EDITORIAL - Amazon Go Challenges Others to Adapt, Adopt and Change

One Hundred Years of Retailing - Can We Deliver a More Satisfying  Customer Experience 

General Store 1917 -  Harris and Ewing

"Hello Mrs. Smith, what can we help you with today," asks the proprietor of this modern, well stocked, general store of 1917. 

We can see most items organized neatly behind the counter, we can imagine a picker pole for reaching the high shelves and see the crates of things customers could select on the floor. 

In fact, some of us can still remember general stores in the small rural communities where we grew up. What I remember most is staff who were happy to see me, knew my name, focused on my need and were always ready to provide friendly advice - not just pushing myriad items through scanners while the clock ticks off the minutes left in their shift. 

Over the past hundred years, we have watched as retailers developed efficient operations and high volume discounting, while subject matter expertise dwindled and valuable personal interactions with customers left the scene.

The launch of the first Amazon Go store in Seattle, may deliver a new client experience that returns high value exchanges to the retail environment and delivers regular loyal patrons. Customers can purchase all the things they want effortlessly, in a process called 'Just Walk Out Shopping'. While technology takes care of the customer need automatically, Amazon's in store associates can focus on providing the experience customers desire.

Observers suggest that Amazon's win in retail has been associated with four things:

• Discoverability (find what you want, when you want it);
• Good prices (inventory turns); 
• Fast delivery (automated order processing, robotics and infrastructure); and the big one,
• Customer satisfaction (customer feedback with quick response).

The frequently asked questions on the Amazon Go web page provided  answers to questions we've heard:

Do you have any people working in the store?

Yes. Our great team of associates works in both the kitchen and the store to prep ingredients, make our ready-to-eat food, stock shelves, and help customers. (Need a product recommendation? Ask an associate!)

Amazon Go Staff Prepping Ready to Eat

How does Amazon Go work?
Our checkout-free shopping experience is made possible by the same types of technologies used in self-driving cars: computer vision, sensor fusion, and deep learning. Our Just Walk Out Technology automatically detects when products are taken from or returned to the shelves and keeps track of them in a virtual cart. When you’re done shopping, you can just leave the store. Shortly after, we’ll send you a receipt and charge your Amazon account.

What can I buy at Amazon Go?
We offer delicious ready-to-eat breakfast, lunch, dinner, and snack options made by our chefs and favorite local kitchens and bakeries. Our selection of grocery essentials ranges from staples like bread and milk to artisan cheeses and locally made chocolates. For a quick home-cooked dinner, pick up one of our chef-designed Amazon Meal Kits, with all the ingredients you need to make a meal for two in about 30 minutes.

How do I shop at Amazon Go?
All you need is an Amazon account, the free Amazon Go app, and a recent-generation iPhone or Android phone. You can find the Amazon Go app on the Apple App Store, Google Play, and Amazon Appstore. When you arrive, use the app to enter the store, then feel free to put your phone away—you don’t need it to shop. Then just browse and shop like you would at any other store. Once you’re done shopping, you’re on your way! No lines, no checkout.

How big is the store?
Our roughly 1,800 square feet of retail space is conveniently compact so busy customers can get in and out fast.

Why did you build Amazon Go?
We asked ourselves: what if we could create a shopping experience with no lines and no checkout? Could we push the boundaries of computer vision and machine learning to create a store where customers could simply take what they want and go? Our answer to those questions is Amazon Go and Just Walk Out Shopping.

The Amazon Go Experience 

It seems like the Amazon Go launch in Seattle this week has thrown down the gauntlet to other retailers. If they accept the challenge to Adapt, Adopt and Change, what response can be expected?

An article by Michelle Evans, a Retail and Technology analyst at Euromonitor, provides an overview of her discoveries at a recent gathering of retailers. She discovered neat tactics, strategies and technologies are coming to encourage a more satisfying customer experience in other retail settings. 

