Blockchain is everywhere

In its most basic form, blockchain technology is viewed as “an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value” according to Don Tapscott, co-founder and executive director at the Blockchain Research Institute.

• 
• 
• 
• 

Technology in the News

Blockchain is everywhere

By Jeff Berman, Group News Editor · March 27, 2018

In my line of work, I get a lot of e-mail, actually make that a LOT of e-mail. The topics range across all modes of freight transportation, to be sure, as well as policy and technology. One common theme in more than a few e-mails that has come in over the last several months, and even longer, centers around blockchain technology and its impact, or rather potential impact, on myriad aspects of freight transportation, supply chain, and logistics operations.

In its most basic form, blockchain technology is viewed as “an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value” according toDon Tapscott, co-founder and executive director at the Blockchain Research Institute.

On the surface, that appears to be intuitive enough to get your arms around, but when one sees the ongoing proliferation, and, again, potential, of blockchain, things quickly move to an advanced level, a level in which a lot is being asked of a technology that is still, for the most part, pretty new, while still continuing to gain traction, as well as increasing interest.

At this year’s SMC3 JumpStart conference, which was held in Atlanta in January, keynote speaker Adrian Gonzalez, head of Adelante SCM, explained to attendees that despite the early traction blockchain has received, it is still too early to gauge its impact.

He described blockchain as a technological platform, asking if blockchain was a better mousetrap than what is currently out there today.

“When you look at the technology, the greatest value proposition of blockchain lies today in the supply chain for sectors like food, pharma, and high-value goods,” he said. “We are seeing some of that happening in pilot programs. My fear is that people will view it as a silver bullet solution for supply chain visibility. But the challenges related to supply chain visibility are not related to just software. There is still a lot of [bad] data and data across multiple different standards and computers, with different nomenclatures. There is the challenge of aggregating and cleansing data. Blockchain does not solve that.”

So, no, blockchain is not likely to be a technology panacea by any stretch, and that is coming from one of the foremost logistics technology experts there is, but, at the same time, it is impossible to overlook at this point. If you need further convincing, take a look at my e-mail in box.

But, seriously, over the past few months, blockchain continues to ride a wave showing no signs of crashing. Here are a few quick examples of that:

• earlier this month, DHL has released a trend report in conjunction with on blockchain technology's potential to transform the logistics industry. The report noted that “global supply chains are notoriously complex, with a diverse set of stakeholders, varying interests, and many third-party intermediaries - challenges that blockchain is well suited to address. The report includes initial findings on a working prototype developed by DHL and Accenture, which tracks pharmaceuticals from the point of origin to the consumer, preventing tampering and errors”;
• in January, ocean cargo giant A.P. Moller-Maersk and technology powerhouse IBM announced plans this week for a joint venture (JV). IBM and Maersk said that the objective of this JV is to provide a jointly developed global trade digitization platform that is built on open standards and designed for use by the entire global shipping ecosystem, adding that it will address the need to provide more transparency and simplicity in the movement of goods across borders and trading zones;
• in July 2017, the Federal Maritime Commission held a “brown bag lunch”, where the topic of blockchain technology and its applicability to supply chain management and increasing efficiency in international trade was explored; and
• the Blockchain in Transport Alliance (BiTA) a forum for the development and application of blockchain technology standards and education for the trucking, transportation, and logistics sectors, continues to welcome new members from truckload, LTL, and parcel carriers, as well as shippers, tech startups and incumbents, insurance companies, law firms, and other industry stakeholders, according to its website

So, these are only a few examples, but you probably get the idea: one that indicates it is full systems go for blockchain within our sectors. In a business that constantly talks about the need for visibility, it stands to reason we are in the very early innings of blockchain technology, and for good reason. It will require a very watchful eye going forward to say the least.

$127 Million Savannah Port Rail Hub Expected to Take 200,000 Trucks Off State’s Freeways

Stephen Morton/Georgia Ports Authority

Across a highway from the gates to the Port of Savannah, crews have cleared trees and driven pilings into the sandy soil to support bridges and a lattice of future rail lines.

Though the construction site is only a few hundred feet from where cranes load and offload freight from giant cargo ships, Georgia Ports Authority officials said the project’s reach will stretch for thousands of miles and could mean billions of dollars in new trade for the state.

