Market Trends November 2016
MOST VALUABLE BRANDS
Apple, Google and Coca-Cola topped the list of the world’s most valuable brands of 2016, according to a new report from brand consultancy group Interbrand. Amazon made the Top 10 list, and Facebook, Amazon and Lego were the top growing brands. Technology and automotive took 29 of 100 rankings. Apple, Google and Coke were the most valuable brands because of strong finances, strength compared to competitors and the fact that their brand is a powerful driver of choice.
BRAINSTORMING FOR RESULTS
Amazon’s two-pizza policy requires that no meeting, no matter how important, should ever involve more people that can be fed by two pizzas. While the two-pizza rule might seem silly the thinking behind it is sound: the fewer the people, the better the discussion and eventually the better the ideas that will be forthcoming. Jeff Bezos says that mentally Amazon is a start-up, and despite their scale, they want to invent like a start-up. In the last several months Amazon has launched several new ventures, including a music-streaming service aimed at challenging Spotify and Apple Music and announced a plan to launch members-only convenience stores. Unlike many consumer products companies, Amazon has no ultimate goal to become the market leader in these new ventures, or even be profitable in the short or even medium-term. Rather the objective is to increase the business streams they play in and make the Amazon name even more pervasive.
TECHNOLOGY CHANGING CONSTRUCTION
Several new high-tech products are making their mark on the architectural, engineering and construction industry, according to a recent review by Global Construction. Some innovations include the Oculus Rift virtual reality headset, which began in the gaming sector, and is now being used by construction workers and architects to assist in the design of homes and commercial buildings. The integrated 3D headset allows users to see the inner mechanisms of model buildings, inspect materials within a virtual reality setting and interact with buildings before they are constructed, improving decision making and speed. The recently released Microsoft HoloLens uses Windows 10 technology to map environments or rooms, allowing users to view holograms and incorporate objects into the real world. The view can be shared anywhere in the world using Skype, allowing for input on how to fix potential issues. Smart Helmets, invented by tech company Daqri, incorporate a sixth-generation Intel Core m7 processor that allows the user to map the surroundings and share information and get help and support. About 30% of contractors surveyed last year by Engineering News Record said they were already using drones to inspect projects and check for compliance issues, among other things.
MORE AMERICANS MOONLIGHTING
The number of Americans holding down more than one job hit an eight-year high in September. Some of those holding down multiple jobs are doing so because they can’t find one job that pays enough. Others prefer having two or more part-time jobs. In September 4.3 million people had both a full-time and a part-time job; 2.1 million had two or more part-time jobs. Economists are dubbing it the “gig” economy, one in which more workers are freelancing and doing contract work, counting on multiple part-time jobs to make a living. Nearly 6 million part-timers would rather have a full-time job. While that’s a substantial number, it’s down from 9 million part-timers who felt that way during the recession and its aftermath. In recent years many employers have brought on workers or hired contractors for part-time or temporary projects to cut costs. Others are trying to avoid hiring full-time workers to sidestep healthcare requirements.
THE BLENDED FUTURE OF RETAIL
The retail revolution underway will ultimately result in consumers deciding where, when and how they want to shop. Amazon is venturing into physical stores and brick and mortar retailers are beefing up their online and mobile businesses in attempts to own as much of the consumer’s mindset and wallet as possible. Analysts point out that shopping in a store is a social experience, and that in-store shopping will never be totally replaced by shopping online. Some physical retailers are moving more toward a showroom model, where customers can come see the merchandise in person, then order exactly what they want, which will be delivered in hours or a day or two, often for free. And physical retailers are hard at work trying to convince customers to shop with them, whether they want to shop in-store or online or on their mobile devices. Walmart’s CEO Doug McMillon said that 90% of their business is still done in-store, and that their goal is to create such a seamless experience that customers don’t even think about how they are shopping, they will just automatically look to Walmart to meet their needs. Few analysts think that Amazon will get involved in large-scale retail, but will instead stick to small footprints in vertical markets like books and electronic devices.
Retail executives are concerned about their company’s ability to deliver omnichannel services. According to a recent analysis of data by Payments Source, only 21% of retail executives are more confident now than they were a year ago about their company’s ability to deliver omnichannel services, and 45% said their efforts are not advancing fast enough. Threats to delivering omnichannel services identified by the execs include:
Inability to Influence End Customer Behavior. Almost all retail loyalty programs offer basic product recommendations based on previous purchases or mass promotions. The study argues that as consumers engage with content they are continuously creating new data points about themselves that should be used to market to them in a more personalized way.
The Amazon effect. Retailers are ill-prepared to compete with Amazon’s technology ecosystem, which is uniquely designed to provide immediacy, transparency and convenience to a hyper-connected consumer base. Amazon Prime is the largest and most active loyalty program in the U.S. To compete, retailers need to create Amazon-like personalized experiences using proprietary data.
Legacy Technology and Cost Commitments. Retailers are incurring a lot of debt upgrading out of date technology systems, and when they do update, the information remains siloed, and thus ineffective. Retailers need machine learning technology that can analyze complex data in a meaningful and useful way, but have been slow to adopt advanced machine learning platforms.
While retailers are embracing omnichannel shopping, they are also trying to lure customers back into stores this holiday season because people who shop in store are more likely to make impulse purchases than those who shop online. One of the things retailers are looking at are ways to make the in-store shopping experience easier. Some retailers, like The Home Depot, have apps that allow people to type in what they are looking for and then get directions that show them exactly where the item is in the store; associates can use the app to see how much inventory the store has. Some retailers are using an app called Tulip Retail, which lets store associates find out if an item is in stock and also look up a customer’s shopping profile, something that retailers say is very helpful at the holidays
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