Saturday, January 30, 2016

Is Costco Being Overcautious About Going Online?

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 About: Costco Wholesale Corporation (COST)Includes: AMZN
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More...)

Summary

Costco's online business is still at 3% of overall revenue, and there are no signs that they will step up their efforts significantly in the near future.
Their experimental model in the UK is now showing signs of success, and Costco may well be getting ready to roll out initiatives in core markets like North America.
They've already got Google Express tests underway in California and New York, but the purpose is to once again drive traffic to their warehouses.
Costco (NASDAQ:COST) seems to have a penchant for hitting a billion dollars in sales within six years wherever it goes. It was the first company in the world to achieve zero to one billion in sales within six years of opening shop. Now it has repeated the feat in Australia, where sales reached $1.3 billion in 2015, exactly six years after they entered the country.
Despite it's strong overall growth and the fact that it's loyalty programs is one of the best in the world, a big question that remains unanswered is why they haven't taken to the internet in a big way.
Costco's e-Commerce initiative is a case study in and of its own. The company has an online presence in only five countries: United States, Canada, United Kingdom, Mexico and Korea. Though they already have a physical presence in Australia, Spain and Japan, their web presence doesn't extend to these markets.
Additionally, Costco's UK and Mexico online services are widely different from what they are offering in their largest market - North America.
Originally, when Costco decided jump into the e-commerce bandwagon, it did so after putting a tremendous amount of time and research into figuring out whether it was worth the effort in the first place. Costco roped in Cisco Internet Business Solutions Group to analyze global online markets and find the best possible rollout plan.
Cisco IBSG recommended Costco start its online business in the UK first, a proposal that the company accepted, and started implementing in October 2012. To this day Costco UK remains the primary test market for the company. The company offers its UK online shoppers three different ways to shop online - something that its home market users in the U.S. aren't even aware of.
In the UK a non-member can buy Costco products online but will have to pay a 5% surcharge on the checkout price. Alternatively, they can choose to pay GBP15 (~$22) as an online subscription fee and avoid the surcharge. The third method is for the regular Costco executive and business members, who can either directly shop at one of their warehouses or buy online if they prefer.
So what are some of the key differences for a UK online buyer vs warehouse buyer?
  1. Greater choice - Costco.co.uk has some products that are not available in the warehouse
  2. Higher price - Due to shipping and handling fees for delivery online products are costlier than warehouse products
  3. Exclusive offers - Costco.co.uk provides exclusive online only offers
Since the UK is still technically a "test" market for their online business, none of this can lead to an assumption of a global roll-out. Even CFO Richard Galanti admits that:
"We're doing it methodically and we're not going to go crazy out there."
From Q4 2015 Earnings Transcript
"For the fiscal year, total e-commerce sales came in just under $3.5 billion, up a little over 20% for the year. Comp sales in e-commerce, again, were also up 20% for both the fourth quarter and the fiscal year."
So, it's clear that Costco is definitely exploring online sales as a legitimate revenue earner moving forward, but it also wants to be careful about cannibalizing its warehouse business, which is a tried and tested model - and has been for several decades.
Unlike Walmart's (NYSE:WMT) attempts to "convert" its customers to online ordering and product pickup, Costco is not ready to mix its wholesale business with its web business. Case in point is the fact that they haven't begun to promote the online option to their regular shoppers, which is what they would be doing if they wanted to go the Walmart route.
What Can They Learn From Amazon?
Possibly Costco's most important "guru" in the online space is Amazon (NASDAQ:AMZN), but not in a way that leaves Amazon looking good, unfortunately. You can sometimes learn more from the master with respect to what NOT to do rather than what TO do.