On March 27, the ports authority held a ceremonial groundbreaking for the $126.7 million Mason Mega Rail Terminal, a sprawling rail yard GPA Executive Director Griff Lynch said will provide better connections to the main CSX and Norfolk Southern rail networks as well as provide direct access to coveted Midwestern cities such as St. Louis and Chicago.

RELATED: Georgia ports orders eight cranes for Savannah intermodal railyard expansion

The project is expected to eventually take some 200,000 big rig trucks off the state’s freeways — even as container traffic in and out of the port grows, Lynch said. Carrying freight by train will ease bottlenecks near the Garden City Terminal and reducing truck traffic on highways across Georgia — including in metro Atlanta.

The Mason rail hub is part of the state’s expanded investment in transportation infrastructure. This includes the gas tax overhaul backed a few years ago by the Legislature and Gov. Nathan Deal that is pumping about $1 billion a year into the state’s roads, as well as the ongoing deepening of the Savannah River channel, which is designed to accommodate larger classes of freighters passing through the expanded Panama Canal.

At the ceremony, ports board chairman Jimmy Allgood said staff expect the completed terminal will cut rail time to Midwest cities by 24 hours, precious time that will make shipping faster and cheaper, and in turn, make Savannah more attractive to businesses.

“This project is a game changer,” he said.

Georgia’s inland and coastal ports are vital cogs in the state’s economy. A study recently released by the University of Georgia found that maritime trade accounts for $44 billion of the state’s gross domestic product and the ports directly or indirectly touch more than 439,000 jobs.

About half of those jobs are based in metro Atlanta, where the warehousing and logistics industries have boomed amid a post-recession rise in consumer spending and e-commerce demand. Much of the freight travels initially by ship and then by rail and truck.

RELATED: Georgia DOT proposes trucks-only lanes along I-75 near Atlanta

In Savannah, warehouse vacancy also is a scant 3%, and demand for space is high, said Michael Toma, a Georgia Southern University economist. Cargo services are running larger ships and making fewer port calls, but to accommodate the larger ships means investing in infrastructure both at the harbor and on land.

“If a chokepoint is between the container and the ultimate destination, time is money,” Toma said.

The first phase of the Mason rail project, named for late longtime ports board member Jimmy Mason, is expected to open by fall 2019. By the fall of 2020, 18 rail lines will crisscross the yard, and gantry cranes will hoist metal boxes onto trains bound for Memphis, Chicago and other points in the Midwest. The port currently has eight rail lines on campus.

The ports authority said it moved a record of nearly 4 million twenty-foot equivalent (TEUs) containers in fiscal year 2017, and the agency is working to double capacity over the next 10 years.

Best way to move freight

The rail hub is a vital cog in that plan, allowing other parts of the Savannah campus to be reconfigured for future growth, Lynch said.

The Mason project will be paid for largely by profits from port operations, and by a $44 million U.S. Department of Transportation grant administered by the Maritime Administration.

The port can accommodate about a half-million rail lifts per year and the new expanded yards will double that figure to 1 million annually.

The project will ultimately allow trains nearly 2 miles in length to be built on site, and overpasses will allow trains to bypass existing surface crossings. That will alleviate traffic congestion around the port to allow freight to be moved faster.

“The great thing about rail is it is the most sustainable and environmentally friendly way to move freight,” Lynch said.

As currently laid out, the Savannah port’s rail network builds trains of about 1,800 feet in length, meaning multiple trains leave during the day and must be assembled at nearby yards into longer more efficient trains.

But all that traffic can cause traffic bottlenecks in Garden City, something that city’s mayor, Don Bethune, said he is glad to see fixed.

Ports across the East Coast are locked in an arms race of infrastructure spending. The state and the Army Corps of Engineers are in the process of deepening the Savannah River channel to 47 feet from 42 feet to accommodate Post-Panamax classes of ships. The deepening will allow the larger vessels to pass the channel with greater flexibility and with fuller loads.

The nearly $1 billion deepening project is expected to be complete in late 2021.

The rail project, Lynch said, will make the Savannah port more competitive with rivals such as Norfolk to serve Midwest cities. Savannah already accommodates about a quarter of the cargo traffic headed to and from, Memphis, for instance, and the authority is counting on the rail project to help grow that figure.

Making A Case for Warehouse Robotics

Brian Barry

March 27, 2018

Many people hear about warehouse robotics and think it’s too futuristic, yet there are ecommerce fulfillment applications being installed today. They are not theoretical. Some may scoff at this technology, but we think it would be a mistake to say “that will never apply to my company.”

