National Retail Federation Conference
More than two dozen of the best and brightest leaders from retail, technology and business will be among the headline speakers as more than 37,000 retailers from nearly 100 countries gather in New York in January to address the latest trends, innovations and strategies for success in retail. Among the speakers will be Lowe’s new President and CEO Marvin Ellison, Target’s CEO Brian Cornell, Walmart EVP and CIO Clay Johnson, Alibaba Group President Michael Evans and former Federal Reserve Chairwoman Janet Yellen.
Tracking Sales from Digital to Physical Worlds
Google and Mastercard made a secret deal about a year ago to track retail sales using a potent new tool that tracks whether ads companies ran online led to transactions in a physical store in the US. Insiders say it took about four years of negotiations for the two giants to reach a deal. The alliance gave Google an unprecedented asset for measuring retail spending, but now that the deal has been uncovered, it is raising privacy concerns. Google reportedly paid Mastercard millions of dollars for the data. A Google spokeswoman declined to comment on the partnership but did address the tool and said that it uses double-blind encryption technology that prevents both Google and their partners from viewing users’ personally identifiable information. Information is reportedly only shared with a merchant’s permission and does not track individual transactions or personal data on individual customers. Google calls the service Store Sales Measurement, and said it has access to approximately 70% of US credit and debit cards through partners, without naming them. Google has flagged when someone who clicked an ad visits a physical store since 2014, using the Location History feature in Google Maps, but advertisers did not know if the customer made a purchase. Here’s an example of how it works: A customer searches for “battery powered drills” online and does some research but doesn’t buy anything. Later she walks into a retail store and uses her Mastercard to buy a drill. The advertiser who ran the ad gets a report from Google listing the sale as Offline Revenue if the browser made the purchase within 30 days of clicking on the ad. Google’s ad business hit $95.4 billion in 2017 and has been growing about 20% a year.
Pop Up Good Housekeeping Store
Sears is partnering with Good Housekeeping magazine and leveraging the Good Housekeeping Seal of Approval. Kenmore Stand Mixers will be featured in a three-month pop-up retail store inside Mall of America called GH Lab. The 2,800-square-foot store is designed with different “rooms,” helping shoppers visualize products within their own homes and also experience the rigorous science GH Labs puts products through. The GH Lab will offer only one item that was tested and recommended in each product category. In addition to Kenmore, brands include Microsoft, iRobot and Samsung. Every product featured has been tested by the GH Institute and carries the coveted GH Seal of Approval. The store will be open to the public from October 3 through December 30 and will offer consumers the chance to see, test and purchase more than 40 products. All merchandise will also be shoppable through Amazon SmileCodes, which allow customers to open the Amazon App, tap the camera icon and select the SmileCode Scanner; the product associated with the SmileCode will appear on the screen. The customer adds it to their Amazon cart and checks out as they normally would. GH is also launching an online boutique on Amazon, where consumers can shop GH-tested products and have them delivered to their door.
Turning AI into a Money-Maker
Amazon is working at turning the artificial intelligence known as Alexa into a profitable entity on its own. Echo started out as one device powered by the voice known as Alexa, but has since expanded into a line of several devices at several price points from entry-level to high-end. Amazon doesn't reveal sales but has acknowledged that they have shipped tens of millions of Echo devices last year alone. In August Amazon linked Alexa to Whole Foods, so users can order groceries for delivery in the dozens of cities where Amazon offers Prime Now food delivery services. People can create a list over several days if they want; when they are ready to order, they tell Alexa to checkout. Alexa sends the list to the user’s smartphone to be reviewed and asks the customer to select a two-hour delivery window unless they’d like to go pick up their order. Amazon is looking to monetize Alexa in a variety of different fields. Amazon has even partnered with Marriot Hotels so travelers can use Alexa while they are on the road. They are also developing new machine learning tools to help developers more easily build Alexa skills.
Bezos Act Would Tax Companies for Federal Benefits
Senator Bernie Sanders introduced legislation aimed at companies like Amazon and Walmart that employ low-paid employees. It’s named the Stop Bad Employers by Zeroing out Subsidies, or BEZOS Act. Jeff Bezos is the founder and CEO of Amazon. The bill would establish a 100% tax on companies equal to the federal benefits that their employees receive. Covered public assistance programs include Medicaid, Section 8 housing, Food Stamps and the National School Lunch and Breakfast programs. The legislation has no real chance of passing in a Republican-controlled Congress, but it is a bellwether of the direction the House may move if Democrats gain a majority in the November mid-term elections and indicative of the trend to hold companies accountable.
Employee Retention Programs
In today’s tight labor market, companies are trying different ways to ensure customer loyalty. Microsoft just gave out surprise stock bonuses worth as much at $100,000 to engineers to keep them from leaving the company and going to a competitor. Poaching is a major concern for many technology companies, including Google and Amazon. More than 4,800 LinkedIn users list Amazon as their current employer and Microsoft as a previous employer, with about 2,500 listed Microsoft as current and Amazon as previous. Other companies are trying to encourage employees to stay put with a variety of incentives, including more flexible hours, better workspaces, the opportunity to work from home, on-site nurseries and child care, sabbaticals and leaves of absence and more. Many retailers competing for holiday workers this season are offering extra perks like discounts, higher wages and the possibility of a full-time job.
Amazon Storefronts Debut
Amazon is launching a new online marketplace called Storefronts where consumers can shop for more than 1 million products from nearly 20,000 US companies. Amazon is supporting the launch with national TV spots featuring real businesses that sell on Amazon and will also feature a “Storefront of the Week” and a series called “Meet the Business Owner.” Small and medium-sized businesses (SMBs) have become a major focus for Google and Facebook as well. Half of everything sold on Amazon comes from SMBs. Consumers can access Storefronts from the Amazon home page.
Amazon’s Alexa Fund Invests in Home Construction Startup
Amazon’s Alexa Fund made its first investment in the home prefabrication market, participating in a $6.7 million Series A bond offered by California-based Plant Prefab. Plant Prefab manufactures custom single- and multifamily homes that they say are sustainable, healthy and high quality. They claim to be the first home factory in the country focused on sustainable construction, materials, processes and operations with homes designed and built to minimize the negative impact of development. The company says its approach reduces construction time by half and costs by 10% to 25% in major cities. Plant Prefab is an offshoot of LivingHomes, a design and development company that is known for award winning pre-fabs; they built the nation’s first LEED Platinum home. The target market is housing-crunched major metros like Los Angeles, New York and San Francisco as well as in Silicon Valley, all areas where high costs, lot and labor shortages and a host of other problems create a real dearth of affordable homes.
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