Amazon's biggest problem, as I see it, is shipping costs. Amazon Prime, for example, does not offer any major discount benefits to members like Costco does, but it does offer free two-day shipping on eligible products - and that's exactly the problem with Prime even though on the outside it seems hugely popular and growing with every year.
According to one source, the average order per Prime member (excluding digital product sales) was $47.31 in June 2012. Even if we retain that figure for 2015, at a spend of $1500 that means at least 30 orders over the year.
Now, Amazon already offers free shipping for products over $35, so a Prime customer making an order of $47.31 on average merely gets upgraded to two-day shipping free of cost. The cost of that shipping for the test order that I took to the final checkout page was not what I expected:
Look at that two-day shipping cost for a $50 product. If I were an "average" Prime customer, the company would essentially be footing a bill of $13.38 X 30 orders per year, or $400!
This is what I fail to understand: how can an average $400 shipping cost per customer be supported by the $99 subscription that they currently charge?
Out of that gross mismatch is where I believe lawsuits against Amazon are coming from. I cannot imagine that a company would spend anywhere near $400 per customer from its own pocket to meet the shipping needs of each "loyal" Prime member paying $99 a year.
It just doesn't make sense.
It can make sense, however, if they're able to get several customers who order fewer than 5 products a year for every customer for on whom they're spending $400 in shipping costs. Unfortunately, they don't have much control over who orders what. The best they can do is try and distract customers with additional offers for digital products that have zero shipping costs and, therefore, higher margins.
This, I hold, is the biggest lesson Costco can learn from Amazon. As the former forays deeper into cyberspace, it needs to ensure that the criteria below are met:
  1. Their revenue from the web does not eat into warehouse sales
  2. Their shipping costs are well covered under whatever membership benefits they plan to offer
Investor-speak: Is Costco Prepared to Fight an Online Battle with Amazon?
Understandably, Costco has been acting like a visually impaired tightrope walker as it tries to grow its online footprint without cannibalizing its predictable warehouse operations. On the other hand, they've clearly identified that online sales are more profitable than warehouse sales. This iswhat CFO Galanti had to say about that in the last earnings call:
"Online sales are more lucrative, too. That boost helped pad Costco's margins, leading to a surprise rise in earnings when most analysts expected the year to end on a down note. E-commerce is definitely quite a bit more profitable than the rest of the company."
That said, Costco is not going to get crazy and start rolling out massive features for online shoppers in the United States; at least, not until it has tested all its ideas in the UK and Mexico. Once they are confident of the after-effects of a solid e-commerce platform, Costco may well choose to roll out that model in North America.
The big advantage they have here over Amazon and even Walmart is that they will have a fully tested model in a market not so different from its core earners.
The other advantage with this approach is that the company can replicate all of its technology know-how in the U.S. market to an astoundingly short turnaround time...and that will be done at a time of its choosing - not because the market dictates it should, but because it's well and truly ready for it. It's like having a nice cash balance in an overseas account and bringing it back home when the economic climate is ideal for the move.
Costco doesn't want to depend on an online business to support its bottom line. More to the point, it wants the web to add to the top line of its warehouse business.
With the Google Express delivery experiments already underway in Los Angeles, San Francisco Bay Area and Manhattan, Galanti hopes that it will ultimately bring more people to their warehouses. Even the LivingSocial website promo they ran "worked well", according to Galanti.
From an investor's perspective, these are the best indicators of a company's healthy fiscal future - a robust core business model that's growing at a steady 6%, a successful and profitable test model that can be rolled out to core markets quickly, and a cautious management team that wants to strengthen its business by exploring new channels that can add to its main offering rather than cannibalize it.