Amazon Go Location in Seattle

MARKET - Canada lagging behind in Ecommerce

Recent headlines suggest that Canada is lagging behind other economies in the development of e-commerce transactions.

Earlier this month the Royal Bank published 'Bricks vs Clicks - Why is Canada Lagging Behind in E-Commerce?'

Last spring, The Record published a story entitled 'E-commerce goes north, forcing Canada’s retailers out of hibernation'.

The following table of Stats Can information dated April 2017 shows retail sales up 4.5% over April 2016 and shows that while E-commerce is outperforming bricks and mortar activities, it is still only 2.46% of total retail sales.  

	April 2016r	April 2017p	April 2016 to April 2017p
	thousands of dollars	thousands of dollars	% change
Retail Trade sales (44-453)	46,164,282	48,253,352	4.5
Electronic shopping and mail-order houses sales (45411)	693,493	828,424	19.5
Retail E-commerce 1	851,144	1,205,434	41.6
Retail E-commerce share of total retail trade (%)	1.82	2.46

r - revised

p - preliminary

Source(s):

CANSIM table 080-0033.

The US Department of Commerce, International Trade Administration, supplies information to American exporters. This Report from August 2017, provides a window on their assessment of Canadian E-Commerce. 

Although they acknowledge Canada is one of the heaviest users of the internet,  two quotations from this US report are telling about the state of e-commerce in Canada:

"Although Canadians prefer to support Canadian businesses, a significant proportion of the nation’s e-commerce spending goes to non-Canadian websites. One-third of the total spending is in the United States and the rest in Asia (primarily China) and Europe.  In fact, 67 percent of online purchases Canadians made in 2016 were from other countries."

"As of March 2017, retail e-commerce sales totalled approximately C$1.2 billion. Retailers are investing in digital platforms to reach consumers dispersed over a vast land mass while responding to competition from global e-tailers such as Amazon. In fact, by 2015, 84 percent of Canadians had purchased something online and more than 20 percent of Canadians shopped online about once per month. It is estimated that there will be 20 million digital buyers in Canada who will spend $50 billion annually online by 2019, representing 10 percent of all retail purchases in Canada. Twenty-seven percent of Canadians have shopped online once a month and it is estimated that the e-commerce industry will reach C$50 billion by 2020, representing 10 percent of all retail purchases in Canada."

WHY THIS IS IMPORTANT:
This glimpse of e-commerce suggests there is a great deal of opportunity for e-commerce in Canada. It also suggests that Canadian firms should accelerate their e-commerce strategies and tactics to reduce or eliminate the number of Canadian consumers who cross the border for e-purchases. Perhaps it also shows a degree of risk in this new economy for those who are unwilling or unable to maintain their consumers online with purchases and services. Finally, the numbers show that e-commerce is growing as a category at 4 to 5 times the rate of growth for all retail. Perhaps it would be prudent to curtail new investments in bricks and mortar.

MARKET - E-Commerce Booms While Retail Remains Flat

On Monday, November 20th, 2017, Business Insider ran the headline: "NOTHING CAN STOP THE SHIFT TO ONLINE SHOPPING"

The article referenced the recent US Department of Commerce report of Q3 sales. The estimate of U.S. retail e-commerce sales for the third quarter of 2017 totaled $107.0 billion, an increase of 1.9 percent (±0.7%) from the second quarter of 2017. The third quarter 2017 e-commerce estimate increased 15.5 percent (±1.1 %) from the third quarter of 2016 while total retail sales increased 4.0 percent (±0.4%) in the same period. 

E-commerce sales in the third quarter of 2017 accounted for 8.4 percent of total retail sales.

As Business Insider declared, "There is one sector in retail that is seriously booming". Meanwhile, overall retail sales are flat, barely ahead of inflation. Comparing these numbers to statistics for retail and service brands involved in e-commerce transactions shows a problem is rapidly developing. Most brands do not have a strategy or effective tactics to compete with the sector domination of a few large online brands.

