It’s easy to have missed some interesting innovations in retail with the past few weeks focused on Black Friday sales. Today, we’ve got a roundup of retail innovators and news to keep you up-to-speed on who’s getting industry and consumer attention.
First, we start with the announcement of Amazon Go – the online leader’s latest retail innovation which lets consumers pick up grocery products at an Amazon convenience store, pay by mobile app with their Amazon account and leave without a check out lineup thanks to innovative technology. Amazon also opens a drive through store concept early in 2017 in addition to new retail bookstores. With 2,000 or more stores on the horizon, that’s the sound of retail competitors shivering and the industry buzz is enormous.
Walmart is building new warehouse distribution centers and investing in new technology in order to keep up with Amazon. Not to be left behind, Target is developing and planning to open hundreds of new smaller-format stores in urban centers and college towns. Toys “R” Us launched a fourth new interactive toy store in Santa Ana, CA with interactive in-store displays including video screens, sound effects and motion-sensor lights.
Nike used the launch of its $720 HyperAdapt high-tech, self-lacing sneakers to generate consumer buzz and store visits. Ace Hardware and online marketplace The Grommet launched a “makers” initiative to sell 20 unique US-made products exclusively in its 160 stores. What’s ahead for retail in 2017? Social is king and influences everything. And of course, Amazon will continue to innovate and be the elephant in the shopping centers.
Amazon will open a physical grocery store
Amazon.com on Monday said that it will open a bricks-and-mortar grocery store called Amazon Go, an ambitious bid by the once-online-only retailer to gobble up more of Americans’ shopping dollars by taking the fight more directly to traditional supermarkets and big-box stores.
The store will be powered by a web of technology that allows customers to fill their shopping bags and walk out without going through a checkout process, a concept that has long been discussed in the retail industry but that has not been implemented at major U.S. stores. The idea is that it will shave time off the shopping experience. (Jeffrey P. Bezos, the chief executive of Amazon, owns The Washington Post.)
Here’s how Amazon Go will work: Customers download an app and then swipe their smartphones as they walk through the store’s entrance. Then they start picking up groceries. In a process that the company does not describe except to say that it involves computer vision, machine learning and artificial intelligence, every item the shoppers tuck into their bags or carts is tracked on the phone. If an item is put back on the shelf, it’s deleted. As shoppers exit, their bill is calculated, a digital receipt appears on their phones, and their Amazon account is charged. This video produced by the company offers visuals that might help you imagine what that will look like. Via washingtonpost.com
Amazon Go is the first of 3 or more new Amazon food store formats, reports say
Amazon’s new Amazon Go store is one of at least three brick-and-mortar food formats being explored by the online retailer, sources told The Wall Street Journal on Monday.
Earlier Monday, Amazon announced an employee pilot program of Amazon Go, a high-tech Seattle convenience store that relies on an app and computer vision instead of traditional registers. It will open to the public early next year, Amazon said.
But The Wall Street Journal’s sources said Amazon is also considering at least two types of bigger stores, including a store with curbside pick-up and a drive-through option. At least one drive-through location is slated to open in the next few weeks, the Journal said, citing people close to the situation, while a combination in-store and curbside pick-up format may be planned for late next year. Via cnbc.com
Amazon just revealed a new plan for revolutionizing how people buy groceries
The e-commerce technology company announced on Monday a new Seattle location, Amazon Go, that has no registers. Instead, shoppers scan into the store with their free Amazon Go app, shop as normal, and leave the store with the items billed to their Amazon.com account.
While some stores have used a wedding-registry technique to allow this kind of shopping, Amazon takes it one step further. Using computer vision — the kind of technology that lets self-driving cars “see” — the store recognizes the user, making it unnecessary to individually scan items.
According to the Seattle Times, the 1,800 square-foot store, featuring ready-to-eat meals and snacks, is open to Amazon employees participating in a testing program. The store will open to the public in early 2017. Via cnbc.com
Amazon Go slammed as ‘the end of jobs’ by the New York Post
The New York Post on Monday called Amazon’s register-less shopping experiment, Amazon Go, the “next major job killer” in the latest doomsday headline for retail workers.
On Monday, the retail giant announced a new advanced supermarket where shoppers can grab items and go without waiting in checkout lines. Once customers leave the store, items are billed to their Amazon.com accounts.
Following the announcement, reports by Quartz and The Wall Street Journal declared the experimental store might signal the end of “millions of cashier jobs.” The New York Post’s front page story on Tuesday called the store “the end of jobs.” Via cnbc.com
Walmart Adding Warehouses and Technology to Take On Amazon
Despite different expectations from its shareholders than Amazon, Walmart isn’t pausing in its planned expansion and investment in e-commerce. Adding giant warehouses and increasing delivery efficiency through technology are key to Walmart’s strategy in the race to build market share, according to Reuters.
By the end of 2016, Walmart will have 10 giant distribution warehouses around the U.S. compared to Amazon’s 40. Last year, Amazon had e-commerce sales of $107 billion, almost 8 times Walmart’s $13.7 billion of online sales. Amazon isn’t sitting still, though. The current online sales leader is planning five more one-million-plus square foot warehouses in the first quarter of 2017. Overall, Amazon currently has 104 warehouses of all sizes, with plans for 18 more.
