MAKING WHOLE FOODS AND AMAZON TRULY WHOLE? FOLLOW THE DATA

Written by: Rami Odeh

 

When you work for Amazon, you rely on two decision-making maxims for everything you do.

First, you must test and gather data.

Second, you must make decisions based on that data.

With the recent announcement that Amazon will expand Whole Foods reach and create new locations, Amazon’s leadership followed this model to a tee.

This is a decision based on what the data was telling people, and people are saying that they want more touchpoints for Whole Foods’ products.  Recently, I wrote an article for Love of Retail  highlighting how predictive artificial intelligence (AI) can impact manufacturers and brands.  Here is a great example of how the data and AI are coming together to create a solution that benefits so many stakeholders.

Amazon and Whole Foods are creating greater access for products sold in the stores.  By having more physical locations, it entrenches more locations for Prime Now customers to get products delivered when and where they want it. But the VELOCITY team sees other opportunities.

Amazon is using the data to solve for supply chain efficiencies on the back end through their confidence in their data. Amazon did not specifically reduce the number of options the customer has, but it is reducing the number of vendors providing those options.

What’s more, this “clean-up in Aisle 7” is a signal that something bigger could be in store (pun intended).  something very different is on the horizon.

At VELOCITY, we believe that the level of efficiency that Amazon is creating on a cost and logistical level indicates that it is paving the way for next-level of ordering, utilizing predictive analytics.  Amazon is going to focus on efficiencies and create an unmatched customer fulfillment model, which in turn will provide savings and convenience to the customers never before seen  in the grocery category.

Although this will seem very new, we’re confident that when managed properly, and mirroring the clear methods that have worked for success on Amazon’s platform in the past, brands and manufacturers have a once-in-a-lifetime opportunity to create a bold brand presence within Amazon’s new system, and dominate market share within their categories.

Reach out to us with any questions on how to be prepared for the coming changes. Let us know on Twitter…or send an email to either Rami Odeh or Christa Klausner.

Amazon’s Customer-centric Evolution—What Amazon’s predictive AI means to Manufacturers and Brands

Author: Rami Odeh 

We already know Amazon is a customer-centric company, and quite possibly the most customer-centric company in modern day history.

Amazon prides itself on focusing on the customer—period.  But even now, the company is evolving into something…more. Recent changes and announcements from Amazon indicate that the next era for Amazon is approaching—or in some cases, already here—focusing on predictive AI feeding its efficiency and profitability.

Let’s be honest, Jeff Bezos, Amazon’s CEO, is a visionary with a master plan and that somewhere in his R&D department, predictive ordering will be coming very soon.

Huh? Said differently, Amazon’s artificial I intelligence (AI) will use past data to predict your future needs.

Bezos Knows You More Than You Do.

Amazon knows its customers VERY well.  Some would argue that Amazon’s data on its customers is unmatched to any other company (or even any government agency).  Amazon’s AI has reached a point where it is able to make some bold moves based on the confidence of their data.   Amazon not only will predict what a customer will order before they even think about it, this predictive AI is essentially picking which products and ultimately brands will succeed before they even launch!

In other words, Amazon has so much confidence in its ability to predict the future, they will be able to tell brands notto launch products, and what products customers actually want before it even happens.  This can have some huge implications for brands in terms of production, demand planning, research and development, and even finances.  A brand can spend tons of money on R&D or production, only to find out that one of their main selling channels is rejecting the product because its predictive abilities already know the product will fail. Let that soak in for a second.

This ultimately means that Amazon is less of a level playing field for all sellers, and products success will be determined through predictive AI.  Evidence of Amazon’s confidence in their predictive AI can be found in the following events that lead us to believe that the is time is now.

Amazon Apple deal–  Apple is selling on Amazon directly, and Amazon is removing other distributors from selling Apple products.

Amazon One Vendor– Amazon is approaching supply chain in a new way where they are dictating if a brand will be a vendor or seller. 

Amazon CRaP Clean-Up– Amazon removing CRaP items from its catalogue, forcing manufacturers to refresh packaging, and kill production of less successful products.

Why AI?

We are entering an era where Amazon’s technology and algorithms are starting to do the thinking for the customer—as opposed to a customer having to choose brands, products and sellers on her own.  Amazon is confident with its own data to dictate products, pack types, sellers, vendors, fulfillment and even brands to be sold on its site.

Some would say that Amazon is going to a more traditional retailer model; I would argue that Amazon is doing its best Walmart meets The Matrix mash-up to create a mass retailer model that is infused with technology and data.

