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[Image: Andreas Gursky, Amazon, 2016]
The struggle for collection and delivery
FedEx is to end its US express business With Amazon (and surprisingly Amazon is only 1.3% of FedEx revenue). The problem with being both vertically and horizontally integrated is that eventually your partners feel like you’re competing too directly with them. You’d imagine that retailers using AWS sometimes have similar concerns.
Click and collect is becoming increasingly important for physical retail. In the US they call it BOPIS/BOSS - buy online pickup in-store/buy online ship-to-store.
Walmart offers fewer items for next-day delivery compared to Amazon because it’s expensive - 200k items vs 10m. And Target is expanding same-day delivery options - 65k items (it bought deliveryco Shipt in 2017). From that last link:
“Ironically, same-day delivery is somewhat easier for retailers to achieve than one-day shipping since same-day services generally rely on couriers and the gig economy to move orders - through providers like Shipt, Deliv, Roadie, Instacart and the like - and not traditional 3PLs.”
That said, delivery remains a hard business, particularly if it’s meals and fresh food: there’s plenty of competition - Deliveroo and JustEat lead in EU, and Uber, Grubhub and fast-growing DoorDash in US. And Amazon’s Restaurants food delivery service being switched off in the US, and it was shuttered in London in late 2018. (Amazon recently invested in Deliveroo, so that looks like its plan B for the meal delivery market.)
The interesting thing here is Amazon’s endless willingness to experiment and invest further if it works or kill it off if it isn’t - a practice all retailers should keep an eye on in an era of rapid technology change.
Capturing all of the spend
You’ll remember all of those “1 in 8 pounds is spent in Tescos” stories of a few years ago [1]. Anyway: GlobalData reckons Amazon will have 20% of all UK online spend in 2024 (also 19.4% of UK online shoppers are now Prime subscribers).
Walmart Grocery is now offering a $98 per year ‘Delivery Unlimited’ subscription - which will compete head-on with Amazon Prime Now, Instacart and others.
In the meantime, this fight between Walmart and Amazon is creating collateral damage for smaller retailers. That piece says that retailers in differentiated product categories (like dollar stores) or “perfected business models” (such as Best Buy and Costco) are doing OK but retailers with shakier finances "have ever-diminishing control over their destiny [...] for the many other retailers, the best strategy could be to try and stay out of the way of this bigger battle."
[1] Even though those stories have receded a bit in the last decade as supermarkets became more competitive and new, low-cost entrants thrived in the UK, Tesco still seems to take 1 in 6.66 of the UK’s retail pounds: 63.9bn in sales in 12 month to end Feb 19 vs ONS estimate of total retail Mar 18 - Feb 19 of 425.9bn.
China news
Why Chinese shoppers buy fresh groceries online: convenience and comfort.
Alipay (Alibaba’s payment platform) has tripled its number of merchant customers in Europe - largely driven by Chinese tourism? Alipay says it has about 1bn active users worldwide now.
As the trade conflict between China and the United States escalates, there are signals that China might restrict the export of rare earth minerals to the US. (Rare earths are used in electronics.)
Tencent invests in UK fintech TrueLayer, which provides banking APIs etc.
Stats
Mary Meeker’s annual internet trends presentation is always a beast of a read - chock full of numbers. Maybe the meta-trend is that as software gets into everything, and nearly everything gets internet connected, it becomes clearer how the internet amplifies everything. The good and the bad. Technology is never neutral, but it is frequently indifferent.
More than a fifth of smart speaker owners have made a purchase online, only 13% would class themselves as regular users - trying it out once?
Only 17% of UK shoppers have used social media buy buttons and a third claim they never will - trying it out never?
Other news
Consequence scanning looks interesting: “a way for organisations to consider the potential consequences of their product or service on people and society and provides an opportunity to mitigate or address potential harms or disasters before they happen”.
Neobank Monzo is launching in the US.
Co-op Bank (which is no longer part of the Co-op Group) is hiring 100 IT/digital staff.
Should Alexa give evidence in German courts? - obvious law enforcement vs privacy tradeoffs.
A grocer designed embarrassing plastic bags to shame shoppers into bringing reusable ones, but they were an unexpected hit.
Co-op Digital news
What to do after a death: how we used service mapping to understand our clients.
Home of Co-op Digital The Federation has friendly, affordable and flexible co-working space available at the moment.
Most opened newsletter in the last month: like a vending machine. Most clicked story: Inside Amazon’s Manchester pop-up shop.
Events
Public events:
- Federation friend and social enterprise Amity CIC are offering free coaching sessions - you can book some time with Maria or Katie.
- Monzo’s Manchester show & tell - Tue, 18 Jun 6.30pm at Colony Jactin House, 24 Hood St M4 6WX
- Ladies that UX - Tue 18 Jun 6.30pm at Federation house.
- Northern Azure user group - Tue 18 Jun 6pm at Federation house.
- Manchester WordPress User group - Wed 19 Jun 6.30pm at Federation House.
- Freetrade (zero-commission stock investing) crowdfunding roadshow - Wed 19 Jun 6.30pm at Workplace, 4th Floor Churchgate House, 56 Oxford Street, M1 6EU.
- Mind the Gap: will AI and Digital create a more inclusive health system? - Thu 20 Jun 6.30pm at Auto Trader UK, First St, M15 4FN.
- Python NW: monitoring - Thu 20 Jun 6.30pm at Federation House.
- NUX Leeds: empathy, product design and being a good human - Mon 24 Jun 6pm at Platform, New Station St, Leeds LS1 4JB
- The Human Hiring Hack - how to improve workforce diversity and inclusion - Mon 1 Jul 6pm at Northcoders, Federation Street, M4 2AH.
Internal events:
- Funeralcare show & tell - Tue 18 Jun 1pm at Angel Square 12th floor breakout area.
- CMO CRM show & tell - Tue 18 Jun 2pm at Angel Square 13th floor communal area.
- Co-operate show & tell - Wed 19 Jun 10am at Fed House 6th floor.
- Engineering community of practice - Wed 19 Jun 1pm at Fed House Defiant.
- PowerBI dataflows - Thu 20 Jun 10am at Fed House 6th floor.
- Data management show & tell - Thu 20 Jun 3pm at Angel Square 13th floor breakout area.
- Membership show & tell - Fri 21 Jun 3pm at Fed House 6th floor kitchen.
More events at Federation House - and you can contact the events team at federation.events@coopdigital.co.uk. And TechNW has a useful calendar of events happening in the North West.
Thank you for reading
Thank you, clever and considerate readers and contributors. Please continue to send ideas, questions, corrections, improvements, etc to the newsletterbot’s trained link-clicker @rod on Twitter. If you have enjoyed reading, please tell a friend!
If you want to find out more about Co-op Digital, follow us @CoopDigital on Twitter and read the Co-op Digital Blog. Previous newsletters.
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