WHAT YOU NEED TO DO
If you do not have an effective plan to support online transactions (e-commerce), get help to determine if that will effect the sustainability of your business. If it turns out e-commerce will disrupt the sustainability of your business, find help to assess if your business can be aligned with one of the dominant online players that will sell and/or fulfill your offerings online (Like Amazon). If that strategy is unavailable, get help to find a strategic partner or an acquirer in your sector. One of the disruptors of your business may find your products, services and clients desirable. Above all else, get good advice and make your moves before you are left on the sidelines. Being on the margins of disruption isn't where you want to be.

Robots Check the Shelves at Walmart, Intel Invests US$17,500,000

Bossa Nova Robotics Inc. is sending its shelf-scanning robots out to 50 Walmart stores in a real-world use of technology to help one of the planet’s largest retailers keep its aisles stocked and ready for customers.

Perhaps that's why Intel and others are supplying new capital to this innovator in robotics.

Late last month, Walmart confirmed the relationship with Bossa Nova and stated it would provide their employees with near real-time data about what is on the shelf, what is not and what has pricing errors. Walmart does not expect it will reduce the head count of its retail stores, but does expect it will eliminate the number of times a client can't find a product or find it at the advertised price. 

There may be other advantages for logistics and inventory management as well as for Walmart's new Ecommerce services.

ACQUIRE - Target Invests $75 Million in Online Startup Casper

Target has become the latest large brick and mortar retailer to take major steps to strengthen their ecommerce profile and appeal to young consumers.

The company recently invested an estimated $75 million in online mattress startup Casper, whose “bed-in-a-box” strategy is tailored to millennials.

The deal will have Casper products exclusively in Target stores starting June 18th.

“At Target, we strive to bring guests amazing new products and exciting partnerships,” says Jill Sando, senior vice president, merchandising, home. “We love Casper’s brand and innovative products—and we really love the idea of giving our guests a simple way to get a better night’s sleep, with everything they need in one convenient place.”

A Recode report, citing unnamed sources, stated Target had initially attempted to purchase the company for $1 billion.

The Casper partnership follows deals Target brokered - with Bevel and Harry’s, two subscription-based online brands - that also resulted in exclusive deals to be the only mass retailer to carry their products.

“The cool factor Target had ten years ago is today captured by these niche brands, and Target is hoping to capture some of their luster with these investments and partnerships,” said eMarketer analyst Yory Wurmser.

These steps by Target are in concert with another large retailer, and one of their major competitors, Walmart.

Walmart recently acquired Jet.com followed by ShoeBuy and Moosejaw - all strong online retailers whose acquisitions have resulted in increased sales and revenue for the retail giant.

Brick and mortar retailers are faced with a rapidly growing global trend in mobile and ecommerce, along with a young customer base growing up in an environment dominated by the Internet of Things.

They are responding by purchasing or partnering with businesses that have a large online subscriber base, outstanding online customer service, and/or strong online retail sales, to help maintain a competitive edge.

BUSINESS - US Pet Food Market to Reach $30B by 2022

A recent report by Zion Market Research states the “US pet food market is expected to reach USD 30.01 billion in 2022 and is anticipated to grow at a CAGR of 3.36% between 2017 and 2022.”

The US pet food market had a value of US$24.60 billion in 2016.

The report, Pet Food Market (Wet Food, Dry Food, Nutrition, Snacks and Others) for Cats, Dogs and Other Animals: US Industry Perspective, Comprehensive Analysis and Forecast, 2016 – 2022, defined pet food as ready to serve food for pets such as dogs, cats, fish, birds and others.

The predicted growth of the pet food market is based on a rise in discretionary income, the increasing variety of ready to serve food on the market, and continued increase in the number of owned pets.

The National Pet Owners Survey in 2015 indicated around 60% of US houses have pets.