Consider how your operation is growing, and how quickly technology can change. In the mid-1970s no one could have imagined that PCs, desktop technology and distributed computing would wipe out most mainframe systems. Or that starting in the mid-1990s, the internet and ecommerce would cause a sea change in retail.

Today’s robotic applications are all based on existing applications and technology, not uncharted research, and each generation of technology gets cheaper. Here are five important considerations when looking at applying warehouse robotics today.

Available, Reliable Labor

Many markets have a shortage of quality, reliable labor, driving up hourly wages. In a recent opinion piece, The Wall Street Journal said, “For every job opening in America, there’s barely more than one unemployed person available to take it.”

Employment data from the U.S. Department of Labor showed job openings rose again in January to the highest level since 2000. In mid-2015 there were 2.3 more unemployed people than open jobs. To be “unemployed” you have to be actively seeking employment, excluding people who have taken themselves out of the workforce. This also suggests wages may have to rise to bring people off the sidelines and meet expansion needs. In April 2018, unemployment reached a 10-year low of 4.4%.

If the new tax and jobs bill continues to fuel investment and create new jobs, this could make fulfillment recruitment and staffing that much harder for companies. It makes a case for robotics in selected jobs.

Human/Robot Collaboration

Many companies, including in ecommerce, are using warehouse robotics in collaboration with employees. The best example is in picking. Studies show that pickers in large warehouses may walk as much as 15 miles per day, with about 75% of day spent in travel time. Robots travel between zones, while employees generally stay within a pick zone.

Picking accuracy is enhanced by the various ways that robotics can be employed. Much like other technologies such as voice, robots have the ability to have the touch screen communicate in the picker’s native language, dynamically changing based on a badge worn by the picker.

In the right environment, the addition of warehouse robotics can double pick rates. Picking is a tiring process. Anecdotally we hear employees are happy to not have to walk those long distances daily.

Cost Justification

Typically, there are two major costs to warehouse robotics you need to consider: implementation and the monthly system lease. We’ve seen from early adopters that once the fully loaded hourly labor cost reaches $15 to $16, robotics can be cost justified. They work longer without needing breaks and can run from 12 to 14 hours on a charge. As labor availability becomes tighter and wages push up, more companies will find a profitable application.

Complex Fulfillment Environments

Small-to-medium-sized warehouses may not be able to cost justify robots at the present cost structure but that will change as the technology becomes more commonplace. Currently the best candidates are large warehouses with long pick routes and large SKU assortments. The latter often adds distance and makes accuracy more difficult due to colors, sizes and similarities between products. Businesses such as third-party logistics (3PL) with multi-client assortments have mainly been the earlier adopters to date.

Add Flexibility to Fulfillment

Warehouse robotics may have another benefit when compared to sortation and other automated conveyance systems: Flexibility. We’ve seen early adopters insert robotics into an existing conventional warehouse without any changes to the physical layout such as racking.

As beneficial as sortation and conveyance systems are, they are also inflexible when major changes to product assortments take place.

If you see your fulfillment operation needing to grow quickly over the next two to three years, we recommend you research where the technology is today, and where it will be in the near future. In the right environment, warehouse robotics will reduce costs, boost productivity and improve customer service with greater accuracy.

Collaborative Mobile Robots Are Coming To Your Warehouse

By: SupplyChainBrain
03.20.2018

A common question warehouse operators often ask themselves is: "what can we do to further increase productivity and efficiency?" For a while, this challenge has been met with Six Sigma methodologies to identify and eliminate waste in the process. However, one of the biggest sources of waste remains non-value-adding movement and material handling. A new breed of robot has recently emerged that tackles this challenge and is helping warehouses to reach next level productivity and efficiency. -John Santagate, Research Director, IDC

Warehouse management is all about handling materials. Within these facilities, materials come in and go out as they progress through the supply chain. For many such facilities, the process of picking and transport of materials is a highly manual process. A person takes a pick list and pushes a cart from aisle to aisle, rack to rack, and takes the required materials from a shelf and then brings it to the packing station or to various work cells. However, modern robotic technology has emerged that is enabling warehouses to automate part of this process.

This new breed of collaborative robots is designed to work in concert with human operators in the warehouse. Whether it is to support the picking process in e-commerce fulfillment or to move components around for product assembly, there is significant value to be gained by deploying robots to manage the movement of materials throughout the warehouse. The focus here is on process optimization. By taking over the movement component within the process, warehouses are able to free up their people to focus on other work activities that add greater value.

