March, good month/bad month
Retail Technology Innovation Hub looks back on an eventful March and rounds up the winners and losers
Good month for…
Voice shopping, which is set to become the next major disruptive force in retail, jumping to $40 billion in 2022, up from $2 billion across the US and UK, according to OC&C Strategy Consultants.
Monoprix is to start selling its products to customers in Paris through Amazon’s Prime Now service this year.
UK online retailers received a Beast from the East boost in February, with sales up +13.1% year-on-year, according to the IMRG Capgemini e-Retail Sales Index.
Hot on the heels of excellent fourth quarter numbers, Target announced that it was significantly expanding its suite of fulfilment options in 2018.
Made.com has pulled in £40 million of equity funding as it looks to expand into new European markets and boost its online presence.
Sainsbury’s, Tesco and Walgreens Boots Alliance made it into the top ten of the 2018 DataIQ 100, which showcases the most influential people in data-driven business.
Amazon is in talks with several leading banks to offer a "checking-account-like" product for customers, according to the Wall Street Journal.
And the move would appear to be a no brainer. A recent survey by LendEDU found that 44.5% of the 1,000 respondents (who had recently purchased something from the e-commerce giant) were open to the idea of using an account created by Amazon as their primary bank account, while 39.1% were unsure, and 16.4% rejected the idea. However, more respondents, 49.5%, were willing to use a savings account created by Amazon, while fewer respondents – 14.9% – were not keen. Over half of Prime members (52% for primary banking and 58% for savings) were interested in letting Amazon handle their accounts.
Farfetch, rumoured to be seeking a US stock market listing later this year, has announced several partnerships with luxury brands in recent months, including Burberry. But this is its first tie-up with a department store.
Bad month for…
Amazon shares plunged on Wednesday, 28th, wiping about $53.6 billion from its market value, following a report that US President Donald Trump wants to go after the e-commerce giant.
Select has become the latest High Street retailer to run into trouble.
Topman was forced to pull a £20 red shirt which appeared to mock the victims of the 1989 Hillsborough disaster, following a backlash from Liverpool fans.
The demise of Toys R Us is the unfortunate but inevitable conclusion of a retailer that lost its way and forgot core retail competencies, according to Neil Saunders, Managing Director at GlobalData Retail.
The retailer is set to shutter or sell all of its 885 stores in the US in the coming months, putting about 33,000 jobs at risk. In the UK, meanwhile, all stores will close in the next six weeks following the chain's collapse into administration. “Even during recent store closeouts, Toys R Us failed to create any sense of excitement. Moreover, its so-called heavy discounts remained well above the standard prices of many rivals like Amazon and Walmart. Arguably, if Toys R Us can't successfully execute a closeout and stimulate interest, then it has little to no chance of trading under normalised conditions,” says Saunders.
Whilst suppliers and competitors could take some blame for its demise, the primary responsibility lies with poor management decisions, Saunders believes. As the competitive dynamics of the toy market intensified, management failed to respond and evolve. As such, the brand lost relevance, customers and ultimately sales.
“Admittedly, the leveraged buyout which burdened the company with debt reduced the room for manoeuvre and left Toys R Us vulnerable. Questions should be asked as to the wisdom of this particular financial transaction which weakened the sustainability of the company,” he adds. “The main tragedy of liquidation will be the extensive loss of jobs. In our view, those on the shopfloor have been badly let down by management and those doing financial deals.
New Look is planning to take an axe to its UK store estate and cut rental costs, following a tough 2017 which saw a widening of losses and ended with poor Christmas sales.
RMH Franchise said that malware had been found on PoS systems at the 167 Applebee’s restaurants it operates across the US.
Shares in Overstock sank about 10% after the online retailer’s cryptocurrency-focused subsidiary, tZero, said the US Securities and Exchange Commission was investigating its plan to raise $250 million by offering digital tokens.
Despite a barrage of hype, Apple Pay has turned out to be a damp fizz Stateside. In fact, it’s one of Apple’s failures, according to Chris Skinner, Chair of The Financial Services Club and Non-Executive Director at FinTech consultancy firm 11:FS.
Mobile payments/loyalty app startup, Zapper, has made many of its UK staff redundant and put on hold roll-out plans with the likes of Gillett's Spar.
The jury’s out on…
Poundland was at it again in March. A few months on from its Elf Behaving Badly social media campaign, labelled "irresponsible" by the Advertising Standards Authority (ASA), the retailer posted Easter themed tweets featuring a “naughty” chick and bunny.
In one of them, the bunny is bending over as the chick burns a cross onto its behind, with Poundland captioning the post: ‘I’ve got a way to make you hot and cross, Bunny’. As was the case with Elf Behaving Badly, many people failed to see the funny side (e.g.: ‘No that's just nasty’ and “This is getting reported’), although some gave it the thumbs up. ‘They are at it again, whoever is in charge of Social Media at @Poundland deserves a pay rise #Poundland’ said one, whilst another declared: ‘And they're back. @Poundlanddon't ever change’.