Alibaba Earnings Top Views Despite Slowing Economy in China

Revenue rises 32%, helped by increase in users, continuing surge in mobile revenue

Despite robust results, Alibaba continues to face challenges, such as intensifying competition from smaller e-commerce companies.ENLARGE
Despite robust results, Alibaba continues to face challenges, such as intensifying competition from smaller e-commerce companies. PHOTO: REUTERS
Alibaba Group Holding Ltd. posted stronger-than-expected earnings in its latest quarter despite a slowdown in China’s economy, highlighting the resilience of Chinese consumers.
The company also reached a roughly $900 million deal to sell its stake in Meituan-Dianping, China’s largest provider of food delivery, movie-ticketing and other on-demand services, according to people familiar with the situation.

Shares of Alibaba fell 1.5% to $68.51 in morning trading in New York. The stock had fallen, before the earnings report Thursday, more than 30% over the past year amid concerns about the deceleration of China’s economy, which saw its growth rate moderate to 6.9% last year, the weakest annual pace in a quarter century.Despite robust results, Alibaba continues to face challenges. For example, the company has to find ways to maintain and accelerate growth in revenue and the value of transactions made on its trading platforms when it is already the dominant player in China’s e-commerce sector, with 80% of the market. It also is facing intensifying competition from smaller but more rapidly-growing e-commerce companies, in particular JD.com Inc., a longtime rival that has been slowly gaining ground in some areas.
But Alibaba said Thursday that its net profit for the three months ended December more than doubled to 12.5 billion yuan ($1.9 billion), including a gain from the sale of its movie-related businesses. Excluding that gain, the company said its profit rose 25%, boosted by improvements in its ability to increase the amount of money it earns from each transaction hosted on its marketplaces.
ENLARGE
Revenue rose 32% to $5.3 billion, helped in part by blockbuster sales during Singles’ Day, China’s online shopping festival in November.Alibaba said sales that day increased 54% from a year earlier, better than what many analysts had expected.
Executive Vice Chairman Joe Tsai said on a conference call that Alibaba was well-positioned to benefit from China’s shift from an investment-driven and manufacturing-heavy economy to one that is fueled by consumption and services.
“Consumption as a share of [gross domestic product] is becoming higher so we benefit from that,” Mr. Tsai said. He said that the massive shift of users accessing the Internet on mobile devices continues to help boost the use of e-commerce. “Underlying our business is a very significant secular trend, and that is really decoupling from the larger economy.”
Many analysts have said the selloff in Alibaba’s shares was unjustified because China’s online retail sector remains a rare bright spot in the slowing economy and that overall consumption remains solid. Nomura Securities analysts expect China’s overall online shopping market to grow at a 33% compound annual growth rate between last year and 2017. The Boston Consulting Group believes affluent shoppers under the age of 35 and Internet surfers will push China’s consumer market up to $6.5 trillion in sales by 2020, an increase of 54% from 2015.
Still, Alibaba faces intensifying competition in the race to provide China’s smartphone users with offline services such as dining reservations, takeout delivery and movie-ticket bookings.
Asked on the conference call about Alibaba’s plans to sell its stake in Meituan-Dianping, Mr. Tsai said Alibaba’s own online-to-offline operations, called Koubei, is doing well. “We believe a better allocation of our capital is to put our resources into Koubei and exiting Meituan is just a matter of time.”
In the latest quarter, Alibaba reported 407 million annual active buyers, up 22% from a year earlier. Mobile monthly active users increased 48% to 393 million, fueling a near tripling of its mobile revenue.
As Alibaba’s user base grew, the company managed to increase its monetization rate—the rate at which the company is able to make money from transactions hosted on its marketplace. The company said the blended monetization rate of its China retail marketplaces rose to 2.98% from 2.7% in the year-ago quarter. Its gross merchandise value—a measure of total value of e-commerce transactions on its platforms—increased 23% to $149 billion in the fourth quarter.
“These are pretty strong results,” said Henry Guo, a senior research analyst with Summit Research Partners LLC in New York.
“Based on the company’s large market share and user base, we can still see strong momentum in the company. It continues to be dominant in China despite the slowdown,” Mr. Guo said.
He said Alibaba is more representative of everyday consumer spending, which hasn’t been significantly affected by the slowdown in the broader economy.
“Investors’ concerns on economic impact on Alibaba’s quarterly results (are) likely overdone,” Mr. Guo said.
This year, Alibaba plans to refocus efforts on expanding its reach in China’s top-tier cities, Chief Executive Daniel Zhang has said. Analysts have read the repositioning as Alibaba’s efforts to better fend off competition from JD.com.

Meet the 10 most influential brands in Canada

Walmart comes in seventh, but Google takes top spot
Canadas-most-influential-brands
For the fourth year in a row, Google has been named the most influential brand in Canada by Ipsos.
On Tuesday, Ipsos Canada COO Steve Levy revealed the firm’s annual list of Canada’s most influential brands in partnership with the Institute of Communication Agencies at FFWD advertising and marketing week in Toronto.
All five of the top spots on the list are held by technology brands, demonstrating how central tech has become to consumers’ lives. Just three non-tech brands were included in the top 10 – Visa, Walmart and Tim Hortons.
Tim Hortons is the top ranking Canadian brand on the list, followed by CBC at number 11, President’s Choice at number 13 and The Weather Network at number 16.
IKEA’s influence grew greatly over the past year allowing the brand to jump 14 spots from 38 to 24 between 2014 and 2015. Nintendo and Expedia also saw great increases, moving from 64 to 43 and 79 to 57, respectively.
Subway, meanwhile, lost influence over the past year; dropping from 30 in 2014 to 53 this year. TD and Sears also saw substantial losses of influence, with TD dropping from 31 to 54 and Sears dropping from 66 to 97.
Ipsos study of the most influential brands is the result of interviews with over 6,000 Canadians. The scores are determined based on the participants’ responses to questions about their engagement with brands and their perception of the brand’s trustworthiness, innovations and corporate citizenship.
Take a look at what propelled the top 10 brands:
Google_influential_brands
Google continues to dominate the top spot because of its “almost maniacal focus on the user,” according to Levy. The brand also benefits from its daily role in consumers’ lives, he said. While brands selling big ticket items like vehicles or home appliances only have the ear of consumers’ once every few years, many consumers use Google products several times a day; a factor that greatly increases its influence.
In 2015, Google refined its logo and brand identity. On the advertising side of its business, it continued to dominate the mobile ad market.