The bottom line?  Amazon has reached a point of confidence in their predictive AI where they are able to make supply chain decisions for manufacturers, and fulfillment methods in the name of customer-centricity.

Velocity. believes that there is common ground where Amazon, the customer, and a manufacturer can profit.  Want to talk about what you can do to be on top of the upcoming changes?  Reach out to us here with questions.

Finding Humanity In An Era Of Change

A perspective from Cannes 2018

By Sharon Love – CEO, TPN

 

Awards for Creativity. Big data. Provocative speakers. Branded beaches. Yachts, parties, concerts, and rose… Some aspects have remained the same over time but the annual Cannes Lions Festival of Creativity has definitely undergone some change—even in the four short years I’ve attended. Beyond the greater presence of big media platforms and the continuing corporate dynamic, there felt to me, this year, a shift in the posture of our industry. A humbling pivot that’s put many marketers in a defensive position. And for good reason. In a moment of transparency concerns, a tech explosion, and the fight for equality and inclusion, how does an agency or brand survive and thrive? The answer may be to rediscover our humanity.

 

Embracing the human spirit in creativity

The list of jobs gobbled up by robots grows each year. And today it seems feasible that new technology, big data, and in-house creative shops may replace the “agency” as we’ve known it to date. Angela Ahrendts—formerly CEO of Burberry, currently SVP, Retail, Apple— went on the offensive at Cannes during her panel “Reimagining the Retail Experience” championing the value of “the human business” with regards to technology, the digital boom, and the future of retail. She acknowledged the importance of technology (she works for Apple, after all!) but was purposely focused on the need for the human touch. At TPN, we share her opinion that retail isn’t dying, it’s merely changing. That truth was complemented in another great panel, “The Not So Secret Life of Creatives”, where they discussed how Pinterest lets you play in a virtual world to generate ideas that you later cultivate in the offline world. My takeaway? Those of us that adapt the most efficiently and find that right balance of man-and-machine will win moving forward.

 

Seeing each other human-to-human

As marketers, an important part of what we owe our clients is a clear delineation of who their target audience is. No one today should be wasting time or money marketing to the wrong person, even slightly. Data has made us more accurate, in a lot of ways. But as I listened to Faith Popcorn’s session, “The Death of Masculinity and its Impact on Creativity”, I was reminded of the limitations of big data. Her take on the constant blurring definitions of masculinity and femininity, and beyond, cannot be captured in data. It’s too nuanced and shifting. Perhaps one way to ensure we’re connecting with our audience in the right ways is to view them as people as opposed to males, females or other gender labels. That would allow us to avoid offensive or alienating stereotypes. Wherever we can, we should ask ourselves how we’d like to be approached by a brand—as a woman? As a man? Or perhaps just as a person of certain interests. That theme seemed to align well with the message Seth Farbman (CMO, Spotify) sent at his panel “Creativity in the Age of Resistance”. He highlighted the voice they give to artists to make positive change—with themes of inclusivity and acceptance of all rising to the top. Seth stressed that using Spotify’s platform for positive change has become “an obligation”. The nature of your brand or platform, of course, figures largely into your ability to deliver this promise. But overall, the thought of steering clear of any level of stereotype and bias is a smart one for the times.

 

Fulfilling the equality promise

Many sessions focused on eliminating bias from our business—both in our internal company structures and in our work. The argument for gender and racial equality as a business imperative has been talked about for a long time and now there is conclusive evidence that companies who have a diverse workforce and leadership team deliver better results than those who do not. Early in the discussions about the importance of diversity, the moral imperative for equality had to take a back seat to business to get all the people who needed to hear it onboard. So why are some brands so slow to act on this and clean up their act? I just saw on Facebook this morning an old friend bemoaning the back of her (unnamed here) breakfast cereal box. It was a heartland story of where the grains had been raised for the cereal and featured the family of farmers who had grown it—there was not ONE female in the picture! It was kind of shocking. But there is reason for hope that the cereal box debacle will be a thing of the past. At one of my favorite panels, “Agents of Change”, featuring Katie Couric, Queen Latifah, Madonna Badger, and Mark Pritchard—they shared that though 29% of ads still portray women negatively or inappropriately, that number is down from 51% just two years ago. It seems like the hard work is beginning to pay off. As Omnicom’s Chief Diversity Officer, Tiffany R. Warren stated in her panel “Diversity—a Values Issue and Business Imperative”: “Diverse teams mean diverse thinking. We need representation in front of and behind the camera at every level, so we can normalize what used to be marginalized.”

