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    Tuesday
    Feb072017

    BBC News Examines Sainsbury's Take on Its' Same-Day Grocery Delivery

    When same-day groceries becomes a service that shoppers begin to find attractive, retailers begin to take notice and try to find how to get it done. In the past, the barrier proved to be technology, but not any longer. The advancement in ways to utilize technology to maximize profit from volume is what is making the difference. Sainsbury is one of London's largest grocery chain retailers that has initiated same-day grocery delivery in 30 stores, anticipating positive results.

    BBC News discussed with Sainsbury and examined the new pilot program. In the discussion, Sainsbury mentioned the driver behind same-day groceries stemmed from the demand and success of its' next-day delivery. When it began to test Same-Day Delivery, customer sales indicated that they wanted the service. Sainsbury stated its' focus is on giving its' customers what they want. Essentially, if their customers wanted it, they were going to give it a try.

    At one of Sainsbury's stores, BBC examined with the processes behind same-day grocery delivery from beginning to end that impact the success of it. A same-day grocery employee there talked about the importance of the picking aspect of it. She would have to go around the store and pick all of the items for the online order and put them in a storage bin for delivery later that day. This part of the service is time consuming. Also, when it comes to fresh fruits and vegetables, the employee couldn't just pick anything. She had to make sure they were ripe, not rotten. This is just one of the aspects of same-day grocery delivery that isn't seen daily that customers don't see, but retailers are fully aware of.

    After the items were picked and stored for the day, the time came when the orders had to be delivered. The store had 45 orders to complete later that afternoon, and BBC went with Sainsbury to deliver them. At one of the homes, BBC spoke with a customer about the service and their opinion of it. The customer stated he used it before and he liked it. The convenience of same-day grocery service was the core driver for him, and for 5 pounds, it was worth not having to go himself.

    Three out of the big four grocery retailers in the London area, including Sainsbury, have all implemented a model of the service. Tesco has its' "click-and-collect" service in London and the South-East in over 300 locations. Morrisons has partnered with Amazon Fresh, which Amazon continues to expand beyond the US. The e-retailer has Amazon Fresh in several major US cities and is probably in pursuit of a high level of growth in London. Grocery retailer Asda is the exception, being the only one that currently has not decided to engage in same-day grocery.

    The same has occurred in the US in which some grocery retailers have jumped into same-day delivery, such as Whole Foods and Wal-Mart. Yet, others have not. Either way, customer demand is driving the quest for more convenience wherever they can get it. For grocery stores seeking to roll-out a same-day grocery program of their own, a Same-Day Courier like A-1 Express is a viable option to optimally fulfill online orders in no time. The Chicago Courier has the delivery expertise nationwide that retailers can take advantage of and start literally meeting their customers right where they are.

    Reference: 1.25.17, BBC News, Why same-day online food shopping is the next big thing

    Tuesday
    Jan242017

    Amazon and Alibaba Compete for Dominance in Southeast Asia

    Amazon is exemplifying its dominance in several areas worldwide, and now has its sights set on Southeast Asia. However, China's leading e-retailer Alibaba is robust as well in its online retail, facing off with Amazon and ready to compete.

    Via Bloomberg News, Alibaba Group Holding Ltd. and Amazon.com Inc. are about to clash in Southeast Asia Internet Retailer says. Lazada Group SA, which Alibaba bought this year for $1 billion, is Southeast Asia’s largest e-commerce site and is rolling out several initiatives anticipating the arrival of Amazon next year. It will also be expanding its delivery network within the region and beyond, via partners in China and Korea.

    Southeast Asia has become a prime location for online retail. The article mentioned that although it lacks the transport and payments infrastructure crucial for adopting e-commerce, the area has become the world’s fastest-growing internet arena, with a combined populace of 620 million people becoming more comfortable with online shopping. “It’s a jungle out here,” Lazada CEO Maximilian Bittner said. He went on to say, “We are looking forward to seeing how they will differentiate themselves.”

    “Both of them will want to dominate Southeast Asia,” said Thompson Teo, an associate professor at NUS Business School. “Alibaba has acquired companies to shorten the learning curve and grow faster. It’s going to give Amazon a good fight.” It isn't known as of yet what Amazon will be implementing there, but some predict Amazon Prime delivery service and Amazon Fresh to Singapore in the first quarter, which involves Same-Day Delivery in a big city. Then, Amazon will springboard into the rest of the region. “Grocery is seen as notoriously difficult one to do online, but it’s the largest market representing 60% of overall Southeast Asian retail,” Egan said. “Customers are much more engaged. They visit twice a week so the frequency allows you to develop a deep relationship with customers.”

    Amazon already dominates the US with its current same-day delivery option--Amazon Prime. Prime members have it as a free service in a total of 27 major US cities. These cities include San Francisco Bay Area, San Diego, Seattle-Tacoma, Boston, New York, Chicago, Indianapolis, Baltimore, Washington DC, Nashville, Raleigh, Richmond, Tucson, Orlando, Tampa, and Atlanta. Amazon has free same-day delivery in Toronto and Vancouver as well. The inevitable is that Amazon will be using drones in every major city nationwide as well. Now, the retail giant is headed for Southeast Asia.