 Apple_influential_brands

Apple has ranked in the top five every year since Ipsos launched the study in 2011. What’s keeping it on top? Brand equity. Over the years, Apple has built incredible equity based on the quality of its products. Put simply, Levy said, Apple products work. And that earned trust helps the brand maintain its influence even when it suffers a misstep.
In 2015, Apple released its much-buzzed Apple Watch, brought its payment system Apple Pay to Canada and continued to report massive profits thanks to strong iPhone sales.
microsoft_influential_brands
Microsoft’s influence is rooted in its 40-year history. Almost half of Canadians use Microsoft products daily and 54% said they believe the company has a strong future. Microsoft is seen as a dependable brand because of the long history with its customers, said Levy.
Last spring, Microsoft killed off its Internet Explorer brand. At the same time, it shifted its focus to making the most use of the Microsoft name, which CMO Chris Capossela said is the strongest in the company’s stable.
In the advertising realm, Microsoft actually backed away from its ad business, selling off a portion of it to AOL last June.
facebook_influential_brands
Facebook’s omnipresence in consumers’ social life is the source of its influence. Almost half of Canadians said it’s a brand they see everywhere, and a similar number report its used by “most” of their friends and family. Like Microsoft and Google, the brand benefits from its daily interactions with consumers.
In 2015 Facebook continued aggressively pushing its platform as a place for video and released new data about its most active group of power-users – parents.
youtube_influential_brands
Despite being the youngest brand in the top 10, Canadians see YouTube as a brand with the power to stick around – 43% of respondents said they believe YouTube “has a strong future.”
The brand also scored well on the innovation front, with 32% saying they believe YouTube “changed the consumer landscape forever” and 35% saying they see the brand as “original.”
Over the past year, YouTube made itself known in the Canadian market with a large OOH campaign featuring Canadian YouTubers. It also continued its dominance in video streaming, with 70% of Canadians reporting they watch YouTube at least monthly, according to Media Technology Monitor.
visa_influential_brands
Visa is viewed as a dependable company, which boosts its influence. More than half of Canadians (52%) believe Visa has a strong future and 43% said they see the company as dependable.
In 2015, Visa Canada teamed up with Movember for a charity campaign, showed off a connected car at TIFF and scored a viral hit with a quirky skills competition video it filmed as part of its NHL partnership.
walmart_influential_brands
Walmart’s hefty presence in the Canadian market helped it secure its fifth top 10 placing on the Ipsos influence list. The brand’s considerable ad spend earned it points, with 53% of Canadians reporting both that they view Walmart as a company that advertises a lot and that Walmart is a brand they see “everywhere.”
In 2015, Walmart grew its retail footprint in Canada by picking up 13 former Target locationsand committing to open 29 “supercentre” stores by Feb. 1, 2016. It also introduced online grocery pickup at several locations and beefed up its offering of organic foods with a new line under its “Great Value” private label.
timhortons_influential_brands
Like Walmart, Tim Hortons’ influence was bolstered by its ad spend and retail footprint. But, it also scored well in the corporate citizenship category, with 58% of Canadians saying they see Tim Hortons as a brand that inspires a sense of Canadian pride – the top score for that question among the brands in the top 10.
Last year, the brand also earned top marks on the Gustavson Brand Trust Index, which named Tim Hortons the most trusted brand in Canada for 2015. That same year, Tim Hortons encouraged Canadians to share their good deeds on social media during its #WarmWishes campaign, enlisted Sidney Crosby to star in a lighthearted ad and topped Insightrix Research’s list of the top sponsors of Canadian hockey teams.
Amazon_influential_brands
Amazon’s customer-centric approach to retail and marketing landed it the number nine spot, marking the first time the brand has made it into the top 10 on Ipsos’ list. A notable 41% of Canadians said Amazon understands consumer needs and 38% said the brand makes life more interesting.
The retailer started selling clothing and shoes in Canada for the first time in 2015; a move that came on the back of a bold prediction from a research firm that Amazon would be the number-one clothing retailer in the U.S. by 2016. It also launched “Prime Day,” a one-day sale that led to a huge surge in sales despite complaints from some consumers the discounts weren’t deep enough.
samsung_influential_brands
Samsung has made a slow, steady climb in influence since Ipsos first launched its most influential study in 2011. In the last five years, Samsung jumped 37 spots and settled into the top 10 last year.
In Canada, Samsung recently partnered with Toronto’s Centennial College on the Samsung Tech Institute – one of several moves that may have contributed to 40% of Canadians reporting they see the company as innovative.

