if it’s two-day free shipping or all-day Prime Video binges that’s keeping Prime members around; Bezos figured out how to bring them to Amazon, and now that he’s got them, he’s not letting them go.
Other nominees: Brian Cornell (Target CEO), Marvin Ellison (J.C. Penney CEO), Jack Ma (Alibaba founder), Doug McMillon (Wal-Mart CEO)

Startup of the year

Winner: Starship Technologies

 

Drones are stuck in a holding pattern. Sure, there’s enormous promise in the concept of deploying unmanned quadcopters to cheaply and efficiently fly packages directly to customers’ doors, but standards and technical guidelines plans outlined by federal officials and their technical advisors suggest that commercial drones optimized for package delivery are more than three years away at best.
Enter Starship Technologies. The London-based startup, launched in 2014 by Skype co-founders Janus Friis and Ahti Heinla, eschews drones in favor of droids — small, self-driving robotic delivery vehicles that motor along city sidewalks at pedestrian speeds. Each six-wheeled Starship robot is capable of carrying the equivalent of two grocery bags and can complete local deliveries from the nearest hub or retail outlet within five to 30 minutes. Shoppers can track the robot’s progress in real time via mobile app; the same app guarantees that only authorized customers are allowed to unlock the cargo upon arrival. 
Starship claims that autonomous robotic vehicles reduce delivery costs as much as 10 to 15 times per shipment compared to other methods, and because each bot is battery-powered, there are no direct CO2 emissions. Forget drones — these are the droids you’re looking for.
Other nominees: Casper, Enjoy, Instacart, Story

Most intriguing investment of the year

Winner: Wal-Mart/Jet acquisition
Wal-Mart’s $3.3 billion acquisition of online retailer Jet represents the biggest deal in U.S. e-commerce startup history — and not just in terms of its record price tag, either. The merger redefined the e-commerce landscape virtually overnight, transforming Wal-Mart from a lumbering brick-and-mortar behemoth into an imposing digital threat.
Wal-Mart not only landed Jet co-founder and CEO Marc Lore, who previously helmed Quidsi (the parent of websites including Diapers.com and Soap.com, sold five years ago to Amazon for $545 million), who brings with him estimable insights into the endlessly complex e-commerce business. It also scored Jet’s cutting-edge technology, in particular a signature pricing algorithm that rewards shoppers in real time with savings on items purchased and shipped together. Perhaps most significant, Jet delivers Wal-Mart the younger, upmarket customer base it has long coveted — and which has always eluded its grasp.
But what ultimately makes the Wal-Mart/Jet deal so intriguing is the strong possibility it will crash and burn. Some observers have expressed concerns about Jet’s stickiness. Others contend Wal-Mart’s corporate culture will stifle Jet’s flexibility and spirit of innovation. Howard Davidowitz, chairman of retail consulting and investment banking firm Davidowitz & Associates, also cites Wal-Mart’s history of poor returns on web commerce investments, telling Retail Dive "What makes anyone think that for Wal-Mart — a company that has failed miserably in the challenge of the retail market online — this is going to work?" It’s still far too early to declare the Jet acquisition a success or failure, but regardless of which direction it trends, the repercussions will be felt across the e-commerce ecosystem. 
Other nominees: Amazon’s cargo/logistics investments, Bed Bath & Beyond's acquisition of One Kings Lane, Honeywell's acquisition of Intelligrated, Unilever's acquisition of Dollar Shave Club

Most disruptive idea of the year

Winner: Automated commerce
At first blush, it seemed like a premature April Fools’ Day prank. On Mar. 31, 2015, Amazon unveiled Dash, a lozenge-shaped, WiFi-enabled device allowing Prime subscribers to replenish everyday household goods with a single push of a button. No one’s laughing now. In fact, some believe that Amazon Dash and other so-called automated commerce technologies are the future of retail.