 

Applying the good in tech

The power to ‘do good’ using data & technology is very exciting—both as a human being and as a marketer. One compelling session I attended, entitled “Androids, AI and the Future of Creativity” touted a function of new technology as a way for humans to understand what it really means to be human—when you interact with a robot, you begin to appreciate the things it can’t do that a human can. But the flip side (the dark side, if you will) of what data & technology have already wrought is concerning. We need good and responsible data and tech to win the day. Simply vilifying data/tech as bad (taking our jobs way!) or dangerous (destroying our privacy, rigging our elections) is to ignore all of the good it can do, and has done. The opportunity to connect our audiences with relevant, uplifting, and helpful content has never been greater. Our customers look to us to provide helpful information. It’s a great responsibility. But as we work to utilize the ever-expanding network of data, and the power of platforms like Google, Amazon, Facebook, and Instagram plus technology like AI, machine learning, and Voice, we need to (somehow) avoid fueling the increasing dependence our audiences have on mobile and social media as personal validation. As Scott Hagedorn, Chief Executive of Hearts & Science pointed out, it’s led to a rise in depression and anxiety (not to mention a polarizing political divide unlike anything we’ve ever seen). It will take human understanding and intervention to help brands utilize the power of data and technology in a transparent, positive, and ethical manner. And the ones who do so will win the ongoing trust of consumers.

 

For an industry a bit on its heels, the unity, positivity, and human spirit in the air at Cannes was palpable. Hopefully, as marketers, creators, thinkers, and—most importantly—humans, we continue to respect the huge responsibility we have to the brands and consumers we serve and harness our platforms and power to make real change, for good.

Amazon Wants to Own Your Home

In the past several years Amazon has moved from your desktop to your mobile to your home speaker to your home broadly and now to your front door. Amazon is buying smart doorbell maker Ring for a reported $1 billion.

The move makes perfect sense as:

  1. Amazon continues to play a massive role in the smart home market and Ring was already integrated as a partner.
  2. Amazon probably arrives at your front door more than any other delivery service or friend or family member, (other than possibly the US Postal Service)
  3. They have already let it know that they want more frictionless entry into your home via Amazon Key for delivery

As Amazon continues their seemingly relentless quest to embed themselves into all the cracks of life, its evident that they are looking to enable everyone to shop as they go through their day, but obstacle-less delivery across the board. So in sum, Amazon has added a key element in the smart home ecosystem and a technology with an installed base that will further accelerate the user satisfaction and growth of their core e-commerce business.

Using AI to Provide Shoppers With Guidance & Personalization

Artificial Intelligence is now being used by B&M retailers for everything from supply chain management to personalized apparel recommendations. Knowing that shoppers want guidance and personalization, smart retailers are using AI engines to create style pairings for shoppers, while also factoring things in like inventory levels and seasons. Then, these pairings can easily be applied to every shopper touchpoint. The result: sales. And, resulting analytics can then be used to refine the strategy and product mix.

TechDMC – February 5, 2018 from TPN on Vimeo.

What We Expect to See From Amazon in 2018

At this point, its clear that Amazon has become more than just another e-commerce company that we all shop from. They are also a digital content provider, research destination and marketing channel. And, with their first brick and mortar opening to the public earlier this week, their bigger step into grocery last year and other recent innovations, everyone seems to be watching and wondering what’s next. Based on what we know and are seeing, here’s what we expect from Amazon in 2018: Sensor Replenishment, Voice and Camera-Enabled Machine Learning.

Continued Alexa Growth

Amazon Alexa is growing at a faster rate than any other voice platform. Today Alexa is used mostly for Setting timers, playing songs, reading the news, and shopping.  Shoppers that utilize Alexa purchase 30% more than Prime members that do not utilize alexa, and 70% more than non-Prime members. With this much potential growth, Amazon looks to be doubling down on voice. We expect to see continued aggressive discounting on the device to get the Amazon Echo into more homes and continued improvements and skills.

Amazon Dash Replenishment Program – More Automatic Reordering

Early 2018 Amazon announced that several manufacturers are producing smart products that integrate with Amazon to automatically reorder for consumables when supply runs low. 3M, Blustream, Epson, HP, and Kenmore are some of the key players in this program. It is expected that several more devices will follow suit.

Amazon’s Dash Replenishment leverages multiple sensors to analyze when a consumable is running low inducing a buy order to replenish the product before it runs out.  Printing paper, ink, laundry detergent, and coffee are some of the products that will be available through Amazon’s Dash Replenishment.