Amazon added more than 76,000 people last year

amazon warehousesREUTERS
Amazon.Com  $587.00
AMZNChange-48.35%Change-7.60
Disclaimer
Amazon added 76,700 employees in 2015, an increase of 50% from the previous year, according to the company's latest annual filing.
That's way more employees than it's added in each of the last three years, and is also the fastest rate of employee growth since 2012, when the company grew employees 57%.
That brings the company to about 230,800 employees. So what are all those people doing?
Probably working in the company's warehouses, for the most part. Amazon actually didn't talk about employment growth per se on its earnings call on Thursday — you can read the transcript here.
But CFO Brian Olsavsky noted that the company, during the year, had added 14 fulfillment centers for a total of 123 and four sortation centers for a total of 23.
A lot of those employees were added during the first three quarters of the year. At the end of Q3, the count was at 222,400 employees, and 39,000 of them were hired in Q3 alone to prepare for the holiday rush.
Here's Amazon's total employee count at the end of each of the last few years:
2011: 56,200
2012: 88,400, growth of 32,200 (57%)
2013: 117,300, growth of 28,900 (32%)
2014: 154,100, growth of 36,800 (31%)
2015: 230,800, growth of 76,700 (50%)

Wal-Mart Closures Bring Out the Amazon Sellers

A man loads groceries at the Wal-Mart Neighborhood Market in Dallas.
 
Associated Press
Wal-Mart Stores Inc. closed about 150 U.S. stores this month, due in part to rising competition from online retailers. The largest of those Web rivals, Amazon.com Inc., is reaping benefit thanks to some eager resellers.
Deep discounts at Walmart locations drew shoppers like 22-year-old Keith Yaple, who says he bought about $12,000 in discounted merchandise at one store in Hartland, Mich., so he could resell them for a profit on Amazon.
The practice is known as retail arbitrage. Thousands of sellers scour store shelves with the aim of scoring narrow margins by peddling their purchases online. Many rely on mobile applications that calculate the profits, after shipping and other fees, that they can expect to make per item on Amazon, based on recent online prices.
And for some, it’s a big business with millions of dollars in sales, using their own warehouses and staff to process the goods.
Sam Cohen, owner of e-commerce company DWNY LLC in Ocean, N.J., sent three employees in a 26-foot truck to the nearest closing Walmart, about 160 miles south, in Baltimore. They hauled off $35,000 in merchandise, like Legos and Star Wars pajamas, which he said he expects to sell for as much as $100,000 on Amazon. “It took six hours to scan and pay for all the items,” he said. “It was time well spent.”
Wal-Mart’s store closings presented a special bonanza. Earlier this month, the Bentonville, Ark.-based retailer began slashing prices by 50% in an effort to clear inventory before closing Supercenter and smaller Express stores. It eventually cut prices by 75%.
Mr. Yaple spent about three hours at the Walmart store last week buying anything he thought he could sell for close to their original nondiscounted price on Amazon, including tablet computers and security cameras.
With the help of his mother, brother and a friend—all of whom brought their own cars and pushed eight shopping carts through the store—Mr. Yaple rang up about $12,000 at the register.
He figures the merchandise will bring him as much as $8,000 in profit online.
“It didn’t matter to me what the products were, as long as they sell,” he said. “I cleared them out of pregnancy tests and condoms.”
He said the security cameras, which at half-off cost him $224, could reap him $130 in profit based on current prices on Amazon.
Mr. Yaple, who had a brief stint as a General Dynamics Corp. engineer before making retail arbitrage his primary business, sent nearly all of the goods he bought to Amazon. The company handles warehousing and shipping for a fee and takes a percentage of each sale.
Nathan Slamans, 23, also walked away from the Hartland Walmart Supercenter with a big haul. He fit about $10,000 worth of merchandise—which cost him $5,000—in two shopping carts. “I bought small, high-priced items like cameras so I could fit them in my car,” said Mr. Slamans, noting that ringing up his purchases took about 30 minutes.
Mr. Slamans said he expects to make at least $30 on each of the 20 Sonicare electric toothbrushes he bought at half-price.
Spokesmen for Amazon and Wal-Mart declined to comment.
Amazon has no prohibition on retail arbitrage as long as the goods are otherwise allowed to be sold on its namesake site.
Likewise, resellers’ merchandise doesn’t get any special designation.
Wal-Mart has said the store closings and about 10,000 U.S. job cuts would help contain costs. U.S. retail sales, including e-commerce, grew just 2.1% in 2015, compared with a 3.9% rise the year before, marking the weakest year for growth since 2009, according to Commerce Department data.
Other retailers are retrenching, too. Macy’s Inc. will close 36 stores this year andGap Inc. is in the process of shuttering a quarter of its North American stores.
For its part, Amazon on Thursday reported a 22% gain in sales during the fourth quarter and its largest quarterly profit in its 20-year history. The company highlighted rising sales from third-party sellers, like Mr. Yaple, which accounted for nearly half of the units of merchandise it shipped.
“I hope Wal-Mart closes more stores,” Mr. Yaple said.

