Tony D'Onofrio
Blog
A Wall Street Journal article this weekend on robotics coming to a garden near you brought back memories of my office in Neuhausen am Rheinfall in Switzerland. Every afternoon, while doing the continuous string of international conference calls, I would observe a robot mower in the yard outside my window. The autonomous roamer would emerge from its electrically protected doghouse, run Swiss precision patterns across the lawn, and when finished return to its home to recharge.
This memory, plus the long string of articles below published in the last week on retail robotics inspired this article.
>> Domino's testing pizza delivery by self-driving robot car in Houston'
>> Chick-fil-A tests robot delivery in Southern California
>> Kroger is Amassing a Robot Army to Battle Amazon, Walmart
>> Save Mart kicks off pilot of shelf-scanning robots
>> Gap rushes in more robots to warehouses to solve virus disruption
>> Alibaba Group Xiomanlv delivery robots hit Chinese Universities
>> Your Drone-Delivered Coffee is (Almost) Here
Above seems to be counter to Walmart's announcement late last year that it was stopping its deployment of aisle scanning robots after installing them in hundreds of stores. Was the Walmart decision an anomaly in the growth of robots in retail? What role are robots playing in E-commerce? How has the pandemic impacted the trajectory of robotics? What's in-store for retail robotics?
Lessons from the Walmart Aisle Computer Vision Experiment
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Throughout my retail career, I have closely followed the growth and progress of the grocery sector. Partially this is the result of actually having worked in a supermarket for 9+ years across many departments.
The importance of this retail segment is reinforced by Deloitte in their annual 'Global Powers of Retailing Report'. The 2020 edition found that fast moving consumer goods (FMCG) which includes grocery, drug, mass merchants, and convenience represents 66.5% of the total retail sales for the global top 250 retailers. Also interesting from that research, this sector tends to least globalize operations and recorded in 2020 the lowest composite net profit margin at 2% of sales.
The pandemic has become a brutal accelerator of digital transformation trends for all retail and grocery has not been immune from the disruption. Being classified as an essential business was a tremendous advantage for food, drug, convenience, and mass merchandise retailers. During the lockdowns, nearly $300 billion in wealth was transferred from general merchandise / hospitality to FMCG retailers.
As I stated in a recent Rethink Retail podcast, grocery sales which were only up 3% in 2019, jumped 11.5% in 2020. The sector stayed financially positive throughout the pandemic and still has substantial opportunities for additional growth. This podcast, recent grocery news from Amazon, and new research inspired this article.
Walmart versus Amazon: The Grocery Wars are Just Getting Started
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"The world’s most successful companies all have one thing in common: powerful brands ... Branding strategy is one of the foundational pillars of business. Simply presenting a unified brand message can increase profits by nearly 25%." - EU Business School
From multiple sources, this article summarizes key insights from the just published Brand Finance top 500 world's most valuable brands report.
Top 10 Most Valuable Global Brands and Key Insights from Entire Study
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As we continue to make progress emerging out of the COVID-19 health crisis, key trends that I have been following closely are both consumer priorities and retailers' technology focus areas. At the height of the lockdowns in 2020, consumers chased convenience and safety as primary purchasing drivers.
Forty-percent of the time in four countries (USA, UK, France, and Germany), this included switching retailers that were more responsive to their new shopping patterns. This was especially prevalent in the United States where 46% of the consumers made the switch. Subsequent research indicated that 88% plan to stick with their new shopping brand choices.
On the technology front, digital acceleration was the operative challenge that all retailers faced. "By some estimates, we (retail) have vaulted ten years ahead in consumer and business digital penetration in less than three months."
This article highlights technology focus areas that consumers are prioritizing as we enter a disrupted new normal. It also summarizes new research on the top retailer technology priorities to meet the demands of a digitally empowered consumer.
Surprising Consumer Shopping Technology Preferences
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Couple weeks ago, I had the opportunity to join other loss prevention professionals in a webinar titled "The power of Teamwork: How Retail LP can work with law enforcement to combat the double problem of ORC and Violent Gangs." In this Loss Prevention Foundation hosted event, my contribution was an ORC trends update, coupled with analysis on future loss prevention technology trends.
Retail crime trends have been changing for some time. Loss prevention / asset protection have not been immune from COVID19 innovation acceleration. As recent McKinsey retail research explained, in a matter of 90 days in 2020, we vaulted forward 10 years in consumer and business digital adoption.
Post my corporate career, I spent a significant amount of time researching growth opportunities and engaging with private equity portfolio technology companies and starts-ups in Silicon Valley, Europe, and India. Based on these market intelligence activities, I can confirm that the innovation funnel in all functions including loss prevention is being filled at a higher speed.
This article summarizes and expands on some of my high-level concepts shared in the LPF webinar. The future of loss prevention is bright, especially when you consider the general technology shifts taking place across harmonious retail channels.
Organized Retail Crime Increasing and Getting More Violent
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By Tony D’Onofrio – CEO, TD Insights / Marcin Pilarz – CEO, Talkin’ Things
The latest retail industry research quantifies the challenge of global inventory distortion at $1.8 trillion with 81% from products being out-of-stock and 19% from overstocks. Lockdowns, misdirected inventory, and closed stores severely compounded challenges with inventory management. An estimated $570 billion in lost revenue has already been attributed to COVID-19 inventory distortion.
All industries now recognize that accurate inventory visibility is critical short term as we continue to recover from the crisis and long term to dynamically adjust product levels based on continuously changing customer purchasing patterns.
The Growth of Retail RFID
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In early 2020, the retail industry was off to a very strong start. Through February USA retail sales grew 7.5%. Then March came in as a pandemic lion with a substantial part of the world hitting the pause button. We all very quickly learned the difference between essential and non-essential retailers. The financial pain for the global retail industry for all of 2020 will total over $1.6 trillion.