While deploying robots is not appropriate for all scenarios, in the situations where it does make sense, robotic deployments are delivering significant value such as:

• Increasing worker productivity – Collaborative mobile robots are built to be a tool that enables human operators to do more. Robots that are deployed to handle the movement of materials throughout a facility reduce or eliminate the amount of time people must spend walking from point to point. This, in turn, allows warehouse employees to spend more time handling materials and adding value and less time having to walk throughout the facility.
• Enhanced warehouse efficiency – Time is a constraint that warehouse operations must consider. You can only get so much done in a day. However, with the use of mobile robots to handle material movement, warehouses can increase efficiency as people are freed up to do more in the same amount of time. Increasing efficiency is tightly related to increased productivity: if your warehouse employees can do more within the same time, the warehouse is able to drive up efficiency of the operation.
•  Increased flexibility – For many warehouses, a common challenge arises during periods of peak demand. In lieu of bringing in expensive temporary labor during times of peak demand, robotics-enabled warehouses can more easily scale by deploying more robots and further enhancing the efficiency of the existing labor within the warehouse.

As warehouses seek to “do more with less”, turning to robots to support the movement of materials provides an opportunity to increase warehouse capacity without the traditional scaling of the workforce. Robots are tools, meant to increase the capabilities of the warehouse worker.

The Outlook

The emergence of the collaborative mobile robot is giving warehouses a new tool set that can significantly enhance warehouse operations. In addition to the productivity and efficiency value delivered, this technology can also help to improve the broader operation as they become connected devices that can integrate into the business operating systems. There is an abundance of value to be captured by deploying robots in the warehouse. As warehouse owners continue to recognize this value, they will increasingly look to robots to help improve the operation.

Motivating Others

Brick-And-Mortar Retailers Take On Omnichannel

ByPYMNTS

Posted on March 21, 2018

 

 

 

To meet consumers where they want to shop, retailers are taking an omnichannel approach to their offerings. Some customers — those of the brick-and-mortar persona — just want to shop in-store and haven’t purchased anything online over the past three months.

And retailers are taking notice: Walmart, for example, recently introduced meal kits in its stores after selling them exclusively online.

The meal kits are designed to serve two people and sell for $8 to $15. Walmart customers can buy them in the store or — in another omnichannel twist — through the retailer’s online grocery pickup service.

Still, many retailers must improve their omnichannel offerings to serve customers who want to shop in-store, online or through a combination of both channels. Retailers, after all, have an average satisfaction score of 37.9 out of 100 for omnichannel features, according to the PYMNTS Omni Usage Index. Here’s how five brick-and-mortar retailers are adapting to the demands of omnichannel commerce.

Target — About 9.2 percent of large-format, brick-and-mortar consumers shop at Target. In the Dallas-Fort Worth area, for example, Target is beginning to experiment with a new rewards program. Dubbed “Target Red,” the new program will not be linked to a debit or credit card, The Star Tribune reported. Joshua Thomas, a Target spokesman, told the newspaper, “We know not everyone wants another credit card. So, we want to find a way to grow our relationship and affinity with those guests.” Through the free new program, shoppers can take 1 percent off purchases and put it toward future visits at Target, without having to use a Target-branded credit card.

Old Navy — Another 9.2 percent of large-format, brick-and-mortar consumers shop at Old Navy. Around the time of the 2018 Winter Olympics, Old Navy took an omnichannel strategy for selling Olympic merchandise through both brick-and-mortar and eCommerce channels. The retailer offered a collection of Team USA knit mittens, winter hats and knit scarves in its Times Square location — not too far from the Team USA store. But it also sold the gear through its website in addition to TeamUSAShop.com.

Walmart — Just over 7 percent — or 7.2 percent — of large-format, brick-and-mortar consumers shop at Walmart. To help make the retailer an attractive destination for apparel, Walmart is also redesigning its clothing departments to help customers find new styles. Starting in March, and by the fall of 2018, the majority of the retailer’s stores will feature upgraded displays, new signage and stylized photography for each brand. In addition, the retailer will remodel some of its stores to include open floor plans — as well as renovated fitting rooms. The news comes as Target launches a lifestyle clothing brand for womenfeaturing lots of denim and even lower prices than its current women’s apparel lines.