In addition to its own giant warehouses, Walmart has 160 stores that serve as distribution centers for online items and other stores that stock online orders. So while both online companies have many smaller to medium-sized warehouses and distribution centers, Amazon is way ahead on the largest structures. The mega-warehouses add efficiency by stocking inventory sufficient that most orders can be included in a single shipment. Via digitaltrends.com
Target Shifts Focus to Small-Format To Improve Traffic
Target CEO Brian Cornell said, on Wednesday, that he is now “increasingly confident” about the next few months as the company plans to open “hundreds” (as he says) of small-format stores. The effort will, of course, serve to reshape the big-box retail chain’s image as well as their real estate footprint.
He says, “We think we have the opportunity to enter many, many new neighborhoods.” So far, Target is already operating approximately 30 of these “small-format” locations; this includes a 45,000 sq ft store in the hip Manhattan neighborhood of Tribeca. Of course, Target hopes to learn from this store, in particular, and what it can do with future operations.
Indeed, this model could prove essential for the company’s growth. On Wednesday, fourth-quarter sales at stores open under a year are registering between down one percent and up one percent. Via technewsobserver.com
Toys R Us opens interactive prototype shop
Toys R Us opened an interactive toy shop this week in Santa Ana, California, modeled after its experimental Toy Lab store in New Jersey. The 25,000-sq.-ft. store will be one of four opening by the end of 2016 that will have a smaller footprint but more experiences for shoppers.
The new format features bold red, yellow and blue walls and a play lab to test out new products. Aisles are specifically branded for merchandise, including American Girl, Lego and Star Wars toys, and buckets hold assorted toys ranging in price from $1 to $5.
Bright displays enhance the experience for shoppers. For example, the Lego section includes a Supergirl built out of Lego blocks. Via fierceretail.com
Best Buy launches innovators program
Best Buy has announced the launch of Ignite, a program that supports innovators and entrepreneurs. Ignite is a way for the consumer electronics company to get some of the newest and most inventive products into the hands of shoppers more quickly.
The program includes dedicated store space for products and services from startups; a new section in the online store for product information and purchase; and a partnership with PCH, a product innovation company that works closely with startups to get products out faster and at a lower cost.
The announcement comes just weeks after Best Buy celebrated its 50th anniversary with 50 hours of sales. Via FierceRetail
With $720 Self-Tying Sneaker, Nike Loosens Ties to Retailers
Nike Inc. this week begins selling a pricey sneaker with self-tying laces, a high-stakes test of the company’s technology investments and efforts to sell more products directly to consumers.
Since its founding, Nike has predominantly been a wholesaler. But as shopping shifts online, Nike is moving to lessen its reliance on retailers. It wants to double its direct sales to consumers to $16 billion by 2020, particularly as rivals Adidas AG and Under Armour Inc. have become more competitive in recent years.
That is where the self-lacing $720 HyperAdapt sneakers play a role. The company is offering the shoes exclusively on its relaunched Nike+ app and at a new retail store in New York City, beginning on Thursday. The idea is to hook consumers into buying via its app or visiting Nike stores for limited-edition sneaker releases, which to date has been a near-weekly phenomenon at Foot Locker and other retailers. Via wsj.com
Ace Hardware Stores Welcome Local Makers
Ace Hardware Corporation and The Grommet are pleased to announce a joint collaboration to bring the innovations of local Makers into Ace Hardware retail stores.
Ace will debut its collaboration with The Grommet, the leading product launch platform for innovative consumer products, in select Ace stores this holiday season and extending through 2017. The new relationship will leverage the strength and passion of locally owned Ace stores with the ingenuity of undiscovered inventors, known as “Makers.”
For the launch, 20 unique products from The Grommet, sourced from 15 local Makers, will debut in over 160 Ace stores; assortments will be updated each season. Products are unexpected, newly discovered and fit within at least one of 10 core values that are central to The Grommet’s discovery process, including: Made in the USA; Sustainable Living; Made for a Lifetime; Tech & Innovation; Handcrafted; Independent Maker; Social Enterprises; Philanthropy; Underrepresented Entrepreneurs; and Crowd-funded. Via ecommercebytes.com
What Retailers Can Expect in 2017
Now that 2016 is gone, I’d like to share our predictions on what 2017 holds for the retail industry. After a year of innovations for the consumer experience – see-now, buy-now to virtual fitting rooms – great products and instant gratification are the expectation of shoppers. Consumers want what they want, when and where they want it. And if they don’t get it, they’re quick to move onto the next brand who will provide it.
The digital revolution has been changing the expectations of consumers for years, but 2016 represents a real turning point. It’s not just the explosion of cool new devices or mobile shopping. In the New Retail Economy, social is king and it influences everything – and not just our shopping habits. We rely on social proof not only when we’re browsing Amazon or finding a great restaurant on Yelp. Social tools are crossing into professional lives as well – think corporate intranets, messenger apps like Slack – changing the way business is done today. It’s a totally different model from the past, where business apps (consider the entire Office suite) eventually flowed into the consumer world. And as retailers strive to meet consumers where they are, they’re starting to adopt tools and social tendencies that match their customer base, and naturally, the way the industry runs changes. Via multichannelmerchant.com
Our predictions for retail in 2017? In a word – disruption. From changes in consumer buying habits to new technologies, social media and intense competition, who will be left standing? Stay with us as we track the disruption.