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Subject:
E-TAIL360
Period: February 1, 2017 to March 1, 2017
Geographies:
Worldwide
Categories:
Comment & Opinion or Companies, Organizations or Consumers or Controversies & Disputes or Deals, M&A, JVs, Licensing or Earnings Release or Finance, Economics, Tax or Innovation & New Ideas or Legal, Legislation, Regulation, Policy or Market News or Marketing & Advertising or Other or People & Personalities or Press Release or Products & Brands or Research, Studies, Advice or Supply Chain or Trends
Contents
 

A Better Customer Experience Is A Major Marketing Priority These Days

Improving the customer experience in all marketing channels – making it seamless and connected – is a top priority among retailers and manufacturers because it leads to higher sales. Seventy-one percent of business execs ranked improving customer experience higher than increasing revenue, reducing costs, or other traditional goals, a Forrester survey found. Consumer behaviors, expectations, and demands continue to rise, and they are especially influenced by personalization, good prices, and efficient fulfillment. Improving customer experience is important in all channeles because: 94 percent do research online before visiting a store; 81 percent have looked up inventory on a retailer’s website, 80 percent won’t visit a store if product availability isn’t shown; 93 percent have reviewed product ratings before purchasing; and 57 percent said loyalty often drives a purchase. 

"Consumer Trends Report - 2017 Edition ", Report, Kibo, January 31, 2017

Walmart Ups Ante In Fight With Amazon By Abandoning ShippingPass

To stay competitive with Amazon, Walmart is ditching its $49-a-year two-day shipping subscription, dubbed ShippingPass, and replacing it with free shipping for purchases over $35. In doing so, the retailer is acknowledging that free two-day shipping is now the standard in online shopping. The new strategy takes aim at Amazon’s highly successful Prime offer, which offers free two-day shipping for an annual $99 subscription fee. Data from Cowen and Company show that by November 2016, almost half of U.S. Internet users were living in a household with a Prime subscription. Some observers speculate that Walmart’s battle with Amazon will lead to even more tactical moves, such as deep discounting.

"Walmart Challenges Amazon with New Shipping Plan", eMarketer, February 01, 2017

Amazon's Fourth Quarter Profit Up, But Sales Disappoint

Amazon's decision to focus on revenue growth and investments rather than on heavy promotions led to a 55% jump in profits for the fourth quarter. But sales hit only the midpoint of the company target, with revenue up by $43.7 billion, a less-than-expected 22% increase from the previous quarter. CFO Brian Olsavsky says the company continues to focus and made great progress on "things we can directly control", referring to price, selection and customer experience. While many retailers turned to heavy promotions during the holidays, Olsavsky said promotions weren't a major factor in fourth-quarter revenue. Amazon continue to dominate online sales, commanding an estimated 42% of total holiday online spending growth in 2016, with Apple Inc. in poor second at 5%.

"Amazon’s Profit Jumps, but Sales Growth Disappoints", The Wall Street Journal, February 02, 2017

Amazon Says List Of Users Of Payments Service Grew By 10 Million

Online retailer Amazon said more than 33 million customers have used its Amazon Payments electronic payment platform as of February 2017. Launched in 2013, the service had a cumulative total of 23 million customers in 2016. Known as Pay with Amazon, the service lets customers use their Amazon accounts to pay for purchases made on other online stores.

"Amazon Adds 10M Users to its Payments Service, Escalating PayPal Rivalry", GeekWire, February 07, 2017

Effective Social Media Involvement Of Super Bowl 51 Fans Stretched Ad Dollars

Interactive ad strategy – use of live-streams, paid social advertising, and giveaways – were the hallmarks of successful social media and mobile campaigns for several Super Bowl 51 advertisers. Especially effective was PepsiCo’s Lady Gaga halftime show strategy for its Pepsi Zero soft drink, but Budweiser, casual dining chain Buffalo Wild Wings, and Snickers were also able to stretch their airtime ad dollars using social media. Pepsi sponsored a number of giveaways during the game in which football fans who were social media users could interact with Pepsi sites up to halftime. They were then given a chance to win merchandise by re-posting Pepsi’s tweets.  

"How Pepsi was One of Few to Leverage Mobile for Super Bowl LI", Mobile Marketer, February 07, 2017

Amazon Expands Its Order Fulfillment Capacity With Two New Centers in California

Amazon.com said it will build two new fulfillment centers in California, adding 2,000 jobs for associates who will pick, pack, and ship customer orders. The company did not say when the new centers in Eastvale and Redlands will open, but together they will have nearly two million square feet of storage space. A center being built in Sacramento is expected to open this year. Amazon employs 15,000 associates in California.

"Amazon to Create 2,000 New Full-Time Jobs at Two New California Fulfillment Centers", News release, Amazon.com, February 09, 2017

Candy Companies Should Get The E-Commerce Ball Rolling Now

Candy makers need to develop an e-commerce strategy now to get a head start on developing relationships with online retailers that stock their product lines. A good example of how an early start reaps rewards is the German unit of Mars Chocolate, which has gained a lot of experience and insight since it launched a B2C website selling personalized M&M’s (MyMM.com) ten years ago. Confectioners should not be dissuaded by the fact that e-commerce accounted for only 4.4 percent of global FMCG sales last year. E-commerce is expected to account for nine percent of the market by 2025 ($150 billion). A Mars Germany exec says it’s a small share now but is “gathering speed so you need to act quite quickly in this area.” 