“[Dash is] the next step in commerce,” Piper Jaffray Senior Research Analyst Gene Munster proclaimed at this summer’s Internet Retailer Conference + Exposition. “Dash will allow consumers to focus less on buying things you don’t really get excited to buy. That ability to free us from thinking about those things is something Amazon is trying to do.”
There are now more than 200 different Dash Buttons encompassing everything from Airheads candy to ZonePerfect nutrition bars, and Amazon claims sales have increased by 5x over the last year. Dash is just the start of Amazon’s automated commerce ambitions: As of last month, customers can now use devices running its Alexa virtual assistant software to shop for toys using simple voice commands.
Nor is Dash replenishment technology limited exclusively to Amazon gadgets. For example, GE Appliances introduced washing machines and dishwashers integrating Dash reordering capability. The machines measure how many detergent pods are used by counting wash cycles, and automatically reorder more when supplies run low. This is digital commerce made as simple and as seamless as a Ron Popeil invention — just set it and forget it.
Other nominees: Augmented Reality/Virtual Reality, driverless delivery, machine learning, warehouse automation/robotics

Obsession of the year

Winner: Pokemon Go
Pokemon Go is the obsession that just won’t quit. Maybe Nintendo’s location-based augmented reality mobile game isn’t quite the phenomenon it was at its summertime peak, when it seemed the collective focus of the global population shifted to “collecting” monsters in real-world destinations, but consumer demand for the application and its accessories remains stronger than Mewtwo, Dragonite and Mew combined.

 

Pokemon Go exploded into the mainstream in July 2016. The game leverages GPS capabilities built into the gamer’s smartphone or smart watch to locate, capture, battle and train virtual Pokemon creatures who appear on the device screen overlaid atop real-world settings, as if the characters occupy the same physical space as the player. Within a matter of weeks, Pokemon Go eclipsed the 100 million download milestone, generating $10 million in daily revenue from sales of in-app goods and enhancements.
App stores weren’t the only beneficiaries: The frenzy to collect more Pokemon drove a deluge of foot traffic to brick-and-mortar stores and restaurants. And ultimately, that’s Pokemon Go’s legacy — opening physical retail’s eyes to the possibilities of augmented reality and mobile devices to bridge the divide between the online and offline worlds, and to create experiences capable of bringing back customers lost to e-commerce.
Other nominees: Amazon Prime Day, Brexit, chatbots, reverse logistics

Turnaround of the year

Winner: Best Buy
Not long ago, Best Buy was good as dead. Think back to 2012: Former CEO Brian Dunn was forced to step down over an inappropriate relationship with a subordinate, the electronics retailer was hemorrhaging market share to Amazon, and Best Buy’s own e-commerce efforts were stuck in neutral. Then Hubert Joly stepped in as CEO, emphasizing cost-cutting, customer care, product selection and signature services. Four years later, the turnaround continues.

 

With sales of mobile phones down as the category reaches saturation and gaming slowing as purchase activity shifts to digital streaming, Best Buy continues focusing on its in-store experience, highlighted by shop-in-shop partnerships with Samsung and Intel. The retailer also unveiled a new program called Ignite, dedicating space in stores for products and services from startups. Ahead of this year's holiday season, Best Buy additionally announced it would dramatically expand live demos of the Facebook-owned Oculus Rift virtual reality headset from 48 stores to 500, and will further appeal to holiday shoppers via ship-from-store fulfillment and free shipping.
The Amazon threat still looms, however. Consumer electronics sales grew 28% at Amazon in 2015, compared to same-store sales increases of 3.8% at Best Buy. Even more daunting, Amazon accounted for a whopping 90% of consumer electronics sales growth nationwide last year, and now it's moving into physical retail to market its own devices. Best Buy isn’t backing down, but its path forward is more treacherous than ever.
Other nominees: Adidas, Amazon-branded devices, Coach, J.C. Penney