    With both e-retailers having same-day delivery in common, it is certain that other retailers will need to jump on board in order to thrive in the coming years. One way to do that is to partner with a Same-Day Courier like A-1 Express to increase salves online, as more and more shoppers enjoy the convenience of being able to make online purchases from wherever they are. Brick-and-mortar stores can't depend solely on traffic in a growing world of e-commerce. A New Jersey Courier that can provide same-day services nationwide is the direction to go in.

    Reference: 12.14.16, www.internetretailer.com, Bloomberg News, Amazon and Alibaba’s Lazada prepare to face off in Southeast Asia

    Tuesday
    Jan172017

    Neiman Marcus Has Quarter Loses Due to Distribution Challenges

    When a luxury retail department store leader like Neiman Marcus makes tech adjustments in its' distribution system, it is clear that traditional warehousing is not what will succeed any longer. Distribution has moved to a more sophisticated approach to managing inventory and shipping, especially when faced with robust Amazon. The e-retail giant has mastered distribution and used Same-Day Delivery to revolutionize how we ship.

    Yet, Neiman Marcus recent announcement shows that the retailer has some improvements to be made. Internet Retailer discussed in an article how thre retailers has had first fiscal quarter losses for 2017 due to the distribution problems that it is facing. Neiman Marcus had challenges implementing a new cross-channel merchandising system, which costs Neiman Marcus up to $35 million during its fiscal first quarter. This impacts sales revenue from the holiday season. Neiman Marcus reported online sales accounted for 29.2% of overall sales in the first quarter, which ended October 29th, at $315.1 million. This number is slightly down from $315.7 million from the previous year.

    Neiman Marcus stated, “These issues primarily related to the processing of inventory receipts at our distribution centers, the transfers of inventories to our stores and the presentation of inventories on our websites. These issues prevented us from fulfilling certain customer demand in both our stores and websites that we estimate resulted in approximately $30 to $35 million of unrealized revenue.” Efficient distribution matters not only for physical stores, but also with online business. Without having the product in stores, it can effect sales, and without correct inventory to fulfill online orders, it effects on-time shipping. This then creates the inability to keep up with demand on both fronts.

    In a filing with the U.S. Securities and Exchange Commission, Neiman Marcus revealed problems that related to the implementation of NMG One, its new cross-channel merchandising and distribution system. It resulted in a negative impact on online and offline sales. More specific numbers mentioned in the report were Neiman Marcus' earnings, which included:

    • A year-over-year total comparable sales decline of 8.0%, compared to a 5.6% decline last year.
    • Net revenue of $1.079 billion, down 7.4% from $1.165 billion.
    • A net loss of $23.5 million, compared to a net loss of $10.5 million.

    One way to improve omnichannels to facilitate online and offline sales is same-day delivery, which is what companies like Best Buy, PetSmart, Toys-R-Us, and others are doing. One prime example is Macy's, which uses its' physical store locations as close proximity warehousing and get product to shoppers fast. Macy's offers same-day delivery in San Francisco, Los Angeles, Seattle, Houston, Chicago, New Jersey, Washington DC, and more. With over 880 store locations, Macy's can fulfill online orders on a national scale, alleviating some of the pressure on its' distribution centers.

    Neiman Marcus can do likewise, partnering with a Same-Day Courier like A-1 Express to develop a same-day solution to move inventory between stores, as well as fulfill online orders to customers. The Orlando Courier also has a nationwide footprint and can handle the volume Neiman Marcus needs. Like Macy's and Amazon, Neiman Marcus can generate sales growth with same-day delivery, turning more inventory and order fulfillment to their stores.

    Reference: 12.15.16, www.internetretailer, Matt Lindern, Distribution problems cost Neiman Marcus during its first quarter

    Tuesday
    Jan102017

    Amazon's Prime Air Same-Day Delivery Via Drone Is Done

    There isn't a retailer in the country that is in front of Amazon, especially with its' latest announcement of its first successful drone flight for Same-Day Delivery. It isn't something that CEO Jeff Bezos just had for an idea in 2013. It is now a reality.

    Fox News has reported that Amazon has officially launched its' Amazon Prime Air via drone in Cambridge, England. This first drone delivery was actually performed on December 7th last week. The drone completed the delivery in a matter of 13 minutes, which even Amazon mentioned in the article that none of them will take no more than 30 minutes. For this level of fast delivery, drone use can revolutionize the way same-day services are used to expand online retail globally.

    The article stated that the drone delivered an Amazon Fire TV and some popcorn, which weighed less than 5 pounds. Guided by GPS, the drone is unmanned and able to be loaded with the purchased items, then flies direct to its destination. Amazon's drone flew no higher than 400 feet, as well as drones have to occupy separate air spaces to avoid planes. When Amazon first began to test drone use, there were several FAA regulations Amazon had to contend with, but Amazon Prime Air is proving to be able to literally take off.

