Can Amazon beat Walmart in the Retail Game?

The e-commerce market where companies such as Amazon, eBay and Alibaba operate is just 8% of the total retail market. The retail is still dominated by brick & mortar players such as Walmart, Target, Carrefour and Tesco.

After seeing this chart, you shouldn’t be surprised when you see headlines such as:

Alibaba to Spend $692 Million to Partner With Intime Retail 

 Jeff Bezos: We would love to open Amazon retail stores

  

Walmart Brings Bricks and Mortar to Battle with Amazon

Ecommerce players are trying to enter traditional retail, and at the same time retailers such as Walmart and Target are improving their e-commerce experience.  Even though total retail spending is increasing globally year on year, the share of ecommerce is growing at a higher rate (11%), and traditional retailers cannot ignore it anymore.

Let’s look at some of the key retail attributes and how e-commerce players are pitted against the retailers:

From the table above, it seems that the game is even with both sides having certain advantages and disadvantages. The fact is that these companies are constantly innovating to get an edge over others. For e.g. Amazon’s recent move to establish a dedicated area in the P&G warehouse to supply consumer products has not gone well with physical retailers: P&G's Pact With Amazon Angers Target. On the other hand Walmart is copying Amazon to offer service like Click & Collect to its customers, who are not comfortable sharing their card details online. Outsiders may see this as battle for supremacy, but it is a good example of how competitive moves from either of players are leading the retail industry towards optimization, and a better customer experience.  

It is early to predict who will be the winner in this war between bits and bricks. Growing penetration of mobile devices and changing buying behaviour of young generation may have tilted the balance towards e-commerce players, but they can’t provide the human need to experience things before buying it, especially when buying an expensive item.

Can Banks create an ecosystem like Apple or Microsoft?

How many times have you witnessed the war between Apple fanboys and Windows pragmatists in the comments section all over the web? Apple and Microsoft reap benefits by increasing the switching cost for their users as they get used to things working seamlessly within an ecosystem. While this kind of ecosystem is established in technology industry, can we envision a payment ecosystem created by banks? 

Apple, Amazon, Paypal and Google are taking lead in creating a payment ecosystem  (spanning virtual and physical stores) because they realize how profitable it would be to dominate the payment industry. But, I personally feel that customers trust their banks more than these technology companies. No doubt that banks have the advantage of TRUST, which is key to adoption of any payment method.

So, what are the possible use-cases in a Banking ecosystem? 

Some of the common services that can be provided by the banking app are: 

1. Buying coffee at the local cafe
2. Paying at the parking lot
3. Splitting the lunch bill
4. Getting promotional offers from retailers
5. Online Shopping
6. Recharging contactless travel card
7. Paying the utilities bill

If I were to translate these requirements into an overarching mission statement for these banks, it would be something like:

Wherever our customers need to transact money, we will provide an easy-to-use, consistent and secure interface to handle the transaction.

3 out of 4 people in UK are estimated to have smartphones by 2016, which makes the scenario above realistic. So, the digital strategist at these banks should start thinking in a systematic way, and identify the scenarios where there is an opportunity to serve their customers. Forming alliances with partners would be key for the banks to create such an ecosystem, and finally they have to rethink themselves as service providers of banking, shopping, and bill payments as different services to their customers through a single app.

Making BIG data accessible to SMALL Businesses

source: www.socmedsean.com

For Businesses, Big data (or Data Analytics) is about analysing data from different sources such as CRM, Social Media, Email Marketing, Public domain, and inferring insights that can help you grow your business by selling more.

Traditionally, Big Data has been within the realms of large corporations that have the resources to collect and mine this data, but gradually there is a trend towards democratization. Rather than being intimidated by the Big D, small businesses can leverage it to provide better customer experience, and ultimately sell more.

How can data benefit small retailers? The insights derived from data analytics can be applied to:

1. Tailor products and services to individual customers by examining the past purchase behaviour.
2. Offer relevant promotions and advertisements.
3. Identify fast and slow moving items, which leads to better inventory management
4. Monitor social media to identify consumer trends, and scale up production accordingly.
5. Shape the word-of-mouth narrative, and be responsive to customer feedback across multiple channels.

Here are 5 tools (which I have come across) small businesses can use to mine this data and generate actionable insights:

1. GoogleAnalytics: If you are an online business, you can use GA to track where your users are coming from, how much time they are spending on your website, and host of other useful info about your visitors.  Another tool is Google Trends to identify what people are talking about.
2. Analytics tool built into Facebook, Twitter and LinkedIn provides useful info about how company is perceived in social media. Also, businesses can monitor what is being talked about them, and shape the opinion by active participation.
3. SumAll: They call it the best analytics tool on the planet. It is empowering over 100,000 small businesses, and is 100% free. It lets you connect all the services such as social analytics, store sales data, Google AdWords, and Paypal.  
4. Looker: It is a 100% browser-based platform, which puts people and cross-functional collaboration at the centre of data analytics. It uses a data modelling language that’s quick to learn, and promotes a curiosity driven approach to analytics within the organization. It offers a free trial too without requiring a credit card. 
5. Fivestars:  It is a US based loyalty solution that is rich in analytics. It easily integrates with existing POS. It offers a social touch by letting customers brag about retailers to their friends with an automated social media integration to drive more likes, check-ins, and word-of-mouth referrals. The customers carry a FiveStars loyalty card that has to be swiped at the till to earn loyalty points.