Disappointment of the year

Winner: Nordstrom
Nordstrom occupies a singular place in the retail pantheon. Its customer service is the stuff of legend, and experts also celebrate its design thinking and spirit of innovation as critical differentiators giving the company a compelling chance of not only surviving but thriving within the embattled department store sector.
But in recent years the wheels have come off, with e-commerce eating away at Nordstrom's sales and store traffic.  After reporting disappointing Q1 2016 earnings, Nordstrom pledged to cut some $150 million in expenses, and in April, the retailer eliminated about 400 jobs. From there executives announced they would be more selective about what the company sells online and would take steps to make its supply chain more efficient.
Some contend those moves threaten to undermine Nordstrom’s core identity and appeal. "Cost-cutting and luxury department store experiences don’t often mix very well," retail futurist Doug Stephens told Retail Dive earlier this year. "Nordstrom has this old fashioned, very personalized, great level of service for which they’ve become notorious. The moment you start cutting into that, and you have one salesperson working in two departments, it becomes a horrible downward spiral."
While Nordstrom was a disappointment in 2016, it’s shaping up as a comeback contender in the year ahead. This month the company beat Wall Street expectations for the second consecutive quarter. E-commerce is also on the upswing. But put away the confetti and streamers. Nordstrom additionally announced a $197 million non-cash goodwill impairment on its Trunk Club online apparel concierge service, a little over two years after forking over $350 million to acquire the startup.
Other nominees: Aeropostale, Jet's early exit, Staples' ill-fated merger with Office Depot, Sports Authority

Controversy of the year

Winner: Alibaba counterfeit merchandise

 

Fake merchandise is a very real problem across the global retail landscape, and no brand causes more counterfeit consternation than Chinese e-commerce goliath Alibaba. Incendiary comments made this summer by founder Jack Ma ratcheted tensions even higher.
Counterfeits have long plagued Alibaba, and the company continued hammering at the problem in 2016, holding its first Rights Holders Collaboration Summit in July and rolling out its IP Joint-Force System, an online platform designed to streamline intellectual property-related communications. But manufacturers contend that Alibaba is still not doing nearly enough, and trade groups from North America, Europe and Asia contend that counterfeit sales are at “crisis levels."
Then Ma claimed that many knockoffs available on Alibaba’s marketplaces are of better quality than the authentic products they mimic, and all hell broke loose. Ma later sought to clarify his comments in an editorial in The Wall Street Journal and last month Alibaba President Michael Evans published a blog post calling trade groups’ “uninformed and misleading accusations” counterproductive, but until it’s certain that counterfeits are going away from Alibaba’s platform, the tensions aren’t going away, either.
Other nominees: Amazon sues supply chain exec Valdez for defecting to Target, Costco/Citi’s credit card rollout glitches, EMV’s rocky rollout, Target’s support for transgender restrooms

Social media fail of the year

Winner: Stephen Curry's "Chef" shoe
Stephen Curry is one of the greatest players in basketball. The Golden State Warriors point guard is a two-time winner of the NBA’s Most Valuable Player award and arguably the finest pure shooter the sport has ever known.

 

Curry's shoes are an unintentional joke, though. In fact, his Under Armour Two Low “Chef” basketball shoes became the subject of many jokes this summer. Social media roasted the all-white sneakers with uncommon intensity and creativity, declaring them devoid of not just color but also personality and flair — in short, a wildly inappropriate design given Curry’s on-court energy and swagger. “I bet these are going to be very popular in nursing homes this year,” cracked one Twitter user, while another called the Chef “a mall walker shoe” and still another dubbed it “UA x Hellman's Lite Mayo.”
Other nominees: Cher slams Fabletics on Twitter, GapKids’ “racist” ad, J.C. Penney’s “period skirt,” Zara charged with plagiarizing indie artist

Dismiss the teenage stereotype shoppers at your peril: Gen Z is smartphoned-up and have a sense of their own worth

