Market Trends May 2018
Robots Working with People
Amazon gave public officials and the press a sneak peek at their first warehouse in Illinois where robots work alongside humans to fill customers’ orders. The facility has been in operation since last August. More than 2,000 full-time employees work alongside a fleet of squatty, 320-pound orange robots that stow newly arrived items and pick out products to be packed and shipped. Amazon says facilities with robots tend to employ more people than those without them because they’re more efficient and process more orders. More than 25 of Amazon’s 175 fulfillment centers worldwide feature the Amazon Robotics drive units, with at least 100,000 robots in use. The robots can cover about 5 feet per second, carry up to 750 pounds, and primarily handle what would typically be described as “grunt work.” Amazon says that while it is true that without the robots they’d have to employ even more people at the facilities, there is a tremendous shortage of employees to work in warehouses.
Target and Kroger in Talks
Target and Kroger are reportedly in talks about a higher degree of cooperation or possibly a merger, according to tech focused magazine Fast Company, which cited inside sources. The companies first talked last summer about a partnership that could improve Target’s grocery business and give Kroger customers more access to merchandise and ecommerce. Talks have picked up again with the companies reportedly trying to explore the best way to move forward.
Smart Speakers Grow
A recent Voicebot.ai report found 47.3 million people in the US, about 20% of the adult population, have access to a smart speaker, up from 1% two years ago. Amazon dominates the market, with Google Home the only meaningful competitor. The Amazon Prime program is helping to drive Alexa’s penetration into the market. Voicebot.ai expects the number of homes using smart speakers to jump from 13% now to 55% by 2022, and for voice shopping to go from $2 billion today to $40 billion in 2022. Market research firm IDC expects shipments of smart home devices to grow at an 18.5% annual rate over the next five years, reaching 940 million devices shipped by 2022.
Home Improvement Competition
More than half of Americans try to outdo their neighbors’ home improvement projects, according to a survey of 1,000 Americans conducted by Wakefield Research on behalf of The Home Depot. Millennials are particularly home-conscious and competitive, with 70% admitting to feeling pressured by their neighbors and nearly 50% saying that they completed a project of their own specifically to outshine their neighbors. Parents tend to be more competitive than non-parents. The most popular ways to “one-up” the neighbors involved projects visible from the outside, with 89% of those who admitted to being competitive going or an outdoor project and 62% focusing on indoor upgrades.
Voice Activated Coupon Test
Target partnered with Google to pilot Google’s first-ever voice-activated coupon. Adweek reported that users of Google Assistant could say or type “spring into Target” and get a coupon code worth $15 for Target products on Google Express. The coupon offer was supposed to run through early April but was stopped early. Target said the promotion was very popular and they hit their goals early.
Same-Day Delivery Programs
Target is expanding two same-day delivery programs they’ve been testing. Drive Up allows customers to order on the Target app and have their items delivered to their car by a Target team member. The service was pilot tested in Minneapolis last fall and is being expanded to nearly 270 stores in Florida, Texas, Alabama, Georgia, Louisiana, Mississippi, Oklahoma and South Carolina. Customers select Drive Up as the fulfillment option, and Target will notify them within two hours that the order is ready. Customers click the “I’m on My Way” button when they head to the store, and park in a Drive Up spot when they arrive. Target plans to expand Drive Up to 1,000 stores nationwide by the end of the year. Target is also expanding a service that lets customers shop select urban stores and have their order delivered within two hours for a flat fee. The service was pilot tested in New York City last year and will now be available in nearly 60 Target stores in five major cities. The service fee is $7; oversized purchases are subject to a $25 handling fee.
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