Is The Convenience Economy Convenient For Retailers? Featured

Is The Convenience Economy Convenient For Retailers?



Just when retailers are finally getting up to speed on omnichannel, they face a new challenge: The Convenience Economy.  It's hard to argue with convenience, right? But for retailers that means finding new ways to get products and services to customers even faster, and finding the right partners to make this goal a reality.
Today, retailers can choose from a variety of partners that can help facilitate their convenience objectives, including UberEATSHurrier andGoButler, to name just a few. A number of other services, across industries, are outlined in this VentureBeat.com article.

The question for retail companies is: Are we set up to be able to offer these types of on-demand products and services? Harkening back to the Daily Deal service that destroyed many small businesses due to over-demand, retailers need to be sure they are set up to "deliver" on this promise.
I recently had a conversation with Chris Bryson, CEO of Unata, about this topic. He outlined a three-step approach to getting up to speed with this trend: IntegrateEngage and Iterate.
  • Integrate back-end systems so you're working with one version of the truth;
  • Engage with the modern consumer by designing real-time, relevant experiences; and
  • Iterate those experiences in new and different ways.
The first step, Integrate, is foundational. It's the least thrilling part of the discussion but it's an absolute necessity for these types of initiatives, as well as other omnichannel strategies. "It's really about getting all systems to talk to each other to create a unified view of the customer," Bryson explained.
Step two, Engage, is the beginning of the fun part: figuring out which types of products and services your target customers are looking for.
Finally, step three is a challenge: Iterate those experiences in order to surprise and delight your customer base. It may be just one offering or it could be several, largely defined by each retailer's product selection and the makeup of the target customer base.

Is Now The Time To Embrace The Convenience Trend?

We know retailers are operating on tight budgets and often take a wait-and-see approach when it comes to new trends, products and services. But today's consumers are not patient. They expect to be able to access the products and services they want faster and faster. "It's all about everything being at your disposal at the click of a button, primarily driven by mobile technology," Bryson noted.
Retailers need to be ready to jump on the bandwagon or be left in the dust by the competition. Often they can take the lead from Silicon Valley companies and other industries that are more willing and able to test new solutions and strategies. Uber, for one, launched UberX just 18 months ago and it has "taken the world by storm," Bryson said.
To help retailers hone their focus, Bryson discussed five ways to expect the Convenience Economy to break into retail:
  1. A continued focus on mobile to create an ‘anytime, anywhere’ experience, enabling online browsing on the go, ordering ahead, paying ahead, curbside pickup, delivery, and more.
  2. More use of wayfinding and location-based services: just like Uber, users want to be notified when their order is ready, or if their delivery is near. Delivery management software like OnFleet & Bringg enable these capabilities.
  3. Targeted offers through beacons and proximity-based services(like Gimbal) to consumers when they are nearby or in-store, to inspire them to buy at just the right moment, making their grocery trip feel easy and successful. 
  4. Digital Coupons & Offers from your mobile phone, allowing the consumer to clip and redeem coupons digitally, while in store. No more cutting up paper or printing coupons.
  1. Order ahead and delivery for catering and prepared foods. This is a huge opportunity for grocers that service lunches with their specialty sections.
As consumers we're all getting caught up in the desire to be able to get what we want when we want it, at the price we choose. So it will be fun to watch how this plays out in the retail industry over the next few years.