teenagers_in_moscow
A new industry report examining the ‘Generation Z’ shoppers — that’s kids aged 15 to 24, daddy-o — finds that they are a shop-happy and digitally-savvy generation, who are open to influence by retailers, but also have high expectations of them.
According to the report from leading independent shopper research agency, Shoppercentric, fewer than one in five of Generation Z feel that retailers don’t think their age group is important, compared with nearly one in three of the general shopping population. And half of them believe that retailers and brands understand their age group, compared with a third of the rest of shoppers.
But they do feel empowered, with 23% strongly agreeing that they could make a difference to their future compared with 17% of shoppers in general.
Many claim that their happiness runs deeper than material possessions alone: 34% strongly agree that they want to feel they are getting good experiences – that life isn’t all about what they own, versus 28% of older shoppers.
But Generation Z are open to persuasion. They shop instore and online at least seven times a month (rising to eight times a month amongst the men in this age group and going to physical shops and malls is as much a social pursuit as it is about buying things: 52% of Generation Z said that going out shopping was a fun way to spend time with friends/family, versus 44% of adult shoppers at large.
Ecommerce provides a welcome distraction to Generation Z with 62% of them agreeing that online shopping is a great way to stop getting bored – compared with 53% of older shoppers. Indeed, 70% of Generation Z shoppers agree that they “often browse online with no intention of buying (versus 63% of older shoppers).
These shoppers are receptive to inspiration and 28% say that they spend lots of time on YouTube getting ideas and recommendations, compared to 13% of older shoppers. They’re also twice as likely as other shoppers to cite product displays as important when shopping instore, and 49% agree that they use the displays instore/online to give them ideas (versus 41% of the broader shopping population).
They’re also using their smartphones instore more often with 53% agreeing that using their smartphone means they can get better information to help them decide what to buy when instore – compared to 38% of older shoppers.
Generation Z love a bargain just as much as anyone else and 48% agree that they tended to buy the cheapest they could so that they could buy more things they really like – compared to just 29% of their older counterparts. 62% are also tempted to buy if an item is on promotion versus 55% of older shoppers.
This is the generation that is doing much of its growing up online and as such, 97% have a laptop / PC, 96% have a smartphone and 63% have a tablet.
They have no problem buying more items than they want, and returning what they don’t want. In fact 28% of Generation Z agree that they buy lots of things online knowing they’re going to send most back – compared with ten% of older shoppers.
They’re more impulsive and willing to take risks with an order than older shoppers – for example 44% of Generation Z say that they often buy things on the internet that they hadn’t planned to purchase, versus 32% of older shoppers.
Speedy delivery is more important to Generation Z than to older shoppers with one in five putting same day/next day delivery in their top three most important factors for shopping online – compared with one in ten older shoppers.
Interestingly re-sellers such as eBay are used less frequently by Generation Z than older shoppers, which might reflect their preference for immediacy.
Social Media plays a huge role for Generation Z, and they are more likely than older shoppers to be connecting beyond their social groups of family and friends or even like-minded groups, to retailers or brands.
“Generation Z are a fascinating section of the shopper population,” says Danielle Pinning, Managing Director at Shoppercentric. “They’ve grown up in a truly connected world and are starting to access the kind of money that means they can flex their spending power. A lot has already been written about who they are as consumers, but there’s been no particular focus for those interested in shoppers. We wanted to take a closer look at what their expectations and needs are since they may not be today’s big spenders, but they could give a real pointer to where the future of retail lies… if we take the time to listen to them.”
Pinnington continues: “We’re all aware that Generation Z are easily bored and have a very short attention span, but on the flip side, they have great confidence and a terrific support system provided by social media which helps them to manage risk when they’re choosing what to do and what to buy. Plus they’re aware that retailers are interested in them and that they’re worth getting to know – this is in stark contrast to how many older shoppers feel.”
She concludes: “Generation Z know that they’re being courted, so it stands to reason that they expect to be impressed before they part with their cash. This apparent self-assurance is important because it will set a high bar against which retailers and brands will be judged moving forwards. Each touchpoint with these shoppers needs to be a positive experience and reflective of the brands’ tone of voice and values whilst remembering that this is a generation that enjoys shopping, so retailers will need to deliver to that brief and make it fun both instore and online.”

Supply Chain Graphic of the Week: Amazon's Incredible Expanding DC Footprint

 

Amazon Increased Fulfillment Center Capacity of All Types about Five Times 2010 Levels by End of 2015, and Keeps on Building

Nov. 30, 2016
SCDigest Editorial Staff

Amazon.com continues to expand its top line at an incredible pace, with revenue growing 20+% quarter after quarter, as it continues to take market share in the fast growing ecommerce world.