Machine Learning Video Camera

Amazon is capturing voice. So, what’s next? View. Amazon has technology that they are releasing to developers to utilize Machine Learning-enabled video cameras. We know Amazon is obsessed with tracking through sensors, and now they will continue to develop on their camera tracking. The next step from here is to follow a similar path to Alexa, where amazon will offer the technology to be included in the manufacturers’ end so they can continue to dominate auto-replenishment and more.

 

Written by: Rami Odeh, TPN VP, Digital Commerce

Why I don’t believe in “The Retail Apocalypse”

So much is being written about a “retail apocalypse” and many spent 2017 talking about the death of brick and mortar.

However, despite what pessimists might say, shoppers and data are telling us a slightly different story and the stats just don’t support such a doom and gloom situation…

  • 4,080 net new stores opened in 2017 (more than the number of stores that closed)
  • 71% of US shoppers still prefer to buy in-store (even if the product is available on-line)
  • 85% of US shoppers want to shop in-store because they want to “touch and feel” before they buy
  • 66% of millennial find store associates “extremely important to their shopping experience”

Sure, certain categories like Fast Fashion and Beauty have taken a hit in-store, but 2017 saw significant store count growth for the Dollars (General and Tree), value brands like T.J. Maxx, Grocers; Lidl and Aldi and beauty brands Sally Beauty and Ulta are demonstrating that brick and mortar retailers are still essential in today’s shopping ecosystem.

An evolution is taking place and brick and mortar retail is at the core.

What is changing are shoppers expectations and what they are looking for when they walk into a store. The right assortment at a good price is no longer enough. Today’s shoppers want more AND they want what they want immediately and they want to have an enjoyable experience. The “currency” of shopper satisfaction is now comprised of Value, Convenience, Discovery and Experience tightly wrapped in Personalization and topped with a shiny bow that is Technology.

While this may sound complex, it represents an opportunity that brick and mortar stores are uniquely positioned to deliver if they take advantage of all of their assets and ensure they are working together toward a common goal of delivering on what the shopper wants. By leveraging an entire store environment, associates on the floor, internal systems/operations and the right technology, retailers can create a “surround sound” affect to ensure the shopper walks out satisfied.

To do this, brick and mortar retailers have to abandon the “one size fits all” approach and move towards having a variety of store footprints that can deliver different brand and shopping experiences. Showrooms, express, pop-up, shop in shops (and a few that have yet to be revealed) all have a purpose and are here to stay. Within those store types, successful retailers can define the role of their associates and provide them with the proper tools and tech to support all shopper needs from basic fulfillment to expert advice. Systems and operations must move beyond self-check-in and inventory-control to be truly connected and assist in the delivery of a seam-less, frictionless, even channel-less shopping experience. That is what shoppers want and expect today – even if retailers aren’t structured to deliver it that way. Connecting on-line to off-line is a retailer problem, not a shopper’s, and connecting all of their systems and operations is the way to do it and make it personalized.

Brick and mortar retailers must become more agile and nimble, accept that partnerships and acquisitions are necessary to remain relevant and succeed. And most importantly, retailers must understand that piloting, testing, measuring and learning are essential and critical to continued success.

Written By: Tracy Faloon, TPN Chief of Client Integration

 

Sources: IHL Group, TimeTrade survey, ChargeItSpot Study, Fortune, ChargeItSpot Study

Maybe The Best Brand You Haven’t Heard Of… Yet.

I wouldn’t be surprised if you have never heard of KITH, and in the likelihood that you haven’t, consider this a short introduction to one of the most innovative and hottest streetwear brands that is redefining the sneaker industry.

It’s founder, Ronnie Fieg, is transcending the industry by carefully crafting his products and retail landscape to be indicative of what consumers find relatable, exciting, and motivating to be apart of. He has disposed of the typical seasonal calendar and rather created a 365-day invitation to product offerings and rotating retail format that keeps consumers engaged, surprised and delighted.

Specifically, his store format, located in New York City, is of particular intrigue as it includes one-third product offering while functioning as one-third art gallery and one-third ice cream/cereal bar (awesome). The use of purposeful digital integration, experiential components, and an ever-changing product offering to limit complacency and drive continual store visits makes this a must-study for innovative store formats of the future. Ronnie certainly has my interest and I promise that next time I’m in New York I’ll be taking a visit to KITH, as should you.

Written by: Brad Sauchak, TPN Associate Planner

Digital & Social Content Predictions for 2018

Digital and social content changes quickly! Brands must ensure their content is evolving just as quickly to meet consumer demand. We’ve been looking at the major trends. Here’s what you can expect to see:

VIDEO DOMINATES

Did you know that in 2017, 90% of all social content shared by consumers was video?1 Video must be woven into content marketing plans as consumers are overwhelmingly expecting this content type. Social platforms like Facebook have also placed a higher emphasis on video content, but its the marketers job to design video to grab attention within the first three seconds.