Kohl’s — About 6.4 percent of large-format, brick-and-mortar consumers shop at Kohl’s. In 2017, Kohl’s announced a partnership with Amazon to use its physical store network to accept returns from Amazon customers. The announcement followed news earlier in Sept. 2017 that Amazon would create its own storefront inside Kohl’s physical stores to sell its line of Alexa-powered devices. The partnership news started a chain of media reports describing Kohl’s decision as a “deal with the enemy” and the “wrecker of brick-and-mortar retail” by a player (meaning Kohl’s) down on its luck. And, of course, more recently, Kohl’s announced a partnership with ALDI to test-drive groceries at up to 10 of Kohl’s department stores.

American Eagle — Just over 5 percent of large-format, brick-and-mortar consumers shop at American Eagle. How does a company that relies on teenagers for the bulk of its commerce keep sales up in an increasingly competitive fashion environment? By taking the advertising to the one thing any teenager in America can’t bear to be apart from for more than a few seconds: their smartphones. The bulk of the American Eagle strategy, in an attempt to drive sales and consumer traffic to the retail outlet and website, has been through in-app promotions and geo-targeting potential customers with localized discounts, as well as a chat function where customers can talk to each other and customer representatives about the various clothes on offer.

For meal kits, retailers such as Walmart have a few advantages when selling them through their channels. Walmart doesn’t require its customers to purchase subscriptions, unlike meal kit delivery services like Blue Apron and HelloFresh.

Traditional meal kit providers tend to rely on subscriptions to support their business models, which often involve costly and complex delivery processes. And retailers like Walmart already have a built-in distribution network — their stores.

DC Metrics: Change Is in the Air

By: SupplyChainBrain
03.21.2018

People are our greatest asset. We've heard this – and similar sayings – for years. Now, however, leading firms are actually putting this into practice, and are reaping rewards for doing so. Going into 2018, people are still a critical link in the supply chain. -Donnie Williams, Asst. Professor of Logistics & Supply Chain Management, and Karl B. Manrodt, Professor of Logistics and Supply Chain Management, both at Georgia College & State University

What should you expect in 2018? Here are three things to consider:
Employees really do matter – and firms are measuring their performance. In this year’s study, we asked what companies consider the primary importance to their organization: people, processes, or technology. Sixty-two percent of respondents stated that people were their primary importance. This wasn’t just lip service either, as employee metrics accounted for four of the top 12 most popular metrics for the first time in the history of the study. Additionally, our results show that firms that focus on people first show significantly better results on many of the operational and customer facing performance metrics. These firms also experience the benefit of greater workforce agility, more full-time employees, and greater strategic human resource practices, which allow the firm to gain better utilization of their workforce through skill development and alignment. While technology and processes are still extremely important, these results really do demonstrate that people are still the most critical link that keeps our supply chains running.
Strategy: division and consolidation. Over the past seven years a mix strategy (be all things to all people) and customer service strategy has consistently garnered 80 percent or more of the respondents. During the past three years, customer service has taken the lead (54 percent in 2017) compared to mix at 29 percent. This means that organizational leaders are really focusing on understanding and pleasing their customers. As competition continues to increase, the ability to deliver consistent results that meet customers’ expectations is more critical than ever, particularly with the impact that Amazon is having on the markets through their rapid fulfillment strategies. The benefit of focusing on customer service strategy is that it helps align operations to what could be the most important skill for distribution centers in today’s environment: consistent and rapid execution!
The best get better. In the race to the top, who's winning? Considering changes in performance from year to year, gains were made by all. Best-in-Class leads the others on improving or maintaining performance on 25 of the measures. Median performers followed closely behind improving or maintaining performance on 23 of the measures, and Major Opportunity performers improved or maintained performance on 21 of the measures.  Why is this important? Three of the five categories of respondents continue to improve year after year. Quite simply, this means that if your performance remains the status quo, you will have trouble keeping up with the competition and fall further behind in your ability to perform well for your customers. This could also impact your ability to retain your employees if you are falling behind on important workforce metrics. Either way, if you aren’t improving, you are losing.

The Outlook

How then should we live? Simply put, people are still our most important asset, particularly in a rapidly changing global supply chain environment. Workers still provide the flexibility and adaptability needed in 2018 to serve their customers. People really are our greatest asset – a fact that still isn’t outdated.