Of course, the company has trouble making any profits despite the strong top line results. This is primarily fpr two reasons: (1) huge capital expense, especially for constructing distribution facilities in the US and abroad; (2) high shipping costs, especially for its hugely successful Amazon Prime service, under which customers receive free two-day shipping on most items for a $99.00 annual fee.

Here, we look at that spending on its fulfillment network in more detail. Below is a graphic released as paet of report on Amazon from an organization called the Institute for Local Self-Reliance (ILSR), which we will note sees the growth of Amazon as no good. The graphic shows the global increase in fulfillment center/warehouse space of all types at the company in terms of square footage. It also includes a timeline of some key events that have impacted Amazon's trajectory.



As can be seen, Amazon's global DC fooprint exploded starting in 2010, rising at an incredible pace to now some 120 million square feet as of the end of 2015.

That is amazingly almost five times the square footage Amazon controlled in 2010, and does not include the tens of millions of square feet of fulfillment center capacity the company will add in 2016.

Generations

Fertility Rates Keep Dropping, And It's Going To Hit The Economy Hard


Total fertility rates, which can be defined as the average number of children born to a woman who survives her reproductive years (aged 15-49), have decreased globally by about half since 1960. This has drastically shaped today’s global economy, but as Visual Capitalist's Caitlin Cheadle explains, a continued decline could have much more severe long-term consequences.
If the world has too many elderly dependents and not enough workers, the burden on economic growth will be difficult to overcome.
Global Fertility Rates

Fertility Rates Start to Decline
First, it’s important to address some of the reasons for these falling fertility rates.In developed nations the introduction of commercially available birth control has played a large role, but this also coincided with several major societal shifts. Changing religious values, the emancipation of women and their increasing participation in the workforce, and higher costs of childcare and education have all factored into declining fertility rates.

Birthrates Wane, Economy Gains

Initially, reduced child dependency rates were actually beneficial to economic growth.
By delaying childbirth, men and women could gain an education before starting a family. This was important in a shifting labor market where smaller, family-run businesses were in decline and a more skilled and specialized labor force was in demand.
Men and women could also choose to start their careers before having families, while paying more in income taxes and enjoying the benefits of a higher disposable income. Increased spending power creates demand, which stimulates job growth – and the economy benefits in the short-term.

A Global Phenomenon

46% of world population is in countries with rates below replacement
Worldwide fertility rates began to fall substantially in the mid-1960s. While each country has its own underlying causes for this, it is interesting that in developed and developing nations, the downward trend is similar.
Part of this is due to developing countries’ own efforts to rein in their rapidly expanding populations. In China, the One Child Policy was introduced in 1979, however fertility rates had already dropped significantly prior to this. India’s government was also active on this front, sterilizing an estimated 8.3 million people (mostly men) between 1975 and 1977 as a method of population control.

The Age Imbalance

So here we are now, with a global fertility rate of just 2.5 – roughly half of what it was 50 years ago.
Today, 46% of the world’s population lives in countries that are below the average global replacement rate of 2.1 children per woman.
Because these countries (59 to be exact, including BRIC nations Brazil, Russia, and China) are not repopulating quickly enough to sustain their current populations, we are beginning to see a substantial imbalance in the ratio of elderly dependents to working-age people, which will only intensify over the coming decades.
Aging Population Map
By 2100, the U.N. predicts that nearly 30% of the population will be made of people 60 years and older. Life expectancy also continues to increase steadily, which means those dependents will be living even longer. Between 2000 and 2015 the average global life expectancy at birth increased by around 5 years, reaching an average of 73.8 years for females and 69.1 years for males.

Economic Reversal

What does this mean for the economy?
As this large aging population exits the workforce, most of the positive trends that were spurred by declining fertility rates will be reversed, and economic growth will face a significant burden.
Working Age Population
The global increase of elderly dependent populations will have serious economic consequences. Health care costs for the elderly will strain resources, while the smaller working population will struggle to produce enough income tax revenue to support these rising costs. It’s likely this will cause spending power to decrease, consumerism to decline, job production to slow – and the economy to stagnate.