MORE EPHEMERAL CONTENT

Ephemeral content has been on the rise for three main reasons: 1) it’s mobile first, 2) it’s perceived as being more authentic given the content is often ‘scrappier’ and 3) it often sees higher engagement as consumers typically only have 24 hours to view it before it disappears. Snapchat pioneered this space, but Instagram and Facebook developed products to take advantage of the trend too.

INFLUENCER MARKETING GROWS

While Influencer marketing has been on the rise for some time, the space is maturing. We’ve seen the landscape divide into four main segments: Micro influencers (1k – 30k followers), the ‘Power Middle’ (35k – 250k followers), the Established Influencers 250k – 5MM, and Celebrity Influencers. Influencer marketing has become an important tactic as it ads authenticity to brand messaging and has more credibility with consumers.

ARTIFICIAL INTELLIGENCE GETS CONVERSATIONAL

Consumers have been reaching out to brands on social media with customer service inquiries for years, but Artificial Intelligence (AI) and chatbots have become so advanced that full dialogs can not only help answer common consumer questions, but can also help guide the shopper journey via a conversational experience.

AUGMENTED REALITY BRINGS NEW BRANDED EXPERIENCES

Pokemon Go put Augmented Reality (AR) in the spotlight, and the technology continues to grow as it has true potential to bring deeper, more immersive brand experiences to consumers. Nissan recently launched an AR Star Wars experience in their dealerships that enabled customers to view cars through their phone and highlighted Nissan’s Intelligent Mobility technologies.

Social Media Marketing Trends 2018

Written by: Andy Perez — TPN Content & Social Marketing Director

CES 2018: More Connected Than Ever

Another successful CES is wrapping up and it did not disappoint.

While there were no major announcements this year, the event truly wowed and delivered more of everything: more speed due to 5G, more screens that fit in every space imaginable, more content to view, more ways to capture images, more ways to power devices, more ways to connect the online and offline worlds, the ability to understand more about you and the ability to automate tasks, like driving, so you have MORE time to do meaningful things.

In 2017, the big news was connected everything and the rise of Alexa. This year was a coming out party for Voice command. Whether its Alexa, Google, Bixby, Cortana or Siri you can magically talk to almost everything now in order to get information, get things done without the touch of a finger and instantly buy.

There was not one tech introduction that felt incredibly breakthrough. But, there were definite improvements and builds on past developments. As a marketer (and as a mom), its exciting to see more technology for the connected life. ARTIFICIALLY intelligent things are truly going to change our lives—how we do things, how we communicate, how we shop/buy. And, it gives us as marketers more ways to constantly connect with consumers and move them to engage or buy brands. From connected fridges to speakers—the route to reach consumers is becoming more complex and we have to be mindful of communicating to both the machine and the consumer in meaningful ways. A few examples…

Kohler Konnect – More from your bathroom

KOHLER Konnect, a new platform and suite of smart fixtures that can interact with owners through voice commands, adapt to user preferences and collect data to provide valuable water usage feedback. “When people talk about smart homes, they always leave out the bathroom,” Kohler innovation practices director David Funk explained. “We wanted to bring tech into the bathroom. Now you can talk to the mirror and ask it anything you would ask of an assistant.”

Samsung – More from everyday living

Samsung will also double down on smart home technology this year, promising to bring connectivity seen in its popular Family Hub smart fridges to other machines around the home.

Samsung Electronics’ Family Hub Refrigerator offers “connected living” and is both a storage and communication device. With a built-in screen on its door, family members can leave messages, see what’s in the fridge while at the store, adjust the thermostat or even check on a sleeping baby in the next room.

Users will be able to direct their vacuum cleaners or query milk expiration dates with a voice command. Samsung’s SmartThings network will connect to devices from other manufacturers, including Ring’s video doorbell, Philips Hue lights, and Netgear security cameras.

Polaroid – More from your moment

Have digital photos left you longing for something more … tangible?

Retro Meets Modern at CES with the first immersive Polaroid Originals experience showcased in a colorful and creative exhibit. Meet the Polaroid OneStep 2 camera – an analog instant camera that is a proud successor to the original Polaroid OneStep camera that democratized instant photography 40 years ago. Polaroid instant digital products are the perfect blend of retro instant prints and modern digital camera technology.

Written By: Amy Lanzi, TPN Managing Director, New York