Shoptalk 2018: Day 2 Takeaways—Same-Day Delivery, Scan and Go and Augmented Reality

Shoptalk 2018: Day 2 Takeaways—Same-Day Delivery, Scan and Go and Augmented Reality

KEY POINTS

The Coresight Research team is in Las Vegas this week, attending and participating in the Shoptalk 2018 conference held March 18–21. 

In this report we share our key takeaways from the second day of the conference, which include: 

• Macy’s is to add mobile scan and pay checkout to all stores by the end of 2018.
• Same-day delivery is becoming the new normal; Target will be offering same-day delivery nationwide.
• The Amazon innovation approach is to “start with the customer,” and work backwards to figure out a solution.
• Brands are using social media communities to build engagement and revenue.
• Kroger says augmented reality (AR) could be used to help customers navigate the in-store shopping experience. 

Shoptalk 2018

The Coresight Research team is in Las Vegas this week, attending and participating in Shoptalk 2018. Described as the world’s largest conference devoted to retail and e-commerce innovation, more than 7,500 attendees are expected at this year’s event, up 40% from 2017’s Las Vegas event.

The conference, which runs March 18–21, is expected to draw executives from established retailers and brands, startups and technology companies, as well as investors, media professionals and analysts. From new technologies and business models, to changes in consumer preferences and expectations, attendees are exploring disruption in the retail industry, particularly how consumers discover, shop and buy.

The event focuses on topic such as the shopping experience of the future, the evolution of the retail store, on-demand delivery and logistics, shifting e-commerce trends, the next generation of direct-to-consumer startups, engaging customer experience, the impact of artificial intelligence (AI) in retail, and more.

The event features more than 300 speakers, representing a broad cross section of countries and companies, including Allbirds, Ascena Retail Group, BJ’s Wholesale Club, DoorDash, Google, Houzz, Instacart, Macy’s and Rent the Runway.

Below, we summarize our key takeaways from the second day of Shoptalk 2018.

1. Macy’s to Add Mobile Scan and Pay Checkout to all Stores by the End of 2018

Macy’s CEO, Jeff Gennette, unveiled new features coming to Macy’s mobile app, most notably mobile checkout. Shoppers will be able to scan product bar codes with their smartphone as they add the merchandise to their shopping carts. Gennette described checking out as the “single biggest pain point” in stores today.

When customers finish shopping, they head to a dedicated counter for mobile checkout, where a store associate removes the security tags and makes sure the number of items scanned adds up to those paid for. Relevant discounts and rewards are applied, via a shopper’s loyalty account, according to Gennette.

The feature is expected to be available in all of Macy’s full-line stores by the end of 2018. Most of the merchandise in-store will be made available for mobile checkout, except for a few product categories such as jewelry, according to Gennette.

2. Facebook Reinforces Focus on Retail Brands, Unveils Three New Ad Products

Facebook announced three new offerings to drive mobile and offline retail sales, all of which utilize Facebook and online behavioral data with varying degrees of personalization.

Last September, Facebook added the ability for retailers to build custom audiences of Facebook users who have previously made offline purchases from the retailer, as well as the ability to create lookalike audiences. The social network took this one step further with Monday’s add-on of the store sales optimization tool, which uses machine learning to display ads to shoppers most likely to make an in-store purchase, even if they are not an existing customer.

Michael Kors tested the tool with a video ad campaign on Instagram and reported an 11% incremental lift in in-store sales when compared with its test group of shoppers who were not served ads incorporating the new feature.

Facebook also updated its Canvas full-screen mobile ad product with the addition of tabs that offer personalized catalogs to users. Eva Press, Director of Global Marketing Solutions at Facebook, said users will see a collection of ads with “category-level” images. The first tabs shown will be categories that best fit their interests.

Finally, brands can now incorporate category-level images into their dynamic ads, reaching people who have expressed interest in general categories (based on browsing activity), but not specific products, enabling retailers to reach consumers earlier in the shopping journey.

3. What Amazon Has Learned in Its First Three Months of Amazon Go 

Amazon’s cashier-less store, Amazon Go, opened to the public on January 22, 2018, in Seattle. Customers scan a smartphone app to enter the store, and then cameras and sensors track what they remove from the shelves. Amazon then bills shoppers’ credit cards that it has on file after they leave the store. At a keynote session, Amazon Go executives Gianna Puerini, VP, and Dilip Kumar, VP of Technology, revealed early insights and some nuances that went into building the Amazon Go store.