Solutions

Immigration has been a source of short-term population sustenance for many nations, including the U.S. and Britain. However, aside from obvious societal tensions associated with this strategy, immigrants are often adults themselves when they relocate, meaning they too will be elderly dependents soon.
Several nations are already experiencing the effects of a large proportion of elderly dependents. Japan, with one-quarter of its total population currently over the age of 65, has been a pioneer in developing technologies, such as robotics, as a solution to ease strained health care resources. Many countries are restructuring health care programs with long-term solutions in mind, while others are attempting to lower the cost of childcare and education.

Tuesday, November 29, 2016

Push my buttons

Experiments in automated consumption
TRILLIONS of dollars of consumer spending have, historically, depended on a few steps. A shopper learns about a product, considers whether to buy it, decides to do so, goes to a shop. If he likes it, he may buy it again. Marketers have long obsessed over each step, and consultants have written treatises on how to nudge people along. E-commerce is already changing the process, but now retailing gurus are imagining a future in which shopping becomes fully automatic.
The idea is that a combination of smart gadgets and predictive data analytics could decide exactly what goods are delivered when, to which household. The most advanced version might resemble Spotify, a music-streaming service, but for stuff. This future is inching closer, thanks to initiatives from Amazon, lots of startup firms and also from big consumer companies such as Procter & Gamble (P&G).
Buying experiments so far fall into two categories. The first is exploratory. A service helps a shopper try new things, choosing products on his or her behalf. Birchbox, founded in 2010, sends beauty samples to subscribers for $10 each month. Imitators have proliferated, offering everything from dog toys to trainers. MySubscriptionAddiction.com, which reviews these services in English-speaking countries, counts 998 new subscription boxes so far this year, up from 284 new ones in 2013. Retailers such as Walmart have followed suit with their own boxes. The scope for such services, however, may be limited. One third of those surveyed by MySubscriptionAddiction.com said they cancelled at least as many subscriptions as they added this year. Consumers, naturally, will delegate purchases to a third party only when they receive products they like. In future, firms that comb purchase histories and search data may be able to send more reliably pleasing product assortments. For now, a consumer who becomes an unwitting owner of toeless socks, which were included recently in a box called FabFitFun, may decline further offers.
The second category of automated consumption is more functional. A service automates the purchase of an item that is bought frequently. Nine years ago Amazon introduced a “Subscribe & Save” feature, offering consumers a discount for agreeing to buy certain goods regularly, such as Pampers nappies. Dollar Shave Club, a male-grooming-products firm, sells razors to subscribers directly, and P&G now has its own, similar service. It is also testing one for laundry detergent.
Amazon is going further. Last year it began selling so-called Dash buttons, designed to be placed around the house to order everyday products—one for Campbell’s soup, for instance, and another for Whiskas cat food (pictured). Investors see this as the first step in its bid fully to automate buying of daily necessities. Already, some manufacturers have integrated Amazon into their devices; General Electric, for example, offers washing machines that shop for their own detergent.
Such services have obvious appeal for Amazon and for big consumer brands. If a shopper automates the delivery of a particular item, the theory is that he is likely to be more loyal. For some brands, the buttons are working especially well: more than half of all the many Amazon orders for Maxwell House coffee in America, for example, are made through the Dash button. Amazon says that across America, an order from a Dash button is being placed more than twice each minute.   
But neither Amazon nor the big product brands should celebrate a new era of shopping just yet. Amazon does not release comprehensive data on its automated services, but Slice Intelligence, a data firm in California, reported in March that fewer than half of those with Dash buttons had ever pressed them. One problem may be the e-commerce giant’s prices, which fluctuate often. Another report, by Salmon, a digital agency inside WPP, an advertising group, found that far more British consumers would prefer a smart device that ordered the cheapest item in a category to one that summoned up the same brand each time. That suggests that automated shopping, as it expands, might make life harder for big brands, not prop them up.