The shift in preference for nutritious pet food over the conventional food is also expected to foster the demand for pet food in the U.S.

The report notes there are almost 300 manufacturers operating in pet food sector in US which in total produce approximately 7 million tons of pet food annually.

Some of the major global players in pet food are Mars Petcare Inc., Big Heart Pet Brands, P&G PetCare, Nestle Purina PetCare, Hill’s Pet Nutrition, Diamond Pet Foods, Deuerer, Blue Buffalo, WellPet and Heristo AG.

Pet Business Recognizes the Best in Pet Products

Pet Business has announced their 2016 Industry Recognition Awards (IRA).

Winners were selected by Pet Business editors after scouring the industry for the most exciting and functional products on the market, as well as worthy candidates in categories such as best packaging redesign and best vendor website.

Recognition is in a wide variety of categories, from pet apparel to dog beds with self-warming technology, cat treats and food, to small animal habitats, supplements, grooming products and absolutely everything in between.

The Link AKC Collar was recognized for its GPS and location-tracking capabilities and activity monitoring and insights.

Its remote-controlled collar light helps find dogs in the dark, and temperature sensor alerts owners when the dog is in an environment that may be too hot or cold.

Lucy Pet Products’ Cats Incredible Litter, featured in InfoStream in March, was acknowledged for their breakthrough, patent-pending technology that stops ammonia from forming in the litter box.

The Torus watering system provides fresh, filtered water without the need for a power source. There’s even a locking system that makes it portable.

For the little critters, the Kaytee CritterTrail LED Habitat features two LED Bubble Plugs, which provide illumination for better pet viewing. The nighttime version has a red LED that will not disturb the pet’s natural nocturnal sight.

Interested in learning more about all the award winning products?

Read the entire article.

DIGITAL - How to Promote Your Product on Facebook

Are you looking for new ways to promote your product that also helps build trust, grow your audience and increase brand engagement?

Social Media Examiner has come up with some fresh ideas in their Five Ways to Promote Your Products On Facebook.

Ask Fans to Show Their Love

Set up a user-generated content campaign where you ask customers to share photos and videos of them using, wearing or talking about your product.

This type of campaign shows your product in an authentic way and can help you reach a wider audience as the post will be seen by all your customers’ friends.

Demonstrate Creative Ways to Use Your Product

Customers want to know and it doesn’t need to be fancy. Simple video demonstrations that you create or customer video that you share work well.

Incentivize Word-of-Mouth Referrals

Create a loyalty program where you can reward customers for referring friends to your business by sharing your page with their Facebook friends.

Build Trust With Ratings and Reviews

Facebook has a ratings tab that you just need to activate.

Make sure when you ask your fans for ratings and reviews, don’t be intrusive or offer incentives and always follow Facebook’s Community Guidelines.

Target Prospects With Facebook Ads

You can use your own company data and Facebook Insights to target audiences similar to your current buyers.

Read the entire article for all the details.

HEALTH - Music Influences Mood and Behaviour

For humans, music is as intimate and integral as a heartbeat. Music can heal, and the beat of a drum can help the heart and mind.

Researchers are still asking why music is so effective in so many therapies.

Music therapy, the intentional use of specific music to assist with medical conditions, is used in treatments as diverse as enhancing the communication of non-verbal children with autism to reducing anxiety and recovery time for patients undergoing surgery.

Music therapy has also been used to treat trauma, dementia, and as a coping and educational tool for individuals with disabilities.

PetSmart’s move to bring intentional, carefully selected music into their stores and PetsHotel boarding facilities no doubt draws on the ability of music to calm stressed animals – whether those animals are humans, dogs, cats, or other pets.

But music is more than simply therapeutic. It also entertainment, communication, and background noise, and people encounter music most often outside of clinical settings.

Wherever it is heard (or played), music has an effect.

Favourite songs can cause the same physical responses as intense emotional arousal, with dilated pupils, rising pulse and blood pressure, and even blood being redirected to the legs and feet.

