One of my fondest memories as a child was being able to spend the summer with my grandmother in France. At the time she lived in a small village about an hour from Paris – Morsains. The village had no commercial establishments so every morning a number of food trucks (really vans) would come by and offer the residents the ability to purchase the usual staples: fresh baguette, cheese, meats, milk to name a few. As a kid it was always exciting to hear that horn (they would honk when they got to the village), because sometimes you were able to purchase candy or some pastries as well. This was back in the 1980s. Interesting that the ability to deliver in this manner lost momentum. Of course we saw this type of delivery start up again in the 1990s when the dot com boom struck. Everyone from Webvan to Kozmo looked to bring just in time food delivery to your front door back to the mainstream. During those hey days I was working at Forrester Research and remember seeing these companies come to brief us and ask our opinion but also, especially when it came to Kozmo, I would see them deliver to myself and fellow co workers on a daily basis. Unfortunately, these companies were not able to solve the nut that is grocery, last mile delivery. Webvan in particular ran into major problems – how to delivery if no one was home, what to do with perishables, what about frozen goods? I remember one discussion we had at Forrester that to be successful Webvan would have to find a way of putting refrigerators in customers garages our somewhere accessible if no one was home. But the investment that would require would destroy their margins…oh wait those already got destroyed. Unfortunately, Webvan and the likes burned through a lot of cash and could never capture profitability. Traditional grocery chains such
Amazon really going after UPS and FedEx?
as Whole Foods have also expanded their home delivery. So consumers have plenty of options. Now add another option…a big one. Amazon.
The eCommerce giant is finally wading into the online grocery and home delivery market. Not a surprise. And could have a major impact on the market. Can Amazon be successful? Of course. Unlike the likes of Webvan, Amazon has been perfecting their order management, inventory optimization and delivery for the past 20+ years. In doing so they have also built a fairly vibrant business (to the tune of $60b in revenue). Groceries are not going to make or break Amazon. However being able to apply what they know of eCommerce will give them a leg up on the start ups from the 1990s. Also, if their past is any indication, they will ease into this. They have already tested this out in their home market and are slowly rolling this out to other large metropolises where their distribution network can be best leveraged. Amazon also knows how to manage multiple smaller retailers. Have you ever noticed when you order products on Amazon that many times it is from another supplier…not named Amazon. They understand how to tie inventory from disparate sources, consolidate payments and move merchandise from these retailers.
Of course the food business is different than delivering books or CDs to your door. The largest issue is around food safety. Unlike the majority of other products that Amazon can deliver to your front door, groceries have a shelf life. This has haunted others who have ventured into this realm. With Amazon’s slow roll out of the offering I am going to assume they are working out the kinks with this aspect. They are already tackling one of the issues with forcing users to choose from two windows for delivery – hopefully cutting down on non deliverable items. That is a major issue with groceries…re-slotting a book in the warehouse is one thing, but having to transport and re-warehouse items like milk or seafood or frozen good is a whole other dilemma. If Amazon can solve this problem, how much harder will it be to deliver other items “same day.” Probably not that difficult. As this article points out, click here, if Amazon can solve the math they can most likely deliver anything from apricots to zubaz pants.
Finally could this foray into grocery delivery also lead to Amazon creating their very own fleet of trucks? Going after the last remaining dollars that Amazon has to share? Rather than having to rely on FedEx or UPS, Amazon can just leverage a delivery fleet to ship some of their items. They can also pocket all the shipping fees. One could envision a “value” add service, an expansion of the Amazon Prime. Pay for a premium service and 75% of your items will be delivered same day via the Amazon truck fleet. Cutting out reliance on 3rd party logistics.
Maybe Amazon’s foray into groceries is not necessarily about getting you fresh produce, but about learning how to do delivery, how to run a shipping fleet. Amazon has made investments by acquiring companies like Kiva to better run their warehouses. Now they can focus on how to most efficiently get material from the warehouse to your front door. If they can learn how to efficiently run the last mile logistics…look out world a new supply chain powerhouse.
Posted in Current Events, Supply Chain | Tagged Amazon, Grocery, Logistics, Supply Chain | Leave a Comment »
Sales is responsible for executing on the now, Marketing is responsible for preparing for the tomorrow.
Anyone who has worked in either sales or marketing knows that there is always an underlying tension between the two organizations. At times this can be amusing and at times it can be down right counter productive. The reality is the two need to work together and the two need to understand that they each have specific and equally important roles to play. Sales needs to close business now…and generate revenue. Marketing needs to get things lined up so that when the tomorrow becomes the now, Sales can be successful.
Today’s announcement by Salesforce.com to acquire ExactTarget for approximately $2.5b is an indication that vendors are realizing the importance of providing an end-to-end tool for marketing and sales. This follows on the heals of Oracle acquiring similar marketing automation firm Eloqua in December of 2012. Both Salesforce and Oracle are looking to integrate these marketing automation companies into their existing CRM offerings and beyond. Really starting to move towards being able to provide a “funnel to funnel” view of the customer acquisition journey. Companies, small and large, need the ability to clearly understand and measure how they target, acquire and convert their leads. Marketing automation tools are a natural extension of what Oracle and Salesforce have developed with their own CRM offerings.
The question becomes, for clients who may have had ExactContact for marketing automation and Oracle or another vendor for CRM, will they be “encouraged” to migrate to a Salesforce offering? Same goes for Eloqua. The other burning question is who targets Marketo? They would appear to be the next domino to fall. Will SAP or Microsoft potentially start sniffing around Marketo?
