Connect with us

Retail

Digital strategy is behind Walmart’s impressive Q4 earnings

Avatar

Published

on

Share this:

Walmart, which remains the world’s largest department store chain, has reported impressive fourth-quarter 2019 financial results (announced on Tuesday, February 19, 2019).

Key to the success has been Walmart’s digital transformation, which is noted by CEO Doug McMillon:

“Progress on initiatives to accelerate growth, along with a favorable economic environment, helped us deliver strong comp sales and gain market share. We’re excited about the work we’re doing to reach customers in a more digitally-connected way. Our commitment to the customer is clear.”

Several leading experts in the retail space have provided analysis as to how this digital strategy was put together and where Walmart will focus its efforts next.

Making a success of online services

A proportion of Walmart’s success can be put down to its strong online presence, notes Michael Lagoni, CEO and founder of Stackline: “Walmart has been successfully executing its online-forward strategy, laying down aggressive e-commerce growth targets and making some savvy geographic expansions and acquisitions across key verticals, like specialty apparel and grocery.”

This model is set to pay further dividends, Lagoni predicts: “As Walmart continues to expand its digital footprint and adds new advertising and merchandising toolkits for brands, we see huge opportunities for accelerated revenue growth on the e-commerce side of the business.”

Challenging Amazon

The figures reported by Walmart signal that the chain remains robust and able to stand up to disruptors that only maintain an online presence. This is noted by Harry Chemko, CEO and co-founder of Elastic Path: “Walmart is the only retail giant that has enough competitive strengths to challenge Amazon’s e-commerce lead – they have the physical locations, strength in grocery and scale. They’ve been investing very heavily in e-commerce, and their year-over-year growth shows that it’s paying off.”

While Walmart is behind Amazon in terms of online sales it has the potential to become an even bigger player if is seeks to monetize the massive amount of data the company has on hand.

Digital transformation success

Digital transformation has played a key part in Walmart’s success, according to Eli Finkelshteyn, CEO and co-founder of Constructor.io. He tells Digital Journal: “Walmart’s recently released Q4 2018 earnings report validates the company’s emphasis and investment in technological innovation.”

The types of digital initiatives have included a focus on engaging with the customer: “Walmart and its subsidiaries have been putting a lot of effort into making online grocery shopping an easier, faster and more comfortable experience for their customers, and it shows based on grocery growth last quarter.”

Developing good technology challenges assumptions that customers are only interested in lower prices, as Finkelshteyn explains: “Repeated studies have shown that customers are willing to pay and buy more when the online customer experience is improved. At the same time, fewer customers become frustrated and leave without buying anything. We can see both Walmart and its subsidiaries like Jet.com making great strides here.”

Based on the recent success, Finkelshteyn predicts further customer-focused digital transformation initiatives from Walmart: “Going forward, we expect to see Walmart and other retailers will continue to improve their online customer experience as more and more grocery sales move from brick and mortar to online. This is a nascent, but growing market, and one where retailers will either innovate or lose.”

Share this:

Retail

IoT + Data = Retail Intelligence

In the equation IoT + X = Intelligence, what role can consumer and supply chain data play as the X factor?

Avatar

Published

on

Share this:

Valued at USD $10 billion in 2017, the retail segment of the Internet of Things (IoT) market is expected to grow at a phenomenal 19% compounded annual rate and hit $35 billion in 2024. New ways of collecting data at the source are enabling this growth. IoT-embedded sensors on shelves and in refrigerators; store beacons that can sense and measure foot traffic; RFID tags on clothes and smartphones with Bluetooth technology are all collaborators in this dance to log and analyze data. Artificial intelligence can then analyze the sheer volumes of numbers generated and give retailers intelligence to increase efficiencies and sales.

The promise of IoT is that it can enable retailers to improve backend supply chain operations and the customer service experience. The following examples illustrate use cases of both.

Frictionless shopping

Amazon Go is a test case for effective use of RFID tags and store beacons to bypass the checkout process altogether. Every item on the shelves has an RFID tag and when the customer walks out of the store, the products he or she leaves with are scanned and billed to the corresponding Amazon account. The IoT at play here delivers more than a seamless customer experience: it also gives the retailer live status updates about inventory, intelligence that can be relayed up and down the supply chain.

An eye on perishables

IoT-embedded sensors in refrigerators can predict when the machine might be about to malfunction based on current temperature and humidity profiles. A similar IoT-driven system used in warehouses alerts vendors about potential spoilage and can prevent waste. While the edge use case of IoT in driving alerts in real-time is an important one, retailers can also extract long-term intelligence about inventory, store traffic and more simply by reading the data and looking for the corresponding patterns.

Interactive shopping experience

At a time when the drumbeats about the demise of brick-and-mortar stores are growing louder, IoT is injecting some much needed theatre into the customer service experience. Digital mirrors in fitting rooms read RFID tags on the garments customers bring in, pull up those items on the mirror and suggest complementary accessories. Customers can also push a button to request the outfits in a different size or colour. 

If a customer has signed on for notifications from a store, in-store beacons through the customer’s Bluetooth can deliver custom product recommendations through push notifications. Such live interactions increase the value of in-person shopping while also delivering intelligence about shopper behaviour.

While IoT dramatically improves backend efficiencies, the customer-retailer interaction can be much more complicated because of data privacy laws. Customers need to willingly opt in to receive notifications and trade data for the value that retailers deliver. 