Music also has an effect on the behaviour of shoppers, and that’s another reason PetSmart is wise to team up with Mood Media for background music in their retail locations. Multiple studies have shown that the volume, tempo, and genre of background music can affect consumers’ behaviour in various ways.

Slower tempos tend to keep customers in stores longer, and in one 1982 study showed a 38% increase in gross product sales in a grocery store.

A 1999 study showed similar results in a restaurant, and also offered insight into how to move consumers through the environment quicker during peak periods, by increasing the tempo of the music.

Newer research has added nuance to the understanding of how music affects consumer behaviour. Mode may be just as important as tempo, and music in the major mode (which is often perceived as “happy”) has the same effect regardless of tempo, but music in the minor mode (“sad”) is significantly more effective when paired with slower tempos.

Music is used for everything from entertainment, to marketing, to therapy for a wide range of issues. Humans have been making music since prehistory, and may even have learned to make music from observing animals.

Research continues into how music can influence mood, health, and behaviour, but regardless of whether the hows and whys are understood, humans will continue making and listening to music.

It’s been part of the human experience for almost as long as there have been humans, and may have been one behaviour that differentiated Homo Sapiens from Neanderthals. It’s clear that this tradition will continue.

By Tiffany Sostar

Tiffany is a writer, editor, academic, and animal lover who came late to her appreciation of pets. At 18, a rescue pup named Tasha saved her from a depression and she hasn't looked back. She has worked as the canine behaviour program coordinator for the Calgary Humane Society, and was a dog trainer specializing in working with fearful and reactive dogs for many years. She doesn't have any pets right now, but makes up for it by giving her petsitting clients (and any dogs she comes across on her frequent coffee shop adventures) extra snuggles.

BUSINESS - PetSmart Adds Mood Music for Pets and Sales

People are used to the being serenaded by “muzak,” that ubiquitous music first found in elevators and now found everywhere from grocery stores to call centres.

Now PetSmart will be bringing their own mood music to each of their 1450+ stores and PetsHotel boarding facilities.

PetSmart has hired Mood Media to develop playlists that will appeal to customers and employees in their stores.

The PetsHotel locations will have “modern mellow tunes” to help keep their animal guests calm, and these playlists will also be used when rescue groups host adoption events at PetSmart locations.

Although music for human shoppers is pretty standard, introducing music for companion animals is fairly new.

But there is science to support PetSmart’s move to use music in their PetsHotel facilities and during adoption events.

Pets do appreciate music, and they are particularly interested in species-specific music. The right sounds can have a positive effect on animals, helping keep them calm even in stressful situations.

Some animals, including dogs, appreciate sounds in the same range that humans do.

Charles Snowdon, a psychologist at the University of Wisconsin-Madison and an expert in animal responses to music, told National Geographic that music made for humans has “positive effects on dogs, elephants, and chimpanzees, and negative or no effects on gibbons, baboons, horses, and lambs.”

The reason is that animals prefer music with rhythms and tempos similar to what they find within their own species.

So cats prefer music that includes the pitch changes and sliding vocalizations that they’re used to, and tamarins prefer music that has a quicker tempo to match the tempo of their calls, which is much faster than human speech.

The right music can even increase egg production in chickens and milk production in dairy cows, and despite the fact that animals often prefer species-specific music, there is evidence of empathetic responses when listening to cross-species songs.

One can assume the decision to play specific types of music is as much for PetSmart's retail business as it is for the animals.

Numerous studies have shown that different types of background music can impact sales, with low tempo music increasing purchases in retail stores and restaurants, and classical music inspiring shoppers to buy more expensive merchandise.

Mood Media global senior vice president, Danny Turner, told CBS that they were searching for “a solution that combined both organic textures and atmospheric styles.”

Mood Media is a global company that supplies music for high end spas and hotels throughout the world, and PetSmart is counting on them bringing the same attention to detail and quality to this project.

