The Bad News and the Really Bad News for Retailers Fighting Amazon.com

Friday in 5 – interesting news bits from around the supply chain horn, served up in one spot to keep you up to date.

This week: Amazon is taking over the retail industry, digital shopping habits are hurting brick-and-mortar stores, Walmart may have created the endless shopping aisle, virtual robots will be the next wave of technology to permeate the fashion and retail markets, and the relationship between shippers and logistics service providers (LSPs) continues to improve.

The really bad news for retailers fighting Amazon.com

Here is a thought that should make investors in U.S. retailers tremble: Amazon could inflict roughly the same amount of cumulative pain on its competitors over the next three years as it did over two decades as a public company. Revenue for Amazon’s North America segment—the bulk of its retail business—was $79.8 billion in 2016, marking the second consecutive year of 25 percent growth. Back in 1997, revenue was below $200 million for its U.S. business. If it’s now massive North America segment continues to grow at 25 percent a year, it will take only three more years for Amazon to add another $76 billion in annual revenue. That could deliver a swift blow to a U.S. retail industry, already wilting from Amazon’s aggressive expansion. 

Digital habits bleed into brick-and-mortar stores

With the help of its Prime membership program, Amazon.com has trained shoppers to open its app at the very moment they realize they need toilet paper or Tide. Now that same frantic, need-now-buy-now shopping behavior is affecting customers of brick-and-mortar stores, as well. Shares of Urban Outfitters Inc. fell 10 percent on Wednesday after CEO Richard Hayne told analysts he had never seen shopping patterns as choppy as they were during the quarter that ended in January, contributing to flat comparable sales and lower-than-expected earnings results.

Has Walmart finally created the endless shopping aisle?

Walmart is getting savvier at creating ways to shop in its stores and online at the same time, and Amazon should be worried. The world’s largest retailer is testing a touchscreen monitor in its toy aisle at certain stores in Texas that helps parents and children alike find exactly what they are looking for. And if they don’t find it in the store, they’re only a click away from ordering online, Walmart CFO Brett Briggs said at the Raymond James Investor Conference on Wednesday. “We’re testing how to interact with the customer differently, understanding better how they want to shop,” Briggs said.

Computers that learn and think: The next wave of technology to permeate the fashion and retail markets

Computers that learn and think — virtual robots as well as physical ones on store aisles to help shoppers — will be the next wave of technology to permeate the fashion and retail markets. After years of investments to support omni-channel commerce, retailers and brands are now looking at automation, machine learning, cognitive computing and the Internet of Things (IoT) technologies to evolve the shopping experience as well as improve product life cycles, according to the latest survey by solution provider Zebra Technologies. The 2017 Retail Vision Study queried close to 1,700 retail executives from North America, Latin America, Europe, Asia-Pacific and the Middle East.

The relationship between shippers and logistics service providers (LSPs) continues to improve

The 2017 Global Logistics Report has provided insight on the relationships between shippers and logistics service providers (LSP), along with challenges LSP’s continue to face in today’s industry. The report is by Haley Garner, Head of Research and Content at eyefortransport (eft), with an introduction and conclusion by Andrew Kirkwood, SVP, Global Logistics and Supply Chain Execution, JDA Software Group, Inc. Despite the rapid pace of change in the market, shippers and LSPs continue to improve the nature of their strategic relationships, recognize the value of technology and innovation, and forecast growth outside their traditional businesses, according to the report.

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