IoT is already delivering valuable intelligence to retailers. A major grocery store, for example, saved millions by outfitting in-store refrigeration systems with IoT sensors. As the cost-value ratio of IoT devices decreases, expect retailers to leverage the power of IoT even more to deliver crucial intelligence about customer shopping behaviour and increase transparency in the supply chain.

Share this:
Continue Reading

Retail

IoT + Data Analytics = Store Operations Intelligence

How many times have you visited a grocery store the day before a snowstorm or other major weather event only to find the bread and milk aisles wiped clean? What might be a disappointment for you is also a missed opportunity for grocery stores, an industry with an already razor-thin 2% margin.

Avatar

Published

on

Share this:

How many times have you visited a grocery store the day before a snowstorm or other major weather event only to find the bread and milk aisles wiped clean? What might be a disappointment for you is also a missed opportunity for grocery stores, an industry with an already razor-thin 2% margin.

Hungry for efficiencies

Inventory management, especially for perishables, is a delicate dance. Too little of it and grocers have lost a revenue opportunity every time a customer leaves empty-handed. Too much of it and grocers lose revenue again, this time from spoilage or having to slash prices to clear shelves. Spoilage is a significant problem — grocery retailers lose an astounding $70 million annually because of food simply going bad. 

Market economics further muddies the picture. A whopping 82% of grocery companies are increasing their stock of fresh foods in response to customer demand so there’s simply more perishables to manage — and therefore more at stake.

To ensure not too much capital is tied up in unsold goods, grocery stores forecast demand and supply based on a variety of conditions, including weather, time of year, and even weekly foot traffic. But as Cognizant as observed, a whole host of additional factors affecting inventory management can drain grocery store revenues.

[Download]: Real Estate Manager Goes Digital

Smart systems

One of Cognizant’s clients, a major supermarket chain, found that working with older equipment also challenged inventory management. 

Internet of Things (IoT)-embedded sensors track ambient temperature, temperature of the food, humidity and even electric current flowing into refrigerators to keep a pulse on perishables. But this leads to grocery stores drowning in data. The sensors cry wolf too often forcing the retailer to waste expensive technician time on every perceived crisis. Such waste happens because too often, sensors do not accurately reflect the whole story. 

Cognizant has shown that data alone is not enough, strategic reading of the data tea leaves also matters in increasing efficiencies. Using the IoT sensors, Cognizant helped the grocery retailer monitor inventory in real time — the pressure on sensitized shelves changes when inventory counts drop — and restock accordingly. Even better, Cognizant’s solution analyzed the data feed in real time, at the edge. Algorithms accounted for many variables including work load, cost of energy at different times of the day, whether the door was open or closed, to recommend intelligent solutions. 

Using edge data analytics and IoT sensors, grocery stores can automate many fixes, proactive reorder inventory and even automatically churn out work orders for technicians only as and when needed.

When inventory management is a delicate and challenging operation, grocery retailers need to be strategic about how they invest precious resources. IoT + edge analytics is a game-changer. It gives retailers the intelligence they need to deploy resources effectively and proactively so they can better cater to demand and cut waste. 

IoT-driven asset management and data analytics will be key to success in the grocery industry. Climate change has increased the clamor for sustainability and less food waste. The timing for smart solutions could not be better.

Read more about Cognizant’s IoT refrigeration solution here.

[Download]: Real Estate Manager Goes Digital

Share this:
Continue Reading

Retail

Punchh raises $40M in funding to augment AI capabilities

Avatar

Published

on

Share this:

In a bid to bring digital transformation to the brick-and-mortar retail space, startup Punchh has raised $40M in Series C funding, co-led by Adams Street Partners and Sapphire Ventures

The company creates data-driven, AI-powered customer experiences for retailers. Funding will be used to accelerate the development of its customer AI technologies while expanding into new verticals.

Accompanying this funding is news of a partnership with Casey’s General Stores, one of the largest convenience store brands in the United States.

“Consumers expect ubiquity of experiences online and off,” said Shyam Rao, CEO of Punchh in a press release. “In-store retail remains extremely popular and is one of the most powerful relationship building channels ever created. Our platform gives retailers an unparalleled understanding of how customers engage with their brand in the real world, along with the ability to use that understanding to create AI-powered experiences that keep customers coming back for more.”

As VentureBeat reports, Punchh’s products work to “supercharge same-store sales by integrating with existing point-of-sale and ecommerce systems, enabling them to collect in-store and online data that inform customer profiles.”

AI algorithms then optimize these profiles into targeted marketing campaigns and promotions. 

The goal is to promote loyalty which has always been at the core of their business.

While Punchh isn’t the sole venture within the cloud-based customer data management space — SessionM and CleverTap come to mind — Sapphire Ventures’ managing director, president and co-founder Jai Das is keen on the “holistic” nature of the startup.

“Analysts predict ecommerce will account for just 10 percent of total retail sales in 2019, which means about 90 percent of transactions are still taking place in store,” said Das.

This means big-time opportunity in brick-and-mortar retail, with brands consistently looking to better understand their customers, using data to build relationships that translate into lifetime loyalty, and in turn, value for the brand.

“Punchh’s solutions allow retailers to do that in a highly scalable manner, which is why they’re trusted by so many leading brands, and why we’re so optimistic on their long-term growth,” Das said.

Share this:
Continue Reading

Featured