“Muzak” has become a term associated with any background music found in public spaces, but the word comes from Muzak, the company that first popularized music in elevators and shopping spaces in the 1930s and 1940s. Mood Media purchased Muzak Holdings in 2011.

By Tiffany Sostar

Tiffany is a writer, editor, academic, and animal lover who came late to her appreciation of pets. At 18, a rescue pup named Tasha saved her from a depression and she hasn't looked back. She has worked as the canine behaviour program coordinator for the Calgary Humane Society, and was a dog trainer specializing in working with fearful and reactive dogs for many years. She doesn't have any pets right now, but makes up for it by giving her petsitting clients (and any dogs she comes across on her frequent coffee shop adventures) extra snuggles.

BUSINESS - Stores Expand as Pet Industry Grows

Petco is expanding their retail presence having opened five new stores in July and done extensive renovation to 13 Seattle locations.

The Seattle market makeover and new store openings are part of the company's overall goal to significantly expand its national footprint by the end of the year.

At the same time, Pet Supplies Plus has signed 20 deals across the country resulting in 55 new stores this year.

Pet Supplies Plus is the leading pet franchise chain in the U.S. with a total of 360 stores.

Why the expansion and renovation in such a short time?

It’s simple - pet industry spending continues to rise.

The American Pet Products Association (APPA) reported total spending of $60.28 billion in 2015 and is projecting an increase to $62.75 billion this year.

“The steady growth of the pet industry is credited to cognizant pet owners looking for natural products for their pets and an increase in the amount of households with pets, which is now roughly 75 percent of the country. Pet Supplies Plus’ growth is exceeding that of the industry and on track to open 55 locations this year, a record year for the company,” David Leonardo, senior vice president for franchising at Pet Supplies Plus, said in a release.

The pet industry appears to be one of the most recession-resistant. As people cut back household expenses they still want to provide the best to their animal companions.

Since 1994, the industry has grown every year by at least $1 billion, according to the APPA. From 2006 to 2011, the industry grew by 32 percent.

As reported in InfoStream in July, PetSmart, the largest specialty pet retailer in North America, is also growing by 80 stores this fiscal year.

It’s interesting that more stores are being built when there is such a shift to online purchasing in general.

However, Petco is including services such as a grooming salon, dog training area and in-store Vetco clinics in the new Wellness Centers and mobile clinics that cannot be provided online.

And Pet Supplies Plus will be launching its own e-commerce capabilities in 2017.

BUSINESS - Largest SuperZoo Ever

World Pet Association (WPA), producer of SuperZoo, proclaimed their 2016 trade show the largest ever.

SuperZoo was held in Las Vegas and had a more than four percent increase in attendees and eight percent increase in companies attending over 2015, as well as nearly 1,200 exhibitors participating.

Attendees had had 820 products to choose from when voting on the best new products in the showcase.

Over 90 education sessions covered a wide variety of topics including: staff training, human resources, leadership, social media, customer service and marketing, and more.

“The quality and depth of SuperZoo’s speakers, education sessions, attendees and exhibitors was incredible,” says Doug Poindexter, president of WPA. “SuperZoo is continually evolving and growing to meet the needs of pet retailers as well as the trends in the industry and this year demonstrated WPA’s sustained commitment to contributing to the pet industry’s continued success.”

SuperZoo wasn’t the only successful pet retail trade show this year, Global Pet Expo also broke attendance and participation records.

Interzoo, held in Germany, reported their largest event ever in June 2016.

The success of these trade shows may come as a surprise to some considering the economical challenges the world has been facing over the past years.

But it shouldn’t.

Despite recessions, pet spending has continued to increase year after year with a record $60.28 billion in the United States in 2016.

SuperZoo 2017 will be held at the Mandalay Bay Convention Center in Las Vegas, July 25-27, with conference sessions July 24-26.