The good news is that key major retail markets such as China and the United States have already overall recovered to pre-pandemic levels. Here are three predictions for the new retail year.
Safety Concerns Will Be with Us into 2022
An April 2020 consumer survey found that consumers felt safest in grocery stores, followed by drug stores and big box retailers. Malls ranked lowest with only 33% of respondents saying they would feel safe shopping in these locations. Sixty-five percent of women did not feel safe trying clothes in dressing rooms, 78% felt unsafe testing beauty products, and 66% had similar concerns working with sales associates.
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The impact of COVID-19 has delayed the arrival of the new roaring '20s projected at the start of the year and it is now setting up a very interesting 2021.
As the Economist asked in sharing their thoughts on the New Year, "do you feel lucky? The number 21 is connected with luck, risk, taking chances and rolling the dice. It’s the number of spots on a standard die, and the number of shillings in a guinea, the currency of wagers and horse-racing."
From a leadership point of view, I do feel lucky in 2021, primarily because I have discovered the ONE word that will make this year successful. This one word is not complicated and you do not need a dictionary to understand its meaning. See if you can spot it as you read this year-end article.
Continuous Introspection
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Let's face it, the last nine months have not been easy for any of us. Leveraging the title from one of my favorite spaghetti westerns, 2020 to date has been the year of "the Good (pre-pandemic), the Bad, and the Ugly."
Routines that were years in the making were disrupted in the blink of an eye. For me personally, it was a fast-paced globetrotting career boarding a flight every week, even after very early retirement two years ago to focus on private equity emerging technology companies.
The global retail industry will decline over $1.6 trillion this year. We all very quickly learned the difference between essential and non-essential retailers.
But much like the hero in many of our movies, in the end multiple of us are emerging refreshed, stronger, and better prepared for a world that has forever changed.
What will I NOT miss in the post COVID-19 "new normal"? What is the most important personal asset highlighted by this crisis? What world does the virus leave behind? How do these changes link to the retail industry?
A Reformed Road Warrior
In retrospect, the timeline of the pandemic to date makes for very interesting reading.
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The Internet, mobile and social media have forever transformed the distribution of viral messaging. No longer the best kept secret, at the center of successful communication is the medium of video. If you still need convincing, here are a few statistics on the future of video.
Six out of ten people would rather watch online videos than television. Mobile video consumption rises by 100% every year. By 2022, online videos will make up more than 82% of all consumer internet traffic - 15 times higher than in 2017.
By platform, EVERY DAY five billion videos are viewed on YouTube, 10 billion on Snapchat, 8 billion on Facebook, and 1 billion on TikTok. Video campaigns on LinkedIn have 50% view rates.
Viewers retain 95% of a message when they watch it in a video, compared to 10% when reading it in text. Seventy-two percent of customers would rather learn about a product or service by way of video. Social media posts with video have 48% more views.
Video increases organic search traffic on a website by 157%. On average, people spend 2.6x more time on pages with video than without. Videos under two minutes long get the most engagement.
Having a passion for powerful visual communications, weekly through my personal website I share multiple new videos focused on retail, emerging technologies, and leadership. As we reach the end of this surreal pandemic year, here are my top 7 amazing innovation leadership videos of 2020.
JD.com and The Future of Retail
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Sponsored Content
Top 3 Weekly Essentials
Chain Store Age
Harvard Business Review
It is a Small World
“Even monkeys can fall from their trees.” – Japanese Proverb
Continuing our global learning journey, our next stop is Tokyo Japan. Founded, in 1603, this city was once a small fishing village called Edo. In 1890, it became Tokyo which means Eastern Capital in English.
In Tokyo, you will find the world’s busiest intersection, the Shibuya crossing where 2,500 people cross the intersection, every time the lights turn green. This city also holds the record for the most Michelin starred restaurants at 212 places to enjoy amazing food.
Tokyo is the most populous city in the world with 37 million people. Uniqueness is everywhere, even in vending machines, where you can buy hot meals, fresh produce, and even umbrellas. There is one vending machine in the city for every two people.
Have lost count on the many times I visited Tokyo to experience their modern retail industry. This picture is from the New Otani Hotel gardens, a favorite during multiple visits.
As the Japanese proverb that opened this summary reminds us, no matter how accomplished we become, you can always make a mistake. Overconfidence can lead to missteps. Life is one sweet ride and Japan provides many reminders on how to enjoy it.
Categories
Brilliant Research
World Happiness Report 2024
The top 10 countries have remained much the same since before COVID. Finland is still top, with Denmark now very close, and all five Nordic countries in the top 10. But in the next 10, there is more change, with the transition countries of Eastern Europe rising in happiness (especially Czechia, Lithuania and Slovenia). Partly for this reason the United States and Germany have fallen to 23 and 24 in the rankings. - A partnership of Gallup, the Oxford Wellbeing Research Centre, the UN Sustainable Development Solutions Network, and the WHR’s Editorial Board. Read more
Smart Infographic
ChatGPT Statistics - Users, Revenue (March 2024)
ChatGPT has over 180.5 million monthly users as of March 2024. Nearly 15% of the ChatGPT users are from the United States. More than 92% of Fortune 500 companies are using ChatGPT. atGPT is forecasted to generate a revenue of $1 billion in 2024. 53% of the readers failed to identify ChatGPT written content as AI-written. – From Demandsage.com
Insightful Videos
The World Ahead 2024: five stories to watch out for
From the biggest election year in history, to how to control AI and even taxis that fly, The Economist offers its annual look at the world ahead. Read more