    Amazon does only have a few customers in the UK that is privy to using drones. However, the e-retail giant has hopes to expand it to a larger demographic. The article also mentioned how Amazon is careful not to use the drones in rain, snow, ice, or other types of inclement weather. The weather can definitely impede drones flight patterns, and most importantly, harm the drones themselves.

    "One day, seeing Prime Air vehicles will be as normal as seeing mail trucks on the road," Amazon says. This means that we could potentially find drones flying in various parts of the country at one time making deliveries. Shoppers will be able to have their online items delivered right to their front door within 30 minutes. Drone delivery will be satisfying for the customers, however, it may have an adverse affect mall traffic and other physical store retailers without a heavy focus on e-commerce.

    Until Prime Air expands, even into using them in the US, Amazon will continue to utilize its' current same-day delivery option--Amazon Prime. The fast delivery service is working, not to mention Prime members have it as a free service in a total of 27 major US cities. These cities include San Francisco Bay Area, San Diego, Seattle-Tacoma, Dallas-Fort Worth, Boston, New York, Chicago, Indianapolis, Baltimore, Washington DC, Nashville, Raleigh, Richmond, Tucson, Orlando, Tampa, and Atlanta. Amazon has free same-day delivery in Toronto and Vancouver as well. The inevitable is that Amazon will be using drones in every major city nationwide.

    There is no telling where drone delivery is going to catapult e-commerce to. What retailers can currently do to compete is to partner with a Same-Day Courier like A-1 Express to shift their e-commerce into more of a core competency to generate sales. The Boston Courier has the courier expertise to create the level of same-day logistics needed to attractive customers and compete online, especially as Amazon continues to spearhead e-commerce innovation.

    Reference: 12.14.16, Fox News, Lulu Chang, From high-flying dream to reality: Amazon fulfills its first order using a drone

    Thursday
    Jan052017

    Sales Down For China Malls, Could Turn to Same-Day Delivery

    When you think of e-commerce, the US has always been the primary country that is spearheading online growth. Not anymore. China's e-commerce is thriving, even to the point that mall stores are seeing the effects of it.

    Mall and restaurant traffic is seeing a decline in China reported the Internet Retailer via Bloomberg News. Traffic decreased in November, which is not a good sign as the holiday shopping season begins that month. The article stated it is due to a surge of online shopping activity, according to Baidu, operator of China’s dominant search engine, and JD.com. China's wealthy shoppers are opting to go online to buy more pricier items. Less traffic translates into less sales. This is the time that retailers look forward to, even to where this season helps to compensate for any revenue losses during the course of the year.

    Online retail is expected to grow to $500 billion by 2018 and China's leading retailer Alibaba is the front runner there, which also offer Same-Day Delivery in several big cities. The online retailer is the Amazon of China, even generated $18 billion in sales in one day during November. The numbers attest to the lower traffic in malls, as more and more shoppers are comfortable with buying online there. It is convenient, easy and saves our most valued commodity--time.

    “China’s two-speed scenario is having a major impact on the country’s retail industry,” said Jason Yu, general manager for China at consumer research firm Kantar Worldpanel. He went on to say, “This massive explosion of online sales growth is being fueled by increasing diversification in the categories purchased online, as well as huge gains in imported products and consumers taking advantage of promotions.” One of the major attractions to online retail is that consumers have access right in the palm of their hands to real-time holiday discounts. With their mobile device, a shopper can look for online deals and instantly take advantage of them.

    The question is then how will malls be able to match the surge of online growth, which shows no signs of slowing down? One strategy US department store leaders Macy's took in the US was to create the omnichannels necessary to bridge their online store with its' physical ones via same-day delivery. Macy's partnered with start-up delivery company Deliv and launched same-day delivery in multiple major US cities last year. Deliv uses a crowd-sourcing approach and delivers in-store products from Macy mall locations to online shoppers.

    Macy's started its' same-day delivery program in San Francisco, Los Angeles, San Jose, Seattle, Houston, Chicago, New Jersey, and Washington DC. Its' sister company Bloomingdale's rolled out the service in San Francisco, Los Angeles, San Jose, and Chicago as well. With at least 885 mall locations, Macy's has been able to use its' store volume to its' advantage, utilizing them essentially as warehouses to fulfill online orders from. Nordstrom's has engaged in some same-day delivery also.

    Like Macy's, it makes sense for mall retailers to turn to same-day delivery to improve sales. Malls can shift with the trend of getting product to the customer, versus the customer coming to the mall when they don't have to. A retailer can partner with a Same-Day Courier like A-1 Express to pick up from mall locations and then deliver to the shopper. The Washington DC Courier has a national footprint and can assist malls in regaining their shoppers back.

    Reference: 12.12.16, www.internetretailer.com, Bloomberg News, China’s e-commerce boom shrinks mall shopping traffic