Amazon decided to use computer vision to monitor the movement of products around the store, rather than RFID tags. According to Kumar, the operational costs of RFID were too high, due to the fast-moving nature of a convenience store where every product would have to be manually tagged before stocking to the shelves.

While Amazon Go is a convenience store, Puerini said the inventory turnover was one thing that surprised her. Due to the efficiency of a store visit, shoppers can enter and leave quickly, requiring shelves to be constantly restocked. Puerini said store associates spend much of their time restocking shelves or helping customers on the floor.

Puerini also said a surprising finding is that many first- or second-time customers are not comfortable just walking out of a store. They tend to ask themselves whether it is really “OK to just leave” before exiting. The presenters declined to discuss expansion plans for Amazon Go and said there were no plans to add the technology to Whole Foods Market.

4. Kroger Says Augmented Reality Could Be Used to Help Customers Navigate the In-Store Shopping Experience 

Yael Cosset, Chief Digital Officer and Group VP at Kroger, discussed how augmented reality (AR) can be used to improve the in-store grocery shopping experience. According to Cosset, grocery shoppers have developed a greater desire for data about food products—they want to find out more information other than just price; they want to know the place of origin, whether the product is organic, and more.

“AR will create opportunities to digest the abundance of data,” he said. “Online it’s easy and customers have an unlimited way of accessing the data, in-store it’s a lot harder.”

Cosset suggested that AR should be leveraged using the shopper’s smartphone. He discussed an example of a shopper at a fish counter asking the store assistant for advice on how to cook salmon. The shopper could use their smartphone camera to scan products and receive more information about the product they are interested in, including recipes and nutritional information.

5. Macy’s Customer Is Looking for Fashion, Inspiration, Key Values and Great Experiences

Jeff Gennette, CEO of Macy’s, said that the company’s long and iconic heritage is not enough to guarantee success. Gennette said that 2015 and 2016 were challenging years for Macy’s and the company was losing market share and customers. The customers that it did have were spending less. This spurred the company to launch a forensic mapping to determine what the Macy’s customer liked. Macy’s found out its customer wanted four key things: fashion, inspiration, key values and great experiences. The company launched its North Star Strategy based on these customer findings and has since revamped each of the four areas, producing positive comps in 2017.

In its fashion and inspiration business, Gennette said that the company is editing the “sea of sameness,” with the plan of increasing its private-label products from 29% of the total portfolio to 40% over the next few years. In the area of “key values,” the company is editing and reducing its promotional cadence, and has revamped its loyalty program. Gennette added that Backstage, the company’s discount store offering, is a clear value for the customer, and the company has seen a 7-point lift in each Macy’s store where a Backstage store has been added.

To improve the customer experience, Macy’s is adding AR for the home to help consumers view how items will look before purchase, and mobile checkout will be added to Macy’s stores, where consumers can scan and go.

6. Same-Day Delivery Is Becoming the New Normal; Target Will Be Offering Same-Day Delivery Nationwide

In a keynote panel moderated by Oliver Chen, Managing Director at Cowen and Company, Target Chairman and CEO Brian Cornell discussed the company’s December 2017 acquisition of Shipt, a company that will enable Target to provide same-day deliveries nationwide. Cornell said, “There are customers that want the same-day shipping offering and the same-day component is very important. We wanted to be able to provide this service to customers nationwide. We thought it was a great step for us to make it easier to shop.”

Bill Smith, Founder and CEO of Shipt, said that the Target acquisition was “jet fuel” for reaching customers, because over 30 million customers visit Target every week. On March 16, Target announced that it is offering free two-day shipping and is piloting free same-day delivery in certain cities. Smith said that he and his wife determined that there was an opportunity for Shipt after they had a baby—they continually needed items, but could not leave the house, and realized it was no longer convenient to dash into the store with a baby.

7. The Amazon Innovation Approach Is to “Start with the Customer,” and Work Backwards to Figure Out a Solution

In a keynote session on Amazon Go, Jeffrey Dastin, Technology Correspondent at Reuters News Agency, interviewed Amazon Go executives Dilip Kumar, VP of Technology, and Gianna Puerini, VP. Puerini discussed the innovation mindset at Amazon, and said that the company writes a press release, and then determines how to execute it. “It is spectacular to invent on behalf of the customer, and that is what we draw energy from at Amazon. The customers decide if it is successful or not,” she said.