"E-Tail-Volution: Why Confectionery E-Commerce Strategies Shouldn’t Be Put on Hold", FOODnavigator.com, February 10, 2017

Smartphones Will Be The Pillar Of U.K. E-Commerce By 2020

Smartphones are rapidly becoming the technological engine powering e-commerce in the U.K., according to a report from OC&C Strategy Consultants, Google and PayPal. Within three years, mobile purchases will account for two-thirds of e-commerce sales – £43 billion – up from £13.5 billion in 2016. Another £14 billion of online retail will involve a smartphone in product research and price comparison, meaning that 80 percent of all U.K. e-commerce by 2020 will be handled over a smartphone. But despite these forecasts, U.K. retailers lag behind U.S. and Asian competitors in terms of mobile readiness, the report notes. 

"Smartphone Shopping to Account for Two Thirds of UK E-Commerce by 2020, says Google, PayPal Study", Internet Retailing, February 10, 2017

More China Consumers Expected To Buy Foreign Goods By 2020, Study Reveals

By 2020, 25 percent of China’s population, or 325 million people, are expected to purchase products from abroad via online retailers, according to eMarketer. Data from the market research firm revealed more than 15 percent of the Chinese population bought $85.8 billion of foreign goods in 2016. With local consumers spending about $473 each on cross-border purchases in 2016, foreign products accounted for 4.2 percent of the total online retail market in the country.

"Survey says more e-shoppers to buy foreign stuff by 2020", China Daily, February 16, 2017

Tough Times Ahead For America’s Agricultural Suppliers?

Small-town stores and co-ops that for decades have supplied seed, fertilizer, herbicides and pesticides to farmers, may be in for a rough patch. Farmers are beginning to catch on to the financial benefits of shopping online, even if they have to forego the expert advice of local suppliers. Several trends have contributed to this phenomenon, not the least of which is that broadband is now available to 63 percent of rural residents. Online ag-suppliers like Farmers Business Network have much lower overhead expenses than brick-and-mortar suppliers, so prices are lower. Delivery of supplies, even in huge amounts, is now economically and technically feasible. A surplus of commodities has driven down crop prices and farm incomes, forcing farmers to shop for better deals. And they are finding them online. One Illinois farmer last year spent $26,000 on the Internet on herbicides for his corn and soybean fields, about half of what he usually spends at a local farmers’ co-op.

"E-Commerce for Farmers: Shopping Online for $26,000 of Herbicides", The Wall Street Journal, February 16, 2017

Walmart Posts Robust Quarterly Sales, But Big Drop In Profit

Walmart’s same-store sales were impressive during the winter holidays, but the company’s e-commerce battle with Amazon is hurting profit. Same-store sales rose 1.8 percent in the quarter that ended January 31, 2017, the tenth consecutive quarterly rise. But profit fell 18 percent as the company pursues its strategic goal of becoming “more of a digital enterprise,” as CEO Doug McMillion put it. Online sales, which included full quarter sales performance from Jet.com, acquired last September, rose 16 percent. E-commerce sales rose 21 percent in the previous quarter. Other downward pressures on profit include plans to raise store workers’ wages and lower prices.

"Walmart Posts Strong Holiday Sales, But E-Commerce Battle With Amazon Pinches Profit", The Wall Street Journal, February 21, 2017

Mondelez Invests In High-Growth Channels And Products

N.J.-based snack maker Mondelez International's strategy is to boost its presence in high-growth channels like e-commerce, discounters, convenience stores and traditional trade. To build its e-commerce snacks business, it is spending heavily on capabilities, infrastructure and broadening the online product portfolio. The effort is working: net revenues in e-commerce grew more than 35 percent last year. More specifically, the company is investing in what it calls its “power brands” – namely, Oreo, Milka and belVita – which account for 70 percent of global revenues. The effort is paying off: last year those brands grew organic net revenue at twice the rate of the company overall and continue to outpace category growth, according to Chief Growth Officer Tim Cofer.

"Mondelez Sees Opportunity in 'power Brands,' E-Commerce", Food Business News, February 21, 2017

 
Companies, Organizations  

Walmart Launches Free Two-Day Shipping For US Customers

Walmart launched a two-day shipping service across the US. Aimed at improving customer experience online, the service is available with a minimum purchase of $35, compared with the $50 threshold for Shipping Pass, the retailer’s previous home delivery service. Unlike Amazon’s Prime program, which costs $99 in annual fee, Walmart’s two-day shipping comes with no membership fee.

"How Walmart is Aiming to Build Ecommerce Loyalty", Retail Analysis, February 01, 2017

Amazon Is Top Online Beauty Seller In 2016, Report Says

Amazon.com Inc. accounted for 21.1 percent of online beauty sales in 2016, according to 1010data. Online sales excluding those sold by its marketplace sellers reached 14.4 percent of total online beauty sales. Macy's Inc. and Sephora USA Inc. grabbed 17.4 percent and 15.0 percent, respectively. Data from the market research firm showed the online beauty segment expanded 14 percent in 2016, compared with 2015.

"Amazon nabs the top spot for online cosmetics sales", Internet Retailer, February 23, 2017

Wal-Mart’s Big Box of Trouble

The Wall Street Journal, February 19, 2017

Global Economies and Consumers in 2017

Euromonitor International, February 23, 2017

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