Posted in Current Events, Marketing | Tagged CRM, ExactTarget, Oracle, Salesforce | Leave a Comment »
This seems to be the year that the big video game console manufacturers decide to release new consoles. Microsoft went first yesterday, Sony is expected to follow this Fall. Unlike other technologies – smart phones, tablets, laptops to name a few – video game consoles have appeared very slow with regards to new generation releases. It has been 8 years since the XBox 360 and 7 years since the PS3…wow…to put that in perspective, 2007 is when the first generation iPhone was released. So 2013 will give us the opportunity to have two major generation upgrades in the gaming console world.
The Xbox One
The first console out of the gate – the Xbox One. From all reports it brings some new bells and whistles – voice activation, enhanced Kinect, centralized control of music/video/game etc. Of course it has some “negatives” such as no backward compatibility with video games…ugh. All expected evolutions for the console. What this is really about is the continued battle for control of the home entertainment hub. Microsoft said as much:
Indeed, Microsoft is totally explicit about Kinect (and Kinect-related IP) being the central part of its strategy in the console battle as well as in the wider war for the living room — far beyond other aspects of the hardware.
Microsoft, as does a host of other technology companies, sees the entertainment center as the next frontier a place where all their software, content and devices will converge. As much as we love our smartphones and tablets, the television still provides the powerhouse of displays. We still gather around the television and leverage it as the communal entertainment hub some even use it as their personal dance trainer. However no one has really taken the “lead” when it comes to this space. Cable companies are trying to leverage their control of the content to be their play. Microsoft and Sony both look to their gaming consoles as the conduit to the entertainment hub. Google has made forays into the actual hardware – Google TVs. Of course Google is also embedded with search and YouTube in many new smart TVs. While Apple TV has been around for a while but has yet to really get into the game – they do have a firm lock on the streaming content via iTunes. What about Amazon? They also have a massive library of content as well as a device – the Kindle – that can force their way into the conversation. Question for Amazon, do they make an investment in hardware to put themselves physically in the living room?
All these moves will be good for the consumer – allow for a host of choices. Of course the problem might arise if all these vendors go with a walled garden strategy. Where the choice we make in hardware is one we might have to live with for a long time or buy multiple platforms!
Posted in Current Events, Game Console | Tagged Amazon, Apple, Apple TV, Google, Microsoft, Sony, Xbox, Xbox One | Leave a Comment »
A fantastic ad from Nokia. Not sure it will get them back on track with regards to their mobile phones, but entertaining none the less!
Posted in Humor, Mobility | Tagged Galaxy, iPhone, Nokia | Leave a Comment »
I was reading a great eBook by our friends over a Google that discuss what they call ZMOT: the “Zero Moment of Truth.” Traditionally we have been taught to focus on two moments of truth. The first being when a consumer gets to the store shelf. At this moment, your inventory had better be available in the shape, color, size, price and quantity that the consumer desires. The second moment of truth occurs when the consumer begins to actually use the item. The experience had better meet their expectations or even better – exceed the expectations.
This model has changed with our 24/7 connectivity as well as the rise of mobility. Now there is what is termed the zero moment. This is the moment when your future consumer realizes they have a need or desire, maybe even want your particular product. With our global connectivity and enhanced by mobility, these consumers can now access a world of information that is at their fingertips…literally. We are starting to see the behavior shift this creates for both retailers and consumers. Retailers and manufacturers must have their house in order when a consumer arrives at ZMOT. The question is – how does this impact our supply chains?
There is a lot to be said of demand signals being picked up from data sources such as POS, order history, inventory levels to name a few. However what about the rich data that can found at ZMOT? An example: today a manufacturer can pick up POS data that shows a high demand for flu medicine. They might
What if you had this map weeks before the outbreak?
correctly assume that there is a flu outbreak in that geography and shift inventory within their system to meet this demand. But could this already be too late? What about looking for demand signals at the ZMOT? When consumers are searching on line for “signs of the flu” or “how do I tell I have the flu.” Google has already demonstrated how it can take data from ZMOT and predict the flu outbreak – click here for story. Rather than waiting to see what is selling, what about anticipating what is going to be looked for at the store shelf?
For your supply chain, it would be beneficial to leverage this data to better anticipate demand. Rather than waiting for the data coming from POS, leverage the information at ZMOT to anticipate how that demand will happen. POS and other data can be used in conjunction to adjust your demand signals. More and more consumers already know what they want when they enter your store or at the purchase point, those that can not only get to them at ZMOT but also leverage information from ZMOT will ensure that the first moment of truth is heavily in their favor.
The saying “you read my mind” can become a reality if you tap into the demand signal that is at the ZMOT.
Posted in Consumer Product Goods, Demand Shaping, Retail, Supply Chain | Tagged Demand, DSR, POS, Supply Chain | 2 Comments »
We are currently being reminded that disruptive technology is all around us…phones, digital cameras, MP3s, steam power are just some examples. There is a new device that might prove as disruptive – the 3D printer. Now you can purchase one at your local Staples!
Wow. Yes I might be showing my dorky side. 3D printers have the potential to be a mini personal factory. A factory that could churn out anything a computer program can offer. Think about the possibilities. You forgot a part for your kid’s bicycle? Go to the Trek web site and download the specs to your printer. Last minute gift for your significant other? Head off to RedEnvelope and find a nice gift that you can “print” out. Your Christmas gifts might come via an email…to be manufactured by your 3D printer.
3D printers will have a drastic impact on supply chains as well as consumers. With a retailer now offering this technology to the masses, we are about to experience some major disruptions.
Posted in Consumer Product Goods, Technology | Tagged 3D printer, Disruptive Technology, Staples | 1 Comment »