For Amazon Go, Kumar said that the customer solution was how to solve for adding items to a cart while checking out seamlessly. Amazon chose computer vision for its technology solution, and Kumar said that the solution is quite challenging. He said that the holy grail of computer vision is to take an arbitrary scene and to understand and interpret the video (in Amazon Go’s case, this scene is understanding who took which grocery items and put them into a cart) and translate them into algorithms. Puerini added that while Amazon Go’s solution is technical, most of her time is spent focused on solving for traditional aspects of retail and real-world customer-centered opportunities. For example, she said that many customers are very interested in food, and learning about customers’ preferences helps to inform Amazon’s decisions. For example, the Amazon Go store is 1,800 square feet, so with limited shelf space, the company has had to think carefully about product selection—and so customer insights are critical. When asked, Puerini said that there are no plans for Amazon Go technology at Whole Foods.

8. Brands Are Using Social Media Communities to Build Engagement and Revenue

Manish Chandra, Founder and CEO at Poshmark, spoke about the power of social media communities to build brands. Poshmark is a social marketplace focused on fashion and style. Chandra said that Poshmark was built on empowering people, and that Poshmark is a “new kind of fashion mall” where the content and SKUs are created by individual users, with items uploaded from their own closets. The Poshmark marketplace platform is built around the foundation that every seller is required to promote other sellers; growing other sellers helps individuals to grow their own following in a community of stylist-sellers.

Poshmark has live virtual shopping parties, and stylist-sellers are a network and community of friends. Stylist-sellers provide customers with personal advice, give personalized styling experiences and curate looks in virtual dressing rooms. Chandra emphasized that the freedom of the community network is what has made it successful, and that these communities should not be constrained. Seller-stylists are one of the largest generators of pins on Pinterest. The average user spends 25 minutes on the Poshmark app, per day, and opens the app 7–9 times a day. Chandra credited this with both the community and newness of the merchandise. He said, “Every time a user opens the app, they find something new.”

9. Panera Is Using Technology to “Anticipate Great Experiences” 

In a session titled, “Mobile Experiences in the Customer Journey,” Mark Berinato, VP, Digital Experience at Panera Bread said that Panera has grown to become a large e-commerce company, with $1.2 billion in digital sales in 2017, over 30% of which are through digital, and over 3 million MyPanera loyalty members. Berinato said that with these numbers, the company started to ask itself, “Are we a technology company that serves great food?” He said, no, the company is still focused on its roots of anticipating the customer desire for great experiences. The core customer has been evolving, and Panera is evolving with the customer and using technology to enable them to order from work, pick up their lunch in minutes, skip the line, provide nutritional value information and remember favorites.

Berinato said that Panera starts with the customer’s everyday needs and determines how the company can use technology to improve and personalize customers’ needs at every step. For example, for customers that want to skip the line, the company offers “rapid pickup” in-store where the customer pre-orders on a mobile device. The company is offering in-store kiosks for consumers that want to order at their own pace and view the nutritional information of each product. For those customers that cannot leave their home, Panera is offering home delivery, and has hired its own staff of over 10,000 drivers to ensure an “elevated customer experience.” Berinato said that the digital implementations are increasing in-store sales; after Panera launched the kiosk, the company saw an increase of customer in-store visits of one to two times per year, which, over millions of customers, has added real value to the company, he said.

10. Future Retail Trends Heard at Shoptalk  

Throughout day one, panelists were asked about their predictions for retail trends. Here are a few of the notable ones:

• New business models are emerging in VR and AR, and this area will get more exciting within the next 18 months. — Gihad Jawhar, VP, Digital Development, Lowe’s
• Voice is the fourth sales channel, with digital assistants such as Amazon Alexa and Google Assistant gaining traction. — Steve Koenig, Senior Director of Marketing Research, the Consumer Technology Association (CTA)
• AR is trending in the areas of furniture or fixture shopping, apparel shopping online and providing in-store product information. — Steve Koenig, Senior Director of Marketing Research, CTA
• VR narratives are growing in the areas of brand marketing and developing brand experiences. For example, the technology is being used to help consumers explore holiday destinations, virtually explore products or services and shop online. — Steve Koenig, Senior Director of Marketing Research, CTA
• Consumers eating habits are changing. People are eating more often. This will impact the food industry to support this new consumer. —Mark Berinato, VP, Digital Sales Experience, Panera Bread